WHERE MIGHT WE BE IN 2050?
(Talk to Evatt Foundation, Sydney, 8 June 1999)
My first and only joke is a quote from Gore Vidal: "I will be reading my speech but, to give an impression of spontaneity, I will be lifting my head from time to time".
In October 1978 I gave a talk entitled ' An Exercise in South Coast Futurology'. I gave it to a group called the Eurobodalla Progress Association. Twenty years ago we were still getting over the 1973-74 oil crisis and most of my predictions were about how, in 1998, the New South Wales south coast might be coping with having had a couple of decades of high energy prices and what this might mean for the tourist industry and the second-home industry. The return of the boarding house, electric runabouts and better bus services were all part of my vision. As we now know, oil and electricity prices did not escalate after the 1970s and we are still junkies when it comes to energy use. I got it wrong.
While still in the future-gazing business I'm more circumspect nowadays. I don't predict the future, not even probabilistically; I recognise and describe plausible possible futures which, in the trade, are called scenarios. I never say 'this will happen'. I say 'this might happen, or it might not; and on the other hand such-and-such might happen'. For example, a best-case scenario for Australian cricket would be that Shane Warne's shoulder heals completely and he comes back better than ever. A worst-case scenario would be that Warne never plays for Australia again. Understand that I am not talking here about odds or probabilities, just plausible possibilities. The nearest I get to probabilities is to occasionally say that I would be surprised---or unsurprised---if X were to happen.
So, you ask, what is the value of scenarios if you can't use them to sharpen the odds and beat the bookies? The answer is that if scenarios really are plausible and believable and say something that the client hadn't thought of, they function to flag upcoming possible problems or upcoming possible opportunities. These possibilities can then be factored into today's choices somewhat like buying an insurance policy or options on the stockmarket. Proverbs provide good examples of the type of thinking that scenarios encourage. 'A stitch in time saves nine' is advice on what to do now to avoid a bad scenario like your trousers falling down and 'Great oaks from little acorns grow' is advice on how to fund your retirement if you are in the timber business.
So, where might Australian society be in 2050? I am going to spend most of my time today sketching out five scenarios which I call polar scenarios. That is, while they are not off the planet, they are in unfamiliar territiory and, like the north and south poles, they are a long way apart from each other.
The first of these I've called Struggling to cope and it is also my worst-case scenario.
Most modern societies have the the resilience to cope with small crises or even one or two large crises, but what happens when a complex society like ours, one full of long-chain dependencies, is clobbered with five or six major crises in the space of a few years? And, as Shakespeare knew, it can happen: 'When troubles come, they are not as single spies but in battalions'.
Take your pick from the following list of possibilities:
Under multiple shocks like these, a complex society runs a very high risk of quickly reverting to a much simpler form of organisation. In extreme cases we call this a social collapse. The symptoms of collapse include breakdown in law and order, pervasive fear in everyday life, declining life expectancy, loss of culture, civil and political rights, health and education services and basics like running water and sewerage. In a sentence, quality of life goes through the floor. For example, Kosovar society has just collapsed. In general terms, the only protection against a multiplicity of local shocks is to build up a capacity for rapid social learning and a store of flexible redundant capital, ready to wheel into action as needed.
I have an even-gloomier variation on the Struggling to cope scenario called Failing to cope. Here, one or more global-scale shocks precipitate rapid collapse in societies around the world, including Australia. Today's four horsemen of the Apocalypse are world war, pandemic disease, global economic meltdown and a sudden global climate shift, triggered perhaps by reversal of a major ocean current. All these possibilities are far from implausible in a highly-connected world where shocks propagate freely. The only protection we can take out against such globally destructive futures is active membership of the world community. We have to simultaneously dialogue to forestall such catastrophes and make plans on the assumption that catastrophe will not strike. Cosmic catastrophes that no amount of dialogue can prevent are also possible of course. Asteroid strikes and geomagnetic reversal are two examples. While global society could take measures to survive such challenges, that's not today's topic.
