Doug Cocks

The forces that threaten global stability can probably be contained for at least one more generation, but not for much longer (McRae 1994).


This paper has been written to document my perceptions of the larger world in which Australians will have to live over the next 50 years, acknowledging in doing so that these perceptions draw heavily on the works of a wide range of authors.   It has been written with a focus on those aspects of the world’s future that, depending on how they eventuate, have most potential to modify Australia's efforts to shape its longer-term future, to make them successes or failures.  Hence, the bulk of the paper is devoted to exploring prospects for global order and governance, the global economy, the global environment and several aspects of global society. 

The paper starts with a review of the last century, looking for powerful trends and established patterns that might carry over into and shape the world’s next  50 years.  It ends with an attempt to summarise a wide-ranging discussion into a manageable number of assertions (28) presented as a set of working answers to most of the questions about the world’s future that might arise when developing and evaluating national strategies for Australia.  These assertions are expressed as subjective certainties (eg world population growth) or as (a) more- and (b) less-surprising pairs of alternative possibilities( eg a decreased (less surprising) or an increased (more surprising) role for the United Nations.

The global springboard to the future

For much of recorded history, societies evolved in relative isolation.  This began to change with the age of colonialism and today societies are intermingling to an increasing degree.  In this paper we view the world, the globe, as a system of interacting nations, trans-national organisations and supra-national organisations.  Systems, by definition, are networks of (many) isolable components or units continuously interacting with each other according to their own behavioural rules.  So, we can view the world as a system of interacting nations etc, each changing the others’ environments while collectively evolving in ways that can be described statistically.

Here, our primary interest is in the future environment which this developing global system might create for Australia, ie in those aspects of the world where change stands to modify the international behaviour of Australia-the-nation and Australian sub-national entities such as corporations and non-government organisations.  In keeping with the prevailing weltanschauung (or perhaps because it cannot be defied directly), our present interest is in the social, political, economic and natural resource dimensions of the global system rather than in more esoteric foci such as the spiritual, the cultural and the bio-evolutionary.  The paper’s focal time-window is from now to about 2050---the mid-future---and while it contains a number of statements of the form ‘the future will be such-and -such’,  this, unless specifically affirmed, is the confidence of the attributed owner of that knowledge speaking, not necessarily the present author.

However, before looking for possibilistic future worlds under these headings, the paper recalls the past century to get a feel for the fluxes (ongoing trends), contingencies and fluidities that it has bequeathed to the present and the future.  I am accepting Elise Boulding’s (1978) view that we need to look at how the world has behaved and changed in the last hundred years if we are to have any understanding of the forces that will shape the next hundred years. This is notwithstanding Boulding’s own admission that our capacity to image the future has been weakened by, probably, the increasing rate of change being experienced in many dimensions of the global system (cf Snooks 1996).  Still, if we can find generalisations over several or many countries, it will be worth asking if they include Australia, and helpful if they do, or, indeed, definitely do not.

The distinguished British historian, Eric Hobsbawm (1994), has written with great insight about what happened and why in the world during the period 1914-1991.  This period (which he calls the short twentieth century) begins with the First World War and ends with the collapse of the USSR and of course covers most of Australia's history as a single nation state.  He divides the period into:

. an ‘age of catastrophe’ from 1914 to the aftermath of the second world war.  Apart from the two world wars, this age includes the great depression of the thirties and the rise of fascism;

. a ‘sort of golden age’ of extraordinary economic growth and social transformation (eg national independence movements) for 25 or 30 post-war years up till the early 1970s (called ‘the long boom’ by Daly and Logan (1989)) ; and

. the ‘crisis decades’ since the ‘golden age’ in which capitalism, as well as communism, has failed to deliver----as evidenced by mass unemployment, cyclical slumps, increasing divergence between wealth and poverty and between state revenues and state expenditures.  An increasingly integrated world economy has undermined the institutions of all regimes.  In an effort to recover, many regimes have replaced the Keynesian economic ideas which ruled in the golden age with neo-liberal and laissez faire ideas.  But followers of that path have done no better than others.  This has also been the time when the potentially catastrophic ecological consequences of economic growth have begun to emerge.  The growth rate of the world economy dropped from five per cent per annum in the 1960s to two per cent in the 1990s (Thurow 1996).

Overall, between 1914 and 1991 people in the advanced economies, including Australia, came to live longer and better (at least until the eighties) than their parents.  Technological  revolutions, particularly in transport and communications, ‘virtually annihilated time and distance’ (sic).  But it has been a murderous and barbaric century.  As predicted by Marx, social relations in the first world have disintegrated under the advance of a-social individualism.  Capitalism (Box 2.1) has been a permanent and continuous revolutionising force.  

At the end of this century it has for the first time become possible to see what a world may be like in which the past...has lost its role, in which the old maps and charts which guided human beings, singly and collectively, through life no longer represent the landscape through which we move, the sea on which we sail.  In which we do not know where our journey is taking us, or even ought to take us (Hobsbawm 1994).


Technicalities aside, capital is the savings from past profits or wages that are available to finance new enterprises.  Physical capital exists as factories, machines etc and finance capital is wealth invested in financial instruments such as loans, shares, bonds.

Capitalism is not a dirty word.  It is a term describing an economic production system characterised by wage-labour that does not own the means of production.  Capitalism creates a social order characterised by constant change caused by the drive to accumulate capital by innovation and expansion of output.  It is the drive for capital accumulation which energises the system.  Undoubtedly, the central issue in capitalist societies is the relation between business and government, the economy and the state.


Hobsbawm’s coming problems

Thus, beyond the ‘crisis decades’ Hobsbawm can see an ‘unknown and problematic but not necessarily apocalyptic future’---a period of destructuring rather than destruction.   Problems he foresees include the following:

. We enter a world in which for the first time in two centuries there is no international system or structure---as evidenced by the emergence of dozens of new territories without any independent mechanisms for border determination.  It is a world in which the First World can win battles against the Third World but not wars, not in the sense of being able to control the conquered territory after ‘victory’.  There is a global disorder and no obvious mechanism for either ending it or keeping it under control.  Hobsbawm’s view matches that of Singer and Wildavsky (1993) who divide the world into two parts. One part is zones of peace, wealth and democracy.  The other is zones of war, turmoil and development in which a century of disruption can be expected.

