TL;DR: real interest rates have been falling for as long as we have records (going back to the 15th century) once you average out some cyclical volatility. Implication is that people waiting for interest rates to bounce back up significantly from their post-great-recession, post-QE lows should probably not expect them to return to anywhere near their historical levels.
As a personal saver/investor, the upshot for me is that just because a certain level of retirement savings would have been enough to generate a comfortable income in historical simulations, doesn't mean that it will necessarily be enough to support me in the ultra-low-interest-rates future. So I should probably save more before retiring than I otherwise might.
I'm not sure why I'm being downvoted? This article is about real the return component, aka usury, of interest rates on T-bills, and by extension savings accounts. The return rates of private equities (stocks) is not tied to this number.
I didn’t downvote you, but reading your comment it looked like you treated interest-based incomes as somehow morally “bad” (at least judging by your use of the term “usury”) and you contrasted that with stock-exchanged-based incomes which, as a result, were painted in a morally “better” light. There were probably some HN-ers who didn’t like that emotional approach.
Now, your opinion in itself isn’t wrong, it’s what the majority of long-term investors suggest, afaik, but I personally think that those investors (including Buffet) have been “blinded” by the exceptional economical and political run of the US as a country in the last 70 or so years. Had they been active at the start of the 20th century and had they invested in the Russian, Chinese or even German stock-exchange their funds would have been completely wiped out by now, after they themselves would have probably died horrific deaths because of the capitals they held (the case in Russia after 1917 and China after 1948).
It is unfortunate that the term has both moral character but also a precise meaning that is correct here -- excessive interest in excess of the risk premium. There is unfortunately no common / non-technical word that conveys that meaning (excessive interest beyond risks).
The savings account interest rate is collected usury--as an FDIC insured deposit account the risk to the account holder is precisely zero, yet a return is nevertheless extracted. That's usury as the term was coined to mean, minus the historical moralistic baggage.
My dictionary defines it as "the illegal action or practice of lending money at unreasonably high rates of interest." It gives no alternate definition. If that isn't what you meant then I think you should use a different word.
it Is what I meant, except for the illegal part which I believe is a bad definition here, and emphasis on the fact that “unreasonable” is up for debate. In many circles any real interest rate (meaning beyond the risk premium) is an economic rent and therefore unreasonable and correctly described as usury. Whether it is legal or not depends on the jurisdiction.
The meaning of a word is not guaranteed to track its origins.
Communication is a two-player cooperative game with a complicated set of shared rules. If you want to win, follow those rules, don’t try to come up with better ones.
Currently I would say the interest rate of an FDIC insured deposit account is imprecisely zero. For example, one of the financial institutions I use pays 0.03%.
Also, the real rate is presumably negative, in the US and I would think Europe. So usury according to your definition doesn't seem applicable.
I didn't downvote you, but it would be reasonable to downvote you simply because your original sentence doesn't express a full idea. You could have added another sentence or two to explain what the advantage of the stock market is. However, your follow up also seems inaccurate:
"interest rates on T-bills"
The article covers a period of 700 years, so clearly more than T-bills are under discussion.
- You're selling products/services to more people (either internal growth or exporting more)
- You're being more efficient
Localized growths might happen as in a new product that people buy (or is replacing an old product)
Now, in a world that seems to be hitting a population limit in the next years, forecasted real growth is anything but obvious. Efficiency can improve but there's a ceiling.
Higher consumption seems locked in since everyone wants, and believes they can get, a middle class life.
Efficiency has to go into overdrive or we overheat the planet. But, by conventional measures of output, efficiency can be recessionary. Phones and phone service will continue to decline in cost long after the market is saturated.
We are headed for either a marvelous soft landing enabled by efficiency and population stability, or we are headed for a crunch with a return to mass starvation, an energy crisis, and economic crisis in general. It's really not obvious which will happen.
The original observation involved the increased efficiency of extracting coal, and the subsequent boom in its use thanks to the drop in price, but can be generalized.
Basic thing was that as the price of coal dropped, because more of it was extracted than before, uses that previous was considered unprofitable were put into practice.
