The List

Megatrends That Weren't

A look at yesterday's Next Big Things, from the Japanese rising sun to Dow 36,000.

From "the rise of the rest" to the resource wars, pontificating on the big trends that will shape the future of global politics and economics has become a big business. But history can be awfully unkind to pundits wielding crystal balls: Anything from a once-in-a-century flood to the suicide of a Tunisian fruit-seller can overturn decades' worth of conventional wisdom. As the following examples show, today's Next Big Thing can quickly become tomorrow's Trend That Never Was.


China-obsessives beware: This isn't the first time America has felt threatened by a rising power to the east. In the 1980s and early 1990s, as Japan's industrial production surged by more than 50 percent, a cottage industry predicting Japan's economic dominance -- kicked off by Ezra F. Vogel's 1979 bestseller, Japan as Number One -- was born. American executives flocked to seminars on Japanese business practices while real-life events like Japan's purchase of Rockefeller Center in 1989 and fictional scenarios like Michael Crichton's 1992 novel Rising Sun elevated the Japanese to national boogeymen.

Of course, just as the Japan hype reached its peak, the country was entering its "lost decade" of economic stagnation. Although still one of the world's richest countries, Japan was overtaken as the second-largest economy by China in 2010.



Only two things are predictable about markets. First, they're unpredictable. Second, someone will always predict that the good times don't have to end. Unbridled optimism has been an integral feature of financial trading as far back as the famous Dutch "tulip mania" of the 17th century, and it was very much in evidence prior to the current financial crisis, when experts placed inordinate faith in the power of computerized trading, financial "innovation," and the exploding housing market.

The Dow Jones industrial average never did get higher than its 2007 peak of 14,164.53, but James K. Glassman and Kevin A. Hassett's book Dow 36,000 wasn't even the most egregious offender, just the best known: Two other 1999 volumes promised Dow 40,000 and Dow 100,000. Or take David Lereah, formerly of the National Association of Realtors and author of 2005's Are You Missing the Real Estate Boom? as well as a revised 2006 edition, Why the Real Estate Boom Will Not Bust, and the more generic 2007 volume, All Real Estate Is Local.

Nowadays, pessimistic titles like Freefall and The Great Stagnation are more in vogue. Let's hope time is as cruel to their authors as it was to their Panglossian predecessors.

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It's certainly true that there's a finite amount of oil in the world and it's going to run out sooner or later. But pinpointing the date at which the global production decline will begin has proved more difficult than expected. In 1956, geophysicist M. King Hubbert developed a model -- now known as Hubbert's peak -- predicting that global oil production would tap out in the early 1970s. It didn't quite work that way.

What peak-oil theorists have failed to take into account is both the discovery of new oil and new means of extracting difficult-to-recover reserves buried deep beneath the ocean or in tar sands in the Canadian tundra. In the last 20 years, global proven reserves have actually increased by more than 380 billion barrels.

Despite the fact that peak-oil theorists keep changing the date for when we will reach Hubbert's peak, from four decades ago to next year, their theory remains popular. The most prominent proponent in recent years was late Texas energy investor Matthew R. Simmons, who argued that Saudi Arabia's reserves are far lower than it has admitted and that a global oil shock is imminent. There are indeed questions about Saudi Arabia's reserves -- unlike other petrostates, the kingdom does not allow its fields to be independently audited -- but oil prices, while volatile, have not returned to their pre-recession heights.

Looking for alternatives to fossil fuels certainly makes sense, but trying to pinpoint the date of the oil apocalypse doesn't seem the best way to promote it.

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In 1798, English scholar Thomas Malthus penned An Essay on the Principle of Population, predicting that global famine and disease would eventually limit human population growth. Although the world's population has increased more than six-and-a-half times since Malthus's day, improvements in crop yields and human health have prevented his dire predictions from coming to pass.

Perhaps the best-known modern proponent of Malthusian thinking is biologist Paul Ehrlich, author of 1968's The Population Bomb, which warned of imminent global famine and catastrophe due to rapid population growth. Ehrlich was also on the losing end of one of history's more famous wagers, when he bet business professor Julian Simon in 1980 that the prices of five widely used metals would increase dramatically over the next decade due to increased demand. Despite a rapidly growing population, the prices of the metals fell, and Ehrlich lost the bet.

There may yet come a time when the Earth's population becomes unsustainable, but for now the problem isn't lack of resources but how to distribute them to those in need.



Buying into overly optimistic predictions can be dangerous. But excessive skepticism has its own dangers, especially when it comes to technology. For every fevered dream of flying cars and food-in-a-pill there are curmudgeons like British entrepreneur Alan Sugar, who predicted in 2005 that the iPod would be "kaput" within the year, or IBM Chairman Thomas Watson, who in 1943 reportedly foresaw a global market for "maybe five computers."

Or take astronomer and popular science author Clifford Stoll, who in his 1995 book Silicon Snake Oil and an accompanying Newsweek article ridiculed the idea that "we'll soon buy books and newspapers straight over the Internet" and argued that "no online database will replace your daily newspaper." As evidence he noted that his "local mall does more business in an afternoon than the entire Internet handles in a month."

Sometimes it pays to believe the hype.


The List

Riot of Opportunity

The most outlandish international reactions to Britain's violence.

