Doug Cocks
The forces that threaten global stability can probably be contained for at least one more generation, but not for much longer (McRae 1994).
This paper has been written to document my perceptions of the larger world in which Australians will have to live over the next 50 years, acknowledging in doing so that these perceptions draw heavily on the works of a wide range of authors. It has been written with a focus on those aspects of the world’s future that, depending on how they eventuate, have most potential to modify Australia's efforts to shape its longer-term future, to make them successes or failures. Hence, the bulk of the paper is devoted to exploring prospects for global order and governance, the global economy, the global environment and several aspects of global society.
The paper starts with a review of the last century, looking for powerful trends and established patterns that might carry over into and shape the world’s next 50 years. It ends with an attempt to summarise a wide-ranging discussion into a manageable number of assertions (28) presented as a set of working answers to most of the questions about the world’s future that might arise when developing and evaluating national strategies for Australia. These assertions are expressed as subjective certainties (eg world population growth) or as (a) more- and (b) less-surprising pairs of alternative possibilities( eg a decreased (less surprising) or an increased (more surprising) role for the United Nations.
For much of recorded history, societies evolved in relative isolation. This began to change with the age of colonialism and today societies are intermingling to an increasing degree. In this paper we view the world, the globe, as a system of interacting nations, trans-national organisations and supra-national organisations. Systems, by definition, are networks of (many) isolable components or units continuously interacting with each other according to their own behavioural rules. So, we can view the world as a system of interacting nations etc, each changing the others’ environments while collectively evolving in ways that can be described statistically.
Here, our primary interest is in the future environment which this developing global system might create for Australia, ie in those aspects of the world where change stands to modify the international behaviour of Australia-the-nation and Australian sub-national entities such as corporations and non-government organisations. In keeping with the prevailing weltanschauung (or perhaps because it cannot be defied directly), our present interest is in the social, political, economic and natural resource dimensions of the global system rather than in more esoteric foci such as the spiritual, the cultural and the bio-evolutionary. The paper’s focal time-window is from now to about 2050---the mid-future---and while it contains a number of statements of the form ‘the future will be such-and -such’, this, unless specifically affirmed, is the confidence of the attributed owner of that knowledge speaking, not necessarily the present author.
However, before looking for possibilistic future worlds under these headings, the paper recalls the past century to get a feel for the fluxes (ongoing trends), contingencies and fluidities that it has bequeathed to the present and the future. I am accepting Elise Boulding’s (1978) view that we need to look at how the world has behaved and changed in the last hundred years if we are to have any understanding of the forces that will shape the next hundred years. This is notwithstanding Boulding’s own admission that our capacity to image the future has been weakened by, probably, the increasing rate of change being experienced in many dimensions of the global system (cf Snooks 1996). Still, if we can find generalisations over several or many countries, it will be worth asking if they include Australia, and helpful if they do, or, indeed, definitely do not.
The distinguished British historian, Eric Hobsbawm (1994), has written with great insight about what happened and why in the world during the period 1914-1991. This period (which he calls the short twentieth century) begins with the First World War and ends with the collapse of the USSR and of course covers most of Australia's history as a single nation state. He divides the period into:
. an ‘age of catastrophe’ from 1914 to the aftermath of the second world war. Apart from the two world wars, this age includes the great depression of the thirties and the rise of fascism;
. a ‘sort of golden age’ of extraordinary economic growth and social transformation (eg national independence movements) for 25 or 30 post-war years up till the early 1970s (called ‘the long boom’ by Daly and Logan (1989)) ; and
. the ‘crisis decades’ since the ‘golden age’ in which capitalism, as well as communism, has failed to deliver----as evidenced by mass unemployment, cyclical slumps, increasing divergence between wealth and poverty and between state revenues and state expenditures. An increasingly integrated world economy has undermined the institutions of all regimes. In an effort to recover, many regimes have replaced the Keynesian economic ideas which ruled in the golden age with neo-liberal and laissez faire ideas. But followers of that path have done no better than others. This has also been the time when the potentially catastrophic ecological consequences of economic growth have begun to emerge. The growth rate of the world economy dropped from five per cent per annum in the 1960s to two per cent in the 1990s (Thurow 1996).
Overall, between 1914 and 1991 people in the advanced economies, including Australia, came to live longer and better (at least until the eighties) than their parents. Technological revolutions, particularly in transport and communications, ‘virtually annihilated time and distance’ (sic). But it has been a murderous and barbaric century. As predicted by Marx, social relations in the first world have disintegrated under the advance of a-social individualism. Capitalism (Box 2.1) has been a permanent and continuous revolutionising force.
At the end of this century it has for the first time become possible to see what a world may be like in which the past...has lost its role, in which the old maps and charts which guided human beings, singly and collectively, through life no longer represent the landscape through which we move, the sea on which we sail. In which we do not know where our journey is taking us, or even ought to take us (Hobsbawm 1994).
Capitalism clarified
Technicalities aside, capital is the
savings from past profits or wages that are available to finance new
enterprises. Physical capital exists as
factories, machines etc and finance capital is wealth invested in financial
instruments such as loans, shares, bonds.
Capitalism is not a dirty word. It is a
term describing an economic production system characterised by wage-labour that
does not own the means of production.
Capitalism creates a social order characterised by constant change
caused by the drive to accumulate capital by innovation and expansion of
output. It is the drive for capital
accumulation which energises the system.
Undoubtedly, the central issue in capitalist societies is the relation
between business and government, the economy and the state.
Thus, beyond the ‘crisis decades’ Hobsbawm can see an ‘unknown and problematic but not necessarily apocalyptic future’---a period of destructuring rather than destruction. Problems he foresees include the following:
. We enter a world in which for the first time in two centuries there is no international system or structure---as evidenced by the emergence of dozens of new territories without any independent mechanisms for border determination. It is a world in which the First World can win battles against the Third World but not wars, not in the sense of being able to control the conquered territory after ‘victory’. There is a global disorder and no obvious mechanism for either ending it or keeping it under control. Hobsbawm’s view matches that of Singer and Wildavsky (1993) who divide the world into two parts. One part is zones of peace, wealth and democracy. The other is zones of war, turmoil and development in which a century of disruption can be expected.
. The privatisation of the means of destruction means that it is now quite possible for small groups of political or other dissidents to disrupt and destroy anywhere. Concurrently, the cost of keeping unofficial violence under control has risen dramatically. Note though that the rapid fall of the twentieth century’s totalitarian and ruthlessly dictatorial regimes has effectively demonstrated the limits of sheer coercive power.
. Global population will rise above 10 billion and regional differences in population change will generate great migratory pressures. There can be little doubt that friction between natives and foreigners will be a major factor in the politics, global and national, of the next decades. Eventually, the problem of how to keep world population stable will have to be faced.
. The ecological consequences of ongoing economic growth will not make the world uninhabitable for humans but will change the environments in which people live and perhaps reduce the carrying capacity of the globe dramatically. In the long run, a balance will have to be struck between humanity, the (renewable) resources it consumes and the effect of its activities on the environment. Nobody knows, and few dare speculate how this is to be done, and at what level of population, technology and consumption such a permanent balance would be possible. One thing however is undeniable. It would be incompatible with a world economy based on the unlimited pursuit of profit in capitalist economies of the type now existing.
. While globalisation and the international redistribution of production will bring more of the world’s six billion into the global economy, there will be a seemingly-irreversible widening of the gap between rich and poor countries. The belief, following neoclassical economics that unrestricted international trade will allow the poorer countries to come closer to the rich, runs counter to historical experience as well as common sense; protectionism regularly cuts off markets while oversupply reduces prices. A world economy beset by growing inequalities is inevitably accumulating future troubles. To judge by the tendency to inequality in the 1970s and 1980s, the major upcoming political problem of the developed world will not be how to multiply the wealth of nations but how to distribute it.
. Technology will continue to squeeze human labour out of the production of goods and services, without providing either enough work of the same kind for those jettisoned, or the guarantee of a rate of economic growth sufficient to absorb them. Very few observers seriously expect a return to the full employment of the ‘golden age’ in the West. Demand in mass markets will continue to decline as transfer incomes (social security etc) fall and as technology squeezes workers out of service industry jobs as well as secondary industry jobs.
Despite the difficulties of doing so identified by Hobsbawm, many have written with great insight about what the world might be like, politically, socially, technologically, economically, and environmentally, in coming decades and even generations.
Probably the three best known future-gazers of recent decades are Daniel Bell, author of The Coming of Post-industrial Society, Alvin Toffler, author of Future Shock, and Herman Kahn.
According to Bell, writing in 1973, the industrial economy based on manufacturing is giving way to a service economy where the bulk of the workforce will be engaged in a wide range of non-manual occupations (and manual leisure activities). The outstanding characteristic of this society is what Bell calls ‘the centrality of theoretical knowledge’. A dominant role will be played by professional and technical people, armed with a new intellectual technology. Technology assessment, forecasting models and systems analysis will replace ad hoc adaptiveness and experimentation in politics. The new scientific and technical elites will displace existing powerful groups and society will be run on the basis of rational decision making---managerialism. Education in the new skills required will be the route to power.
A similar optimistic perspective is apparent in the work of Herman Kahn (Kahn and Weiner 1967; Kahn and Bruce-Briggs 1972; Kahn and others 1976). He sees the connection between history and the future in terms of a ‘long-term multifold trend’, one important component of which is the movement towards a post-industrial society. Kahn and his collaborators foresaw continued economic expansion, linked with the growth of education, leisure and material welfare, although not in the ‘non-coping’ nations (after Encel 1979).
Alvin Toffler's (1970) 'future shock' is essentially about the increasing transience of our individual experiences of things, people, ideas, organisations and places. He points out that the industrialised world is changing so rapidly that it no longer functions as a model for the non-industrialised world to emulate.
We turn now from such panoramic views to several collations of more focussed views of the world’s mid-future, beginning with power politics, the ways in which nations might attempt to influence each other’s actions, usually, but not always, to their own benefit.
Assume that the dynamic driving inter-nation relations is that nations seek to survive and prosper within the community of nations (cf. Snooks 1996). For the foreseeable future, the model for inter-nation relations stands to be that of each country using threats and/or persuasion, backed up as required and feasible by tangible power, to try and make others behave as desired---what is called power politics.
Power on the world stage has economic, political and military components. With the 1989 collapse of the Soviet Union, the United States became the world’s only superpower; but few see America’s superpower status lasting as the global competitive system expands to include Russia, China and the Middle East (Thurow 1996). For the moment however, the ending of the Cold War does not obviously imply any immediate major shift in international relations, despite releasing previously suppressed rivalries between the US, China, Japan and others and an outbreak of tribalism (Kennon 1995).
After the loss of US hegemony, any of a variety of scenarios would be unsurprising, including:
- A multi-state system without major alliances. This would involve coalition building between countries on an issue by issue basis eg the Australian experiences on agricultural trade, chemical weapons, Law of the Sea, Cambodia, Antarctica.
- A first world versus ‘the rest’ scenario (Peters 1995)
- A ‘three power bloc’ system built around Europe, the Americas, and East Asia. The precursors of such blocs are already in place (Grant 1994) although being so diverse, ethnically and culturally, perhaps reduces East Asia’s prospects for becoming a globally important entity. Also, defence spending is rising more rapidly in East Asia than in other parts of the world (Wilson 1996). Conversely, the logic for eastern Europe being gradually absorbed into western Europe is overwhelming (McRae 1994). While Australia would have some claim to belong to any of these three blocs it is not a natural member of any!