I call my second scenario Muddling down. In this scenario, quality of life declines slowly under 'do nothing' governments which act only in response to extreme political pressure or it declines under gridlocked governments which, try as they might, find they can only take actions that do not offend major interest groups. Under this scenario, so much social energy is used up in arguing about who gets what that things just slowly stop working, they clog up; not just services and utilities and markets but framework institutions like parliament and the legal system. In a rapidly changing world like ours, a society that does little to adapt to changed circumstances stands to go into slow decline even if it is not exposed to major shocks. Under this scenario we possibly end up living in hovels and taking our goods to market in horse-drawn carts along disintegrating highways.
While Australians as individuals are richly talented we do seem to make heavy weather of reforming outdated institutions---perhaps for the very reason that those same institutions have been historically successful. It's all too easy to imagine a 'muddling down' future for Australia characterised by pragmatic, laggardly, kneejerk responses to emerging threats and opportunities; like a boiling frog that doesn't read its pocket thermometer. Even a society more flexible than ours is still like a giant oil tanker that takes ever so long to turn around. Think of how long it takes to replace a city's housing stock or to upgrade the Hume highway, not to mention changing the tax system; I mean really changing it.
Some of the big challenges already bearing down on us, apart from lagging institutions and declining oil reserves are soil salinisation and acidification, dysfunctional cities and a growing-ageing population. On the population issue, many fail to realise that unless we are increasing real expenditures on education, communications, the legal system etc by at least one per cent a year (which is about the rate the population is growing) we are actually going backwards. While an ageing population may not be as problematic as many think, it will require substantial adjustments. An accumulation of small failures can squeeze a society as surely as the anaconda squeezed the family donkey in The Swiss Family Robinson.
OK, let me recapitulate. In my first scenario, Australian society collapses quickly because we're king-hit by a number of sizeable crises squashed into a relatively short time period. In my second scenario, we decline slowly, withering on the vine because we are incapable of recognising and decisively countering cumulating threats to our way of life. You might scoff at my first two scenarios, but never forget that just as there are a lot more extinct species than living ones, there are a lot more dead civilisations than living ones!
Let me turn now to three more-optimistic scenarios under the general heading of Chasing the Rainbow As we all know, there is a crock of gold at the end of the rainbow if you can only get there before the rain stops. What these three more- optimistic scenarios have in common is a presumption that we Australians are going to collectively and enthusiastically attempt to shape our own future; that we are going to try to be active future makers rather than passive future takers; and that our plan will be to search for and settle on some future-shaping strategy and stick with it for decades or more. Now that last presumption would never be realised of course. No society should or would stick rigidly to some master plan for decades, although Singapore has come close perhaps.
In creating these three proactive scenarios, I have tried to base them on three socio-political strategies that are as different as possible without being outside the square of political reality. For example, shocks and squeezes aside, it is difficult to see Australia being anything other than a capitalist society with a mixed economy and some semblance of democratic governance over the next 50 years. So I've built three candidate strategies compatible with that description. I've built them around the ideas of self-regulated capitalism, managed capitalism and subordinated capitalism.
Strategies also need goals. As someone said, 'If you don't know where you're going, it doesn't matter which bus you catch'. I've picked three strategies which all have the same goal, namely high quality of life for most present and future Australians. What do I mean by quality of life? People with high quality of life are able to satisfy their higher needs for creative activity, esteem and participation in community life, as well as for basic needs such as food, shelter, and security.
I could have picked another national goal, economic or military power perhaps , or given each strategy a different goal; but I didn't. It's hard, and perhaps pointless, to compare strategies with different goals. While not pausing to defend my choice of quality of life as a hypothesised national goal I might note that most aspirations presented to the community as goals are much more readily interpretable as means rather than ends. I give you interest rates, inflation rates and the trade balance as examples.