Adding to your coal example, let’s suppose that we somehow magically make all cars run on solar or renewable energy that has costs aproaching 0. What will most likely happen is that people will drive even more, we will have to build exponentially more roads (building a road is pretty polluting by itself, in terms of the materials being used) and the ecosystem will be even more threatened compared to now.
Feedback effects are often important, but can be overstated - for instance with the concept of risk homeostasis, or the Laffer curve. While reality is often counterintuitive, that doesn't mean the pattern "X causes -X or more" is automatically true.
> Efficiency has to go into overdrive or we overheat the planet.
Just the efficiency of burning fossil fuels. We can afford to be wasteful with eg solar energy. (Efficiency is still great, but not required to avoid overheating.)
We need to actually be net negative in total with usage of all energy sources at this point. We're already well into the overshoot, so we need to be actively cooling the planet.
Either sinking carbon, converting other atmospheric GHGs to less harmful forms, or radiating energy into space outside the absorption bands of the atmosphere.
Real interest rates are basically the "price of capital". The question is: is it the demand side that is weakening (i.e. there are fewer and fewer worthwhile projects with reasonable returns) or is it the supply of capital that has grown (i.e. more and more people seeking to invest their capital)?
1. More people (as you state), which is likely to happen in a growing population with wealth equality.
2. More capital per person engaged in the capital market, also grows with population but at a slower rate -- this is a more likely outcome in markets overlapping areas of high wealth inequality.
If you have 3X increase in the amount of capital seeking funds, the risk aversion of the median participant is going to be very different in each of those scenarios, and therefore dictate relative rates.
These days, the common wisdom is to pay into a huge fund of money (401(k) and similar into index funds) which mitigates a lot of the individual risk to investors.
Capital intensity (aka "capital deepening") is the is the ratio of capital needed in relation to other factors of production. The long term trend seems to be that capital intensity is growing.
Increasing capital intensity increases the the productivity of labor even if the worker is not "more productive" in the sense the term is commonly understood. Factory that replaces 1000 workers in a manufacturing line with 10 workers looking monitors all day long higher labor productivity because they produce more GDP per hour worked. This is probably one of the reasons why productivity increase is not transferring fully into wage increase (wage share is decreasing).
Capital intensity growing would increase the return of capital if everything else would stay the same. But if people are paid less, they consume less. If the household final consumption expenditure deceases, government final consumption expenditure (or NGO's) must take the slack or final demand decreases and capital gains decrease.
In a closed economy (or import export balance): wages + other benefits + taxes => demand that produces capital gains in the private sectors.
It's impossible to say how it turns to be unless you know the relevant coefficients.
There's no reason to choose. This is the logical conclusion of runaway inequality: less consumption and oversupply of capital (aka financialization). In real terms, outside of the big three (education, real estate, and healthcare) we're seeing a great deal of demand destruction. Millennials are buying less of everything -- food, entertainment, clothing, transportation, and even babies. All the while the labor pool shrinks and shrinks ensuring the low demand becomes structural. On the supply side increasingly concentrated capital has no choice but to chase after any and every growth opportunity no matter how wacky. The whole thing is self-reinforcing in a kind of three body problem: low effective wages and big debts (student loans, mortgages) drive less consumption and low interest rate drive increasing asset prices drive wacky investments in bitcoin/real estate/education/healthcare ... which drive low effective wages and big debts.
All of this was predicted by Marx and isn't terribly surprising. The surprising thing here is that the new peasants are able to consume so little without owning land. The price of food and clothing and a lot of consumer technology has collapsed. Seems like most entertainment is either free or Netflix-style subscription (too cheap to meter). By some estimates [0] Millenials are spending just $20/day! The crashing birth rates are the future's problem and the growing political unrest and populism is unlikely to lead to anything but twitter fights. (It's possible it might lead to thermonuclear war but we're assuming nobody's stupid enough to press the button.) In the end there's really no need for global communist revolution if we can all get fat off junk food and keep each other entertained with youtube.
Frequently when I read a comment where Marx is quoted or referenced, I struggle to understand the point.
The article discusses a trend that has lasted longer than 6 centuries. Are you claiming this is due to 600 years of runaway inequality?