And to even further expand the range of geopolitical possibilities, the sheer politico-economic mass of an emerging energy-hungry China could lead Japan, India and Russia to recognise their common security interests against an unpredictable giant (Goodman and Segal 1995). Although McRae (1994) observes that China and Japan are more likely to become rivals than partners, what if they find it profitable to co-operate to the disadvantage of the US? Could Japanese militarism resurface? Friedman and Lebard (1991) conclude that Japan must at some point rearm in order to protect its access to raw materials, eg Gulf oil. Hartcher (1996) notes that, as in pre-1914 Europe, close economic integration amongst Asian countries does not preclude wars there, started by territorial claims, deep nationalism and competition for resources, notably oil.
What part might wars play in creating and maintaining future power standings and alignments? A world war in 2045 is used in Wagar’s (1989) Short History of the Future as the device to trigger the end of a global capitalist economy dominated by twelve ‘mega corporations’. However, most perceptions of next century’s wars (but not Friedman and Lebard (1991) see the possibilities as being less total than that. For example, Huntington (1994) sees wars of the future as being between civilisations, (not between nations as such) eg between the Islamic and the Christian worlds. Against this, it is Wagar’s (1989) view that while Islamic fundamentalismI is likely to have some political success for a while, it will not be able to break free of the global economy because of its need for modern arms and the need to pay for these. Mid-future wars, excluding civil wars, stand to be between pairs of nations rather than coalitions of nations or ‘core’ nations, but always with the possibility of neighbouring states becoming involved. However, continuing advances in military technology, such as precision missiles, have decoupled territory and defence (Langford 1979, Leslie 1996). By 2020, precision strike capabilities might create the potential to achieve strategic effects over continental distances.
While trade wars to protect markets are not foreseeable at this stage, 21st century wars of redistribution would not be particularly surprising (Elkins 1995). The World Bank has suggested that next century's wars could be over water. Chronic water shortages already affect 40 % of the world's population in 80 countries. Global demand for water doubles every 21 years. In the Middle East, disputes are already erupting in the watersheds of the Nile, Tigris and Euphrates. In South Asia, Nepal and Bangladesh are in dispute over the waters of the Ganges-Brahmaputra Basin. Closer to home, it would not be too surprising if Java were to run out of water.
But scarcities of resources other than water also stand to generate major conflicts, most notably when a scarcity of food-producing land created by population growth and land degradation leads to mass population movements, eg sub-Saharan Africa (Homer-Dixon 1991).
While the end of the cold war has led to an outbreak of tribalism and to wars within and between nations in Europe, Asia, Africa and South America, there does seem to be some possibility of a system of enforceable international law emerging in coming decades. Saunders (1994) sees the world of 2025 being more integrated with more policy being driven by international and supra-national organisations, both public and private. Certainly, no first world country is interested in using military power to establish a new empire; and, most importantly, having enforceable international law is in the interests of both business and powerful bureaucracies in the first world. Against that, many deep conflicts remain to be resolved.
Such an international administration would, at first sight, be largely built around the United Nations Organisation’s establishing of minimum human rights and standards and rules for international economic and political relationships (see also Naisbitt 1994). Alternatively, the priorities might be to actively regulate the global economy or implement a ‘rights of nations’ charter which would protect and help nations taking actions they considered necessary for their citizens’ well-being. John Burton’s (pers comm) contrary view is that the United Nations is an organisation primarily seeking to preserve the sovereignty of its nation state members and will come to be seen to be largely irrelevant in the global economy. Thurow (1996) is also amongst those pessimistic about world regulation replacing national regulation of economic activities, saying ‘No one can agree on who should regulate, what should be regulated, or how it should be regulated’. Whatever form the supranational order takes, it seems likely to be a creature of the first world with others playing largely by their rules (see also Naisbitt (1994) and Boulding (1978) for discussions of prospects for world government).
Having discounted the prospect of global war, it must nonetheless be recognised that the spread of nuclear weapons remains a problem (Grant 1994; Leslie 1996) and that a ‘rogue’ nation indifferent to conventional notions of self-interest could trigger a major conflict across continents. Nuclear proliferation still provides a strong argument against nuclear fission as an energy source (Elkins 1995).
While the above discussion envisages wars as continuing to be based on military action, other possibilities exist such as information warfare based on wholesale industrial espionage and the deliberate pollution of data transmissions underlying key systems; banking and power generation for example (Elkins 1995). A first world rogue nation might be willing to introduce ethnically-specific ‘designer plagues’ into teeming third world countries seen as threatening first world security.
National sovereignty is eroded from above by the mobility of capital, goods and information across national boundaries, the integration of world financial markets, and the trans-national character of industrial production. And national sovereignty is challenged from below by the resurgent aspirations of subnational groups for autonomy and self-rule. As their effective sovereignty fades, nations gradually lose their hold on the allegiance of their citizens...nation-states are increasingly unable to link identity and self-rule (Sandel 1996).
Political unrest is the wild card in history’s deck (Heilbroner 1995).
Decline in the power and role of the nation state in the 21st century is a common theme in the writing of contemporary futurists. McRae (1994), for example, identifies reasons such as:
· power is being passed upwards to supranational bodies via treaties and international regulations and standards. Trans-national arrangements such as the European Community and North American Free Trade Association are already over-riding parts of traditional national sovereignty.
· power is being passed downwards to regional authorities
· world financial markets set limits on fiscal and monetary policy for most countries
· nations have limited scope for any actions that reduce international competitiveness
· trans-national companies determine investment partly on the basis of tax treatment and hence there is a limit on any country’s capacity to extract tax from foreign businesses.
· the talented are becoming more mobile and can choose to live where life is good and personal tax rates are low.
Cerny (1995) notes the difficulties that nation states have in providing public goods such as law enforcement, regulatory structures, property and environmental protection etc when the ideal scale for providing these is changing, under globalisation, from national to international. But while nations are declining as political actors, the political means to control world capital have not yet emerged (Leach 1995; Fagan and Webber 1994)
Just as such international influences are intensifying, so are demands for local control, eg Aboriginal demands for self-determination. Dissociation through intra-national secession is occurring in first, second and third world countries. This trend towards a world that is both shrinking and fragmenting (Camilleri and Falk 1992) is called ‘glocalisation’ by Courchene (1993). Hobsbawm (1994) also recognises symptoms of the loss of state power internally such as, for example, the rise of private security services and the erosion of natural monopolies such as postal services.
Nevertheless, the ‘territorially rigid’ nation state will continue to exist. Kennon (1995) foresees a continuation of the current division of nations into a first, second and third world, perhaps with some limited movement of nations between these categories, just as, for example, post-Franco Spain has joined the first world.
First world countries, mostly liberal democracies such as those in the OECD (eg Australia), are politically stable without having to depend on police-state methods or foreign support. They are economically advanced in terms of such indicators of a modern economy as GDP per head, price stability, inflation rate etc. They are socially developed in terms of education, life expectancy, public health and other social indicators of well-being.
Second world countries are commonly in disequilibrium because they have powerful and unrelenting internal enemies whom they control with loyal and effective police forces. The more authoritarian second world regimes put security above principle and make no claim to higher abstractions, eg Burma. Others justify and legitimate themselves on ideological grounds or on the basis of economic success (eg the newly industrialising countries of Asia). A few are totalitarian in the sense of trying to control how people think (Totalitarianism and libertarianism, the idea of minimal state interference in people’s lives, are at opposite ends of the political spectrum).
Third world countries, sometimes called the south because so many are in the southern hemisphere, are those unable to enforce their will throughout their national territories (Kennon 1995). Many are overwhelmingly burdened by foreign debt. In 1970 the 15 most heavily indebted nations had an external public debt of 9.8% of GNP. By 1987 this had risen to 47.5% of GNP. Having to make such debt repayments to first world countries ensure that schools and hospitals cannot be built and that ever-more resources will be sold off, exacerbating the problem even more.
Homer-Dixon (1991) suggests that severe civil strife is likely when:
· there are clearly defined and organised groups in society
· some of these groups regard their level of achievement as unacceptably low and, hence, the socio-economic system as unfair
· these same groups believe peaceful opportunities for change are blocked but that the authority system is capable of being overthrown.
On this analysis, the only way for a police state to cease to be a police state is to cease to be deeply divided.
The quintessence of liberal democratic government is majority rule restrained by culture, law, custom, ‘natural’ rights to protect minorities and the power of a range of countervailing institutions (such as churches, unions, business, the public service, academia). It allows the individual an effective say in running the state through a process of electing representatives under broad suffrage to make laws and carry out policy. Gorer (1966) emphasises that not only is majority rule restrained by a range of values in a democracy, it must be if democracy is to survive; that the attitude of ‘winner takes all’ is fatal to democracy.
Now that is the theory, but it is not difficult to identify a rapidly growing disenchantment with government, both with the institution itself and with its ability to perform (Shuman 1978). This is despite some spreading of forms of democratic government around the world. The Freedom House organisation, which follows such matters, rated 42 countries as ‘free’ in 1972 and 75 as ‘free’ in 1994. Domestic policies for managing deficits, debts and unemployment have generally been unsuccessful (Daly and Logan 1989). There is some evidence that young people are unimpressed with political processes, even in stable democracies (Eckersley 1995). And many first world countries contain a growing underclass that feels that the political process has failed it. Certainly many unemployed feel betrayed by a society that says ‘If you try hard enough you will get a job’.
But how has this happened? Democracy’s greatest strength, having to maintain the approval of the voters, is also its greatest weakness, namely, having to get re-elected every few years by pandering to short-sighted and greedy voters and not take account of future voters, non-voters etc. Single-issue parties can exert a disproportionate influence. Liberal democracies seem incapable of pre-empting (anticipating? forestalling?) or even seriously debating problems and, moreover, tend to overreact when they do eventually respond. The reason has been neatly diagnosed as `pluralistic stagnation' (Lindblom 1959, 1965) wherein competing interest groups continually nullify each other: whatever is proposed by one group is commonly against the interests of some other organised group and therefore vigorously opposed. Contributing to the `log jam' in many cases is the built-in unwillingness of contending parties to compromise, to moderate their demands. It is proposals which threaten only a diffuse and unorganised public interest which best stand to succeed! Mancur Olson (1982) talks about distributional coalitions or special-interest groups that are willing to sacrifice large national gains to obtain small gains for themselves. Olson foresees this fate for all developed countries and Kennon (1995) finds the signs already visible in Britain, United States, Japan and Germany; but there are also signs that some groups are beginning to voluntarily restrict their powers to gridlock the system.
Thus, failures to cope with the problems of Hobsbawm’s (1994) crisis decades have undermined political consensus and participation, leaving governments vulnerable to sectional interests. However, at this stage, the liberal ‘representative’ democracies face little internal threat of takeover through ‘direct democracy’ (eg the widespread use of citizen-initiated referenda) or through the ballot box by non-democratic groups such as Christian fundamentalists or US-style ‘patriots’. Their numbers are too small.
Of more concern is the prospect of some liberal democracies becoming authoritarian police states, as a response to deepening intractable divisions within the society, along with the loss of both sovereignty and legitimacy. Where such divisions are geographic (eg Quebec in Canada, Scotland in the United Kingdom), dissociation becomes a plausible possibility, but where some 20% of the community forms a diffuse underclass, it is Rio de Janeiro-style ‘war’ and terrorism in the cities (van Creveld 1991) that becomes plausible. Beginning signs can be seen in Liverpool, Manchester and Newcastle in the United Kingdom and in Los Angeles and New York in US, to take examples from two countries which Australia tends to use as role models.
