Sunday, April 7, 2024

This Matters For Markets

 

This matters for markets. The success of the West lies not just in its liberalism, now unravelling, or its rule of law, which business evidently could care less about, or its military, which is going to be eclipsed on the current trend, but on its science and technology that powers that military. That’s why allowing top universities to turn into what @EricRWeinstein calls “Revolutionary Marxist justice fingerpainting day-care for sociopaths” is not a good idea. How many econometric papers talk about human capital, R&D, technological progress, etc., without looking at what the universities are actually doing? Economically, this can point to lower productivity and so stagflation. Geopolitically, Russia and China are throwing money at science in a Cold War manner, but it doesn’t even enter markets’ minds that this a talent contest the West could lose.



This matters for markets. Western institution after institution is being proved unfit for purpose. Congress, already held in contempt, is now finally seeing that academia is just as morally and intellectually corrupted, if not worse. A successful society might be able to get by for a while with one of those two not functioning, but surely not both. So, alongside the minutiae of data points and reading geopolitical runes, we also need to see if these university presidents step down, are fired, or U-turn towards substantive policy changes that can turn the ship around – and then look ahead to 2024 elections. So far, we have a series of official mea culpa tweets and promises of action. Then again, we heard a lot of “build back better” and “transitory” in recent years.

By Michael Every of Rabobank

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