This man pointed to a troubling trend last year, too.

Photographer: Fred Dufour/AFP/Getty Images

Seven Troubling Trends for 2015

Noah Smith is a Bloomberg View columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
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By nature I’m an optimist. I love stories like this one from Vox, entitled “26 charts and maps that show the world is getting much, much better.” And it’s true -- crime, poverty, war and disease, humanity’s main nemeses, are all way down, even as technology continues to make the world a better place.

But optimism is a dangerous drug. Too much of it, and we can lose the will to fight the problems that still exist. Focusing on the good can distract us from areas that need work. So even though the world is getting better overall, here is a list of seven worrying trends that could use some attention:

No. 1. Democracy is on the back foot.

In 1992, Francis Fukuyama published “The End of History and the Last Man,” declaring that capitalism and democracy had won the battle of ideas. And until the mid-2000s, history seemed to be obliging -- the percentage of democracies in the world rose and rose.

Then it stopped rising. Since 2007, the think tank Freedom House reports that the number of “free countries” in the world has fallen. In middle-income countries such as Turkey, Hungary, Thailand and Russia, a fusion of quasi-capitalism and authoritarianism has gained currency at the expense of the values espoused by the West during the Cold War. Meanwhile, in rich countries such as the U.S. and Japan, there have been worrying increases in executive power and government secrecy.

No. 2. Household income is still way down in rich countries.

Median household income isn't a perfect measure of standard of living. Household size decreases as people have fewer children and as fewer people get married. Also, advances in technology make life better in ways that the official numbers don’t capture, because these improvements are not counted in the official inflation rate. Finally, an influx of low-skilled immigrants changes the composition of the workforce. But even so, it is a worrying sign that real median household income in the U.S. is way down since the late 1990s:

Progress in American living standards is probably continuing, but at a much slower pace than in the 20th century. Meanwhile, in Japan and much of Europe, the situation is worse.

No. 3. The rate of new business formation is falling.

In a landmark 2014 paper, economists Ryan Decker, John Haltiwanger, Ron Jarmin and Javier Miranda showed that there has been a serious decline in business dynamism in the U.S. Simply put, fewer and fewer Americans are starting new businesses. Here is a graph from their paper:

Until about 2000, the drop was mainly caused by a reduction in small, family owned stores, driven by the expansion of chains and franchises. But in the past 15 years, the rate of new tech and high-growth businesses has been declining. This can only bode ill for the U.S. economy. Whether this is the result of increased regulation or the natural result of a technological slowdown remains to be seen.

No. 4. Wealth inequality is on the rise.

With the publication of Thomas Piketty’s “Capital in the 21st Century,” more and more attention has been focused on the spectacular increase of wealth inequality. Here, courtesy of economists Emmanual Saez and Gabriel Zucman, is a famous graph of the wealth share of the top 1 percent, 0.1 percent and 0.01 percent of U.S. households:

Why do we care about wealth inequality? Many economists and writers have come up with reasons to fear the trend, but I can’t help feeling that University of Chicago finance professor and blogger John Cochrane is right when he says that it’s all about political power:

[M]ost inequality warriors get down to the real problem they see: money and politics. They think money is corrupting politics, and they want to take away the money to purify the politics. As Berkeley economist Emmanuel Saez wrote for his 2013 Arrow lecture at Stanford University: “top income shares matter” because the “surge in top incomes gives top earners more ability to influence [the] political process.”

A critique of rent-seeking and political cronyism is well taken, and echoes from the left to libertarians.

Whether this is the reason to fear wealth inequality, the trend to most people is simply flat-out disquieting. It seems to signal that something isn't working in our economy, even if we don’t know what that something is.

No. 5. Obesity is still rising.

The epidemic of obesity has gone global. Rates continue to rise in rich and poor countries alike, and by 2030 there are projected to be more than a billion obese people on the planet. Obesity causes huge medical costs, but beyond that, the popularity of diet and exercise products shows that most people dislike being obese. It isn't yet clear who or what has the power to stop the relentless rise of excess fatness.

No. 6. Measles and whooping cough are back.

In the U.S., the antivaccination movement continues to spread its dubious pseudoscience, and it’s winning. Vaccination rates have fallen, and as a predictable result, preventable disease is mounting a comeback. As Sarah Mimms of National Journal reports, measles, which had all but vanished as of the year 2000, is now at a 20-year high, with 15 separate outbreaks in the first five months of 2014 alone, and whooping cough is up by 24 percent. This is a case of a rich, complacent culture shooting itself in the foot -- except it’s children who are suffering as a result of adult foolishness.

No. 7. Antibiotic-resistant bacteria are on the rise.

I saved the most worrying trend for last. The invention of antibiotics freed humanity from much of the scourge of communicable disease. It also made widespread surgery possible. It wouldn't be an exaggeration to say that our entire medical system depends on this one miracle technology.

And that technology is losing its effect. Due to overuse of antibiotics by doctors and by agribusiness, antibiotic resistance is rising. The Centers for Disease Control and Prevention are on the case, but so far little has been done about overprescription in humans. On the agribusiness front there has been a bit of progress – a few firms have heeded the call to voluntarily stop dousing their animals in antibiotics, and hopefully new Food and Drug Administration regulations will help. 

Again, let me reiterate that these negative trends are not reasons to think that the world is going to the dogs, or that modern civilization has failed. Overall, most of the global trends are positive, and modern civilization continues to be a smashing success. But at any point in time, there will be both negative and positive trends in the world, and we need to focus attention and effort on stopping the negative ones as they inevitably pop up. The world doesn’t get better automatically -- it requires constant effort by all of us.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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Noah Smith at

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