. The privatisation of the means of destruction means that it is now quite possible for small groups of political or other dissidents to disrupt and destroy anywhere.  Concurrently, the cost of keeping unofficial violence under control has risen dramatically.  Note though that the rapid fall of the twentieth century’s totalitarian and ruthlessly dictatorial regimes has effectively demonstrated the limits of sheer coercive power.

. Global population will rise above 10 billion and regional differences in population change will generate great migratory pressures.  There can be little doubt that friction between natives and foreigners will be a major factor in the politics, global and national, of the next decades. Eventually, the problem of how to keep world population stable will have to be faced.

. The ecological consequences of ongoing economic growth will not make the world uninhabitable for humans but will change the environments in which people live and perhaps reduce the carrying capacity of the globe dramatically.  In the long run, a balance will have to be struck between humanity, the (renewable) resources it consumes and the effect of its activities on the environment.  Nobody knows, and few dare speculate how this is to be done, and at what level of population, technology and consumption such a permanent balance would be possible.  One thing however is undeniable. It would be incompatible with a world economy based on the unlimited pursuit of profit in capitalist economies of the type now existing.

. While globalisation and the international redistribution of production will bring more of the world’s six billion into the global economy, there will be a seemingly-irreversible widening of the gap between rich and poor countries.  The belief, following neoclassical economics that unrestricted international trade will allow  the poorer countries to come closer to the rich, runs counter to historical experience as well as common sense;  protectionism regularly cuts off markets while oversupply reduces prices.  A world economy beset by growing inequalities is inevitably accumulating future troubles.  To judge by the tendency to inequality in the 1970s and 1980s, the major upcoming political problem  of the developed world will not be how to multiply the wealth of nations but how to distribute it.

. Technology will continue to squeeze human labour out of the production of goods and services, without providing either enough work of the same kind for those jettisoned, or the guarantee of a rate of economic growth sufficient to absorb them.  Very few observers seriously expect a return to the full employment of the ‘golden age’ in the West.  Demand in mass markets will continue to decline as transfer incomes (social security etc) fall and as technology squeezes workers out of service industry jobs as well as secondary industry jobs.

Despite the difficulties of doing so identified by Hobsbawm, many have written with great insight about what the world might be like, politically, socially, technologically, economically, and environmentally, in coming decades and even generations.

Probably the three best known future-gazers of recent decades are Daniel Bell, author of The Coming of Post-industrial Society, Alvin Toffler, author of Future Shock, and Herman Kahn.

According to Bell, writing in 1973, the industrial economy based on manufacturing is giving way to a service economy  where the bulk of the workforce will be engaged in a wide range of non-manual occupations (and manual leisure activities).  The outstanding characteristic of this society is what Bell calls ‘the centrality of theoretical knowledge’.   A dominant role will be played by professional and technical people, armed with a new intellectual technology.  Technology assessment, forecasting models and systems analysis will replace ad hoc adaptiveness and experimentation in politics.  The new scientific and technical elites will displace existing powerful groups and society will be run on the basis of rational decision making---managerialism.  Education in the new skills required will be the route to power.

A similar optimistic perspective is apparent in the work of Herman Kahn (Kahn and Weiner 1967; Kahn and Bruce-Briggs 1972; Kahn and others 1976).  He sees the connection between history and the future in terms of a ‘long-term multifold trend’, one important component of which is the movement towards a post-industrial society.  Kahn and his collaborators foresaw continued economic expansion, linked with the growth of education, leisure and material welfare, although not in the ‘non-coping’ nations (after Encel 1979).

Alvin Toffler's (1970) 'future shock' is essentially about the  increasing transience of our individual experiences of things, people, ideas, organisations and places.  He points out that the industrialised world is changing so rapidly that it no longer functions as a model for the non-industrialised world to emulate.

We turn now from such panoramic views to several collations of more focussed views of the world’s mid-future, beginning with power politics, the ways in which nations might attempt to influence each other’s actions, usually, but not always, to their own benefit.

Geopolitical futures


Assume that the dynamic driving inter-nation relations is that nations seek to survive and prosper within the community of nations (cf. Snooks 1996).  For the foreseeable future, the model for inter-nation relations stands to be that of each country using threats and/or persuasion, backed up as required and feasible by tangible power, to try and make others behave as desired---what is called power politics.

Power on the world stage has economic, political and military components.  With the 1989 collapse of the Soviet Union,  the United States became the world’s only superpower; but few see America’s superpower status lasting as the global competitive system expands to include Russia, China and the Middle East (Thurow 1996).  For the moment however, the ending of the Cold War does not obviously imply any immediate major shift in international relations, despite releasing previously suppressed rivalries between the US, China, Japan and others and an outbreak of tribalism (Kennon 1995).

After the loss of US hegemony, any of a variety of scenarios would be unsurprising, including:

- A multi-state system without major alliances.  This would involve coalition building between countries on an issue by issue basis eg the Australian experiences on agricultural trade, chemical weapons, Law of the Sea, Cambodia, Antarctica.

- A first world versus ‘the rest’ scenario (Peters 1995)

- A ‘three power bloc’ system built around Europe, the Americas, and East Asia.  The precursors of such blocs are already in place (Grant 1994) although being so diverse, ethnically and culturally, perhaps reduces East Asia’s prospects for becoming a globally important entity.  Also, defence spending is rising more rapidly in East Asia than in other parts of the world (Wilson 1996).   Conversely, the logic for eastern Europe being gradually absorbed into western Europe is overwhelming (McRae 1994).  While Australia would have some claim to belong to any of these three blocs it is not a natural member of any!

