Friday, 23 March 2012

Global perspectives on the future

A series of short articles in the November 2011 issue of Prospect was intended mainly as a report for those wishing to invest internationally; but they seemed to me to have some points of wider interest so here they are with my comments in italics.

  • Forget the Malthusian gloom: human ingenuity plus the power of incentives always defeats pessimistic predictions. Technological innovation has raised living standards in the developed world over the last century or so, despite a rapidly rising world population and higher average consumption per person. Cheap labour has been a factor in giving the developing world its high standard of living but I’m fairly sure that technology-driven agriculture and division of labour are the main causes.

  • Water shortage and sanitation are big problems. 880 million people are without safe drinking water and 2.6 billion have no access to basic sanitation. How do you define ‘without’? If you have to walk 2 miles to fetch a bucket of water is that defined as ‘without’?  On sanitation there is a lot of scope for technical solutions.

  • Water shortage can be combated with drip feeding. This is 90% efficient if computer-controlled, as is the case with greenhouse systems in the Netherlands. Compare this with 65% for sprinklers and 35% or less for surface irrigation where water is diverted along open conduits. The aim should be to introduce drip feeding in Africa, China and India. Could China be instrumental in developing such technology? It is already the biggest producer of wind driven generators of electricity, surpassing even Germany. Also, desalination should be viable if done as a by product if solar thermal power generation – see......... I read that 20% of the world’s fresh water is in Lake Baikal in Russia and that this may be used by China.

  • Rich countries are most likely to innovate in dealing with shortages. When the cost of a resource soars and it is no longer trivial compared to wages there is a powerful incentive to find more of it or use it more sparingly. E.g. when oil prices rose rapidly new methods of extraction were developed and made viable (horizontal drilling and vertical fracturing of rock). And energy is used more efficiently.
  • Investment follows strong property rights and the rule of law. This is a basic precondition for economic growth in any country. Few will risk setting up an enterprise if it’s likely to be nationalised, taken over by robbers or blown up by terrorists.

  • Uncertainty about safe assets. Traditional safe havens like the currencies of countries having sound fundamentals are disappearing. This is because countries whose currencies appreciate too steeply are likely to devalue their currencies to protect their industry. E.g. Switzerland is printing money to stop the Swiss franc rising above 1.20 euros. The article says that gold is also losing its attraction as a hedge against inflation and debasement of currency but I don’t understand this. It appears to be something to do with fears of recession and deflation.

  • Commodities. The shortage of these is very difficult to forecast. As their prices rise new locating, mining and processing method are invented, as well as ways of reducing the amounts needed. E.g. hydraulic fracturing and horizontal drilling has greatly increased the supply of natural gas. No doubt there will be a restructuring of the market for all kinds of goods, with the emphasis on durability, repairability, the ability to be recycled and the location of manufacturing closer to the consumer.

Some months ago I read an interesting article (Oxford Today vol.23 no.3, ‘Predicting Our Future’ by James Martin), which made many insightful points:

  • China is buying up and securing the resources it needs. E.g. it has already cornered the market in rare earths.  But there may be new sources.

  • Future catastrophes will be caused by an endless babble of misinformation. Examples: PR organisations persuading people to believe whatever increases the profits of the hiring company, business executives focusing on stock prices and politicians seeing only as far as the net election. Some, but not all, of the climate change deniers have used PR companies. And in this babble valuable insight and wisdom can be lost. See also Distorting reality

  • USA, Canada and Russia will probably benefit from global warming. Russia, in particular, has a lot of fresh water. Within my own country (UK) Scotland and Cornwall are likely to become more pleasant. As one living in the south east of England I am conscious of the growing shortage of water in recent years and the weather patterns suggest this could be with us indefinitely.

  • China has the world’s fastest computer at 2.5 thousand trillion operations per second. In the future quantum computers are likely to be able to run applications that would take millions of years to run on today’s computers. A lot of judgement and spiritual wisdom will be needed to make good use of this computing power.

  •  Education could be greatly assisted by computer technology. But only if human beings provide the inspiration to pupils and the writers of software.
  • People’s abilities will be technology-enhanced and robotics will enable us to concentrate on tasks which are uniquely human. The challenge to our wisdom and humanity will be greater than that to our technology. See also the post: Robotic technology: work for the west, help for all

  • Lifespans of 120 years could become common and leisure time longer. I don’t see much evidence of this latter trend recently - we seem to be caught up in a mad rat race of consumption but over the decades he could be right.

See also the post Distorting reality

There is a lot to digest here. Our Creator has given all these gifts and powers for good and evil. I hope we will get closer to God and so be able to make the right choices for a better world.