How does it make any sense to claim Marx predicted this since he was born more than 400 years later than the start of the trend described in the article?
>>By some estimates [0] Millenials are spending just $20/day!
You may have missed the word "less": "By some estimates, Millenials are spending $20/day less than they were in 2016." The Gallop Poll[1] referenced in the Business Insider article shows that avg. spending by adults aged 18-29 was $93 in 2008 and $74 in 2016.
Your comments were somewhat interesting until you got 'this is as marx predicated'. Yeah, you'll have to be more specific about what exactly he predicted and how it matches today. I think today's world would be very surprising to the world of 25 years ago.
One way to test this is with data that has sufficient random walks (say for example daily open and close prices over several decades) and use the additive noise method (ANM)[0] to determine if noise from one correlator affects noise in the other (and hence one causes the other).
Both are true. Wealth inequality will naturally lead to an overabundance of capital (rich people with more money who invest more than they spend) and weakening aggregate demand (poor people spend less because they have less money).
This is an interesting question but I think you've got the terms reversed. This question should read:
"Real interest rates are basically the "return on capital". The question is: is it the supply side that is weakening (i.e. there are fewer and fewer worthwhile projects with reasonable returns) or is it the demand for capital that has grown (i.e. more and more people seeking to invest their savings in capital)?"
I wonder if the pension funds, 401Ks, and large retirement savings of the baby boom generation is playing a role. There is a lot of supply for investment out there today.
Now the children of the baby boom are having a hard time saving. What will happen in 30 years when they all have little saved to retire on (or invest with)? Might be a different situation.
> there are fewer and fewer worthwhile projects with reasonable returns
Or the projects now require less capital?
The industrial revolution relied on machines and processes that were incredibly capital intensive. In today's dollars, you could easily spend millions of dollars just to get started.
In the information revolution, a thousand dollar computer can set you down to road to a very successful enterprise.
My $0.02: equilibrium interest rates represent the risk market participants are willing to pay for/be paid for funds to be locked up in other ventures.
Two factors probably drive a long-term overall decrease in this rate: improvements to the standard of living in people able to engage in that market drives additional funds into that market (possible in times of extreme inequality or in times of equality), and external decreases in risk (trust in the rule of law, insurance, etc.).
If we can consume both at better quality and more quantity now, there is less incentive to invest in the future, and thus economic growth matches population.
I wonder what Thomas Pickety would say about this. If I understand correctly, this would mean that r is tending towards zero, while g may or may not be affected, but it could conceivably lead to a long term r<g situation, meaning more equality in society.
It's hard to imagine how. I think more likely g<r but it will also stagnate, leading to instability of the entire system. I suppose r<g could be the case if economic growth is no longer driven by capital investment, perhaps because it is too costly to figure out where to allocate capital to get returns. But such a situation is so different from the past that you ought not call it capitalism anymore.
I don't think capitalism is at it's structural limit quite yet. The world is still yet big enough that there are markets to develop and capture.
I agree that capitalism is not at its structural limit, I imagine within the next 50 years ideological descriptions of resource management (capitalism, communism, syndicalism, etc.) will begin disappearing in favor of something like "Keep feeding the replicators." The human and environmental costs of competing economic ideologies don't have much tangible payoff, and discussions of capital are illusory compared to real measures of human happiness.
If a guy was like "I can't grow grain here but with a small material surplus the people here can live happily and have families and exhaust the local mineral reserve for whomever needs it," at least to me the answer would be, "Provide them with a small material surplus."
I program computers but would have to take a pay cut and assume large debts, etc., to begin operating a fruit orchard and wood mill. I might become happier, but the economic value of that decision and whether or not I would survive it economically is unclear. However, this seems to have nothing to do with economic systems, at least to me.
Yeah, I think "r > g" is more likely. The article talks about the "risk-free rate" (ie. bonds/CD's etc) which is not really "r" (which could vary widely for individuals/groups/institutions). The "risk-free rate" seems like it has alot more in common with g than r.