And to even further expand the range of geopolitical possibilities, the sheer politico-economic mass of an emerging energy-hungry China could lead Japan, India and Russia to recognise their common security interests against an unpredictable giant (Goodman and Segal 1995).  Although McRae (1994) observes that China and Japan are more likely to become rivals than partners, what if they find it profitable to co-operate to the disadvantage of the US?  Could Japanese militarism resurface?  Friedman and Lebard (1991) conclude that Japan must at some point rearm in order to protect its access to raw materials, eg Gulf oil.  Hartcher (1996) notes that, as in pre-1914 Europe, close economic integration amongst Asian countries does not preclude wars there, started by territorial claims, deep nationalism and competition for resources, notably oil.

Future wars and world order

What part might wars play in creating and maintaining future power standings and alignments?  A world war in 2045 is used in Wagar’s (1989) Short History of the Future as the device to trigger the end of a global capitalist economy dominated by twelve ‘mega corporations’.  However, most perceptions of next century’s wars (but not Friedman and Lebard (1991) see the possibilities as being less total than that.  For example, Huntington (1994) sees wars of the future as being between civilisations, (not between nations as such) eg between the Islamic and the Christian worlds.  Against this, it is Wagar’s (1989) view that while Islamic fundamentalismI is likely to have some political success for a while, it will not be able to break free of the global economy because of its need for modern arms and the need to pay for these.  Mid-future wars, excluding civil wars, stand to be between pairs of nations rather than coalitions of nations or ‘core’ nations, but always with the possibility of neighbouring states becoming involved.  However, continuing advances in military technology, such as precision missiles, have decoupled territory and defence (Langford 1979, Leslie 1996).  By 2020, precision strike capabilities might create the potential to achieve strategic effects over continental distances.

While trade wars to protect markets are not foreseeable at this stage, 21st century wars of redistribution would not be particularly surprising (Elkins 1995). The World Bank  has suggested that next century's wars could be over water.  Chronic water shortages already affect 40 % of the world's population in 80 countries.  Global demand for water doubles every 21 years.  In the Middle East, disputes are already erupting in the watersheds of the Nile, Tigris and Euphrates.  In South Asia, Nepal and Bangladesh are in dispute over the waters of the Ganges-Brahmaputra Basin.  Closer to home, it would not be too surprising if Java were to run out of water. 

But scarcities of resources other than water also stand to generate major conflicts, most notably when a scarcity of food-producing land created by population growth and land degradation leads to mass population movements, eg sub-Saharan Africa (Homer-Dixon 1991).

While the end of the cold war has led to an outbreak of tribalism and to wars within and between nations in Europe, Asia, Africa and South America, there does seem to be some possibility of a system of enforceable international law emerging in coming decades.  Saunders (1994) sees the world of 2025 being more integrated with more policy being driven by international and supra-national organisations, both public and private.  Certainly, no first world country is interested in using military power to establish a new empire; and, most importantly, having enforceable international law is in the interests of both business and powerful bureaucracies in the first world.  Against that, many deep conflicts remain to be resolved. 

Such an international administration would, at first sight, be largely built around the United Nations Organisation’s establishing of minimum human rights and standards and rules for international economic and political relationships (see also Naisbitt 1994).  Alternatively, the priorities might be to actively regulate the global economy or implement a ‘rights of nations’ charter which would protect and help nations taking actions they considered necessary for their citizens’ well-being.  John Burton’s (pers comm) contrary view is that the United Nations is an organisation primarily seeking to preserve the sovereignty of its nation state members and will come to be seen to be largely irrelevant in the global economy.  Thurow (1996) is also amongst those pessimistic about world regulation replacing national regulation of economic activities, saying ‘No one can agree on who should regulate, what should be regulated, or how it should be regulated’.  Whatever form the supranational order takes, it seems likely to be a creature of the first world with others playing largely by their rules (see also Naisbitt (1994) and Boulding (1978) for discussions of prospects for world government).

Having discounted the prospect of global war, it must nonetheless be recognised that the spread of nuclear weapons remains a problem (Grant 1994; Leslie 1996) and that a ‘rogue’ nation indifferent to conventional notions of self-interest could trigger a major conflict across continents.  Nuclear proliferation still provides a strong argument against nuclear fission as an energy source (Elkins 1995).

While the above discussion envisages wars as continuing to be based on military action, other possibilities exist such as information warfare based on wholesale industrial espionage and the deliberate pollution of data transmissions underlying key systems; banking and power generation for example (Elkins 1995).  A first world rogue nation might be willing to introduce ethnically-specific ‘designer plagues’ into teeming third world countries seen as threatening first world security.

Prospects for the nation state

National sovereignty is eroded from above by the mobility of capital, goods and information across national boundaries, the integration of world financial markets, and the trans-national character of industrial production.  And national sovereignty is challenged from below by the resurgent aspirations of subnational groups for autonomy and self-rule.  As their effective sovereignty fades, nations gradually lose their hold on the allegiance of their citizens...nation-states are increasingly unable to link identity and self-rule (Sandel 1996).

Political unrest is the wild card in history’s deck (Heilbroner 1995).

Decline in the power and role of the nation state in the 21st century is a common theme in the writing of contemporary futurists.  McRae (1994), for example, identifies reasons such as:

·     power is being passed upwards to supranational bodies via treaties and international regulations and standards. Trans-national arrangements such as the European Community and North American Free Trade Association are already over-riding parts of traditional national sovereignty.

·     power is being passed downwards to regional authorities

·     world financial markets set limits on fiscal and monetary policy for most countries

·     nations have limited scope for any actions that reduce international competitiveness

·     trans-national companies determine investment partly on the basis of tax treatment and hence there is a limit on any country’s capacity to extract tax from foreign businesses.

·     the talented are becoming more mobile and can choose to live where life is good and personal tax rates are low.

