Scramble for supermacy: the world in 2024

Last year we wrote that 2023 would be a year of ‘war by other means’, with multi-spectrum strategic competition between the big powers across trade, finance, technology, as well as military domains.  And this is what we have seen over the past year: friend-shoring and economic de-risking activity is evident in the data, with trade, investment, and technology flows being shaped by geopolitical alignment. 

As we look into 2024, we think the year ahead will be characterised by increasingly sharp, visceral competition – distinct from the norms established over the past few decades.  Multi-spectrum strategic competition between geopolitical rivals will intensify, and will be accompanied by: increasing economic competition between friends; political competition in a year of consequential elections; competition for dominance between monetary and fiscal policy; and growing competition between labour and capital as labour markets tighten. 

Politics will continue to be at the centre of global developments in 2024, reinforced by economic tensions: sluggish growth, high debt levels and sticky rates, and cost of living pressures.

The world may be due a quiet year after a succession of crises and shocks: pandemics, wars, inflation, and so on.  This is possible: geopolitical guardrails may be established; immaculate disinflation may occur; the political centre may hold; and productivity growth may strengthen.  But the strategic dynamics at work make a quiet year (unfortunately) unlikely.

The full note is available at: https://davidskilling.substack.com/p/scramble-for-supremacy-the-world