Futurists do not have crystal balls. The best of us seek to identify trends, ahead of conventional wisdom, economic forecasting and market research. The trick is to widen the focus and map all these longer-term trends identified as keys to the future and see how they may amplify or dampen each other. Of course, this depends on the values and goals of the futurists and their clients. As with all research and scientific enquiry, the first step is normative: what to pay attention to in our diverse societies and our living planet. I believe that futurists need to be independent systems thinkers and like me, self-employed. When futurists are employed in-house, whether in business or government, or as contractors, too often they narrow their enquiry, e.g. the future of General Motors or of the U.S. Department of Energy. As the old joke has it: economists can’t even get their hindsight right!
My focus has always been the human family’s prospects on planet Earth. So what do I see from this multi-disciplinary perspective over the next fifteen years?
- Increasing multilateralism, as all countries come to realize that the planet’s current problems –– from global warming, widening gaps between haves and have-nots and new pandemics to terrorism, extinction of other species and proliferation of weapons of mass destruction –– cannot be solved by any one nation or even groups of nations acting alone. National sovereignty will increasingly be pooled to address these new issues of globalization. Just as the European Union now painstakingly hammers out standards and harmonizes rules among its 27 member nations, we will see this model adapted elsewhere. Latin America is well along the path of integration and may well have its own currency, the mercosur, in the next decade. Asia with its groups including ASEAN, APEC and the SCO (the Shanghai Cooperation Organization) may also have a regional currency and certainly its own Asian version of the IMF.
- Today’s resource-nationalism will grow, as more countries see that their own natural resources are more valuable than colored pieces of paper or blips on computer screens. Commodities prices will continue upward and will increasingly become the benchmark of other asset prices. Many developing countries have also realized that the old game of hoarding US dollar reserves is foolish…it just over-values the US currency and locks them in to Washington Consensus policies. This is one of the reasons behind their shedding US dollar reserves in favor of euros, pounds, yens and other strong currencies and why the euro has now become a rival reserve currency, representing 35% of trade and investment in the world. Other reasons include tacit disapproval of US foreign policy and the new currency risk in the US dollar, which will continue its slide for this and other reasons (including our loss of prestige and increasingly obvious vulnerabilities). Along with major reserve currencies: the US dollar, the euro, Asia’s yuan/yen area and the mercosur in Latin America, we may see a new global currency issue of “paper gold” by the IMF, i.e. Special Drawing Rights (SDRs) for global development and public goods.
- As countries exhaust the possibilities of collective action through the new regional blocs, the United Nations will increasingly be seen as the only forum for planetary concerns and global security. The UN is already accepted as such in most countries in the world, with only the USA dragging its heels or obstructing this world body with 191 member countries. The UN-bashers’ “propaganda” in the USA about wasteful bureaucracy ignores the realities. The UN’s administrative budget is about the size of the New York City Fire Department. Its special agencies: the UN Development Program, UNICEF for children, WHO for health, the ILO for workplace standards, UNEP for the environment and its protocols on climate change, ozone depletion, the use of outer space, the oceans, telecommunications, and many other international agreements forged over its 60-year history, are the vital infrastructure underpinning global travel, communications, markets and commerce. They also help level the playing field upward and reward the most ethical players.
So I expect the UN will be re-invigorated, reformed and the Security Council expanded to include Brazil, India, South Africa, Japan and Malaysia becoming permanent members –– and no longer stymied by the vetoes of the winners of World War Two. This should make peace-keeping more effective, especially if the proposed United Nations Security Insurance Agency (UNSIA), in partnership with the insurance industry is enacted, which would allow countries, like Costa Rica (which gave up its army in 1947) to purchase peace-keeping insurance with their premiums going to fund a well-trained standing contingent of peace-keepers and peace-makers (more information on UNSIA at www.HazelHenderson.com). As nations are realizing, already, many conflicts can not be solved militarily, so it is logical to expect that weapons budgets will be reduced and the long-awaited “peace dividend” may materialize. Most countries now understand that in this 21st century, the weapons of choice are currencies.
- Economic and technological globalization will increasingly be subject to binding agreements and global standards. Covering corporate accountability, these will include core labor standards, a global minimum wage (in purchasing power parity), transparency and the internalizing of social and environmental costs and impacts into prices, company balance sheets, and capital asset pricing models. ESG (environmental, social and governance) issues will be material to all asset evaluation, risk and securities analyses. Beyond micro-indicators of ethical performance at the corporate and municipal level, macro-indicators will also have been overhauled. A conference on new indicators of national wealth, progress, sustainability and quality of life, “BEYOND GDP” will be held in the European Parliament, November 2007 (I am honored to serve on its advisory board).