Cerny (1995) notes the difficulties that nation states have in providing public goods such as law enforcement, regulatory structures, property and environmental protection etc when the ideal scale for providing these is changing, under globalisation, from national to international.  But while nations are declining as political actors, the political means to control world capital have not yet emerged (Leach 1995; Fagan and Webber 1994)

Just as such international influences are intensifying, so are demands for local control, eg Aboriginal demands for self-determination.  Dissociation through intra-national secession is occurring in first, second and third world countries. This trend towards a world that is both shrinking and fragmenting (Camilleri and Falk 1992) is called ‘glocalisation’ by Courchene (1993).  Hobsbawm (1994) also recognises symptoms of the loss of state power internally such as, for example, the rise of private security services and the erosion of natural monopolies such as postal services.

Nevertheless, the ‘territorially rigid’ nation state will continue to exist.  Kennon (1995) foresees a continuation of the current division of nations into a first, second and third world, perhaps with some limited movement of nations between these categories, just as, for example, post-Franco Spain has joined the first world.

First world countries, mostly liberal democracies such as those in the OECD (eg Australia), are politically stable without having to depend on police-state methods or foreign support.  They are economically advanced in terms of such indicators of a modern economy as GDP per head, price stability, inflation rate etc.   They are socially developed in terms of education, life expectancy, public health and other social indicators of well-being.

Second world countries are commonly in disequilibrium because they have powerful and unrelenting internal enemies whom they control with loyal and effective police forces.  The more authoritarian second world regimes put security above principle and make no claim to higher abstractions, eg Burma.  Others justify and legitimate themselves on ideological grounds or on the basis of economic success (eg the newly industrialising countries of Asia).  A few are totalitarian in the sense of trying to control how people think  (Totalitarianism and libertarianism, the idea of minimal state interference in people’s lives, are at opposite ends of the political spectrum). 

Third world countries, sometimes called the south because so many are in the southern hemisphere, are those unable to enforce their will throughout their national territories (Kennon 1995).  Many are overwhelmingly burdened by foreign debt.  In 1970 the 15 most heavily indebted nations had an external public debt of 9.8% of GNP.  By 1987 this had risen to 47.5% of GNP.  Having to make such debt repayments to first world countries ensure that schools and hospitals cannot be built and that ever-more resources will be sold off, exacerbating the problem even more.

Homer-Dixon (1991) suggests that severe civil strife is likely when:

·     there are clearly defined and organised groups in society

·     some of these groups regard their level of achievement as unacceptably low and, hence, the socio-economic system as unfair

·     these same groups believe peaceful opportunities for change are blocked but that the authority system is capable of being overthrown.

On this analysis, the only way for a police state to cease to be a police state is to cease to be deeply divided.

The quintessence of liberal democratic government is majority rule restrained by culture, law, custom, ‘natural’ rights to protect minorities and the power of a range of countervailing institutions (such as churches, unions, business, the public service, academia).  It allows the individual an effective say in running the state through a process of electing representatives under broad suffrage to make laws and carry out policy.  Gorer (1966) emphasises that not only is majority rule restrained by a range of values in a democracy, it must be if democracy is to survive; that the attitude of ‘winner takes all’ is fatal to democracy.

Now that is the theory, but it is not difficult to identify a rapidly growing disenchantment with government, both with the institution itself and with its ability to perform (Shuman 1978).   This is despite some spreading of forms of democratic government around the world. The Freedom House organisation, which follows such matters, rated 42 countries as ‘free’ in 1972 and 75 as ‘free’ in 1994.  Domestic policies for managing deficits, debts and unemployment have generally been unsuccessful (Daly and Logan 1989).  There is some evidence that young people are unimpressed with political processes, even in stable democracies (Eckersley 1995).  And many first world countries contain a growing underclass that feels that the political process has failed it.  Certainly many unemployed feel betrayed by a society that says ‘If you try hard enough you will get a job’.

But how has this happened?  Democracy’s greatest strength, having to maintain the approval of the voters, is also its greatest weakness, namely, having to get re-elected every few years by pandering to short-sighted and greedy voters and not take account of future voters, non-voters etc.  Single-issue parties can exert a disproportionate influence.  Liberal democracies seem incapable of pre-empting (anticipating? forestalling?) or even seriously debating problems and, moreover, tend to overreact when they do eventually respond.  The reason has been neatly diagnosed as `pluralistic stagnation' (Lindblom 1959, 1965) wherein competing interest groups continually nullify each other: whatever is proposed by one group is commonly against the interests of some other organised group and therefore vigorously opposed.  Contributing to the `log jam' in many cases is the built-in unwillingness of contending parties to compromise, to moderate their demands.  It is proposals which threaten only a diffuse and unorganised public interest which best stand to succeed!  Mancur Olson (1982) talks about distributional coalitions or special-interest groups that are willing to sacrifice large national gains to obtain small gains for themselves.  Olson foresees this fate for all developed countries and Kennon (1995) finds the signs already visible in Britain, United States, Japan and Germany; but there are also signs that some groups are beginning to voluntarily restrict their powers to gridlock the system.

Thus, failures to cope with the problems of Hobsbawm’s (1994) crisis decades have undermined political consensus and participation, leaving governments vulnerable to sectional interests.  However, at this stage, the liberal ‘representative’ democracies face little internal threat of takeover through ‘direct democracy’ (eg the widespread use of citizen-initiated referenda) or through the ballot box by non-democratic groups such as Christian fundamentalists or US-style ‘patriots’.  Their numbers are too small.  

Of more concern is the prospect of some liberal democracies becoming authoritarian police states, as a response to deepening intractable divisions within the society, along with the loss of both sovereignty and legitimacy.  Where such divisions are geographic (eg Quebec in Canada, Scotland in the United Kingdom), dissociation becomes a plausible possibility, but where some 20% of the community forms a diffuse underclass, it is Rio de Janeiro-style ‘war’ and terrorism in the cities (van Creveld 1991) that becomes plausible.  Beginning signs can be seen in Liverpool, Manchester and Newcastle in the United Kingdom and in Los Angeles and New York in US, to take examples from two countries which Australia tends to use as role models.  

