MEGATRENDS 2015

By Karl Arnold Belser
26 July 2015



I have written a lot of blog posts since I posted Megatrends 2013. I want to review what I have written and determine if any of my previous trends have changed  or if there are new trends that I missed. I have also added links to other posts that bear on my mega trends. It is hard for me to foretell which , if any, of these mega trends will cause problems in the future.

ECONOMICS

The United States has been spending more than it makes, deficit spending, in order to maintain most people in a tolerable life style until the economy recovers. However, i
t appears that the central banks have not been able to stimulate economic growth. I continue to  expect the world to evolve into a low growth,, steady-state economy as it was prior to about 1700.  In this case, the US will not be able to continue the level of deficit spending it is currently doing. The mega trend, then, is that a majority of the US population will become poorer and poorer. See my post The Second Machine Age and Stagnation.

The following is a summary of why I make these conclusions.:

It is now clear that the actions by the Federal Reserve to hold interest rates low has allowed the US economy to recover in terms of GDP growth, housing price growth and stock price growth. This growth has allowed the companies and banks of the US to survive. I would call this a macro success.

but is the recovery a micro success? By micro success I refer to the social contract that the government has with its citizens to provide an environment in which they can maintain a tolerable living standard. I discuss the social contract in my post Future Politics.

 I would say that the recovery has not been a success in terms of fulfilling the social contract according to the following observations from  
The Big Bad Bear Case.

1.  Median, inflation adjusted wages have not risen much for decades. Many new jobs today are low wage. Productivity growth is very low, which makes labor less valuable.

2. The median net worth of the younger demographic has  dramatically fallen. Eighty percent of Americans own virtually nothing.
See Of Means and Medians.

3.  The employment participation rate is at a 50 year low, meaning that many people in the age group of 20 to 60 have given up looking for work.

4.  The student loan debt has risen to over 1.2 Trillion dollars, making it unlikely that 40 million people with a median student debt of 29 thousand dollars can ever achieve economic success.
The sad truth is that much of the education that is paid for by expensive student loans is useless. The government simply does not know how to educate people to be employed in the current society.  See my post The Student Load Dilemma.

5.  Employers usually do not offer a defined benefit retirement pension.  People are just not accumulating enough money to allow them to retire. See my post Financial Literacy.

6 The birth rate of new companies is much less than the death rate of old companies, and much of the new employment comes from new companies. The low rate of new company starts is partially due to excess US regulations that effectively gives big existing companies an advantage over newer ones. See the Econtalk podcast Future Freedom, Democracy and Prosperity. and 528's article The Slow Death of American Entrepreneurship.

AUTOMATION and EMPLOYMENT

Automation and outsourcing have gravely affected the American life. 
See my post The Second Machine Age and Stagnation.

In addition to the economic malaise that I descried above, there are many low cost, Internet based activities such as on-line games, Netflix movies, Facebook and twitter that are consuming an enormous amount of time for the average American. These activities are non-productive and sedentary.

One mega trend is that many people are wasting their time and becoming poor and fat. See my posts Agnotology, Culturally Induced Ignorance, Cognitive Deficit and Poverty, Wealth and Longevity and  Obesity and Public Policy.

The countervailing mega trend is one of free lance employment. People are today taking the initiative using low cost on-line resources to educate themselves and find employment. See my posts Shape Shifting Employment and The Internet, A Paradigm Shift in Learning.

NATURAL RESOURCES

The lack of natural resources such as water continues to be a wide spread problem.. I live in California which is experiencing a severe drought. I am letting my landscaping wither and am collecting shower water in order to water some of my plants.

The mega trend that is just starting is that of desalination of sea water. The city of Carlsbad, California has a new desalination plant that will provide about ten percent of potable water in the region south of Los Angeles at a cost that is about double of the water rates today. I expect more desalination plants to be built in the near future.. See my post Fusion Power as a Water purification Black Swan.  

The demand for many other resources has fallen because of the slow economy. So the drain on these resources has abated.
The mega trend here is one of deflation in the price of many natural resources.. This goes hand in hand with a stagnate economy.

WEALTH INEQUALITY

Thomas Piketty's book Capital in the Twenty First Century shows that widening wealth inequality is an on-going mega trend. Wealth inequality will continue to grow exponentially unless the government changes its tax structure. I discuss this issue in my posts Politics and Capital.and Limiting Wealth Accumulation.

I believe that in the end the government will act to fulfill its social contract after there is some kind of crisis. 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

Climate change and rising global temperatures are continuing mega trends.

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 far from any cooperation like this.  They don't see the urgency today.

Curbing carbon emissions will have an insignificant effect on  rising global temperatures and climate change. However, a lower level of carbon dioxide would lower the acidification of the worlds oceans that are cause by water dissolving the carbon dioxide. Acidification is a threat to shellfish everywhere.

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.

The science fiction author Margaret Atwood paints a more grim, and I think realistic, picture of what is going on n the world today in her article It's Not Climate Change, It's Everything Change. Atwood suggests that people might try to tell the truth and accept this truth about our world situation and then explore ways in which the situation can be handled. She suggests a way to explore, by writing what she calls CliFi (Climate Fiction). This suggestion is one that embraces the true spirit of Anntifragility.

BIG BROTHER

Government interference and management of people using on-line resources is a continuing mega trend.


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. 

This data surveillance capability is awesome, and it is hard to say how far the government will go in using this capability.  

For example, the article This Will Make You Cry illustrates an on-going program in the United States to develop a Threat Assessment on every student under guidance of the National Threat Assessment Center. The UK is doing the same profiling as described in 3-Year-Old London Child Deemed "Extremest".

SOCIAL CAPITAL

Robert Putnam points out in his book Bowling Alone that the people of the world might be loosing Social Capital because people are having less face-to-face communications. Participation in fraternal, political and religious organizations have declined dramatically. Putnam asserts that democracy might suffer because of this lack of connectedness.

I think that a new type of social capital is evolving via the Internet. Certainly Facebook, Twitter YouTube and Linkedin are facilities that do connect people, but not in a particularly intimate way. However there is an intimate part because of Skype, Face Time and even by dating sites and Camming. The mega trend is that people are apparently substituting cyber association for face-to-face association.

The movie Her describes how an artificial intelligence might fulfill some of the needs for social capital. 
   
Last updated August 3, 2015
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