After five days of riots in London that have spread across the country, everyone seems to be pontificating on -- or pointing the finger at -- who's to blame for the wave of violent social unrest. And some of the comments are just plain wacky: Since when does Mahmoud Ahmadinejad approve of mass protest in the streets? Here's a look at some governments around the world -- especially those past recipients of British condemnations and military campaigns -- who just can't resist the temptation to give Britain a taste of its own medicine.


The Iranian Foreign Ministry has urged the British government to stop its violent confrontation with rioters and start a dialogue. Hossein Ebrahimi, a member of the Iranian parliament, also told the Fars News Agency that Britain should permit human rights monitors to investigate the troubles in its restive cities. And on Wednesday, Aug. 10, President Mahmoud Ahmadinejad told reporters after a cabinet meeting in Tehran:

What kind of country treats its own people like this? The ugliest treatment is the police's unacceptable attack on the people, who have no weapons in hand.… What kind of a treatment is this for the people who run out of patience because of poverty and discrimination?… I advise them to correct their savage behavior because this kind of savage treatment of people is absolutely not acceptable.

Ahmadinejad later rhetorically asked during a radio interview, "What else should happen for the [United Nations] Security Council to react and condemn one of its own members?" After praising and referring to British protesters as "opposition," he told reporters that the true opposition in Britain is the people who are pushed to the ground and beaten on the streets of London and slain and yet "no one hears their voice." One wonders what the Green movement protesters think of this change of heart.

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In Libya, the Qaddafi regime's deputy foreign minister, Khalid Kaim, told the official Jamahiriya News Agency that Prime Minister David Cameron should step down:

Cameron has lost his legitimacy and must go … after the massive popular protests that reject him and his government, especially after the violent police repression unleashed by his government against peaceful protesters … to force the British people to accept a government it rejects.

"The international community [should] not stand with arms folded in the face of this gross aggression against the rights of the British people, who are demanding their right to rule their country," Kaim added.

Of course, Muammar al-Qaddafi has yet to recognize the London rioters as the legitimate representative of the British people.

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In Bahrain, an editorial in the independent Gulf Daily News argues that the British government had it coming, thanks to its adventures abroad:

The irony is that if the UK hadn't been so occupied fraternising with the political opposition in Bahrain, co-managing a coup in Libya, retreating from its misadventures in Iraq and playing hide and seek with the Taliban in Afghanistan -- all at a time when the country's national debt is higher than ever -- then it might have realised all was not well in its own backyard. The fact is that people in the UK have legitimate reasons to be angry.

One quote in particular jabs at certain Western memes in covering the Arab Spring:

Rioters are using modern technology such as Blackberry and Twitter to mobilise, just as they did in Bahrain, and video footage is being posted on YouTube. The only thing missing is Nick Kristof getting his hair coiffured in "Trafalgar Roundabout" and Robert Fisk telling fibs about trucks being loaded with dead bodies and secretly hauled away to the Isle of Man.

Take that, you inquisitive Western reporters!

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In Syria, currently embroiled in its own revolutionary fervor, Reuters reports that Syrian state-run television repeatedly showed footage of a policeman chasing and knocking a man down. A breaking news caption read:

Cameron: 'We face a problem confronting the gangs in Britain.'

Is it a coincidence that Syria has repeatedly referred to its protestors as "armed gangs"? Perhaps President Bashar al-Assad is reaching out to Cameron in a gesture of solidarity against thuggery in general -- or maybe he's still upset about the disinvitation of his British envoy to the nuptials of Will and Kate.

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In Zimbabwe, President Robert Mugabe took the opportunity to admonish the United States and Britain for meddling in his country. Mugabe, more accustomed to being the subject of international condemnation over his controversial rule, seemingly enjoyed getting one back against his country's former colonial master. During a speech to the armed forces, Mugabe acknowledged the British riots:

Britain I understand is on fire, London especially and we hope they can extinguish their fire, pay attention to their internal problem and to that fire which is now blazing all over and leave us alone.

Mugabe chuckled and then deviated from his speech, "We do not have any fire here and we do not want them to create unnecessary problems in our country."

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China seems particularly keen to take swipes at the West lately. The British riots provide fodder on two fronts. First, after months of Western lectures about China's fierce crackdown on its own dissenters in the wake of uprisings in the Middle East and North Africa, a commentator in the state-run People's Daily noted:

The West have been talking about supporting internet freedom, and oppose other countries' government to control this kind of websites, now we can say they are tasting the bitter fruit [of their complacency] and they can't complain about it. 

And, as Britain's Telegraph reports, China, the home nation to the 2008 Summer Olympic Games, is apparently concerned as to whether London was still a safe bet to hold the games (via Xinhua News Agency): 

The three consecutive days of rioting has spread to east London area where the main sports stadium of London Olympic is located.… After the riots, the image of London has been severely damaged, leaving the people sceptical and worried about the public security situation during the London Olympics.

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It's not just the mouthpieces for authoritarian governments that have crazy things to say about the rioters. In Britain itself, the commentariat has rushed to condemn not just the government, but the protesters as well. But in the Daily Mail, writer Max Hastings takes the old "kids these days" rant to a spectacular new level:

They are essentially wild beasts. I use that phrase advisedly, because it seems appropriate to young people bereft of the discipline that might make them employable; of the conscience that distinguishes between right and wrong.

They respond only to instinctive animal impulses -- to eat and drink, have sex, seize or destroy the accessible property of others.

Their behaviour on the streets resembled that of the polar bear which attacked a Norwegian tourist camp last week. They were doing what came naturally and, unlike the bear, no one even shot them for it.

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