But even where democracies are not deeply and intractably divided to the point of being threatened by violence and its repression, or not threatened at the ballot-box by anti-democratic minorities, they are still threatened by ‘creeping bureaucratisation’.  Kennon (1995) sees the rise and fall of nation states as dependent on the interplay between the political sector, the bureaucratic or managerial sector and the private sector.  The political sector is essentially confrontationist which is inefficient and he notes that economically successful states of recent times are those where the bureaucracy and its specialists are able to concentrate on facilitating the activities of the private sector and solving ‘technical’ problems.  He conjectures that first world countries intent on retaining that status, but bedevilled by pluralistic stagnation or gridlock, will gradually turn more and more decisions over to bureaucrats and specialists.  The increasing role of economists is a good example of the erosion of authority by technical competence.  Interest groups would not be able to play the same role as they do now in influencing government decisions.  Concurrently, the core business of government stands to move from the provision of services to the administration of service provision (OSCA 1996).

The political sector would not disappear in such a ‘postdemocratic world’, nor would it cease to have important functions: it would legitimise bureaucratic actions just as the monarchy legitimises parliament; it would act as an ombudsman for individuals and as umpire for disputes between bureaucracies; it would channel violent tendencies into harmless theatre (as sport does); and, if things went really wrong, it could reassert itself as an authority of last resort.

Geoeconomic futures

The globalisation process

Over the 20th century, the capitalist system has responded to recurring industrial over-capacity, with all that this implies for profits, in changing ways.   There has been a progression from protectionism and imperialism in the first half of the century to cartelisation and then, starting  in the 1970s, to globalisation.   

Globalisation began as a search for low-cost production by American corporations as they came under intense competition from Japanese and European corporations (Reich 1991).  Beginning with the location of manufacturing in low-wage countries, it rapidly became a ‘geographic unbundling’ of business systems with research and development, design, manufacturing and service delivery being based in different locations or countries.  Simultaneously, the 1970s slowdown in growth and rising unemployment fuelled a successful push for deregulation of business in industrialised countries, notably in banking (Daly and Logan 1989).

More recently, as profits again begin to falter under the influence of decreasing transport and communication costs and increasing ease of entry into many sectors of the economy, globalisation is transmuting into a drive by trans-national corporations to provide high-value customised goods and services to the world’s middle classes.  That is, profits are increasingly being derived from a continual adjustment of production to customer needs (Reich 1991).   

What are some of the direct consequences of these processes? 

·     The 1990s global economy is six times larger than in 1950, is more integrated and has significant new players.   In the same period, the volume of world trade has grown consistently (at 5.9 % pa between 1960 and 1988), fuelled by falling real transport costs and the progressive removal of tariff and non-tariff barriers.  Trade is still growing at three times the rate of Gross World Product (GWP), while foreign investment is growing at seven times the rate of trade growth.  The export of capital from trade-surplus countries has the effect of maintaining  the domestic rate of profit as well as providing high profits from low wage costs abroad.

·     National savings flow to where they earn most.  National competitiveness is thus less dependent on national savings than on having the national skills which attract investment.

·     Returns to a country’s investors increasingly depend less on the success of their domestic companies than on the global portfolio selected. 

·     Globalisation appears to pit workers in different parts of the world against each other in competition for jobs, wages and working conditions (Fagan and Webber 1994).  As jobs move offshore, organised labour in the industrial countries is losing its capacity to bargain with large corporations engaged in high volume production.  Concurrently, organisations have learned that it is possible to grow without growing the work force.  The pain of falling real wages is moving up the organisational hierarchy.

·     Productivity gains tend to show up as falling prices rather than as rising wages; there has been a shift from an inflation-prone environment to a deflation-prone environment (Thurow 1996).

·     Nations can no longer substantially enhance the wealth of their citizens by subsidising, protecting or otherwise increasing the value of ‘their‘ corporations; the connection between domestic corporate profitability and citizens’ standard of living is attenuating.

·     Products, corporations and economies no longer have distinct nationalities.

·     Dematerialisation, decarbonisation and miniaturisation.  Steel, chemicals,  motor vehicles and oil were the world’s backbone industries in the energy-intensive years of the ‘long boom’ (Daly and Logan 1989).  Now, materials, routine labour and energy are increasingly being designed out of products as corporations respond to the two forces driving competitive markets: the hope of capturing intra-market share with a cheaper or better product ;and the hope of capturing inter-market share with innovative products.  Concurrently, product lifetimes and product life cycles are shortening. 

·     The world’s 200 biggest trans-national corporations are responsible for a rapidly increasing share of GWP, with sales in 1995 equal to 28% of GWP, up from 24% in 1982.  Their combined sales exceeded the combined GDP of 182 nations, ie all except the largest nine economies (Canberra Times 17 Oct 1996).  Yet employment worldwide in these global firms has remained virtually flat since the 1970s.

Towards the networked organisation

Emery et al (1975) and Kennon (1995) see employment in modern economies as becoming ever more specialised and bureaucratised, this being but the continuation of a long-time trend.  The relationship between specialists and bureaucrats is that bureaucrats understand and co-ordinate the functions which different specialists can perform.  Collectively, specialists and bureaucrats constitute Bell’s (1973) knowledge class or professional class.

Trans-national corporations are increasingly being managed and staffed by people, akin to Kennon’s specialists and bureaucrats, called symbolic analysts by Reich (1991)---problem solvers, problem identifiers and brokers of deals. Typically, these work at terminals when not talking and otherwise communicating.  They create and co-ordinate flows of information (intellectual capital) which evoke and blend flows of goods and services produced by smaller companies staffed by more traditional industrial and service workers.  Globally, demand for their services has been boosted by declining transport and communication costs.  It is because, in search of flexibility under change, big organisations are increasingly using contract inputs and contract workers for routine functions (outsourcing) that most new jobs come from small companies, not large.  Handy (1994) sees organisations becoming more like ‘condominiums of transients’, groups of project teams coming together for specific operations, rather than ‘castles’ where workers have a home for life.   In part this is because there is less value in being able to access ‘corporate memory’ under conditions of rapid change.