But even where democracies are not deeply and intractably divided to the point of being threatened by violence and its repression, or not threatened at the ballot-box by anti-democratic minorities, they are still threatened by ‘creeping bureaucratisation’. Kennon (1995) sees the rise and fall of nation states as dependent on the interplay between the political sector, the bureaucratic or managerial sector and the private sector. The political sector is essentially confrontationist which is inefficient and he notes that economically successful states of recent times are those where the bureaucracy and its specialists are able to concentrate on facilitating the activities of the private sector and solving ‘technical’ problems. He conjectures that first world countries intent on retaining that status, but bedevilled by pluralistic stagnation or gridlock, will gradually turn more and more decisions over to bureaucrats and specialists. The increasing role of economists is a good example of the erosion of authority by technical competence. Interest groups would not be able to play the same role as they do now in influencing government decisions. Concurrently, the core business of government stands to move from the provision of services to the administration of service provision (OSCA 1996).
The political sector would not disappear in such a ‘postdemocratic world’, nor would it cease to have important functions: it would legitimise bureaucratic actions just as the monarchy legitimises parliament; it would act as an ombudsman for individuals and as umpire for disputes between bureaucracies; it would channel violent tendencies into harmless theatre (as sport does); and, if things went really wrong, it could reassert itself as an authority of last resort.
Over the 20th century, the capitalist system
has responded to recurring industrial over-capacity, with all that this implies
for profits, in changing ways. There
has been a progression from protectionism and imperialism in the first half of
the century to cartelisation and then, starting in the 1970s, to globalisation.
Globalisation began as a search for low-cost production by American corporations as they came under intense competition from Japanese and European corporations (Reich 1991). Beginning with the location of manufacturing in low-wage countries, it rapidly became a ‘geographic unbundling’ of business systems with research and development, design, manufacturing and service delivery being based in different locations or countries. Simultaneously, the 1970s slowdown in growth and rising unemployment fuelled a successful push for deregulation of business in industrialised countries, notably in banking (Daly and Logan 1989).
More recently, as profits again begin to falter under the influence of decreasing transport and communication costs and increasing ease of entry into many sectors of the economy, globalisation is transmuting into a drive by trans-national corporations to provide high-value customised goods and services to the world’s middle classes. That is, profits are increasingly being derived from a continual adjustment of production to customer needs (Reich 1991).
What are some of the direct consequences of these processes?
· The 1990s global economy is six times larger than in 1950, is more integrated and has significant new players. In the same period, the volume of world trade has grown consistently (at 5.9 % pa between 1960 and 1988), fuelled by falling real transport costs and the progressive removal of tariff and non-tariff barriers. Trade is still growing at three times the rate of Gross World Product (GWP), while foreign investment is growing at seven times the rate of trade growth. The export of capital from trade-surplus countries has the effect of maintaining the domestic rate of profit as well as providing high profits from low wage costs abroad.
· National savings flow to where they earn most. National competitiveness is thus less dependent on national savings than on having the national skills which attract investment.
· Returns to a country’s investors increasingly depend less on the success of their domestic companies than on the global portfolio selected.
· Globalisation appears to pit workers in different parts of the world against each other in competition for jobs, wages and working conditions (Fagan and Webber 1994). As jobs move offshore, organised labour in the industrial countries is losing its capacity to bargain with large corporations engaged in high volume production. Concurrently, organisations have learned that it is possible to grow without growing the work force. The pain of falling real wages is moving up the organisational hierarchy.
· Productivity gains tend to show up as falling prices rather than as rising wages; there has been a shift from an inflation-prone environment to a deflation-prone environment (Thurow 1996).
· Nations can no longer substantially enhance the wealth of their citizens by subsidising, protecting or otherwise increasing the value of ‘their‘ corporations; the connection between domestic corporate profitability and citizens’ standard of living is attenuating.
· Products, corporations and economies no longer have distinct nationalities.
· Dematerialisation, decarbonisation and miniaturisation. Steel, chemicals, motor vehicles and oil were the world’s backbone industries in the energy-intensive years of the ‘long boom’ (Daly and Logan 1989). Now, materials, routine labour and energy are increasingly being designed out of products as corporations respond to the two forces driving competitive markets: the hope of capturing intra-market share with a cheaper or better product ;and the hope of capturing inter-market share with innovative products. Concurrently, product lifetimes and product life cycles are shortening.
· The world’s 200 biggest trans-national corporations are responsible for a rapidly increasing share of GWP, with sales in 1995 equal to 28% of GWP, up from 24% in 1982. Their combined sales exceeded the combined GDP of 182 nations, ie all except the largest nine economies (Canberra Times 17 Oct 1996). Yet employment worldwide in these global firms has remained virtually flat since the 1970s.
Emery et al (1975) and Kennon (1995) see employment in modern economies as becoming ever more specialised and bureaucratised, this being but the continuation of a long-time trend. The relationship between specialists and bureaucrats is that bureaucrats understand and co-ordinate the functions which different specialists can perform. Collectively, specialists and bureaucrats constitute Bell’s (1973) knowledge class or professional class.
Trans-national corporations are increasingly being managed and staffed by people, akin to Kennon’s specialists and bureaucrats, called symbolic analysts by Reich (1991)---problem solvers, problem identifiers and brokers of deals. Typically, these work at terminals when not talking and otherwise communicating. They create and co-ordinate flows of information (intellectual capital) which evoke and blend flows of goods and services produced by smaller companies staffed by more traditional industrial and service workers. Globally, demand for their services has been boosted by declining transport and communication costs. It is because, in search of flexibility under change, big organisations are increasingly using contract inputs and contract workers for routine functions (outsourcing) that most new jobs come from small companies, not large. Handy (1994) sees organisations becoming more like ‘condominiums of transients’, groups of project teams coming together for specific operations, rather than ‘castles’ where workers have a home for life. In part this is because there is less value in being able to access ‘corporate memory’ under conditions of rapid change.
Ownership, control and profit-sharing are taking new and evolving forms in this model of the corporation as an impermanent network of nodes of expertise. As demonstrated by their shares of turnover, both capital and ‘traditional’ labour are ‘subordinated’ to the claims of the symbolic analysts whose skills are rewarded at rates set on world rather than domestic markets.
Capitalism is an economic system energised by a drive to accumulate capital by making profits which are then invested in increased productive capacity. But continuing such investment leads to productive over-capacity, falling prices and falling profits. War or ‘military Keynesianism’ (Knight 1987) is one way of increasing demand to solve the excess-capacity problem.
Innovation is another. Schumpeter’s (1934) ‘waves of creative destruction’ lead to the abandonment of unprofitable capital and the diversion of profits into the production of new goods and services. So, as profits from productive processes inescapably fall over time, there is a constant search for new ways of doing things, usually involving the substitution of capital for labour, or new ways of producing goods or finding new goods to produce. However, while capitalism is organised to search for and seize on profit opportunities created by technological and organisational change, there is no guarantee that these will arrive with the regularity required to maintain investment opportunities.
While we might not be too surprised to see 21st century capitalism enjoying successes and setbacks similar to 20th century capitalism, the possibility of a system-destroying setback cannot be ruled out (Heilbroner 1993). Disney’s (1994) slightly less apocalyptic judgement is that during the next few decades there is a strong possibility of at least one major crisis in the international financial system, causing massive economic and social damage throughout the world. There is concern for example about the destabilising effects of massively increasing speculative international currency flows and the inhibiting effect these have on productive investment (Hutton 1996). If Thurow (1996) is right, it was fear of communism and the dominance of the US economy that held the capitalistic world economy together for decades and the possibility of global economic collapse is increased, not decreased, by the demise of communism and the loss of US economic hegemony.
One major reason why variations of capitalism will provide the basis for most national economies in the 21st century is that, with the breakdown of the Soviet system in the 1980s, there are no substantive alternatives, no blueprints for a successor. This pervasiveness will be despite the obvious failures of most capitalist economies to provide full employment, high living standards, proper working conditions, rising productivity, international competitiveness, subdued cyclical behaviour, an egalitarian income distribution, inter-generational equity and a sustainable, culturally-sensitive economy. The seventh annual United Nations Human Development Report (1996) noted that 70 of 174 countries have lower average incomes today than in 1980. Declining prices for raw materials, the burden of international debts, the absence of an industrial base, powerlessness in key international negotiating fora as well as rising internal instability in many cases bodes ill for the economic future of many developing countries (OSCA 1996). Given the economic gains accruing to capital under globalisation, there is no foreseeable incentive for capitalism to reform itself as happened under the threats of fascism and communism.
Modern economic ideas suggest that, in unregulated markets, positive feedback mechanisms are likely to allow larger companies to grow relentlessly at the expense of smaller companies. Many industries already comprise one or a few firms (Meacher 1982). In coming decades, it would not be surprising to see an ever-increasing fraction of Global World Product (GWP) being produced by an ever-decreasing number of TNCs and consumed in the first world and, to a lesser extent, in the second world. This would leave perhaps a hundred third world countries with stagnant or declining domestic economies largely decoupled from the global economy or outside the trading blocs that are emerging as stepping stones towards a more global economy. Kennon (1995) conjectures that while TNCs will have the power to topple governments, they will leave token democracies in place in all first world countries, shaping policy to suit corporate needs. If system-collapse can be avoided, the ‘alliance capitalism’ experience of the petroleum industry provides an unsurprising scenario: As each industry is reduced to a few major players, they will cease serious competition and will instead collaboratively manage production, distribution, and pricing to their mutual benefit. Similarly, one could expect financial markets to be ultimately stabilized, and a single global currency adopted. If the global economy does come to be dominated by a handful of non-competing megacorporations, will this be the prelude to a ‘post-capitalist managerialism’ era in which competition gives way to ‘property management’?
Meanwhile, other ‘brands’ of capitalism remain possibilities. The overlapping candidates include competitive capitalism, market-access capitalism, guided capitalism, crony capitalism, fascism and social market or civic capitalism. Competitive capitalism means something like the free market capitalism of economic theory. Competitive capitalism can be contrasted with market-access capitalism where offsets are demanded in return for allowing entry into particular markets. Asian-style guided capitalism sees the state playing an important role in co-ordinating the domestic and international operations of the nation’s large corporations. Guided capitalism can degenerate into crony capitalism where business opportunities are gifted by the state rather than competed for. Capitalism under fascism sees worker rights traded for security of employment and the protection of business from legal scrutiny. Fascism has great emotional power and many of the themes that accompanied the emergence of fascism in the twenties are re-emerging according to Umberto Eco (1995). In civic capitalism, participants accept obligations imposed by the (legal) framework that makes their commerce possible (Emy 1993).
Equally plausibly, while GWP continues to grow over coming decades, perhaps doubling by 2025 and again by 2050 (Halal 1993), the product mix stands to continue shifting from goods to services, services being everything other than industrial and agricultural products. An example of importance to Australia is that demand for tourism services could continue its present rapid growth. Travel and tourism is already the largest single industry in the world, employing 130 million people world wide in 1993. More generally, first world economies will continue moving from extractive industries through fabricating industries to information processing and knowledge-intensive industries, but adding these sectors on rather than replacing the old ‘saturated’ industries.
...if there is one rule of international economics, it is that no country can run a large trade deficit forever (Thurow 1996).
It is the nature of international capitalism that as one part of the world succeeds and builds up trade surpluses, these surpluses have to be reinvested elsewhere in a process that is necessary if trade-deficit countries are to be able to continue to trade.
It is commonly predicted that the future rate of economic growth in East Asia, which is very much trade-based, will exceed that of Europe and North America and hence contribute an increasing share of GWP. McRae (1994 ) however observes that East Asian growth is thinly based in terms of products and export markets and is therefore fragile eg vulnerable to US protectionism. Daly and Logan (1989) note that most countries of the Asia-Pacific region are not well-placed to benefit from the movement of the world economy from labour and energy intensive industries to services and knowledge intensive industries.
