Economists, don’t ignore social trends. They can upend your forecasts

If people just hate and mistrust each other, how will the economy function anyway?

It is that time of the year where we look forward to bidding goodbye to the Old Year 2024 and welcoming the New Year 2025. The economics community gets busy giving their outlook for 2025 and beyond. Reading through economic outlooks, one realizes that economists are ignoring a major risk confronting the World Economy: Rising cases of hate crimes and genocide.

In the United States, number of hate crime offenses has increased from nearly 7000 -8000 throughout 1990s. The number of hate crime had touched 10000 levels in 2001 due to the 9/11 attack and declined to near 6000 levels. Since 2016, according to FBI data, the number of hate crimes particularly in last four years have increased every year to touch 12500 levels in 2023.

UK follows suit

Leadership Conference Education Fund, a civil and human rights organisation in US on its State of Hate report notes that hate crimes rise typically during elections. We don’t have the data for 2024 yet but most likely the numbers are likely to remain high. The data from UK shows number of hate crime incidents declined in year ending March-2024 compared to March-2023 but has tripled over last 10 years.

Source: (FBI)

United Nations warns that there are “alarming trends of growing xenophobia, racism and intolerance, violent misogyny, antisemitism and anti-Muslim hatred around the world”. UN puts the blame of rising hate crimes mainly on hate speeches which “has become one of the most common ways of spreading divisive rhetoric on a global scale”. It also adds that hate speeches and hatred is not new but its scale and impact have been amplified by new communications technologies.  We see it all around us how hate speeches become viral on social media platforms.

Nature of leadership matters

The United Nations does not mention another important factor for rising hatred and hate speeches. This factor is rise of strongmen leaders across the world. These speeches and sentiments are often ignited by the strongmen leaders and their followers. These strongmen leaders either usurp power by force or are ironically elected to power by people themselves. People elect strongmen leaders thinking they will revive their country only to realise later that not just there is irreversible damage but also their democratic powers have been taken away, perhaps for good. It is even more ironic to see women elect such strongmen leaders as these leaders even rob them of basic dignity.

The problems don’t just end with strongmen delivering hate speeches but they lead to spectrum of huge societal problems. António Guterres, United Nations Secretary-General noted that “Hate speech is an alarm bell - the louder it rings, the greater the threat of genocide. It precedes and promotes violence.”

Genocide Watch is an organisation which has been established to predict, prevent, stop, and punish genocide and other forms of mass murder. Genocide has prepared 10 stages of genocide and also has a world map which ranks different countries on their respective stage of genocide. It is a very worrisome map which shows how both autocracies and democracies are in danger to committing genocide in near future. The annual reports of the organisation tell us how the world looks to be in a very troublesome spot going ahead.

Another organisation named ‘Early Warning Project’ uses state-of-the-art quantitative and qualitative methods to predict mass atrocities around the world. The world map by Early Warning Project gives you an equally depressing picture of the world.

Economists shouldn’t ignore social trends

Given this trend, it’s really worrisome that economists ignore these major risks of rising hate, genocide and atrocities across the world. One hardly sees international organisations or think-tanks mention the grave risks faced by humanity in their economic outlooks and research. If people just hate and mistrust each other, how will the economy function anyway? These concerns are no more limited to Africa or select countries but are spreading to developed economies as well. So it is not anymore just a basket case but a major issue facing the world economy.

One can argue that economists should stick to economics and stay away from politics. This is a narrow approach of looking at economics and extremely dangerous given today’s times. The subject of economics developed as an interdisciplinary field of politics, philosophy and economics and then became super-specialised to become today’s economics. Economists need to go back to their roots and argue why and how humanity faces significant risks ahead because of lack of humanity. Economists occupy a special place in society as they write and talk across different forums. They should join forces with all other human-watch organisations to save both humanity and the economy. Economic advisers who lamely serve respective governments that incite hatred and violence should understand their disservice to humanity. The history of this period will judge all such feigned ignorance harshly.

So, for 2025, one eternal hope and prayer is for less hate and more peace. Digging the past and constantly riling people will only lead to more graves in future. We have ample lessons and experiences from history on how all these events play out. This time of the year people give recommendations of movies, books, songs etc. My recommendation would be to hear the song “Heal the World” composed by Michael Jackson. The music and lyrics of the song remains highly relevant despite being composed 35 years ago.