Ownership, control and profit-sharing are taking new and evolving forms in this model of the corporation as an impermanent network of nodes of expertise.  As demonstrated by their shares of turnover, both capital and ‘traditional’ labour are ‘subordinated’ to the claims of the symbolic analysts whose skills are rewarded at rates set on world rather than domestic markets.

The future of global capitalism

Capitalism is an economic system energised by a drive to accumulate capital by making profits which are then invested in increased productive capacity.  But continuing such investment leads to productive over-capacity, falling prices and falling profits.  War or ‘military Keynesianism’ (Knight 1987) is one way of increasing demand to solve the excess-capacity problem. 

Innovation is another.  Schumpeter’s  (1934) ‘waves of creative destruction’ lead to the abandonment of unprofitable capital and the diversion of profits into the production of new goods and services.  So, as profits from productive processes inescapably fall over time, there is a constant search for new ways of doing things, usually involving the substitution of capital for labour, or new ways of producing goods or finding new goods to produce.  However, while capitalism is organised to search for and seize on profit opportunities created by technological and organisational change, there is no guarantee that these will arrive with the regularity required to maintain investment opportunities.  

While we might not be too surprised to see 21st century capitalism enjoying successes and setbacks similar to 20th century capitalism, the possibility of a system-destroying setback cannot be ruled out (Heilbroner 1993).  Disney’s (1994) slightly less apocalyptic judgement is that during the next few decades there is a strong possibility of at least one major crisis in the international financial system, causing massive economic and social damage throughout the world.  There is concern for example about the destabilising effects of massively increasing speculative international currency flows and the inhibiting effect these have on productive investment (Hutton 1996).  If Thurow (1996) is right, it was fear of communism and the dominance of the US economy that held the capitalistic world economy together for decades and the possibility of global economic collapse is increased, not decreased, by the demise of communism and the loss of US economic hegemony.

One major reason why variations of capitalism will provide the basis for most national economies in the 21st century is that, with the breakdown of the Soviet system in the 1980s, there are no substantive alternatives, no blueprints for a successor.  This pervasiveness will be despite the obvious failures of most capitalist economies to provide full employment, high living standards, proper working conditions, rising productivity, international competitiveness, subdued cyclical behaviour, an egalitarian income distribution, inter-generational equity and a sustainable, culturally-sensitive economy.  The seventh annual United Nations Human Development Report (1996) noted that 70 of 174 countries have lower average incomes today than in 1980.  Declining prices for raw materials, the burden of international debts, the absence of an industrial base, powerlessness in key international negotiating fora as well as rising internal instability in many cases bodes ill for the economic future of many developing countries (OSCA 1996).  Given the economic gains accruing to capital under globalisation, there is no foreseeable incentive for capitalism to reform itself as happened under the threats of fascism and communism.

Modern economic ideas suggest that, in unregulated markets, positive feedback mechanisms are likely to allow larger companies to grow relentlessly at the expense of smaller companies. Many industries already comprise one or a few firms (Meacher 1982).  In coming decades, it would not be surprising to see an ever-increasing fraction of Global World Product (GWP)  being produced by an ever-decreasing number of TNCs and consumed in the first world and, to a lesser extent, in the second world.  This would leave perhaps a hundred third world countries with stagnant or declining domestic economies largely decoupled from the global economy or outside the trading blocs that are emerging as stepping stones towards a more global economy.  Kennon (1995) conjectures that while TNCs will have the power to topple governments, they will leave token democracies in place in all first world countries, shaping policy to suit corporate needs.  If system-collapse can be avoided, the ‘alliance capitalism’ experience of the petroleum industry provides an unsurprising scenario: As each industry is reduced to a few major players, they will cease serious competition and will instead collaboratively manage production, distribution, and pricing to their mutual benefit.  Similarly, one could expect financial markets to be ultimately stabilized, and a single global currency adopted.  If the global economy does come to be dominated by a handful of non-competing megacorporations, will this be the prelude to a ‘post-capitalist managerialism’ era in which competition gives way to ‘property management’?

Meanwhile, other ‘brands’ of capitalism remain possibilities.  The overlapping candidates include competitive capitalism, market-access capitalism, guided capitalism, crony capitalism, fascism and social market or civic capitalism.  Competitive capitalism means something like the free market capitalism of economic theory.   Competitive capitalism can be contrasted with market-access capitalism where offsets are demanded in return for allowing entry into particular markets.  Asian-style guided capitalism sees the state playing an important role in co-ordinating the domestic and international operations of the nation’s large corporations.  Guided capitalism can degenerate into crony capitalism where business opportunities are gifted by the state rather than competed for.  Capitalism under fascism sees worker rights traded for security of employment and the protection of business from legal scrutiny.  Fascism has great emotional power and many of the themes that accompanied the emergence of fascism in the twenties are re-emerging according to Umberto Eco (1995).  In civic capitalism, participants accept obligations imposed by the (legal) framework that makes their commerce possible (Emy 1993). 

Equally plausibly,  while GWP continues to grow over coming decades, perhaps doubling by 2025 and again by 2050 (Halal 1993), the product mix stands to continue shifting from goods to services, services being everything other than industrial and agricultural products.   An example of importance to Australia is that demand for tourism services could continue its present rapid growth.  Travel and tourism is already the largest single industry in the world, employing 130 million people world wide in 1993.  More generally, first world economies will continue moving from extractive industries through fabricating industries to information processing and knowledge-intensive industries, but adding these sectors on rather than replacing the old ‘saturated’ industries.

World trade

...if there is one rule of international economics, it is that no country can run a large trade deficit forever (Thurow 1996).

It is the nature of international capitalism that as one part of the world succeeds and builds up trade surpluses, these surpluses have to be reinvested elsewhere in a process that is necessary if trade-deficit countries are to be able to continue to trade. 

It is commonly predicted that the future rate of economic growth in East Asia, which is very much trade-based, will exceed that of Europe and North America and hence contribute an increasing share of GWP.  McRae (1994 ) however observes that East Asian growth is thinly based in terms of products and export markets and is therefore fragile eg vulnerable to US protectionism.   Daly and Logan (1989) note that most countries of the Asia-Pacific region are not well-placed to benefit from the movement of the world economy from labour and energy intensive industries to services and knowledge intensive industries.  

