As a 10-year-old boy I remember the turn of the century very clearly. Not just the rush to ensure all computers were “Y2K compliant”, the devastation accompanying the Proteas’ World Cup semifinal draw or the thrill of playing Fifa 99 — headlined by Dennis Bergkamp. But also the societal zeitgeist.
SA faced many challenges — indeed, many of my friends’ families emigrated as a result — but the mood was optimistic. Nelson Mandela had just completed his term as president, the economy was growing, and there was much about which one could be positive.
Someone published a small navy booklet filled with good news facts about the country, which I memorised by heart. “Did you know that Johannesburg has the third cleanest drinking water in the world? SA is the world’s top producer of gold!” I would proselytise my friends.
The world at large seemed to be in its most stable state. While technological innovation in the material world had stalled, computers and the internet were in their nascency. With the fall of the Soviet Union a decade in the past, we had reached the “end of history”. The liberal world order was at its peak, and that was comforting. On both a macroeconomic and an individual level, the rules for progress were clear. Stability and order. Relative calm.
— Anger and angst are the near universal sentiments.
A quarter way through the 21st century it is an apt time to reflect. Political polarisation and popularism, societal divisions, wars in Africa, Europe and the Middle East; these are the salient features of our time. Macroeconomically, countries are saddled with debt, bond yields are high and inflation — albeit not at the heights of a few years ago — has made a return. I could, but need not, go on. Anger and angst are the near universal sentiments.
Measuring progress with data
What of the data? Just this century the world’s real GDP has doubled. In other words, the value of the goods and services produced by humanity is twice what it was 25 years ago. The world’s population has grown from 6-billion to 8-billion over the same period, representing an increase of one third. Therefore, GDP per capita has increased by half.
In 2000 the percentage of the population living in extreme poverty (less than three 2021 dollars) was more than 36%. Today it is less than 10% percent. Life expectancy at birth is up by almost six years. The rate of homicides is down by a fifth. Deaths from natural disasters have decreased by 35% as a proportion of the population at risk.
Even in SA GDP per capita is up from 2000 (though it is below 2007 levels, which is a shocking indictment). I could go on — and here there is a need. Often, perhaps mostly, the dominant narrative is not in line with the facts. This can lead, as it does in this case, to unwarranted pessimism.
Balancing optimism and realism
This is not to say that we should be unrealistically optimistic; it is not a law of nature that “the arc of history bends towards justice”. When progress is reversed we should not turn a blind eye, or don rose-tinted glasses (to maintain the metaphor). However, it is helpful to view current events with the perspective of their historical context.
This is the first of what will hopefully be a fortnightly column, exploring actuarially adjacent themes and guided by unbiased data and facts. My inspiration is the late Dr Hans Rosling, who was a master at explaining and communicating historical data and trends to inform, and entertain, his audience. I look forward to surprising — and also unsurprising — discoveries.
• Freidus, a consulting actuary, is cofounder of Five2two Analytics.
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