Thurow (1996) regards the current US-Japan trade imbalance as unsustainable and standing to have major repercussions around the Asia-Pacific region, however it is resolved, eg by emergency tariffs. The US must start running substantial trade surpluses to pay interest on its international debts or ’at some point, a falling (US) dollar is going to lead the rest of the world to quit holding dollars’. A run on the dollar will lead to debts in appreciating currencies (yen? marks?) becoming unserviceably high. Australia's part in this play is that when the US annual growth rate changes by one per cent, our annual growth rate changes, on average, by 0.74 per cent three months later.
So, while accepting that we are living on the edge of the global region with the strongest prospects for continuing high economic growth, Australians need to be aware of these contingencies, especially if, as predicted by Industry Minister John Moore (1997), free trade among all major nations may well be in place before 2020.
Welfare systems focussing on income support and the provision of health, housing and education services expanded in most first world countries after the Second World War. These systems reflected both a willingness to share the fruits of economic growth and an insurance against social conflict. Indeed, the societal goal of economic growth was ‘sold’ on the grounds that such growth would reduce poverty. Now, the social welfare state is disappearing, slowly or rapidly, in all first world countries and poverty is increasing (Thurow 1996).
While the reasons for this decline are complex, they include:
. widespread pressures to cut personal and business taxation (Self 1993) and balance government budgets;
. widespread inefficiencies and failures in the operations of welfare systems;
. a resurgence of the doctrine that providing welfare benefits at any level of generosity destroys people’s willingness to and capacity for providing for themselves and making their maximum possible contribution to increasing the wealth of society;
. reduced need since 1989 to maintain the welfare state as a counter-attraction to Communism (Greider 1997).
The life of the welfare state could be dragged out, perhaps, by various reforms such as competitive provision of services, but only radical changes in community values could give it significant new life. The least surprising of such value shifts would be community acceptance of the ‘new growth theories’ which recognise that the welfare state is actually providing much of the human capital (eg educated healthy workers) and organisational capital (eg accessible justice) on which successful market economies already and increasingly will depend, eg Romer (1994); EPAC (1995). Because the financing of such investments in social capital would require tax increases, it would be difficult for any country to pursue such a strategy in isolation.
Conjectures about the characteristics of first-world countries standing to experience above-average rates of economic growth in coming decades include the following:
· For the first years of the 21st century, it will remain vitally important to be good at making things, but gradually economic advantage will move to countries good at producing services.
· .McRae (1994) says efficiency in the service industries will be the motor of growth. He uses a broad economy-wide concept of efficiency which includes not having to use scarce resources for ameliorating deep social problems. Crime is the most obvious of these. For example, the US puts 1.3 % of GDP into overt law and order (excluding private security). New South Wales now has 35 000 private security guards, twice the number of police officers. The conventional family unit is an efficient way of combining child-rearing with earning a living and the economic cost of family breakup is high. Health costs and transaction costs (eg legal costs) can vary markedly between countries. Countries which want to grow richer will find it much easier if the society is well-disciplined, which is not necessarily the same thing as the ‘soft authoritarianism’ of some ‘Asian tigers’.
· Because infrastructure (capital invested in land) and people are the relatively immobile factors of production, economically successful countries will give high priority to developing problem-solving skills and high quality institutional and physical infrastructure. Foreign ownership and control will be of little concern in successful economies because the value of corporations lies increasingly with their mobile symbolic analysts and, as long as these do not live abroad, their home countries gain most of the benefits of their skills (Reich 1991).
· Technology is making skills and knowledge the only sources of sustainable strategic advantage (Thurow 1996). Capital in the form of land and natural resources will matter less because the industrialised world can produce its own food. Financial capital is always available at a price (sic) in London, New York or Tokyo and natural resources no longer fuel economic growth (McRae 1994).
· Countries that are willing to sacrifice environmental standards, wages, working conditions, civil and political rights and ethical standards will win the economic war (a Pyrrhic victory?).
· The Japanese ‘team approach’ to manufacturing production has proved very efficient and adaptable in the face of change. A lack of sentimentality about established ways of doing things is very important.
· An open economy will be vital to economic success(!). National security is no reason for keeping foreign firms out. Albania, which refuses to trade with the West, is secure in a fashion but its citizens transport their wares in oxcarts and live in hovels. Complete security is equivalent to autarky (self-sufficiency). But autarky deprives a nation’s citizen’s of all the advantages of economic interdependence with the rest of the world. In the event, trade, as a fraction of economic activity might fall sharply of its own accord next century if more and more products can be made more efficiently in locations close to the consumer, due to both reduced material and energy inputs and the fast pace of technology transfer (OTA 1988). It is not easy to understand how the global economy would operate under a trade decline.
· Economically successful countries will learn to initiate new ‘growth industries’ well before old industries begin to decline (Handy 1994). If, as seems possible, a new Kondratieff (1926) growth cycle is beginning, the candidate industries for driving that resurgence of global capitalism are the knowledge-intensive industries, particularly information and communications. Indeed, the US economy’s 12 million new jobs in the last five years has been a ‘change dividend’ attributed to this process beginning (Milne 1997).
Technology drives social change today (Platt 1993).
The most powerful and disruptive forces of the twentieth century are science and technology. The world’s most pressing political, social and economic problems have their origins in science and technology; the population explosion, economic growth, pollution and environmental deterioration, the means of war, the limits to growth, disparities of wealth and urbanisation (Birch 1975).
It is the nature of capitalism that new and profitable technologies lead to changes in the structure of the economy, eg the root cause of globalisation is technological. Economic changes, in turn, initiate social changes reflecting people’s proactive and reactive adaptations to price and product changes.
New technologies that can be immediately applied in a number of different sectors of the economy can be usefully called generic technologies. Contemporary examples of ever-increasing importance include microelectronics, biotechnologies, telematics (infotronics, computer-telecommunication technologies) , new-materials technologies and robotics (eg Sheffield et al 1994). Another class of important technologies are those that change the price or quality of some basic input used in many sectors of the economy such as energy, transport, information, telecommunications or services such as legal services. These can be called infrastructural or enabling technologies.
Space permits only a brief review of prospects for further development of profitable and economy-driving technological change in the energy, transport and information/communications sectors of first world economies, ie in meeting basic social functions. We also note the problematic prospects for social technologies that facilitate institutional and organisational adaptation to economic and social change.
...even the most optimistic estimates indicate commercial fusion power is unlikely to be available for fifty years or more (Oliphant 1992).
Even when it arrives, high capital costs and high maintenance costs may mean that fusion power is not profitable enough to replace fossil fuels or alternative energy sources. And even when developed, fusion reactors will have severe residual radiation problems (Leslie 1996; Hardin 1993). However, Marchetti (1987) still conjectures that nuclear energy will succeed natural gas as the world’s primary energy source in the second half of the 21st century, possibly being used to produce fuel-hydrogen in lightly-populated areas.
In this book we are interested in global energy provision in the first half of the 21st century. Traditional calculations of future energy needs start from information on current energy use per dollar of GDP (called energy intensity) and then make assumptions about (a) the rate of GDP growth and (b) the rate of decline in energy intensity. Grubler et al (1995) suggest that the world will not run out of energy in coming decades even though energy needs in 2050 might be an order of magnitude higher than today. Looking further ahead again, Gilland (1995) reviews global energy demand up to 2100 and, even with a world population of perhaps 11 billion, speculates that current average annual energy consumption of 1.7 tonnes of oil equivalent per capita should be maintainable.
But what of the energy mix? With the exception of the OPEC countries, every major oil producing country is already experiencing declining production (Bronner 1996). Of the world’s 1023 billion barrels of proven reserves, 60% or about 614 billion barrels lie beneath the sands of Iran, Iraq, Saudi Arabia, Bahrain, Oman, Qatar, Kuwait and the United Arab Emirates. Oil is also peaking in terms of market share and Marchetti (1987) sees it as having less than 10 % market share by 2050. He also sees most oil being converted to transportation fuels, a relatively easy task technically. The World Resources Institute (1996) suggests that oil production--- currently 40% per cent of the world’s energy supply---could peak before 2002, in contrast to more conventional estimates that production will peak somewhere between 2010 and 2025. Thereafter, oil production could halve every 25 years or so. The energy breakeven point for USA oil production (when it takes a barrel to retrieve a barrel) will probably occur in the first decade of 21st century. Oil will be increasingly replaced for some decades by natural gas for which only 2% of known reserves have been extracted so far (Marchetti 1987). Gas could be replaced in turn by solar, wind and other alternative energy sources (including perhaps new ways of using coal), depending on demand and the speed at which supply prices drop.
Not only will the energy mix be responding to declining oil supplies, it will be responding to a ‘pervasive and persistent demand’ for ever cleaner, more flexible and more convenient energy forms. There will be a continuing ‘decarbonisation’ as well as a ‘dejouling’ of the economy. Ausubel and Marchetti (1996) say the world is just past the middle point of a decarbonisation process that will take another 150 years to complete. The precise energy mix after about 2020 will depend on both research and investment paths. Improvements to fuel cells has the potential to trigger ‘the big switch’ from a combustion-based polluting economy to a sustainable hydrogen/electro-chemical economy (DAS 1996). Whatever the mix though, the energy sector’s capital requirements will continue to be extremely large.
Energy prices are expected to rise presently, perhaps significantly enough to constitute a ‘shock’ or perhaps gradually enough to not constitute a major obstacle to increased energy use. A significant rise in energy prices would particularly affect transportation systems, now largely dependent on oil-based fuels. Aircraft will consume most of the fossil fuel in future transport systems (Marchetti 1991) and liquid hydrogen aircraft could be an important development for both greenhouse reasons and as a replacement for increasingly scarce kerosene (Victor 1990).
Change in the world transport system stand to be a major driver of global change with benefits from an improved system coming in the form of lower production and delivery costs. Disbenefits from increased passenger and freight volumes include pollution, landscape disruption and loss of amenity values (values directly meeting human needs and wants) (GACGC 1993). Beyond the immediate costs and benefits of the transport system lurks the whole question of the net benefits of free trade.
How might the world's transport networks change in coming decades? Conjectured increases in the value of global trade imply large increases in the physical magnitude of the transport task, despite trends to dematerialisation, to ‘value-added’ exports and to relatively more trade in services than goods. However, the geographic extent of the global transport network has probably already been largely set; what will change as the global economy evolves are the absolute and relative volumes and categories of people and freight, and the modal split (road versus rail etc), on particular links. Mass tourism stands to be a major generator of people traffic.
Technologies already available, or in the research and development pipeline, suggest that reduced costs and higher speeds are possibilities for both freight and passenger transport by road, rail, air and sea. One consequence of the availability of higher speed travel might be to integrate groups of cities into ‘supercities’. Marchetti (1991) argues that people spend on average about an hour a day travelling in their ‘territory’ and always have done; and they spend about 15% of their disposable income to maximise distance travelled in that hour, ie to maximise the size of their ‘territory’, given that they ‘‘have to return to the ‘den’ each night’’. Thus, very poor people have a mean speed of 4 km per hour and a 4 X 4 km territory. The very rich have a mean speed of 500 km per hour and a 500 X 500 km territory. Average territory sizes would continue to increase if average travel speeds continue their historical increase of between 1% and 4% a year.
The aeroplane is the fastest means of transport and given (a) a slow decrease in real terms of the cost of air transport and (b) increasing disposable incomes, air travel stands to be the fastest growing branch of the passenger transport business. Where passenger volumes warrant it (eg Europe, North America), there might also be a place for the increasing use of advanced high speed ground transport such as maglev trains. Notwithstanding, road traffic, with its relatively high emission levels, is set to rise dramatically in some regions, notably Asia (excluding Japan) (GACGC 1993). Whether total vehicle emissions improve or worsen in first world countries depends on the outcome of a race between increasing traffic volumes and improved emission control technology.