I think the problem is that our nations are having globally is that "g" (refers to the growth in the national income) is declining, which to me says that governments/nations are becoming increasingly inefficient at allocating capital overall compared to the likes of rentec, two-sigma, etc.(especially as capital becomes less sticky to a particular nation).
The stagnation represents the end of peak globalism, right before it flips back to growing nationalism (underway now). This cycle will continue to repeat. Increased nationalism will bring about more war, general national conflict and invention. The easy gains from globalism for this cycle have been mostly tapped out. Tension and competition between nations will spur a new wave of innovation. Just as one example, the US and China will increasingly race each other for every advantage they can manage. Globalism is increased tranquility and a lowering of friction at a cost of dynamism, nationalism is a nasty irritant that produces pearls at a cost of stability and peacefulness. Despite the desire by some to view nationalism as evil, it's as natural a part of the cycle as globalism, and just as required. The nationalism flip occurs because as you get toward the end of the globalism expansion cycle, the entropy hits lows, the possible gains from the globalism cycle get exhausted, and the people that were comforted by the prior gains, grow restless in the stagnation. High levels of entropy are a requirement for great technological leaps forward and great societal change, as people prefer to go to sleep in their comfort otherwise, stagnating. Globalism spreads comfort (distributes gains - technological, process, etc - made by some nations across most nations), nationalism riles survival responses and increases desperation.
The argument is for a trend far beyond that; that perhaps those cycles do matter but there is a 700 year trend in one direction.
Even the globalism to nationalism trends that drove both world wars (after common wisdom thought them impossible since economies were too linked) is really a small factor, at least in the analysis of the article.
I don't even think that your analysis is correct in a broader context. The fall of the Roman Empire and the rise of manoralism (and constant conflict in Europe) was not innovation and didn't particularly drive it. The staunch nationalism of the Chinese empire didn't drive innovation (though it did mean less conflict).
WWII may have held in it (or pushed forward) the seeds of much great innovation - rocket science, computing, plastics, antibiotics, nuclear science, etc. But what innovation would have occurred without it? What would the lives lost have contributed?
I don't think it's fair to say that rapid change is only possible in such an environment of conflict. Great advances occurred in the interwar years, too.
It's not just the active wars of nationalism that unleash waves of invention, it's the cultural atmosphere, the lingering of such over all nations. At high levels of nationalism you can feel the tension in the air across the globe, it alters how people behave and how they think.
Nations stop cooperating as much, and start competing with each other in an aggressive manner more. That's the core of what spurs the increased invention, rather than war specifically. War plausibly can prompt and enable a short, unsustainable, burst of heightened levels of invention.
WW2, as an atmospheric, a cultural change agent, didn't just go away when WW2 ended. It's reasonable to consider that the impact it had on people would last for decades. For the generation or two that primarily lived it, it permanently changed how they think and view the world.
Most of the great advances we've enjoyed post WW2, were sparked in the 20 or 30 years after WW2. Globalism spread those advances and refined them; which is what we've been mostly doing since the collapse of the USSR in the early 1980s after oil imploded. This cycle of globalism began somewhere between the late 1970s and mid 1980s.
edit: to add to my opinion here - I view the invention that occurs under nationalism vs globalism, as tall spikes vs low gentle waves. Invention doesn't cease under globalism, the nature of it changes. Nationalism will deliver intense blunt trauma invention, that may be impossible under other circumstances and or require a far longer timeline. If it's 1960-1965 and you tell the US Government they can acquire an immense leg up on the USSR by plowing $10 billion into some focused great technological leap forward attempt, they're probably going to do it. That's the application of blunt trauma to technological progress. The difference between: we should consider doing XYZ thing, versus: we must do XYZ thing and do it now. Would the modern superpower version of the US Government - eg in ~1994-2004 at the height of its superpower status vs other nations - do projects like that? I'm skeptical the solitary superpower version of the US would create the Internet or go to the moon. In the next 20 years, in heightened nationalistic competition with China, I think you're going to see a revival of that spirit.