Thurow (1996) regards the current US-Japan trade imbalance as unsustainable and standing to have major repercussions around the Asia-Pacific region, however it is resolved, eg by emergency tariffs.  The US must start running substantial trade surpluses to pay interest on its international debts or ’at some point, a falling (US) dollar is going to lead the rest of the world to quit holding dollars’.   A run on the dollar will lead to debts in appreciating currencies (yen? marks?) becoming unserviceably high.  Australia's part in this play is that when the US annual growth rate changes by one per cent, our annual growth rate changes, on average, by 0.74 per cent three months later.

So, while accepting that we are living on the edge of the global region with the strongest prospects for continuing high economic growth, Australians need to be aware of these contingencies, especially if, as predicted by Industry Minister John Moore (1997), free trade among all major nations may well be in place before 2020.

The welfare state

Welfare systems focussing on income support and the provision of health, housing and education services expanded in most first world countries after the Second World War.  These systems reflected both a willingness to share the fruits of economic growth and an insurance against social conflict.  Indeed, the societal goal of economic growth was ‘sold’ on the grounds that such growth would reduce poverty.  Now, the social welfare state is disappearing, slowly or rapidly, in all first world countries and poverty is increasing (Thurow 1996).

While the reasons for this decline are complex, they include:

. widespread pressures to cut personal and business taxation (Self 1993) and balance government budgets;

. widespread inefficiencies and failures in the operations of welfare systems;

. a resurgence of the doctrine that providing welfare benefits at any level of generosity destroys people’s willingness to and capacity for providing for themselves and making their maximum possible contribution to increasing the wealth of society;

. reduced need since 1989 to maintain the welfare state as a counter-attraction to Communism (Greider 1997).

The life of the welfare state could be dragged out, perhaps, by various reforms such as competitive provision of services, but only radical changes in community values could give it significant new life.  The least surprising of such value shifts would be community acceptance of the ‘new growth theories’  which recognise that the welfare state is actually providing much of the human capital (eg educated healthy workers) and organisational capital (eg accessible justice) on which successful market economies already and increasingly will depend, eg Romer (1994); EPAC (1995).  Because the financing of such investments in social capital would require tax increases, it would be difficult for any country to pursue such a strategy in isolation.

Wealthiest of nations

Conjectures about the characteristics of first-world countries standing to experience above-average rates of economic growth in coming decades include the following:

·     For the first years of the 21st century, it will remain vitally important to be good at making things, but gradually economic advantage will move to countries good at producing services. 

·     .McRae (1994) says efficiency in the service industries will be the motor of growth.  He uses a broad economy-wide concept of efficiency which includes not having to use scarce resources for ameliorating deep social problems. Crime is the most obvious of these.  For example, the US puts 1.3 % of GDP into overt law and order (excluding private security).  New South Wales now has 35 000 private security guards, twice the number of police officers.  The conventional family unit is an efficient way of combining child-rearing with earning a living and the economic cost of family breakup is high.   Health costs and transaction costs (eg legal costs) can vary markedly between countries.  Countries which want to grow richer will find it much easier if  the society is well-disciplined, which is not necessarily the same thing as the ‘soft authoritarianism’ of some ‘Asian tigers’.

·     Because infrastructure (capital invested in land) and people are the relatively immobile factors of production, economically successful countries will give high priority to developing problem-solving skills and high quality institutional and physical infrastructure.  Foreign ownership and control will be of little concern in successful economies because the value of corporations lies increasingly with their mobile symbolic analysts and, as long as these do not live abroad, their home countries gain most of the benefits of their skills (Reich 1991). 

·     Technology is making skills and knowledge the only sources of sustainable strategic advantage (Thurow 1996).  Capital in the form of land and natural resources will matter less because the industrialised world can produce its own food.  Financial capital is always available at a price (sic) in London, New York or Tokyo and natural resources no longer fuel economic growth (McRae 1994). 

·     Countries that are willing to sacrifice environmental standards, wages, working conditions, civil and political rights and ethical standards will win the economic war (a Pyrrhic victory?).

·     The Japanese ‘team approach’ to manufacturing production has proved very efficient and adaptable in the face of change.  A lack of sentimentality about established ways of doing things is very important.

·     An open economy will be vital to economic success(!).  National security is no reason for keeping foreign firms out.  Albania, which refuses to trade with the West, is secure in a fashion but its citizens transport their wares in oxcarts and live in hovels.  Complete security is equivalent to autarky (self-sufficiency).  But autarky deprives a nation’s citizen’s of all the advantages of economic interdependence with the rest of the world.  In the event, trade, as a fraction of economic activity might fall sharply of its own accord next century if more and more products can be made more efficiently in locations close to the consumer, due to both reduced material and energy inputs and the fast pace of technology transfer (OTA 1988).  It is not easy to understand how the global economy would operate under a trade decline.

·     Economically successful countries will learn to initiate new ‘growth industries’ well before old industries begin to decline (Handy 1994).  If, as seems possible, a new Kondratieff (1926) growth cycle is beginning, the candidate industries for driving that resurgence of global capitalism are the knowledge-intensive industries, particularly information and communications.  Indeed, the US economy’s 12 million new jobs in the last five years has been a ‘change dividend’ attributed to this process beginning (Milne 1997).

World-shaping technologies

Technology drives social change today (Platt 1993).

The most powerful and disruptive forces of the twentieth century are science and technology.  The world’s most pressing political, social and economic problems have their origins in science and technology;  the population explosion, economic growth, pollution and environmental deterioration, the means of war, the limits to growth, disparities of wealth and urbanisation (Birch 1975).

It is the nature of capitalism that new and profitable technologies lead to changes in the structure of the economy, eg the root cause of globalisation is technological.  Economic changes, in turn, initiate social changes reflecting people’s proactive and reactive adaptations to price and product changes. 

