MEGATRENDS 2013

By Karl Arnold Belser
16 June 2013




I have been contemplating what I have learned from my first BLOG entry, Reading List for An Uncertain Future. I conclude that the world seems to be on the cusp of a major change due to the following megatrends:


ECONOMICS

The world appears to be in a depression whose severity has been softened by the central banks in many countries in which they have held interest rates low. The magnitude of this action is larger than any central bank actions in the past. Hence,  the risks and effectiveness of these actions are unknown
. However, it appears that the central banks are betting that economic growth can be revived, whereas I expect the world to evolve into a more steady-state economy as it was prior to about 1800.


AUTOMATION

Computers and robots are now doing many of the jobs that used to be done by ordinary people, and I expect more and more middle-level jobs to be automated. The result might be similar to what happened during the late 19th century
when many people became domestic servants in response to the industrial revolution.  

The current US laws an regulations have made it onerous for individuals to hire people to help them.  Instead many people are being forced into low paying, temporary jobs in the service sector of the economy.



NATURAL RESOURCES

The natural resources of the earth are being depleted at a high rate to accommodate the growing world population. It follows that people on the average will have to consume less. This may mean that people might have to live in small dwellings in compact and efficient cities with good public transportation like Hong Kong. I recently visited Hong Kong and I personally would find living in such a city acceptable.


WEALTH INEQUALITY

There is a large unequal distribution of wealth in the world with fewer than a million people owning a dominant share of the world’s assets.  One could argue that this inequality will lead to war or social revolution, but I don’t think so because such outcome would only happen if a large population of people were suffering because of lack of food and shelter.

I note from Robert Shiller’s Open Yale economics course that the purpose of economics is to promote the general welfare. I believe that this general welfare intent is ubiquitous in world governments. Hence, I expect that there will be some pretty aggressive government action to redistribute wealth so that the average standard of living is tolerable.


ENVIRONMENT

The Earth is experiencing global climate change that is probably unavoidable because of the long time constants in the dynamical system of the heating and cooling of the planet.  There are ways, if everyone on earth were to cooperate, to mitigate  or compensate for these changes.  For example, injecting sulfur dioxide into the upper atmosphere could cause the earth to cool. See the book Superfreakonomics by Lefitt. The result would be a planet that was analogous to  a single living organism.  However, I believe that the governments of the world are a far from any cooperation like this.  They don't see the urgency today.

Instead, I expect a slow and steady change to occur, like the proverbial boiling of a frog in a slowly heating pot of water. The results will probably be more weather related damage and death, changes in the agricultural productivity of certain parts of the world, and migration of people to minimize the pain they experience from this type of change.  I think that as long as the changes happen slowly, people will adapt.


BIG BROTHER

Big data is a fact today.  Most governments can track its citizens via GPS in cell phones, log all communication via the Internet, and monitor most financial transactions. This capability is an enormous integrating and controlling factor. 

Alan Watts (in the 1960s) talked about the metaphor of a city being like a living thing with counterparts to the functions of the human body. This metaphor is truer today than it was 50 years ago.

I think that this unification via government just has to be accepted. And as such any fundamental changes might result in moral hazards that the government will have to correct and control. This process is I believe going to be slow and problematic.

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The above items are the mega-trends that I see. There also may be Black Swan events that have a small probability of happening, like war, terrorist attacks or incurable disease. It is worth some small amount of thought and preparation for such rare events.


Last updated July 2, 2013
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