I don't think nationalism is necessarily hawkish, indicative of survival responses or desperation. I think a little bit of nationalism is a comfort to those participating in it, as indicative of their faith in the wellbeing and character of their compatriots. Especially after a mostly-successful period of global trade marked by a recession, the new nationalism feels a little bit more like the spirit of buying locally, and seeing your neighbors at the market. A person can take pride in their self without feeling a need to do violence to neighbors; why shouldn't nations be the same?
If you're happy in your nation, you want that others in the nation be happy too, as (with tolerance) you abide the same laws and, while economic inequality declines, mostly have access to similar resources. You also want that these others are able to contribute to the economy without coercion into dangerous or objectionable trades, which means more light industry and less tolerance for what the President calls "dumping." That isn't so much a hawkish impulse as the desire to decline a gift which seems too generous, if you will.
Especially after successful global trade and the burgeoning pride in items manufactured locally with global materials, I don't foresee a return to solitary autarchic superpowers. If anything the tendency I'd predict would be more trade in raw materials, and more local labor by those who would once purchase import products, like a kit car economy. 3D printing and stuff are a part of this too.
I can't claim to see the future but that's my opinion on what I'm seeing.
Hypothesis (for which I have zero supporting data): the long term trend towards lower interest rates is the result of the disappearance of a risk premium for lack of liquidity. In other words, you used to have to worry about both losing your money in a long-term way (e.g. the government you loaned it to defaulted, the business you loaned it to went bust) and not having access at the moment you need it (the government/business is solvent, but it's not come due yet, and nobody wants to buy your bond). As financial markets have gotten bigger and more sophisticated, the risk of the latter has diminished. So, eventually the dropping of interest rates will plateau at a non-zero value, reflecting only the risk of outright default, since the risk of nobody wanting to buy just now becomes vanishingly small as the market gets broader and broader (perhaps as broad as the entire planet's saving population).
A related theory i've heard is that of the "central bank bid": the idea that we now know that if asset prices collapse, central banks will step in and buy enough to prop prices up. That means the downside risk of those assets is much less than it would seem, and investors therefore demand lower returns from them.
53 comments
[ 3.5 ms ] story [ 112 ms ] threadAs a personal saver/investor, the upshot for me is that just because a certain level of retirement savings would have been enough to generate a comfortable income in historical simulations, doesn't mean that it will necessarily be enough to support me in the ultra-low-interest-rates future. So I should probably save more before retiring than I otherwise might.
Now, your opinion in itself isn’t wrong, it’s what the majority of long-term investors suggest, afaik, but I personally think that those investors (including Buffet) have been “blinded” by the exceptional economical and political run of the US as a country in the last 70 or so years. Had they been active at the start of the 20th century and had they invested in the Russian, Chinese or even German stock-exchange their funds would have been completely wiped out by now, after they themselves would have probably died horrific deaths because of the capitals they held (the case in Russia after 1917 and China after 1948).
The savings account interest rate is collected usury--as an FDIC insured deposit account the risk to the account holder is precisely zero, yet a return is nevertheless extracted. That's usury as the term was coined to mean, minus the historical moralistic baggage.
Communication is a two-player cooperative game with a complicated set of shared rules. If you want to win, follow those rules, don’t try to come up with better ones.
Also, the real rate is presumably negative, in the US and I would think Europe. So usury according to your definition doesn't seem applicable.
"interest rates on T-bills"
The article covers a period of 700 years, so clearly more than T-bills are under discussion.
- You're selling products/services to more people (either internal growth or exporting more)
- You're being more efficient
Localized growths might happen as in a new product that people buy (or is replacing an old product)
Now, in a world that seems to be hitting a population limit in the next years, forecasted real growth is anything but obvious. Efficiency can improve but there's a ceiling.
Efficiency has to go into overdrive or we overheat the planet. But, by conventional measures of output, efficiency can be recessionary. Phones and phone service will continue to decline in cost long after the market is saturated.
We are headed for either a marvelous soft landing enabled by efficiency and population stability, or we are headed for a crunch with a return to mass starvation, an energy crisis, and economic crisis in general. It's really not obvious which will happen.
https://en.wikipedia.org/wiki/Jevons_paradox
The original observation involved the increased efficiency of extracting coal, and the subsequent boom in its use thanks to the drop in price, but can be generalized.