Note that there is a natural limit to travel speeds, at least on Planet Earth. Given the time it takes to reach cruise speed and slow down for landing, it makes little sense to travel at speeds much above Mach 2.5 on a planet the size of Earth (S. Singer 1994). ‘The most optimistic date for putting a man (sic) on Mars is 2020,’ says Dr Richard Zurek of the Jet Propulsion Laboratory, California (The Australian, 18 July 1996). Given the 2050 horizon of this book, issues of space travel and colonisation will not be discussed.
It is the capacity to (a) manipulate and (b) transfer information ever-faster that lies at the heart of the electronics-based communications and information industries which are set to be the dominant drivers of the world economy in the next Kondratieff cycle or the next long wave of economic growth if you prefer. Around 20% of world trade, $740 bn a year and growing rapidly, is in intellectual property. The information industry revolves around the creation, organisation, distribution, storage, retrieval and use of information. It has two key components: electronic publishing and information retrieval for business, entertainment and research (OSCA 1996). The key hardware that both depend on, for the moment, is silicon microchips, the heart of every computer. Fabrication of microchips is a massive global industry, currently increasing its output at the rate of 15% a year. Foreseeable developments in superconductors could see them rivalling semiconductors in computer processors and boosting operating speeds, in theory, by a factor of 50.
The Internet provides a dramatic example of the growth occurring in electronic-based communications---at the present rate of connection, everyone in the world would be on the Internet by 2003 (Negroponte 1995) !! Perhaps 200 million actually will be. What Rowland Hill did for letter-writing by inventing the penny postage stamp, the Internet could do for inter-personal communication in the next century, provided that access is cheap enough. Along with accessibility, the big issues in Internet management are likely to be accountability (in a quality control sense) and privacy (William Gibson, in an interview with the magazine 21C (Issue 2(1) 1994). Protecting the integrity of traded knowledge stands to become more difficult (OSCA 1996).
Arguably, the single most important thing about the Internet is that it has the potential to increase the power of the individual in relation to the State and other authority structures. For example, dissenting views can be published world-wide instantaneously; electronic discussion groups and petitions are possible; direct democracy becomes more feasible vis-a-vis representative democracy. More widely recognised though is the potential of the Internet to continue carrying an increasing fraction of global commerce and, by increasing personal productivity, to expand global commerce.
Beyond the Internet as we know it, broadband optical fibres and direct-to-home digital satellite broadcasting stand to allow real-time multi-media communications. This is the heart of the communications revolution---the ability to communicate one-to-one in video, audio and data. Multi-media technology is driving convergence of the publishing industry, the computer industry, the broadcasting industry and the recording industry (OSCA 1996). But not the travel industry; contrary to conventional wisdom, Marchetti (1991) suggests that communication advances (ISDN, local area networks, cellular telephones, faxes etc) may change the way travel budgets are spent but not the amount; that transport and communications are not substitutes.
The loss of the stable state requires that we shift from the rational model to a model of learning, both personal and public. Our concern, then, becomes not only that of finding right answers or solving problems but of developing continuing processes by which problems can be solved and answers found (Schon 1974).
Capitalist economies require a supportive physical, social, cultural, educational and organisational infrastructure (Thurow 1996). Social technologies are the building blocks of that infrastructure. These are new and imaginative ‘recipes’ deliberately developed to solve social problems, meet a social need or achieve a social objective. Some are developed for profit, others by government acting in the public interest. Social technologies appear in various guises. Some work, metaphorically, by creating roles for people and then issuing stage directions for playing those roles; think of the legal system. All are practical applications of ideas for structuring classes of directed interactions between people and parties, 'rules of the game' if you prefer. They are institutional changes in the sense of either changing these rules or setting up new 'games'.
In The step to man, John Platt (1966) addresses the problem of deliberately developing social technologies, or social inventions (his term). He points out that we have many organisations searching all the time for new inventions and combinations of these to solve technical problems. The research and development teams of industrial and government laboratories do nothing else and every few years new technologies change our social structure and our ways of living and working. But we have no corresponding organisations that spend all their time searching deliberately in this way for new inventions and combinations of ideas for solving social problems. There are no national laboratories with full-time research and development teams assigned to come up with ingenious ideas for improved social organisation and communication and interaction, and to set them in motion.
Nonetheless, while little progress has been made in developing a generic understanding of how to develop social technologies for particular tasks (Cocks 1992), proposals for and experiments in trialing ad hoc social technologies abound. Interest in the use of so-called economic instruments for correcting market failures is a contemporary example of the search for social technologies.
But, at the top of the list of needed social technologies must come the emerging discipline of conflict and dispute resolution (eg Burton 1996) with its promise of being able to successfully reduce partisan conflicts in pluralist societies, eg conflicts over natural resource use, welfare payments, taxation levels. Further success in developing conflict and dispute resolution methods has the potential to create new political structures, the highest form of social technology.
One misunderstanding that should be pre-empted is that social technology is just another name for social engineering. Social technologies work with people's desires and tendencies; social engineering tries to change them. If there are worries that a social technology might condition or indoctrinate people in unacceptable ways, the solution is to establish clearly just what people's rights are and ensure that these are respected, not to take the attitude that a society can never attempt to change its members' values and attitudes.
Surveys by experts of the plethora of new technologies foreseeable over coming decades (eg Sheffield et al 1994) are extremely interesting and usually include, amongst others, biotechnologies, developments of new materials, measuring technologies, robotics and nanotechnology (equals miniaturisation and self-assembling components). Photonic computers, running on light beams instead of electron flows, will replace electronic computers in the next century (Sceats 1992). An era of commercial high resolution earth observation satellites is arriving and will generate geographic information of overwhelming detail and scope. However, technological forecasting, at least at global level, is outside the scope of this book.
Nonetheless, glimpses of technologies beyond 2050 are fascinating to the point where, as an indulgence, some might be briefly noted. Regis’ 1990 review covers a range of startling possibilities including ideas like downloading memories onto disc, neurone-chip grafts, the use of drug-mediated virtual reality to extend people’s vicarious experiences, time travel, limb regrowth, cryonic re-animation, artificial wombs (shades of Aldous Huxley), alchemy, repositioning planets under threat from approaching cosmic bodies, bacteria-sized robots. Nerve regeneration could allow the curing of some blindnesses, quadriplegia and paraplegia. Immunological diseases such as asthma, arthritis and some cancers could be brought under control. Technologies for splitting an embryo so as to provide a reservoir of spare parts for one’s old age are foreseeable and raise major ethical questions as does the use of other species to provide organ transplant material (Cravalho 1994). Life extension technologies based on bio-drugs such as melatonin and human growth hormone could increase first world life expectancy at birth to 120 by 2100. This would have downstream implications for average population age, population size, inheritance taxes etc.
It is curious that environment enhancing and restoring technologies are seldom found on such ‘gee whiz’ lists.
Linked to, but still more-or-less separable from changes in the global political economy, there are a number of trends and processes in world society shaping the environment to which Australia will have to adapt over coming decades. These include:
· the growth, urbanisation, ageing and movement of world population
· trends in international crime
· shifts in personal and community values
It is widely accepted that even though total fertility rates are falling in many countries, world population is likely to double to more than 10 billion before approaching stability late next century (United Nations Fund for Population Activities 1992). This figure is compatible with nine world population scenarios prepared by International Institute for Applied Systems Analysis (IIASA) (Lutz 1994), although the ‘best guess’ or ‘central’ scenario amongst these nine is for a stabilising population of 12.6 billion by 2100. In coming to this state, the average age of people in all the major regions of the world would increase. The more rapidly fertility declines, the faster the population ages.
It is also widely accepted that developing countries will account for a greater share of the world population. Most of the world’s population increase is taking place in today’s developing countries in a way such that by 2030 these will contain between 85% and 87 % of the world’s population, even under diverse assumptions about fertility and mortality. Under IIASA’s central scenario, South East Asia’s population in 2100 will be 1.1 billion, up from 0.52 billion in 1990. China’s population will be 2.0 billion, up from 1.2 billion in 1990. Looking to Australia's near neighbours, between 1950 and 2050 Indonesia’s population will rise from 80 million to 320 million and Papua New Guinea’s population will rise from 4 million to 8 million by 2020 (Tait 1994; Cole 1993).
As well as growing and ageing, the world’s population is urbanising and moving. The percentage of the world’s population living in cities will rise from 45% today to 61% in 2025 according to UN projections. Many will be cities like Bangkok which appears to be uncontrollably decaying to the extent that the centre of the city could soon become uninhabitable because of floods, ground subsidence and pollution) (ESCAP 1996).
The large scale immigration between first world countries seen after World War 2 seems to have come to an end. The 21st century stands to be one of movement of people from poor to rich countries and, indeed, the first wave of third-worlders has already arrived in the first world (Kennon 1995). Differences in population change will generate great migratory pressures, especially between proximate rich and poor countries such as China and Japan or eastern and western Europe. Thurow (1996) foresees population movements more massive than the world has ever known. His reasons include (a) falling international travel costs and (b) the availability of Western ‘good life’ images on third world TV screens. If tensions between Taiwan and Beijing, or between North and South Korea escalate into armed conflict, the Asia-Pacific region could see massive movements of displaced persons.
It is widely (but not universally) accepted that all countries have a responsibility to stabilise their populations as quickly as possible. At the United Nations International Conference on Population and Development in Cairo in September 1994, signatories to a 20-year Programme of Action committed themselves to formulating national strategies and programs to deal with population and development problems as an integral part of an overall development and planning process. As a further example, a declaration by the world's scientific academies, meeting in New Delhi in 1993 said that the world population goal should be zero population growth within the lifetime of our children (Graham-Smith 1994). However, short of coercion, even active and effective population stabilisation programs, would not change the broad trajectory of future world population growth. Stability will come as more and more populations pass through the demographic transition to lower fertility associated with rising incomes and better female education (Caldwell 1994).
The many conceivable consequences of changing global demography include:
· Changing world markets, particularly the emergence of sizeable middle-class populations in otherwise poor third world countries eg India, China;
· Changes in consumption patterns reflecting changes in the cohort mix (eg more elderly people in absolute but not relative terms);
· Increased pressure on global natural resources with particular implications for resource-based conflicts and resource degradation (see below);
· As the world’s population ages, people in the first world could become more valuable and life could get better for the underclass perhaps by about 2020, just when life in the third world is beginning to go chaotic due to population growth. There could be some tendency in first world countries to try and counter ageing by bringing in young immigrants and guest workers.
Professor Robert O’Neill said it was probably only a matter of time before terrorists stole a nuclear warhead and detonated it in the US (The Australian Aug 15 1996).
Profit-seeking crime flourishes where governments are unstable and where there is wide disparity in income levels. (OSCA 1996). Crime is already as powerful as government in some countries, eg Colombia, and, perhaps, Russia (Elkins 1995). Certainly organised crime has been quick to take advantage of weaknesses which have opened up with globalisation (OSCA 1996).
Organised crime groups are expanding internationally beyond the narcotics trade into areas such as human-organ traffic, arms traffic and information fraud. For example, bank, credit and telephone fraud reached $8 bn globally in 1991. According to the Far Eastern Economic Review (Jan 23 1995), 19 of Phnom Penh’s 29 banks are being used to launder drugs money and, given the country’s history of violence and instability, Cambodia could become another Colombia on Australia's doorstep (OSCA 1996). Piracy and kidnapping (eg for child prostitution) may well become increasingly important. However, the increasing cost of law enforcement may also lead to the decriminalisation of some offences, particularly drug offences (and particularly if experiments in the privatisation of prisons do not work).
