Political Economy of Tomorrow, by Marc Chandler

Overview

There is a late 19th-century journalist-cum-presidential adviser, Charles Conant, whom I introduced in my first book, Making Sense of the Dollar. 
Conant was part of the broad discourse during that period that recognized that a profound challenge of capitalism grew out of its strengths.  It produced more wealth than it could successfully manage. Conant offered a far-reaching vision, which dominated the US foreign economic agenda for decades.    

I pick up Conant's theme and analysis to understand the post-WWII period through the Great Financial Crisis.  This is the work of the first half of the book.  The second half of the book focuses are how three sets of relationships are changing to cope with the economic forces that have been unleashed:  women and men, employees and employers, and the citizen and the state.  

Reviews

"Marc Chandler has long been one of Wall Street's masters in calling the short-term moves in capital markets. In The Political Economy of Tomorrow, he gives us a framework for looking at the very long-term. Many of us have fixed economic terms of reference, but this book-without too many numbers and without any Greek letters-gives a new way of trying to understand the way the world is moving. Bretton Woods, and now Reagan-Thatcher have had their day; Chandler helps cut through the uncertainty to look at the third post-war economic paradigm which is now emerging. For many, including me, it will be revelatory."
John Authers, Senior Investment Commentator, Financial Times 

"I have known Marc for many years, and what strikes me about him is how much of an original thinker he is, his ability to connect the dots most people don't see, and his broad vision of the world most people don't have. This book is one more example of his intellectual brilliance."
Sylvia Brasil Coutinho, CEO UBS Bank Brazil

"From the crumbling of the Bretton Woods system to the entry of the renminbi into the SDR, no one has more keenly and continuously chronicled the paths of so many currencies, metals, and markets throughout the globe. Marc Chandler's The Political Economy of Tomorrow is a masterful summary of the political and economic tides that constantly reshape our investment horizons. A "must-read" for global investors and policymakers."
Suzanne Bishopric, Managing Partner, Global Sovereign Advisors; Former Director, Investments, United Nations Joint Staff Pension Fund; Former Treasurer, United Nations"

"Regardless of the reader's background, there is plenty of thoughtful, relevant, and forward-looking material in this book. Chandler puts the idea of surplus capital into historical context, showing that the post-2008 environment is far from new. Ergo, the political economy calculus also is far from new. The book also provides an excellent roadmap to understand whether or not policymakers are meeting the challenges posed by the success of capitalism. His 2009 book Making Sense of the Dollar was equally out of the consensus. I expect this book will be just as prescient."
David Abramson, former Head of Research and Managing Editor at BCA Research, lecturer in economics and international finance at McGill University

"A masterly account of the tectonic shifts that shape our economic, social, and political future. At a time of great change and political upheaval, a book that offers perspective, direction, and hope."
Zoltan Pozsar, FID Global Strategy and Economics

"In Political Economy of Tomorrow, Marc Chandler tackles several of the critical societal issues of our day...with a twist. In first laying out his understanding of our post-WWII global political economy and then providing us an especially insightful framework for what might be, Marc presents a piece that is at once smart, thoughtful, and provocative. A must-read."
Bill Lipschutz, CIO of Hathersage Capital Management

Reader Reviews

1. Chandler's latest book is a refreshing and innovative surprise. The author takes a number of well-worn themes from the fields of twentieth-century financial history and sociology and uses some established narratives to weave a totally new cloth. The book, divided into two parts, covers the main areas of both disciplines, skillfully incorporating a vast body of knowledge into a slim volume. Most of the subject matter will come as little surprise to students and enthusiasts of both areas. (Chandler does, however, present his own post-Marxist view on capital surplus, regarding it as a weakness rather than a strength of the capitalist system). Where the text truly soars, however, is the linkage between the interpretation of financial events and the sociological repercussions. Here Chandler enters original territory.

Tracing the history of twentieth-century finance, Chandler offers an eloquent and elegantly written outline of the key landmarks, from Bretton Woods, the post War order stagflation and commodity crises, leading to a new social contract to reflect broken labor capital mobility and financial innovation. To help guide the reader, the author uses a minor economist, Charles Conant, and the essays published from 1893-1903. This clever device keeps the plotline moving and ties together the underlying principles.

Now comes the brilliant new perspective: Chandler knits together the outcomes of these developments to the real world we live in. Assume that increased technology results in great manufacturing output, yet with less labor and capital needed for production. Those changes affect every aspect of everyday life: the nuclear family, government transfer payments, gender, and women in the workplace, pension structures like defined benefits and defined contribution plans. On an immediately recognizable level, we have witnessed dramatic evolutions in education, childcare, work culture and participation, demographics, and an aging population. In terms of recent cutting edge themes, Chandler explores wealth disparity and inequality, the so-called gig economy, the shared economy, and networking.

Does that all sound a little like a sociology textbook? Yes, it is, and an excellent and readable one too. But this book goes far beyond that, Think of a string of beads, a necklace. All these tenets of sociology represent the beads, but the string, which connects them, is the most interesting part. It is a remarkable achievement to compile a history of everything, spanning a century, but Chandler manages the feat.

2.  One of the most prominent voices in foreign-exchange, Marc Chandler is well-known on Wall Street as a thinker who can re-examine markets in new, even counter-intuitive ways.
His latest book is no different: what if the problem with economics isn't scarcity, but surplus? 
We see this today, as global rates are at historical lows because there simply aren't enough productive uses of capital to go around -- the supply of capital greatly outstrips demand. Both the Bretton Woods and Reagan/Thatcher eras provided their own solutions to the problem of surplus capital; the post-Great Recession response has yet to fully present itself. Drawing on some of the great contrarian economic thinkers of the past 120 years, Chandler speculates on the new paradigm and also what it will mean for our work-lives, home-lives, and relationships to the state.

The book is thought-provoking and suggests several actionable themes for both institutional and retail investors.

3. This book takes a different approach to re-framing the monumental changes impacting humanity. Most importantly it brings a palpable understanding that our very basic economic understanding of scarcity, where supply and demand concepts shape our solutions, are just plain wrong. It also exposes the responsibility we have to help define what comes next. Excellent quick read.