2050: A Global Forecast for the next 40 Years by Jorgen Randers, Chelsea Green, 2012
This report to the Club of Rome commemorates the 40th Anniversary of its first report Limits to Growth in 1972, which caused wide controversy since it challenged the basic assumptions of all governments concerning the future of humanity. I recall visiting MIT and my conversations with its lead authors Donella and Dennis Meadows, after my review of Limits to Growth in the Futurist (1972). I largely agreed with the authors, having arrived at similar conclusions regarding the primary tool used worldwide to measure the progress of societies: the money-denominated model of GDP-measured growth, for example in my plenary speech to the National Association of Business Economists, reported in the New York Times, July 1971.
I had seen early how macro economic models of economies (abstracted from their social and environmental context) assumed general equilibrium conditions - while I and other critics, notably Nicholas Georgescu-Roegen and his more famous student Herman Daly, realized that human societies evolve and are therefore morphogenetic - constantly morphing into new structures.
The economics establishment reacted by circling the wagons and attempting to discredit the systems' dynamic models used in Limits to Growth developed by MIT pioneer Jay Forester, also the developer of the Random Access Memory (RAM) for computers. Since then, economic models have been invalidated by many other scientific disciplines. Brain scientists, endocrinologists and psychologists have countered economic models of "human nature," while physical scientists have pointed to economists' use of obsolete Newtonian physics, equilibrium-based mathematics and fatally ignoring the 2nd Law of Thermodynamics as I explored in my The Politics of the Solar Age (1981), reviewed in the New York Times (September 13, 1981).
Thus, I was surprised to find Jorgen Randers in 2052 relying so heavily on conventional economic models, GDP and all its suspect statistics on "productivity," employment, investment "income" and similar categories now widely criticized for decades. No doubt this top-down view of our global future, using so many conventional, official sources, has led Randers to his mostly gloomy conclusions. His main causes and effects model overlooks, among other factors, the financialization of the world which can no longer be subsumed as in Randers' model as "investment" (p. 57). Finance is often overlooked by economists, since their textbooks have not caught up with today's global financial casino, driven by high-frequency, algorithmic trading, ever higher leverage and more synthetic derivatives. Finance now is the mother of all global bubbles and its continuation of crises into the future is inevitable, since incremental reforms cannot address its structural instabilities - nor the power it holds over governments and political choices.
Thus I agree with two contributions Randers invited in 2052, which do see alternatives to his forecast. Nick Robins, a deeply knowledgeable financial expert sees, as I do, rapid transformations in finance as its recent collapses have revealed the extent of its mal-investments, risk-taking and reliance on obsolete economics. I see such stresses leading to collapse of unsustainable structures as evolution's tool - breakdowns that drive breakthroughs to more robust configurations. As my late friend E.F. Schumacher, author of Small is Beautiful (1973), would say: "if companies or banks are too-big-to-fail then break them up!" This is now happening, as millions of retail investors flee Wall Street and other stock markets. In today's Information Age, average citizens rage against bailing out big banks, and they have learned that money-creation and credit-allocation are equally corrupt, while they see money printed on TV daily.
These forces create feedback I don't find in Randers' worldview. Neither does he see, as I do, the rapid transition now accelerating from the fossil-fueled Industrial Era to the cleaner, greener information-rich technologies of the Solar Age. A four-page invited contribution from Paul Gilding sees the same "sudden rush to solar" that we track at Ethical Markets Media in our Green Transition Scoreboard, with private investments in wind, solar, energy efficiency, smarter infrastructure, etc., since 2007, now totaling $3.3 trillion. Our model forecasts additional private investments of $1 trillion annually between now and 2020 will continue to ramp up efficiencies, lower prices and encourage governments to reduce the over 90% of subsidies which go to fossil fuels. This alone will be enough to usher in Solar Age technologies, along with other policy reforms to promote efficiency, price carbon and other pollutants, as well as tax-shifts from incomes and payrolls to pollution, waste and all externalities.
2052 is an important contribution to futures research and presents much food for thought. This includes Randers' challenging of conventional forecasts of population growth, for the same reason I do: women are everywhere choosing fewer children as they empower themselves and assert their own styles of leadership in all walks of life.
As a member of the Club of Rome, I welcome 2052, as I have all the ground-breaking research reports on what founder Amelio Peccei called "the global problematique" (see my conversation with Peccei in Caracas, Venezuela, in 1983 on Ethical Markets TV). Thus, I am also championing another important report Money and Sustainability from the Brussels chapter of the Club of Rome, by monetary expert Bernard Lietaer, which focuses on how we must reform money-creation itself, as well as banking and credit-allocation. I hope Jorgen Randers will take heart from these alternatives now being driven by the imminent collapse of financialization.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.