I am also assuming of course that the nation state called Australia will be around to manage itself for the next 50 years. Many commentators see national governments being reduced to impotence as globalisation proceeds. If I might add my definition of globalisation to the pile, it is the process under which once-separate societies are moving towards functioning as a single society, albeit one that is pretty chaotic and under-governed. Globalisation may be disturbing but it is certainly not mysterious. It is an accelerating expression of the same great forces that have moulded the world for the last 200 years---capitalism, technological change and the search for political emancipation. For those who believe in Kondratiev cycles, expansion of a global economy based on oil, chemicals, steel and consumer durables is coming to an end and, for the next fifty years, expansion will be achieved through growth in the information and biotechnology sectors, and perhaps through growth in the nanotechnology and advanced materials sectors.
The view I'm taking today, the alternative to the impotent-state view, is that national governments, particularly if they collaborate, will continue to be important agents of change and stability in a globalising world. I'm presuming that over the next fifty years Australia will remain a middle-ranking first-world power, making a small contribution to global governance while working out its own ways of responding to widespread domestic concerns about various obstacles to high quality of life. While there are other candidates, the four widely-recognised obstacles I'll focus on here are environmental degradation, a shortage of social justice measured as life opportunities, deteriorating social relationships and a rate of economic growth which, depending on your viewpoint, is either too high or too low.
I call my first rainbow-chasing scenario Going for Growth---economic growth. The basic belief behind this strategy is that we really have only one problem to solve if we want everyone to have high quality of life and, come 2050, be living in a society with good long-term survival prospects. That perceived problem is how to get the economy growing at a steady 3-4% year after year. The rationale behind this scenario is that if you achieve very high income per head---perhaps three times present levels---it will be possible to find the money to protect the environment and to eliminate poverty. As for the means to this end, the belief that goes easily with this scenario is that our best prospects for getting high economic growth lie in reducing the size of the government sector and the level of business regulation.
Rainbow scenario number 2 is called Conservative Development and it's a first cousin to what has been called 'sustainable development' for some years now. Remember the wasted effort that went into developing a strategy for ecologically sustainable development in the ealy nineties? The basic perception behind this strategy is that if we want a good life for everybody come 2050 we have three big problems to solve first, none of which can be reliably solved by free markets. These challenges are to get solid economic growth, to manage environmental quality and to achieve social justice. Our only chance of surviving economically in a globalising world is to adopt interventionist industry policies derived from 'new growth' thinking; things like research subsidies and advanced education, to boost our knowledge-intensive exports. The conservative development strategy accepts that social welfare programs and active job-creation programs, funded through green taxes, resource taxes and wealth taxes, are needed to protect people from the roller coaster ride of globalisation. And that the main way to protect the environment is strong regulation of entrepreneurial activity---preferably through environmental and social impact assessment, but also through large government programs to directly protect ecosystems from people, weeds and feral animals. This is a 'tax and spend' strategy which has faith in the capacity of government to contribute strongly to solving the problems of low economic growth, unacceptable levels of life opportunities and poor environmental quality.
Rainbow-chasing scenario number 3 is called Post-Materialism and I'll spend a little longer on this one because it will appear stranger to most people than scenarios 1 and 2 which can be viewed as derived from either end of the current spectrum of political discourse.
Viewed as a strategy for managing the future, Post-Materialism starts from the two premises that economic growth is very much a mixed blessing and that pathological social relations are ever-diminishing people's quality of life. On the issue of environmental quality, this strategy sees our best efforts to date as puny relative to the size of problems that continue to get further and further out of hand. For example, a colleague and I once calculated that you would need to plant 12 bn trees in the Murray-Darling Basin to counter dryland salinisation. Post-materialism is a scenario of life in Australia after we reject a consumerism where most people want to buy ever-increasing quantities of goods and services, rather than take productivity gains in the form of leisure. These sorts of values are not a product of my fevered imagination. Political scientists have been recording their spread for years.
