Complexidade

Why short-term thinking is the greatest threat to the global economy

BY DANIEL ALTMAN

The biggest problem facing the global economy is not climate change, trade imbalances, financial regulation, or the eurozone. It is short-term thinking. An epidemic of myopia has swept over the world in the past few decades, and it threatens our living standards like nothing else.

It's an epidemic with more than one cause, and not all of them are obviously sinister. Part of the problem is the growing complexity of the global economy. Life is simply getting harder to handle with the brainpower at our disposal.

To understand why, imagine a chess master. She might be able to think her way through the game about eight moves in advance. Now add more squares to the board, and perhaps a few new pieces. How many moves in advance can she think? Not eight -- maybe not even five. Because of the growing interconnectedness of the global economy, our lives are becoming more complex in much the same way, with many more moving parts; we can no longer worry just about those closest to us. As a result, we can't plan for the long term as easily as we used to. Every corner of the global economy is like a chessboard with an infinite number of squares; there's simply too much uncertainty.
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