International terrorism, as distinct from profit-seeking crime, is widely regarded as a growing threat to first world countries with post-Cold War defence budgets being increasingly spent on combating terrorism (and international crime) (Elkins (1995). Apart from the ultimate terrorist act quoted at the head of this section, bombings and shootings stand to give way to sophisticated operations grading, eventually, into non-military war (see above). Third world countries could be subjected to food terrorism eg poisoning grain shipments. There are no obvious reasons why national and international law enforcement agencies stand to become more effective at combating international crime and terrorism.
Values are ‘entities that are highly valued’. They act as rules of thumb for individuals and communities in the making of choices between re-occurring complex alternatives. In stable societies values evolve slowly through natural selection---rules that work are retained, others are discarded. In modern societies the rate of social change challenges the capacity of the value-making process; past experience is of declining relevance to selecting present actions (Toffler 1970). Nonetheless, the search for values goes on and here we note four areas (issues) where struggles between candidate values are determining the most fundamental aspects of future societies. These are:
. distribution of sovereign power
. individual rights and responsibilities
. role of religious behavioural standards
. perceptions of collective priorities
Sovereign power, power to make autonomous and binding decisions on behalf of people, such as a sovereign ruler has, can be shared, in a bewildering variety of ways, between the individual and various collectives such as family, tribe, region, nation, global community etc.
Value shifts and/or trends that are readily identifiable in one or more first world countries include:
. widespread acceptance of neo-liberal individualism, the doctrine of the primacy of the interests of the individual and that the individual should be free to live life with minimum interference from the state;
. movements towards greater participation and more direct democracy;
. movements to complete the emancipation of women;
. cultural protectionism (Elkins 1995)
. separatist movements and, more generally, surging nationalism (Grant 1988);
. movement towards a sense of global community as expressed in the establishment of international agreements and institutions;
. movements for greater regional autonomy within democratic nation states;
. formation of multi-nation trading blocs and federations
While it is difficult to generalise over such diverse value shifts, many writers, as noted above, see an overall continuing movement of sovereign power away from the nation state; upwards to supra-national bodies and downwards towards individuals and sub-national collectives.
In the realm of social technologies, the invention of human rights is arguably humanity’s greatest achievement. Civil and political rights are passably well recognised and protected in the western democracies (five out of ten?) but social, economic and environmental rights are scarcely recognised, even by governments striving to improve social, economic and environmental quality of life for all. The reason for the latter situation, as much as anything, is that governments just do not know how to guarantee social, economic and environmental rights. There seems little prospect of formally-guaranteed human rights being extended in the first world in coming decades.
However, even without formal guarantees, first worlders live under a tacit social contract within which society has a responsibility to attempt to provide some sort of rising standard of living in return for the individual citizen fulfilling certain obligations and accepting certain responsibilities to the society, some legally enforceable, some not.
But, for much of the first world since the 1970s, society has provided a declining standard of living for an increasing proportion of the population (Thurow 1996) and it is presumably in response to this that the tacit obligations of citizenship are being eroded and replaced with political apathy, anti-social behaviour or an aggressive individualism that refuses to recognise the social basis of individual well-being (‘There is no such thing as society ‘, says Margaret Thatcher).
The rich too are losing their allegiance to the social contract, but for different reasons. Their well-being is increasingly being determined in world markets rather than domestic markets. Because the fortunate thus feel less connected to and less dependent on their own country’s people, they are less willing to invest in their futures and the social and economic gap between rich and poor is widening (Reich 1991). The dilemma is, as Reich puts it, that if the rich are taxed they will move to tax havens offshore just as, but more readily than, they have for years; but, if the rich are not taxed, public infrastructure, physical and institutional, will degrade and the rich will secede and move to private enclaves and provide their own exclusive infrastructure. In any case, as mobility increases, notions of citizenship will become more complex and may become blurred.
Religion provided a clear value system for Europe prior to the industrial revolution but this role has been giving way ever since to more secular values (Tawney 1920; Lasch 1995). However, with a loss of confidence in the ‘march of progress’ in recent decades (and in the secular religion of socialism (Hutton 1996) and a clouding of people’s perceptions about how the world will evolve over coming decades, there has been a resurging belief in the power of religiously-prescribed behaviour to ensure a good future for the world.
More particularly, there has been a spread of Islamic fundamentalism in the second and third worlds and of Christian fundamentalism in the first world (Elkins 1995). But the western fear of a fundamentalist tide advancing unchecked across the Islamic world---and then beyond---seems to be unjustified (Roy 1994, Kennon 1995). Within the mainstream versions of Christianity, Islam and Judaism, some modest ongoing reform of their existing patriarchal styles stands out as a common trend. The first world is also experiencing a rise in the popularity of a-rational ‘new age’ values such as the power of astrology. And, for many, the environmental movement provides quasi-religious values.
Patently, the three values jostling for top priority in gaining the attention of most first world governments are economic growth, social justice and environmental protection. While economic growth is clearly winning this struggle at the present time, its virtues are being increasingly challenged by trends such as:
. greater ecological knowledge and awareness in the community
. the appearance of more aggressive environmental groups
. increasing concern over global environmental issues such as global warming and stratospheric ozone depletion (see below)
The widespread acceptance of the concept of sustainable development, as popularised by the Brundtland Report (World Commission on Environment and Development 1987), can be interpreted either as a dialectical synthesis of growth and ‘green’ values or as a clever rearguard action by growth protagonists seeking to delay environmental regulation of their activities. The latter interpretation is more likely to be true of American, British and Australian industry where there has been stronger resistance to environmental thinking than in Germany and Japan where some industries are proactively greening themselves.
At the same time, capitalism, in its normal vigorous way, is responding to increasing demands for environmental protection; for example, in the growth of the environmental protection industry and in the rapid spread of greener technologies and products.
Beyond growth and the environment, other collective purposes struggling to improve their standing as priority values amongst first world governments include:
. better distribution of income to eliminate poverty;
. full or, at least, fairly shared employment;
. improved working conditions.
Sitting just outside the reigning spectrum of values influencing first world governments, knocking at the door, are two values which have the potential to ‘shift the paradigm’, to induce quite dramatic changes in the way first world societies organise themselves. These are:
. long-termism, ie increasing concern for the long-term survival of civilised society; the promotion of long-term thinking over short-term thinking;
. promotion of mutualism, ie co-operative interaction, at the expense of, but not the destruction, of individualism and competition. Mutualism is the doctrine that maximal individual and collective well-being is attainable only by accepting the mutual dependence between people and fostering their mutually supportive interaction, eg Wilkin (1996). Mutualism, in practice, means proactively creating a wide range of semi-autonomous non-adversarial, collaborative, voluntary, interactive, participatory, inclusive, consensual, co-operative, institutional arrangements.
A common obstacle precludes the greater acceptance of both mutualism and long-termism, namely a lack of shared perceptions about the practical institutional reforms needing to be undertaken to implement these values. Exploring these reform possibilities will be central to the Australian post-materialist scenario to be developed below.
Few important (society-moulding) values have remained dominant over their rivals in the crisis years of the present century. While it is necessary for competing values to be debated and trialed, such struggles contain two dangers. One is that adherents of opposing values settle down into paralysing or, worse, nation-shattering antagonism. The other is that frightened societies will fall prey to people peddling simplistic values as answers to complex problems.
...it seems that supernova explosions, solar flares, mergers of black holes or neutron stars, large scale volcanism or impacts by asteroids or comets are very unlikely to kill all of us in the near future (Leslie 1996).
The threat of ecological disaster is rooted in the inability of the market mechanism to resolve the global problem of pollution (Heilbroner 1993).
The earth’s biosphere (plants and animals), geosphere (soils and minerals), atmosphere and hydrosphere (water in all its forms) have always, throughout evolutionary time, been in the process of changing for one reason or another. But, in the last few hundred years, rates of change in these components of the natural world have been increasing in readily measurable ways. This is the phenomenon known as global environmental change. It seems, for example, that a great wave of species extinctions, comparable to five earlier such waves, is under way and effectively unstoppable (May and others 1995).
Human activities are the cause of global environmental change. The most widely recognised and easily understood change in the global environment is the modification of the atmosphere’s composition by humans. Three global phenomena, widely agreed to be global problems, follow from this: intensification of the greenhouse effect, and the global warming and climate change associated with that; ozone depletion in the stratosphere, resulting in higher levels of life-damaging ultraviolet radiation (Leslie 1996), and changes to the troposphere and associated phenomena eg, photochemical smog and acid rain.
If human behaviour fails to change, then the anthropogenic increase of greenhouse gases, according to best available knowledge, will cause a mean global warming of 3°C next century. This may not sound much, but, unless appropriate action is taken, major changes can be expected, above all a redistribution of precipitation zones and a rise in sea level of 65 cm plus or minus 35 cm by 2100. The greenhouse effect is an indirect cause of global warming but, because all energy is eventually converted into waste heat, there is also some direct limit on energy use beyond which thermal pollution will begin to affect living organisms (Birch 1975).
Land-based marine pollution has not yet fully emerged as a global environmental problem but is on its way. Pollution by litter and sewage are the two most publicly visible forms of impact on the marine environment. The less visible but potentially very damaging pollutants of the marine environment include organic contaminants, such as non-biodegradable polychlorinated biphenyls (PCBs) and chlorinated hydrocarbons (eg dioxins), and heavy metal discharges (especially mercury, lead, zinc, cadmium, copper), mostly from industrial sources. Dumping of toxic wastes in Australia's unpoliced oceans could become a problem (OSCA 1996). Eutrophication of coastal waters is an increasing problem worldwide. It results from coastal development and land use changes and occurs in response to addition of nutrients (nitrogen and phosphorus) to estuarine and inshore waters. Algae proliferate on the surface and deprive deeper waters of oxygen and light, killing most marine organisms. Nutrient inputs of this kind may be from industrial sources, but are especially associated with sewage, urban run-off and agricultural practices.
Other major components of global environmental change include depletion of fish stocks, deforestation, overuse and pollution of water supplies and the degradation of agricultural land. The world’s natural resources are being used up or made unusable, ie unusable under present technologies. Concurrently, the capacity of the world’s major habitats and ecosystems to satisfy the recreational needs and spiritual and aesthetic values of residents and visitors has also declined (World Resources Institute 1996).
During the last decade there has been a genuine shift in the scientific community’s perception of global environmental processes. For example, it is now thought that the earth’s climate does not respond to ‘forcing’ in a smooth and gradual way but in sharp jumps which involve reorganisation of the earth’s climate-weather system. If so, small changes cannot be regarded with the same equanimity as previously; they may take the system across major thresholds.
The distribution and occurrence of natural physical hazards such as volcanic eruptions, tidal waves and cosmic events (eg meteorites) remains unaffected by growth in human populations and their activities. What is changing however is the probability of such natural events causing major disasters, simply because there is an increasing likelihood of (bigger) communities being in the places where they occur (Cocks and Davis 1985). Cyclones and storms are a special case though. Warming the oceans, as we are doing, will extend the regions of the world where these phenomena stand to cause disasters.
And then there are the various potential disasters sitting on the boundary between the natural and the anthropogenic. Two of the potentially most disruptive are:
. The existence of many aging nuclear plants suggests the possibility of more Chernobyls, affecting perhaps hundreds of millions of people.
. ‘Environmental hormones’, oestrogen-mimicking compounds result from the breakdown of plastics, insecticides etc. Thus, the increasingly widespread use of synthetic chemicals could precipitate a major drop in human (and animal) fertility and a major rise in developmental abnormalities (Colborn et al 1996, Dibb 1995).