What does this scenario involve? On the economic front, the challenge facing a post-materialist society would be to see if it could slow economic growth to a crawl without shutting down the economy or spinning it into recession. Putting a cap, an upper limit, on total energy use and on the use of virgin raw materials would be a fundamental medium-term objective under this strategy. The reasoning here is that energy throughput is strongly correlated with both economic growth and environmental impact. Another objective would be the introduction of a regional land use planning system with real teeth to control all aspects of land and resource use at a region-wide scale, not just on a case by case basis. For tackling the issue of social justice, the main policy would be to narrow the spread of incomes in the community by raising the lowest incomes and lowering the highest incomes.
But Post-Materialism includes much more than slowing growth, narrowing income gaps, making regional environmental plans and dejouling and dematerialising the economy. As well as confronting the three problems of excessive economic growth, poor environmental quality and social injustice, the Post-Materialism strategy recognises the need to strenuously tackle the fourth problem of sociopathy or social fragmentation if most Australians are to enjoy high quality of life by 2050. A fragmenting society is not easily defined by a single characteristic but, to a large extent, it's one where more and more people believe that they are not needed and not wanted and behave accordingly. The symptoms of a fragmented society include alienation, crime, dissociation, anomie, conflict and mistrust. In a healthy society, people feel secure, wanted, useful, empowered, and able to grow.
Advocates of a post-materialism strategy argue that dealing with social fragmentation requires nothing less than a change in the deep structure of society, that is, in the distribution and use of decision-making power in organisations, institutions and social groupings. Clearly we are talking about a strategy that would take decades to implement.
The most dramatic change under a power-sharing scenario would be on the political front, where a post-materialist strategy would centre on creating a new tier of about 30 regional governments somewhere in size between state and local government. Simultaneously, there would be a disempowering of state governments on the grounds that they are too big to be sensitive to the people they are supposed to serve and too remote to allow people to participate in political life. Of course, even though they are lead in the saddlebags, you couldn't really get rid of the States could you. I mean, what about the Sheffield Shield competition and State of Origin matches?
On the industrial front, a post-materialist strategy would encourage worker ownership, industrial democracy and what are called stakeholder organisations, ie companies that have a sense of responsibility to the world, the environment and the community as well as to the shareholders. The education system would actively socialise children to appreciate the value of balancing competitive individualism with collaborative co-operative behaviour. The single word that best sums up the post-materialist remedy for social fragmentation is 'participation'.
Well, there you have three three rainbow-chasing strategies. I only have time to spend a sentence or two on envisaging a best-case and worst-case possible outcome under each.
Under an economic growth scenario the best case outcome might be that we are all rich and willing to spend lots of money on cleaning up the environment. In the worst case, an ever-widening spread of incomes, fuelled by the absence of any direct incentive for income redistribution, might create an angry underclass and social chaos.
Under a conservative development scenario, the best-case outcome might be steady progress on all fronts---economic, environmental and social--- and the worst-case outcome might be a gridlocked society drifting slowly out of touch with a changing world. Success in achieving full employment would stand to improve quality of life for all, not just the unemployed. Alternatively, stubborn resistance from a business community faced with having to pay the full social costs of using natural resources and having material and energy throughputs regulated and taxed might result in GDP decline or half-hearted environmental management or both.
Under a post-materialism scenario the best-case outcome might be one of most people living in modest comfort while enjoying a healthy environment and the self-fulfillment that comes from playing a decisive role in one's society. The worst-case outcome would be a disintegrating economy with most people living in grinding poverty. The danger here is that if consumption were to be capped and the economy pushed to be more diversified, democratised, localised and green, business activity might simply decline rather than move vigorously towards a new production-investment mix.
Let's do another check on where we've got to. In addition to a collapse scenario and a slow decline scenario, I've now sketched out three scenarios which envisage proactive strategies for attempting to build high quality of life for our grandchildren. If time permitted I could have created other proactive scenarios. For example, I could have created one called Back to the Fifties, based on the ideas of the 'vernacular Australia ' movement. Conversely, it would be futile to create one called, say, Imperial Australia. It is just not plausible to think of Australia trying to acquire new territories. The beauty of the scenario-writing approach to future-gazing is that if you don't like any of the presumptions I have had to make to get my scenarios up and running, we can just change them and start again; not today though.
