Updates from Chicago Booth

Local communities are driving global politics

By Raghuram G. Rajan – We live in a strange time.

Countries are more prosperous than ever before, new technologies that promise to solve our most intractable problems are on the horizon, and yet there is widespread unhappiness in some of the richest countries in the world. White males of working age in the United States are killing themselves through alcohol, drugs, and suicide at a rate that is as if 10 Vietnam Wars were raging simultaneously.

The immediate reason appears to be economic despair, as moderately educated workers lose jobs because of trade and automation. But workers lose (and gain) jobs regularly.

Why are even well-educated workers, holding decent middle-class jobs, so disheartened now? What should we do?

What we are seeing is a consequence of the information-technology revolution that started in the early 1970s, magnified by trade.

Every past technological revolution has been disruptive, prompted a societal reaction, and eventually resulted in societal change that helped us get the best out of the revolution. We have felt the disruption of the IT revolution, which has sometimes been punctuated by dramatic episodes such as the 2007–10 global financial crisis; we are now seeing the reaction in populist movements of the extreme left and right.

What has not happened yet is the necessary societal change, which is why so many despair of the future.

We are at a critical moment in human history, when wrong choices could derail human economic progress. more> https://goo.gl/aLSuFh

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