It is clear to a great many that late stage capitalism is
becoming unsustainable for four big reasons.
The first is that it has led the creation of environmental
unsustainability. All scientists agree that climate change is happening and
that humans are a contributor to the changes in the patterns of weather and
that these changes are impacting species, soils, watersheds, oceans and air.
Changing what we do and how we do it, especially our use of fossil fuels, is a
key response to this challenge. Investments are quickly shifting from old forms
of energy to new and from old models of manufacturing to new. As the world
population rises to between 9.5 and 10 billion people, our use of natural
resources (especially water) will place continuing strain on the planet.
The second big reason is debt. Global debts from all
sources – governments, corporations and individuals – is now in excess of $250
trillion. In addition, global unfunded pension liabilities are growing very
quickly and, if unchecked, will add $400
trillion to the global debt mountain by 2050 and this from just eight
countries (US, UK, Japan, Netherlands, Canada, Australia, China and India. In
the US alone, unfunded pension liabilities are already $28 trillion and will
rise to $137 trillion by 2050 if no action is taken. The world already has $17
trillion in negative equity bonds. The market cannot absorb the growing debt
and the world will periodically experience significant recessions as the
debt-cycles replace growth.
The third big reason is inequality, especially
income inequality. The top 1% now own 44%
of the world’s wealth, with the rich taking ever increasing share of wealth
created by workers. This has many significant impacts on the world’s economy –
not least of which is that wealth holders distort the political process. The
richest people in the US now pay less income tax than the middle class as a
result of their political lobbying. The neo-liberal adoption of “trickle-down”
economics, widely shown not to work at all (even
by the IMF), has been encouraged and enabled by those who benefit – the rich
and the super-rich.
The fourth big reason for late stage capitalism to be “in
trouble” is the emergence of technology. Technology has always disrupted
economies – machinery disrupted the agrarian economy, global supply chains
enabled by rapid transport systems disrupted national and regional economies,
the internet has disrupted a great many sectors of the economy. But the emerging
technologies such as AI, robots, 3D printing, stem-cell enabled bio-parts, augmented
and virtual reality will reduce the demand for certain kinds of labour, change
the relationship between labour and profitability and dramatically change the
skills required to enter the labour market. As Justin Trudeau said in his 2018 speech at Davos, referring to the impact of these emerging technologies on business
models, “the pace of change has never been this fast, yet will never be this
slow again”. In particular, some 30-40%
of all jobs will require employees to adapt to and work with technology in ways
not seen before. While some new jobs will be created, profit will no longer
lead to more employment. We already see this in the energy sector where profits
remain high, but employment is lowered because of the adoption of “smart”
technologies.
These four factors (along with several others, such as
demographics, changes in the structure of organizations, the growth of the gig
economy, the growth of the intangible economy) are all changing our world
quickly – too fast for a great many people. Indeed, a theme of a great deal of foresight
work is that we are living in “an in-between time” – a time between our current
way of working and a new way of working – a time between labour intensive
capitalism and capitalism that is intangible and requires less labour. It will
impact us all.
Experience of Loss of The Future
The future world will require more from those who work in
terms of creativity, curiosity and commitment. It will not be a place where a
great many of those with low levels of cognitive skills, low levels of literacy
and a disrespect for life-long learning will do well. Indeed, much of the anger
and anxiety about our society which can be seen in political discourse and
social transactions relates to the inner anxiety about how “we fit” into the
new world that is emerging.
We can usefully look at Kubler-Ross’s work
on how people cope with death and dying as a way of understanding what is happening
now.
As people lose the sense that they understand how the world
works and what the near and medium term future will look like for them, their
thinking and experience shifts through a number of stages:
- · Shock that their understanding of the world and how it works (especially for them) no longer holds true.
- · Denial that the world they know and understand will not return as it was.
- · Anger and Frustration with all, most especially those who they see as representing the different future – the one they are resisting in the hope that the “old and familiar” future will return.
- · . Bargaining about how they can “live” in the new world while retaining some semblance of the old.
- · Depression when they release that the bargaining they were engaged in will not lead to what it was they had hoped for. This often leads to a return to anger and frustration and a new attempt at bargaining – this can be a repeated cycle for some time.
- · Decision to accept that the world has changed and that they need to move on.
- · Integration of the new understanding of the world into the way in which they live their lives.
It should be clear that not everyone who experiences the
sense of loss of the future as they had understood it will successfully move
through these stages. Many get stuck at anger and frustration or are locked
into the anger-bargaining-depression cycle and repeat it many times.
One consequence of this experience are challenges around
mental health and wellness. It is no surprise that, in all sectors of society
and at all ages, we see a mental health pandemic. Whether it is rates of
anxiety, depression, addiction or suicide – the numbers are rising as quickly
as society and our economy is changing.
The In Between Time
We can see what is happening as an in-between time – a time
between the old and a the new economy, between an old form of capitalism and a
new form of capitalism, a time between a stable planet and an unstable one.
For individuals and families, the in-between time is full of
uncertainties, risk and cost. Trying to make decisions now which will produce
outcomes 2-3 years from now produces a great deal of anxiety. Is a college or
university education worth the growing cost and debt and if it is, what should
I study that will give me some surety about future work? Is this a good time to
marry and, if it is, where is the best place for us to live and work? What about
having children – given the state of the planet and the uncertainty about the
future, what world will be leaving them? Shall I try for this job – if so, how
long might it last?
To make this very real, look at the decision someone made
four years ago to study petroleum engineering in an oil rich place like Alberta.
Four years ago, companies were hit by a major downturn with a great many
lay-offs. While the big companies that account for 80% of production continue
to be highly profitable, they leveraged the downturn to focus on innovative technologies
that enable them to produce a growing volume of oil and gas with much less
labour. Now the sector in Alberta employs fewer than 20,000 people and is no
longer an engine of employment, though continues to have undue influence over our
economy and politics. That petroleum engineer is now most likely to find work
in some other part of the world or in another sector that can use his technical
and thinking skills – a sector not connected with petroleum.
The in-between time is messy, painful and difficult and, for
some, can last a long time. It is a necessary phrase in a transitional economy.
We all need to understand that this is happening and, more importantly, we
cannot go back to the past since the future is pulling whether we like it or
not.
2 comments:
Masterly and pithy summary that Slav Heller would have been delighted to endorse had he still been with us.
Must be Pierre's son at Davos in 2019 unless some preternatural occurrence happened!
Post a Comment