Basic thing was that as the price of coal dropped, because more of it was extracted than before, uses that previous was considered unprofitable were put into practice.
Just the efficiency of burning fossil fuels. We can afford to be wasteful with eg solar energy. (Efficiency is still great, but not required to avoid overheating.)
Either sinking carbon, converting other atmospheric GHGs to less harmful forms, or radiating energy into space outside the absorption bands of the atmosphere.
1. More people (as you state), which is likely to happen in a growing population with wealth equality.
2. More capital per person engaged in the capital market, also grows with population but at a slower rate -- this is a more likely outcome in markets overlapping areas of high wealth inequality.
If you have 3X increase in the amount of capital seeking funds, the risk aversion of the median participant is going to be very different in each of those scenarios, and therefore dictate relative rates.
These days, the common wisdom is to pay into a huge fund of money (401(k) and similar into index funds) which mitigates a lot of the individual risk to investors.
Capital intensity (aka "capital deepening") is the is the ratio of capital needed in relation to other factors of production. The long term trend seems to be that capital intensity is growing.
Increasing capital intensity increases the the productivity of labor even if the worker is not "more productive" in the sense the term is commonly understood. Factory that replaces 1000 workers in a manufacturing line with 10 workers looking monitors all day long higher labor productivity because they produce more GDP per hour worked. This is probably one of the reasons why productivity increase is not transferring fully into wage increase (wage share is decreasing).
Capital intensity growing would increase the return of capital if everything else would stay the same. But if people are paid less, they consume less. If the household final consumption expenditure deceases, government final consumption expenditure (or NGO's) must take the slack or final demand decreases and capital gains decrease.
In a closed economy (or import export balance): wages + other benefits + taxes => demand that produces capital gains in the private sectors.
It's impossible to say how it turns to be unless you know the relevant coefficients.
Land is the boogeyman.
(In the general sense. We can turn some ocean floor into land, but that doesn't really make much of a difference.)
All of this was predicted by Marx and isn't terribly surprising. The surprising thing here is that the new peasants are able to consume so little without owning land. The price of food and clothing and a lot of consumer technology has collapsed. Seems like most entertainment is either free or Netflix-style subscription (too cheap to meter). By some estimates [0] Millenials are spending just $20/day! The crashing birth rates are the future's problem and the growing political unrest and populism is unlikely to lead to anything but twitter fights. (It's possible it might lead to thermonuclear war but we're assuming nobody's stupid enough to press the button.) In the end there's really no need for global communist revolution if we can all get fat off junk food and keep each other entertained with youtube.
[0] http://www.businessinsider.com/millennials-genz-spending-les...
The article discusses a trend that has lasted longer than 6 centuries. Are you claiming this is due to 600 years of runaway inequality?
How does it make any sense to claim Marx predicted this since he was born more than 400 years later than the start of the trend described in the article?
You may have missed the word "less": "By some estimates, Millenials are spending $20/day less than they were in 2016." The Gallop Poll[1] referenced in the Business Insider article shows that avg. spending by adults aged 18-29 was $93 in 2008 and $74 in 2016.
[1] http://news.gallup.com/poll/215618/young-adults-report-spend...
https://arxiv.org/abs/1412.3773
"Real interest rates are basically the "return on capital". The question is: is it the supply side that is weakening (i.e. there are fewer and fewer worthwhile projects with reasonable returns) or is it the demand for capital that has grown (i.e. more and more people seeking to invest their savings in capital)?"
Now the children of the baby boom are having a hard time saving. What will happen in 30 years when they all have little saved to retire on (or invest with)? Might be a different situation.
Or the projects now require less capital?
The industrial revolution relied on machines and processes that were incredibly capital intensive. In today's dollars, you could easily spend millions of dollars just to get started.
In the information revolution, a thousand dollar computer can set you down to road to a very successful enterprise.
As such, there is lower demand for capital.
Two factors probably drive a long-term overall decrease in this rate: improvements to the standard of living in people able to engage in that market drives additional funds into that market (possible in times of extreme inequality or in times of equality), and external decreases in risk (trust in the rule of law, insurance, etc.).