While there will continue to be natural and man-made disasters, many proving catastrophic at regional scale, none will significantly threaten the global-scale wealth-generating process which has continued since the industrial revolution and none will threaten the human species’ survival (McRae 1994).
In 1995 the International Food Policy Research Institute (IFPRI) hosted a conference entitled A 2020 Vision for Food, Agriculture and the Environment. The central message from the meeting was that while the world should be able to provide enough food to feed 8 billion in 2020, with the main food crops selling at even lower prices than today, more people will be hungry in the world’s poorest countries---unless there are radical policy shifts. Hardest hit will be South Asia and sub-Saharan Africa where food production will barely outstrip population growth. Cereal prices were foreseen to fall by 20% and meat prices by 10%, a conclusion disputed by Lester Brown of the World Resources Institute (1996). Brown says that whether food prices rise depends on China’s need for grain imports, already 16 million tonnes in 1995. In the IFPRI scenario, Australian cereal exports were seen to double by 2020, a matter of considerable doubt.
The conventional view is that this looming problem can best be tackled by raising incomes and therefore the buying power of the poor in developing countries. That is, given effective demand, the market will provide. Other priority actions seen as being important for reducing the number of hungry people in coming decades (Pinstrup-Andersen 1994) include:
. Strengthening government capacity to manage the economy and society in developing countries;
. Investing in the health and education of poor people;
. Managing natural resources more effectively;
. Accelerating the rate of increase in agricultural productivity. One indicator of potential here is that post-harvest storage losses amount to perhaps 20% of world grain production.
. Reducing food marketing costs as a contribution to reducing retail food prices;
. Expanding and realigning development assistance.
Looking further ahead to when the world’s population doubles next century, we will need to find an extra 64.5 m sq km to feed everyone, assuming that sources of food and the productivity of agricultural land remain unchanged. To get a feel for this, North America covers about 28.5 m sq km and Australia is about 7.7 m sq km. So we will need to set up a new farm equal in size to two North Americas plus one Australia. If we cannot do this, appropriately modified for productivity gains and losses, people will starve. Productivity losses from soil erosion and degradation are central here and show no sign of declining. As for productivity gains, there is no new generation of land-based technologies waiting in the wings. Even if genetic engineering eventually produces nitrogen-fixing, salt-resistant, drought-resistant, pest-resistant grains, their widespread adoption will, for logistical and financial reasons, still take decades. Nonetheless, an ever-increasing fraction of the world’s food will be produced from organisms genetically-engineered and patented by large multinationals such as Monsanto.
It is fairly clear to me that while technologies will continue to improve in existing food-production industries, the world will only be able to feed its people by developing new supplies of cheap food from the sea (eg whale farming, fish flour, seaweed flour), from the land (eg meat powder) and from industrial processes. These latter include crop plants produced by hydroponic methods, cultured foods (eg yeasts, animal and fish tissue) produced in tanks and vats and chemically-synthesised foods (Prehoda 1967).
Overall, despite some not-unreasonable doubts about methods of estimating global hunger (Poleman 1996), it is problematic whether the additional billions who will inhabit the world of 2050 can and will be provided with the means to live in even frugal comfort. Currently one billion people live in quite unacceptable poverty. However, it may be that while malnutrition is rampant, starvation is relatively rare (Wagar 1989). In our own Asia-Pacific region, the growth of population and industry will continue to reduce the availability of arable land and countries there will increasingly rely on food imports.
Being a finite resource, per capita global supplies of water are continually declining as world population increases. Already 27 countries fall into the water-scarce category---less than 1000 cu m of fresh water per person per year. This list includes some developed countries (eg Belgium) and stands to be extended rather than reduced by any redistribution of precipitation associated with global warming.
While there is considerable scope for managing water resources much more effectively, this requires an uncommonly high level of social control in areas such as water pricing, consumer education and dispute resolution. Technologies for increasing water supplies above the natural renewable level include distillation of seawater which is an energy-intensive process and, a more promising prospect, Ocean Thermal Energy Conversion (OTEC) ships which exploit temperature differences between surface and deep waters.
Chapman and Roberts (1983) estimate that the energy cost of retrieving a kilogram of minerals is likely to rise at 2-3% pa in coming decades. However, there are several ways in which the major price rises this implies stand to be ameliorated:
. the trend towards recycling of metallic and other components of worn-out goods;
. the trend towards dematerialisation, ie the use of smaller quantities of raw materials to achieve a product of given functional capability;
. a nascent trend towards producing ‘long life’ products;
. increasing possibilities for substitution between metals and of non-metallic materials for metallic materials in goods production.
Based on indicators such as life expectancy, child mortality and disability, there is a consensus among experts that the world’s population has never been healthier (Douglas 1996). But official predictions that modern medicine would eradicate infectious diseases have, smallpox aside, proved to be spectacularly misplaced. Diseases such as malaria, tuberculosis, measles and hepatitis are still a major cause of death in many parts of the world. ‘New’ diseases (eg Lyme disease, AIDS) continue to emerge at unprecedented rates while old ones return to regions where they were on the decline. As the world fills with people, increasing interaction between humans and animals such as rodents, stands to assist more diseases, like AIDS, to cross the inter-species barrier (Gibbon 1993). And, as AIDS-damaged immune systems demonstrate, old diseases can re-emerge in partnership with new diseases. In many cases, changes in the environment (eg forest clearing, algal blooms, air conditioned buildings, climate change) are creating new pathways for diseases to spread and take hold (Harvard Working Group 1995).
Two other major causes of disease resurgence are increasing drug resistance of causal organisms (eg tuberculosis) and international travel. It is an open question as to whether medical science will be able to stay ahead of the evolution of drug-resistant strains of micro-organisms. The malaria parasite appears to be mutating into increasingly deadly forms, eg cerebral malarias resistant to mefloquine. Might the AIDS virus mutate into something more transmissible? Potentially, about 45 per cent of the world’s population is currently exposed to malaria and, under the climate change scenarios of the International Panel on Climate Change, this could rise to 60 per cent (Martin and Lefebvre 1995).
Given time and a reasonably stable world, diseases and populations tend to come into balance. However, increased urbanisation and increased interactions between peoples mean that the world community becomes one big disease pool. While this ‘global village’ means that there are no longer susceptible unexposed local populations waiting to be drastically reduced by diseases new to them (eg the Australian Aborigines after white settlement), it also means that a virulent new disease could drastically reduce the world population (McNeill 1979). Or, less apocalyptically, pandemics of Cholera, Yellow Fever and Plague are all possible in coming decades. Loss of children and old people to disease can be tolerated in one sense but the loss of, say, 20% of the adult working population stands to threaten the stability of any society.
Poverty always lowers resistance to infectious diseases as does exposure to pollutants. And the poor tend to be more exposed to pollutants than the rich, although some pollutants, like smog, are quite democratic (Beck 1992). As measured by a greatly reduced capacity to work, there could be a drastic reduction in the ‘’quality’ of third world populations over the next several generations due to hunger, infectious and chronic diseases.
As populations pass through the demographic transition to lower birth and death rates, causes of death change from diseases of famine and pestilence to ‘lifestyle’ diseases such as cancer, accidents and cardio-vascular disease (Douglas 1996). Amongst the lifestyle diseases, smoking-related deaths (particularly in China) will rise globally to 10 million annually in a few years eclipsing AIDS, malaria and TB deaths. The World Health Organisation predicts that road accidents will rise from ninth to third (behind clinical depression and cardio-vascular disease) as a cause of world death and disability by 2020. Finally, the possibility of germ warfare, the ultimate lifestyle disease, (a) occurring and (b) going horribly wrong cannot be wholly discounted (McNeill 1979). Is some psychopath hoarding the supposedly extinct smallpox virus for future release into a susceptible world?
This section extracts, from the material presented and referenced above, 28 basic propositions about what the world---viewed as Australia's environment--- might be like over the coming half-century. Perhaps these can be most usefully thought of as a flight manual or traveller’s guide for those piloting Timeship Australia. They are one person’s assertions about the possibilities, impossibilities and certainties that Australians most need to be aware of as we guide the country into the future (As some counterpoint, Box 2.1 contains a list of ongoing world problems collated by the Club of Rome). They are important in the sense that, prima facie, they set bounds around Australia's plans for the future and on the plausible consequences of those plans. While Australia, as a player in the global drama, can do something to change those bounds (see below), just how much is problematic.
My propositions about global futures fall into four categories:
· Global catastrophes. These are depressing images of the future which have low potential surprise and profound implications for the quality survival of Australian society, and indeed world society, but which I am prepared to accept, for later scenario building purposes, as certain to not eventuate.
· Global givens. These are images of part-futures I am prepared to accept as certain to more-or-less eventuate, at least for the purpose of developing ‘active’ national scenarios. If this book were about constructing world scenarios instead of national scenarios, these are future-images which would be common to all scenarios.
· Global windfalls. These are encouraging images of the future which have high potential surprise but which, if they did eventuate, would significantly improve Australian society’s prospects for quality survival, eg nuclear fusion. For scenario building purposes, I will accept these as certain to not eventuate.
· Global possibilities. These are paired, contrasting, possibilistic images of part-futures, all of low to moderate potential surprise and all of significance for Australia's future, eg more versus less economic growth. For scenario building and evaluation purposes, I will usually assume that one or other of each of these pairs will eventuate (and therefore, necessarily, that other related possibilities will not occur). This is simply an analytical device that, by abstracting out and concentrating on ‘focal’ possibilities, allows an infinitely rich suite of possible futures to be discussed.
In summary then, Australia's future global environment will be assumed, at least initially, to contain:
1. No global catastrophes or windfalls,
2. A set of ‘certain’ givens and
3. A set of pairs of contrasting possible part-futures, such that one or other member of each pair will always eventuate. While the members of each pair express possibilistic knowledge and cannot be given even subjective probabilities, they will be assigned a qualitative indication of the degree of potential surprise that would be felt in the event of their occurrence.
While it would be highly unsurprising in the 21st century to see global climates change slowly in response to greenhouse warming, there is also a possibility, albeit one with higher potential surprise, that climates around the world could change massively, rapidly and in unforeseen ways. This has the potential to massively disrupt human society, both nationally and internationally, but I am assuming this will not happen.
While it is true that the cold war is over and that democratic states have never waged war against each other, the number of nuclear states is proliferating and military capabilities are increasing, qualitatively and quantitatively, in many countries. There remain a number of plausible sequences of events (eg Friedman and Lebard 1991) leading to all-out war between nuclear powers, including major powers, but I am assuming this will not happen.
An outbreak of disease capable of reducing the world’s human population by an order of magnitude is possible. Facilitating and predisposing conditions include increasing concentrations of people in big cities with poor public health standards, increased global travel, increased opportunities for inter-species transfer of diseases and increasingly rapid resistance of disease organisms to new medical drugs. I am assuming such an outbreak will not occur.
Global economic depressions and crises (plunging GWP and threats thereof) have happened before and could happen again (Daly and Logan 1989). Facilitating and predisposing conditions include a fragmented international money system, third world debt, US balance of payments problems (Thurow 1996), over-investment in industrial capacity, the volume of currency sales, the speed with which financial market moods can diffuse around the world, food shortages and rising energy prices.
While very little about the first half of the 21st century should be taken for granted we can be fairly confident of:
Population will rise from 6 billion towards 10 billion late next century, with most of that increase being in the developing countries, particularly their major cities. Urbanisation will be characterised by urban sprawl and inner city urban decay.
For the next fifty years the world will continue to be divided into a first world of industrialised countries, a second world of developing countries and a third world of industrially undeveloped countries. Between and within these worlds there will be great inequalities of wealth and, in the third world particularly, widespread illiteracy, homelessness, hunger and malnutrition. Many third world countries are ‘locked into’ poverty and there is no foreseeable trigger that could induce the first world to behave in a way that would allow the third world to make significant progress towards meeting the basic needs of its peoples. This is not to say that such a trigger will not appear, just that nonesuch can be identified.