I happen to think that my three rainbow strategies are as diverse a sample of our feasible options for shaping the future as might be realistically imagined. They are presented as big strategies to be implemented over decades but are probably more usefully seen as signposts rather than destinations. That is, I want them to be seen as real, and certainly risky, alternative bearings on which to begin steering the ship of state, the oil tanker of state, rather than rigid sailing directions for the next 50 years. Tomorrow, figuratively speaking, when circumstances change, strategies can be rethought and another path perhaps chosen.
In the book on which this talk is based I develop the three rainbow strategies in some detail by using the device of presenting each as the manifesto of a hypothetical political party seeking to govern Australia over coming decades. I bend over backwards to present each strategy as fairly as I can and I am certainly not here to advocate supporting any one of them in particular. My agenda is broader than that and would be jeopardised by such advocacy.
What I want to see is a serious debate about where Australian society is going over the next several generations---not the next electoral cycle---and how it might plan to get there. I want to see us chasing the rainbow, but not haphazardly. I want a debate that recognises that if our plans for producing high quality of life all round involve major changes to values, institutions and the capital mix we can expect to be busy for some decades; and we almost certainly need to start right away. Keynes was wrong when he said that if you look after the short run, the long run will look after itself.
Certainly I would hope that my reference strategies, or variations on them, would be part of the debate but I can see that such a debate would also address questions such as:
The circumstances under which collective intervention is legitimate;
Whether there is any point in having a national goal;
Alternatives to quality of life as a national goal;
What are the major impediments to quality of life?
What effort should go into shaping the future relative to addressing today's pressing problems?
How far ahead should we be looking? Why not as far as the next ice age which incidentally is not all that far away?
My hopes for a national debate are probably doomed, despite the fact that many people are concerned about what sort of world their grandchildren will grow old in and despite the fact that many decisions made today will stand or fall on what happens in coming decades. Just for starters, the list of policy areas with obvious long-term implications includes education curricula, infrastructure provision, environmental management, defence procurement, land clearing; annual immigration levels and groundwater loadings.
For reasons which escape me, we do not seem to be able to properly debate our options for managing the long-term future. We live in a society where the long term, to quote Peter Costello, is anything the other side of Christmas. Part of the answer may be that the battlers have no surplus energy for contemplating the future. And for the majority, still basking in Galbraith's 'culture of contentment', memory and folk memory are short. For this majority, there has been insufficient recent failure and turbulence in the system to sensitise people to the possibility of future failure or, indeed, future progress. Perhaps the paradigm has to clearly fail before it shifts.
A good example of what those pushing the long view are up against was the Australia Unlimited conference organised by The Australian newspaper in early May. It was a showcase for elite opinion on how we should manage our future as a society and economy. It revealed general support for a strategy of trying to clamber aboard the globalisation train before it accelerated. However, it was equally recognised that this strategy would produce losers as well as winners and that it will be important to ensure that the losers are sufficiently compensated to guarantee that they do not withdraw support for the basic strategy. Both Ross Garnaut and Bettina Cass were recommending forms of guaranteed minimum income for example. What was most interesting about this exploration of a 'third way', apart from its ignoring of environmental issues, and its view of losers as people it would be wise to placate rather than as fellow citizens, was its focus on what to do today about today's problems and its apparent indifference to what we might achieve for our grandchildren.
An evolutionary biologist seeking to explain our 'grasshopperism'---remember the story of the ant and the grasshopper?--- might suggest that, genetically, we are still hunter-gatherers who never had to look ahead because their environment was changing so slowly. In those days, it may even have been a disadvantage to spend time future-gazing. Today our bio-social environment is changing too rapidly to allow genetic adaptation, and we have to adapt culturally or not at all. Rapidly changing environments have always been fatal for most species living in them. Let's not panic, but if we can't increase our capacity to adapt by looking further ahead we surely increase our chances of being in that evolutionary lottery where, up till now, only one ticket in every thousand wins a prize.