If we can consume both at better quality and more quantity now, there is less incentive to invest in the future, and thus economic growth matches population.
I don't think capitalism is at it's structural limit quite yet. The world is still yet big enough that there are markets to develop and capture.
If a guy was like "I can't grow grain here but with a small material surplus the people here can live happily and have families and exhaust the local mineral reserve for whomever needs it," at least to me the answer would be, "Provide them with a small material surplus."
I program computers but would have to take a pay cut and assume large debts, etc., to begin operating a fruit orchard and wood mill. I might become happier, but the economic value of that decision and whether or not I would survive it economically is unclear. However, this seems to have nothing to do with economic systems, at least to me.
I think the problem is that our nations are having globally is that "g" (refers to the growth in the national income) is declining, which to me says that governments/nations are becoming increasingly inefficient at allocating capital overall compared to the likes of rentec, two-sigma, etc.(especially as capital becomes less sticky to a particular nation).
Even the globalism to nationalism trends that drove both world wars (after common wisdom thought them impossible since economies were too linked) is really a small factor, at least in the analysis of the article.
I don't even think that your analysis is correct in a broader context. The fall of the Roman Empire and the rise of manoralism (and constant conflict in Europe) was not innovation and didn't particularly drive it. The staunch nationalism of the Chinese empire didn't drive innovation (though it did mean less conflict).
WWII may have held in it (or pushed forward) the seeds of much great innovation - rocket science, computing, plastics, antibiotics, nuclear science, etc. But what innovation would have occurred without it? What would the lives lost have contributed?
I don't think it's fair to say that rapid change is only possible in such an environment of conflict. Great advances occurred in the interwar years, too.
Nations stop cooperating as much, and start competing with each other in an aggressive manner more. That's the core of what spurs the increased invention, rather than war specifically. War plausibly can prompt and enable a short, unsustainable, burst of heightened levels of invention.
WW2, as an atmospheric, a cultural change agent, didn't just go away when WW2 ended. It's reasonable to consider that the impact it had on people would last for decades. For the generation or two that primarily lived it, it permanently changed how they think and view the world.
Most of the great advances we've enjoyed post WW2, were sparked in the 20 or 30 years after WW2. Globalism spread those advances and refined them; which is what we've been mostly doing since the collapse of the USSR in the early 1980s after oil imploded. This cycle of globalism began somewhere between the late 1970s and mid 1980s.
edit: to add to my opinion here - I view the invention that occurs under nationalism vs globalism, as tall spikes vs low gentle waves. Invention doesn't cease under globalism, the nature of it changes. Nationalism will deliver intense blunt trauma invention, that may be impossible under other circumstances and or require a far longer timeline. If it's 1960-1965 and you tell the US Government they can acquire an immense leg up on the USSR by plowing $10 billion into some focused great technological leap forward attempt, they're probably going to do it. That's the application of blunt trauma to technological progress. The difference between: we should consider doing XYZ thing, versus: we must do XYZ thing and do it now. Would the modern superpower version of the US Government - eg in ~1994-2004 at the height of its superpower status vs other nations - do projects like that? I'm skeptical the solitary superpower version of the US would create the Internet or go to the moon. In the next 20 years, in heightened nationalistic competition with China, I think you're going to see a revival of that spirit.
If you're happy in your nation, you want that others in the nation be happy too, as (with tolerance) you abide the same laws and, while economic inequality declines, mostly have access to similar resources. You also want that these others are able to contribute to the economy without coercion into dangerous or objectionable trades, which means more light industry and less tolerance for what the President calls "dumping." That isn't so much a hawkish impulse as the desire to decline a gift which seems too generous, if you will.
Especially after successful global trade and the burgeoning pride in items manufactured locally with global materials, I don't foresee a return to solitary autarchic superpowers. If anything the tendency I'd predict would be more trade in raw materials, and more local labor by those who would once purchase import products, like a kit car economy. 3D printing and stuff are a part of this too.
I can't claim to see the future but that's my opinion on what I'm seeing.
Again, zero supporting data, just a hypothesis.