- Taxation will have shifted from incomes and payrolls to waste, pollution, resource depletion and planned obsolescence. Current subsidies to advertising will be removed to curb impulse buying, credit-card abuse and to boost personal savings rates –– in recognition of new findings in brain research. Taxes will be progressively harmonized to reduce jurisdictional arbitrage, money-laundering and tax havens. For example, the European Commission’s March 28, 2007 Green Paper on Market-Based Instruments endorses such tax shifts for EU countries (more information at www.EthicalMarkets.com ). Taxation of global “bads”: arms sales, currency speculation, excessive exploitation of the global commons and pollution will be collected by national governments under international treaties and allocated to the provision of global public goods: health, education, environmental restoration and peace-keeping, as Inge Kaul outlines in Global Public Goods (1999) and Providing Public Goods (2005). Emissions trading of pollution allowances will have been reformed to prevent today’s windfall profits, by allocating rights to everybody, since the air is a public resource and auctioning rights, rather than giving them only to polluters. The proposed International Bank for Environmental Settlements (more information at www.undp.org ) will manage global carbon trading to allow both rich and poor people and countries to participate in vastly expanded environmental finance markets.
- The shift beyond fossil fuels and nuclear power toward renewable energy, efficiency, re-use, re-manufacturing, recycling and better process controls will continue its double digit growth of 2006-07. The drivers: Institutional investors (including the UN Principles of Responsible Investing with $6 trillion of assets; the Carbon Disclosure Project with $31 trillion of assets, and CERES) and others including concerned shareholders, SRI mutual funds, labor unions, employees, citizens and consumers, as well as global civic groups such as those of the World Social Forum and socially-responsible business organizations from the UN Global Compact to Brasil’s Instituto Ethos (on whose board I am honored to serve). In Europe and most countries the shifts will be led by governments reducing the $235 billion of current subsidies to fossil fuels and the billions more subsidies to nuclear power. In the USA the shifts will still be led by the private sector and by state and local governments. The last holdout in the world with its for-profit medical system, the US will gradually have moved to a more efficient, tax-based, single-payer national health insurance system, such as used in every other major advanced democracy. Most of these countries enjoy similar or better outcomes at half the US cost of 16 percent of GDP. Business leaders will continue to spearhead this change, so as to remain competitive with other global companies enjoying tax-supported medical insurance. As GDP national accounts are corrected to deduct social and environmental costs and add infrastructure, education and health into new asset accounts, voters will see the benefits of these tax-supported, public investments and the avoided costs (i.e. real, calculatable benefits) they deliver to both public and private sectors.
Of course, I also see plenty of worrying counter-trends, from those global problems already mentioned to the consequences of money corrupting politics and democracy, the dearth of visionary leadership, global mediocracy and monopoly over the public airwaves. Yet we have all the tools we need to make the transition to global sustainability. The planet is holding up a mirror to humanity and we are slowly learning that our values must change to reflect planetary realities. Stress has always been evolution’s tool. We humans have three main resources to develop ourselves and our societies: information, matter and energy. As we move deeper into the Information Age, we know that information, knowledge and wisdom control how efficiently we use matter and energy. Globalization since the 1980s has ridden on the slogans of “market reforms”: privatization, open borders, free trade and $1.5 trillion of daily currency trading ––– overwhelming the efforts of even the democratically-elected governments to manage their domestic economies. This led to the race to the bottom that began to reverse itself in the ensuing decades. The new mantra became “reform markets!” The new global financial architecture and prudential regulation called for in the meltdowns of the 1990s, was slowly enacted in the first two decades of our new century. More ethical markets and cleaner, greener economies are already going mainstream. In a planetary perspective, all human self-interests are similar. Morality has become pragmatic!
Article by Hazel Henderson, independent futurist, creator of the “Ethical Markets” TV series and the Calvert-Henderson Quality of Life Indicators, with the Calvert Group, has authored nine books, including Ethical Markets: Growing the Green Economy. © 2007
Article originally published in the GreenMoney Journal’s special 15th Anniversary issue (Summer 2007). More information at- www.greenmoney.com