Gordian Knots of the 21st Century

Abstract:     
In this paper we identify four Gordian Knots of the global economy in the 21st century, that is 1) limits to growth: scarce energy and natural disasters, 2) aging of the developed world and the 21st century as the age of migration, 3) the rise of China and the failure of democracy, and 4) rising significance of global financial markets and emergence of new global players.

We describe what policies are adopted at international and European level to deal with these Gordian knots and assess, when it can be done, what are the strengths and flaws of these polices. Finally we suggest "outside-the-box" Alexandrian solutions to some of these problems.

We argue that while the natural resources constitute limits to growth in the medium run, the humanity ability to develop disruptive innovations will challenge those limits in the long run. We therefore call on the Club of Rome to broaden its discussion as what appeared as the main Gordian knot of the 21st century some 30 years ago should now be seen in a broader context. Europe has immense challenges and opportunities lying ahead. It is high time that the Club of Rome warns politicians which so diligently take Europe towards the dead end called global marginalization. Lack of strategic vision, national patriotism, protectionism, inability to see developing countries as legitimate global players. All these strategic weaknesses will strike back and will lead to weak Europe, unable to play an important global role in the 21st century. It is not to late avoid this gloomy scenario.

Keywords: growth limits, aging, migration, Chinafrica, democracy, sovereign wealth funds

JEL Classifications: F02, F22, F33, G15, J11, O13

Working Paper Series