Andy Sloan: My four for ’24

Quick question. Who said last week: ‘I’m here to tell you that the Western world is in danger, and it is endangered because those who are supposed to defend the values of the West are co-opted by a vision of the world that only leads to socialism and poverty. And I’m here to tell you that collectivist experiments are never the solution’?

No, it wasn’t Mark Helyar speaking about Lindsay de Sausmarez’s trampling of private property rights with her behind-closed-doors review of the open market inscription policy.

And though it has strong echoes of the introduction to Let’s Go Crazy, the genius that was Prince is sadly no longer with us. As I’m guessing there weren’t many Guernseymen (or women) at Davos last week, I doubt there’ll be any readers fortunate enough to have heard in person Javier Milei, the Argentinian president, give the most fervently pro-capitalist speech since I inadvertently attended a Contra fundraiser in London in the ‘80s.

OK, so I made that last bit up but for those who weren’t there – and that’ll be a few of you, I’m sure – the ‘80s was truly a great time and it was the kind of thing that went on. The music was great – mind the fashion was questionable perms, pixie boots and leg-warmers – and that was just the men. Sure there was the monumentally enormous recession of the first half of the decade where 20% of the UK’s manufacturing base was brutally and deliberately wiped out. And true, it was the height of the Cold War and hindsight and declassified files tell us that we very nearly accidentally wiped ourselves out. It was a time of CND and the ‘wimmin’ of Greenham Common. And a time of serious ideological political debate.

As you can imagine, Javier’s speech took me back. For crying out loud he even aped Milton Friedman with the line ‘socialism is always and everywhere an impoverishing solution’. Admittedly, the original quote about inflation is lifted from Friedman’s address to the American Economic Association in 1969, but the 1980s were his decade spiritually. Remember Thatcher’s Medium Term Financial Plan anyone?

But back to the point before I get too dewy-eyed. Given its impact, you may have already watched Javier’s performance on YouTube. If not, I recommend it. A performance where he laid into the current global policy consensus and, by extension, the assembled audience, but whether they truly appreciated the personal slight at the time, it’s difficult to tell.

I have written before that I feel that there are economic lessons from the 1980s that we appear to have unlearnt. And this was pretty much Javier’s point. He was also quite explicit in saying that the current global policy consensus is far removed from a traditionally capitalist perspective and global policymakers are guilty of collaborating with the neo-Marxists who have taken over academia and global policy institutions. Yes, he was pointing his finger at the UN, the OECD et al and yes, his hosts, the World Economic Forum. A present-day world far removed from the Washington consensus of the late 20th Century and the halcyon days of IMF shock therapy.

At times railing against this tide of history feels a bit lonely. I do it occasionally in this column but it’s a political debate that’s become very one-sided. There aren’t many who speak out, so it’s nice to have someone step up and take one for the team. Whether Javier’s outburst helps Argentina’s cause is debatable. I suspect the forces of the global policy consensus are too strong and Javier will be brought back to the mainstream in time. Or turfed out. Remember Yanis Varoufakis?

So what else happened at Davos last week? I’m sure, being an international finance centre, the coffee houses of St Peter Port must be all abuzz with discussion of the week’s events, no?

In actual fact, I didn’t follow it either, but I did see a really interesting social post from EY at Davos. Ordinarily I’m cynical about such formulaic marketing from the Big Four, but I thought it was an unusually thought-provoking one. The new and old CEO of EY speaking to camera sharing their ‘four for 2024’, suitably togged up outside in the snow, assumedly to demonstrate that, while they may have been at Davos, they were still ‘of the people’. Indeed, they slightly overdid this point, talking about the 1.1bn. of ‘our people’ projected to lose their jobs due to AI. That’s some workforce. But it got me thinking about my choices…

AI, yes. Plus war, recession and climate. That’s my four. #4424.

Not a cheerful list to start the year.

But how do they compare to the key themes to come out of Davos? According to Reuters, it was… tech, war, climate, recession. I’m sat here high-fiving myself. Except on closer inspection, that was a report on Davos 2023. Bother. But serendipitously, and I do not make this up, as I write these lines my inbox receives an email from the World Economic Foundation (I subscribe to lots of garbage newsletters) telling me of the Davos 2024 ‘Four Key Takeaways’ (this being 2024, lists need to be four points long, not five, not three).

And I can happily report, the official top four takeaways were: 1) Global Cooperation and Security ‘Leaders need to pull together’ (war); 2) A New Model for Growth, ‘Projections are not destiny’ (recession); 3) AI: Opportunities and Challenges, ‘Humans are going to have better tools’ (AI); and 4) Tackling Climate Change and Building New Energy Systems, ‘Urgency is our only saviour’ (climate).

Check out the big brain on Brad! What prescience! No wonder the States is never off the phone asking me for advice.

Honestly, I didn’t cheat. I posted my list an hour before the email. Don’t believe me? I can show you the meta data. Seriously, more people should read this column. It’s clearly quality stuff.

But as to the contents of the list? It’s not cheery stuff, is it?

War. 30 years after the fall of the Berlin Wall, the world looks a very insecure place. It’s difficult to see an endgame in the Ukraine. I suggested last summer that stalemate looked a firm favourite, but the odds now seem to be shortening on a positive outcome for Russia.

Recession. The US is a special case but in Europe, Germany’s there, the UK looks like it’s joining in, the tapered tightening effect of monetary policy will feed through into 2024. The issue for debate is whether or not subdued conditions trigger corporate debt defaults and with it lay-offs. In many ways it could be cathartic if that were so, but only an economist would write such a thing. Are we going to dodge it over here? I don’t think so, so best not count too much on buoyant corporate tax receipts. This isn’t one of those stability arguments, safe port in a storm, its general economic downturns. Let’s leave the secular shrinkage of the finance sector for another day.

Climate. Yes, the climate juggernaut rolls on. It has to really and frankly I’m glad. Domestically, for us it’s a case of the States figuring out a proportionate, practical path to net zero and when and how the GFSC implements the new global rules from the ISSB. Obviously, I have views on both. Always happy to share.

And finally AI. If you haven’t tried it, it’s a useful tool. And applications are mushrooming hourly. Could it be the tech that unlocks the productivity growth in services that we need to fund both our ageing societies and increasing living standards for the rest of us? It just might. I’ve used a few apps now and I’m beginning to see it. But there’s going to be pain on the way. I’m thinking those 1.1 billion jobs of our people. Locally, compliance reporting and AML are surely ripe for a dose of it. Perhaps it’ll be the magic wand that lessens the regulatory burden and provides that desperately-needed boost to our competitiveness. Let’s hope so eh? If only to end on a brighter note.

So that’s my four for 2024. What’s yours? I wonder what Javier’s four might be?