Within the first world, all nation states will be organised around a capitalist economy of some sort married to a state of greater or lesser reach that is, at least nominally, democratic (Heilbroner 1993). What is of paramount importance to the world is that, within those parameters, states should be highly diverse because, somewhere amongst that diversity, will be the state that stumbles across the successor to the capitalist paradigm, a way of organising society that offers the promise of ameliorating the many problems that persist under 20th century capitalism.
Gross World Product will continue to rise, perhaps with pauses, predominantly in the Asia-Pacific region. The product mix will continue to swing away from goods towards services. Nonetheless, the global economy’s material throughput will continue to rise despite trends to dematerialisation. This will be due to population growth and rising real incomes for many, effects that will swamp the more efficient use of materials and saturation of some markets, eg the rich buy services not another car (Larson et al 1986). Growth will be driven by continuing trade liberalisation and expansion and by technological change, particularly in the information, communications and transport sectors. An increasing fraction of Gross World Product will be produced by a small number of ever-growing mega corporations.
The two processes behind glocalisation will continue, namely:
. the geographic dispersion between countries of components of the mass production system, and
. movements by cultural and regional communities within first, second and third world countries to achieve recognition and greater autonomy.
Natural disasters occur when people occupy hazardous areas, an increasingly widespread conflux as world population grows. This prospect stands to be exacerbated by global climate change.
A ‘wish list’ of beneficial developments that are not inconceivable but which, for practical planning purposes can be presumed impossible could be long. I restrict myself to listing two, nuclear fusion and social learning. The point of any such listing is to draw attention to what should not be assumed (no magic bullets) while simultaneously suggesting that an enhanced search for such developments is intrinsically worthwhile.
On balance, it would be a great bonus for the world to have access to ‘unlimited’ electricity generated by affordable nuclear fusion at a date much earlier than that foreseen by experts.
A breakthrough in learning how to routinely develop democratic, value-sensitive, information-sensitive ‘recipes’ for tackling diverse social problems would be a great bounty for humanity. It would ameliorate the problem of pluralistic stagnation and allow obsolete institutions and value systems to be redesigned in a legitimate way as required.
In this section, under each of 16 headings, I identify a contrasting pair of possible ways the world could change by 2050, namely, a more-surprising and a less-surprising possibility. These forking alternatives, with their different degrees of potential surprise are presented as though those potential surprise levels are independent but this is not really so. For example, if one knew that democracy was going to spread further, one would be less surprised than otherwise at the idea of social movements coming to strongly influence policy formation and institutional behaviour.
A more-surprising possibility: The nations of the world give the United Nations Organisation (UN) real resources and real powers to begin establishing world government.
A less-surprising possibility: The UN becomes increasingly irrelevant with the rules governing behaviour between nations being set by agreements between major powers and major corporations.
A more-surprising possibility: The proportion of the world’s people living in liberal democracies grows somewhat.
A less-surprising possibility: The proportion of the world’s people living in liberal democracies declines somewhat.
The dual basis for these assertions is simply that a large proportion of the world’s population growth is occurring in non-democratic countries and that democracy is losing its appeal as many democracies fail to deliver improving quality of life to their citizens. ‘Token’ democracies are also a possibility.
A more-surprising possibility: First world governments come to play enhanced roles in their nation’s affairs.
A less-surprising possibility: First world governments come to play diminished roles in their nations’ affairs.
A more-surprising possibility: There is significant movement in first world countries towards co-operation and mutualism and away from individualism and competition as a basis for managing national affairs.
A less-surprising possibility: There is no significant movement in first world countries towards co-operation and mutualism and away from individualism and competition as a basis for managing national affairs.
A more-surprising possibility: One or more nations emerge as clearly demonstrating that it is possible for a liberal democracy to begin solving the problem of pluralistic stagnation in a way which protects the interests of minorities.
A less-surprising possibility: Most first world nations move to a ‘winner takes all’ strategy in which the electoral majority’s interests are pursued with little recognition of minority interests.
A more-surprising possibility: Movements for greater protection of the environment, for political emancipation and for female emancipation grow rapidly and come to exert a major influence on policy formation and institutional behaviour in most countries.
A less-surprising possibility: Movements for greater protection of the environment, political emancipation and female emancipation grow slowly and come to exert some influence on policy formation and institutional behaviour in most countries.
A more-surprising possibility: The Asia-Pacific region experiences a number of regional wars.
A less-surprising possibility: Few, if any, regional wars occur in a stable Asia-Pacific region.
Unstated, but common to both possibilities, is the ‘given’ that there will be regional wars in Europe, central Asia and Africa in the first half of the 21st century.
A more-surprising possibility: Civil war between an underclass (rather than a cultural minority) and mainstream society occurs in some first world countries.
A less-surprising possibility: There is a massive increase in uncoordinated violence in first world countries.
Here, a difference in the nature and degree of violence is foreseen in the two possibilities. The possibility of declining violence is regarded as too surprising to be included in a short list of possibilities. The forces of prejudice, discrimination, poverty and alienation are regarded as too strong to be tamed within the time frame being considered.
A more-surprising possibility: There is a small increase in international crime.
A less-surprising possibility: There is a massive increase in international crime.
The possibility of a decrease in international crime is regarded as too surprising to be seriously considered.
A more-surprising possibility: The economies of the Asia-Pacific region languish.
A less-surprising possibility: The economies of the Asia-Pacific region continue to grow monotonically, if not steadily.
A more-surprising possibility: Rate of loss and degradation of natural resources (particularly soils, water and forests) slows.
A less-surprising possibility: Rate of loss and degradation of natural resources accelerates.
A more-surprising possibility: Demand for legal and illegal immigration into Australia declines in favour of domestic and foreign immigration to East Asian growth zones.
A less-surprising possibility: In tandem with major illegal immigration, there is a dramatic increase in international pressure on Australia to take large numbers of legal immigrants.
A more-surprising possibility: First world life expectancies stabilise or go into slow decline.
A less-surprising possibility: First world life expectancies rise very slowly.
The critical factors here are the extent to which a reasonable level of health care is available to all, the pervasiveness of healthy lifestyles and the quality of the public health infrastructure.
A more-surprising possibility: First world education systems concentrate on and become highly proficient at inculcating socially legitimated values and teaching life skills to all.
A less-surprising possibility: First world education systems concentrate on and become highly proficient at providing vocational education to those able to afford it.
A more-surprising possibility: Irrespective of income, all in the first world have access to a global electronic infrastructure supporting ubiquitous personal communications and customised information and entertainment services.
A less-surprising possibility: Rationed by income, there is a moderate level of access, in the first world, to a global electronic infrastructure supporting ubiquitous personal communications and customised information and entertainment services.
A more-surprising possibility: Energy prices rise significantly enough to constitute a ‘shock’.
A less-surprising possibility: Energy prices rise, but gradually enough to not constitute a major obstacle to increased energy use.
Yet it is important not to regard the actions of governments and corporations here [ Australia] as merely responses to globalisation. They are themselves one of the components of globalisation (Fagan and Webber 1994).
In broad terms, the relationship between Australia and the world is that we are more future takers than future makers. While we have to largely accept the world as it is and will be, there is some scope for us to shape the way the world will be, in particular, the part of it we live in.
This means knowing what we regard as being in the national interest, what might be possible and then pushing hard for it. Alternative attitudes to this task will be discussed presently, but it can be noted that the instruments available for such moulding of our global environment include foreign aid, leading by example, treaties, quiet diplomacy and active participation in international programs and fora.
While it would be somewhat surprising if we were to play a leadership role in global or regional affairs (Grant 1988) it would be even more surprising, under any credible national strategy, if Australia failed to continue playing some sort of active role in such.
Recall that the purpose of this paper has been to collate (a) subjectively certain and (b) possibilistic knowledge of the global environment within which Australia will find itself over the next 50 or so years. The focus has been on identifying and characterising those critical dimensions of the world’s future that Australia and Australians cannot afford to ignore, that ought to be factored into national thinking about the future. Also, the paper’s material has necessarily been chosen from the perspective that Australia has a particular interest in (a) the future of first world countries (currently being one) and (b) in the Asia-Pacific region, its geographic environment. While there is some scope for Australia to change its global environment (through international fora, by example etc), it largely has to be treated as ‘given’.
While there is a common view abroad that global society is in a state of flux from which clear patterns have yet to emerge, there is in fact a remarkable consensus amongst futurists about many aspects of the world’s mid-term future, now that 1970s perceptions of a world going forward into an age of abundance and leisure have been decisively rejected (Boulding 1978). In the 1990s, what does seem clear, certainly in the views of both Hobsbawm (1994) and Heilbroner (1995), is that global change in coming decades will take place within a cage formed by the same giant forces as those moulding recent centuries---capitalism, technology and the search for political emancipation. The difference is that these forces are no longer regarded unambiguously as carriers of progress. Rather, the outlook for the future has turned sombre because negative aspects of these agents, either unknown or unrecognised previously, are now perceived to be as important as their undisputed positive effects.
It is true that many future-gazers can be readily tagged as either global optimists or global pessimists, but closer inspection reveals not so much incompatible perceptions as different foci. The wonderful achievements painted in scenarios of technological Utopias are for the rich. Most of the world will continue to be poor. Global optimists (eg North 1995) are those concentrating on the apparent ‘winners’ while global pessimists are concentrating on the ‘losers’. Another split is between optimists focussing on economic and technological change and pessimists focussing on environmental change.
What then are these conventional wisdoms about the world’s future? Certainly there are contingencies, both catastrophes and windfalls, that would trigger an unknowable restructuring of the global system if they came to pass (eg world war; cheap fusion power; nano-scale constructor robots), and there are existing trends which also could trigger fundamental change eventually, eg the consequences for world order in a generation or so of global population growth. But, catastrophes and windfalls aside, it can be taken as ‘given’ that the world of 2050 will still be divided into first, second and third world countries, much as it is now and that the world will be populated by a billion or so ‘rich’ people and eight or nine billion poor people. Driven by the communications and information industries and other knowledge-intensive industries, the world economy will be dominated by capitalist countries and will continue to globalise, grow and shift towards service industries. Within that envelope, it would not be particularly surprising if the economies of Australia's neighbours in the Asia-Pacific region continued to grow relatively strongly.
The possibility of some democracies being reduced to token or nominal status is also plausible as nation states struggle to survive at home and in a global economy. Many sub-national groups will successfully struggle for recognition and more autonomy and many national powers will be ceded to supranational bodies. The global environment and resource base will continue to degrade. Large or small increases in crime and violence in first world countries would be unsurprising. Various strengthening social movements (eg female emancipation, environmentalism) will begin to impose their values on their societies, perhaps slowly, perhaps more rapidly. It would be more rather than less surprising if first world life expectancies were to decline rather than creep up; just as it would be more rather than less surprising if education focussed on life skills replaced education focussed on vocational skills.
Within this family of global scenarios, it would be highly surprising if Australia were to descend into second world status with no capacity to improve conduct of the nation’s economic and social affairs. However, it would be of little surprise if Australia were to remain a middle-rank first-world power, making a small contribution to global governance while working out its own style of capitalism and liberal democracy for responding with more or less success to issues of health, education, income distribution, environmental quality, crime, social conflict etc. Australia will sit in the spectrum of capitalist societies, but where will Australia sit? It is an open question.
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[1] Prepared for a series of workshops organised by CSIRO Tourism Research Program in collaboration with the Tourism Council of Australia and the CRC for Sustainable Tourism (Sept-Oct 1999)