New technologies that can be immediately applied in a number of different sectors of the economy can be usefully called generic  technologies.  Contemporary examples of ever-increasing importance include microelectronics, biotechnologies, telematics (infotronics, computer-telecommunication technologies) , new-materials technologies and robotics (eg Sheffield et al 1994).  Another class of important technologies are those that change the price or quality of some basic input used in many sectors of the economy  such as energy, transport, information, telecommunications or services such as legal services.  These can be called infrastructural or enabling technologies.

Space permits only a brief review of prospects for further development of profitable and economy-driving technological change in the energy, transport and information/communications sectors of first world economies, ie in meeting basic social functions.  We also note the problematic prospects for social technologies that facilitate institutional and organisational adaptation to economic and social change.


...even the most optimistic estimates indicate commercial fusion power is unlikely to be available for fifty years or more (Oliphant 1992).

Even when it arrives, high capital costs and high maintenance costs may mean that fusion power is not profitable enough to replace fossil fuels or alternative energy sources.  And even when developed, fusion reactors will have severe residual radiation problems (Leslie 1996; Hardin 1993).  However, Marchetti (1987) still conjectures that nuclear energy will succeed natural gas as the world’s primary energy source in the second half of the 21st century, possibly being used to produce fuel-hydrogen in lightly-populated areas.

In this book we are interested in global energy provision in the first half of the 21st century.  Traditional calculations of future energy needs start from information on current energy use per dollar of GDP (called energy intensity) and then make assumptions about (a) the rate of GDP growth and (b) the rate of decline in energy intensity.  Grubler et al (1995) suggest that the world will not run out of energy in coming decades even though energy needs in 2050 might be an order of magnitude higher than today.  Looking further ahead again, Gilland (1995) reviews global energy demand up to 2100 and, even with a world population of perhaps 11 billion, speculates that current average annual energy consumption of 1.7 tonnes of oil equivalent per capita should be maintainable.

But what of the energy mix? With the exception of the OPEC countries, every major oil producing country is already experiencing declining production (Bronner 1996).  Of the world’s 1023 billion barrels of proven reserves, 60% or about 614 billion barrels lie beneath the sands of Iran, Iraq, Saudi Arabia, Bahrain, Oman, Qatar, Kuwait and the United Arab Emirates.  Oil is also peaking in terms of market share and Marchetti (1987) sees it as having less than 10 % market share by 2050.   He also sees most oil being converted to transportation fuels, a relatively easy task technically.  The World Resources Institute (1996) suggests that oil production--- currently 40% per cent of the world’s energy supply---could peak before 2002, in contrast to more conventional estimates that production will peak somewhere between 2010 and 2025. Thereafter, oil production could halve every 25 years or so.  The energy breakeven point for USA oil production (when it takes a barrel to retrieve a barrel) will probably occur in the first decade of 21st century.  Oil  will be increasingly replaced for some decades by natural gas for which only 2% of known reserves have been extracted so far (Marchetti 1987).  Gas could be replaced in turn by solar, wind and other alternative energy sources (including perhaps new ways of using coal), depending on demand and the speed at which supply prices drop.

Not only will the energy mix be responding to declining oil supplies, it will be responding to a ‘pervasive and persistent demand’ for ever cleaner, more flexible and more convenient energy forms.  There will be a continuing ‘decarbonisation’ as well as a ‘dejouling’ of the economy.  Ausubel and Marchetti (1996) say the world is just past the middle point of a decarbonisation process that will take another 150 years to complete.  The precise energy mix after about 2020 will depend on both research and investment paths.  Improvements to fuel cells has the potential to trigger ‘the big switch’ from a combustion-based polluting economy to a sustainable hydrogen/electro-chemical economy (DAS 1996).  Whatever the mix though, the energy sector’s capital requirements will continue to be extremely large. 

Energy prices are expected to rise presently, perhaps significantly enough to constitute a ‘shock’ or perhaps gradually enough to not constitute a major obstacle to increased energy use.  A significant rise in energy prices would particularly affect transportation systems, now largely dependent on oil-based fuels.  Aircraft will consume most of the fossil fuel in future transport systems (Marchetti 1991) and liquid hydrogen aircraft could be an important development for both greenhouse reasons and as a replacement for increasingly scarce kerosene (Victor 1990).


Change in the world transport system stand to be a major driver of global change with benefits from an improved system coming in the form of lower production and delivery costs.  Disbenefits from increased passenger and freight volumes include pollution, landscape disruption and loss of amenity values (values directly meeting human needs and wants) (GACGC 1993).  Beyond the immediate costs and benefits of the transport system lurks the whole question of the net benefits of free trade.

How might the world's transport networks change in coming decades? Conjectured increases in the value of global trade imply large increases in the physical magnitude of the transport task, despite trends to dematerialisation, to ‘value-added’ exports and to relatively more trade in services than goods.  However, the geographic extent of the global transport network has probably already been largely set;  what will change as the global economy evolves are the absolute and relative volumes and categories of people and freight, and the modal split (road versus rail etc), on particular links.  Mass tourism stands to be a major generator of people traffic.

Technologies already available, or in the research and development pipeline, suggest that reduced costs and higher speeds are possibilities for both freight and passenger transport by road, rail, air and sea.  One consequence of the availability of higher speed travel might be to integrate groups of cities into ‘supercities’.  Marchetti (1991) argues that people spend on average about an hour a day travelling in their ‘territory’ and always have done; and they spend about 15% of their disposable income to maximise distance travelled in that hour, ie to maximise the size of their ‘territory’, given that they ‘‘have to return to the ‘den’ each night’’.  Thus, very poor people have a mean speed of 4 km per hour and a 4 X 4 km territory.  The very rich have a mean speed of 500 km per hour and a 500 X 500 km territory.  Average territory sizes would continue to increase if average travel speeds continue their historical increase of between 1% and 4% a year. 

The aeroplane is the fastest means of transport and given (a) a slow decrease in real terms of the cost of air transport and (b) increasing disposable incomes, air travel stands to be the fastest growing branch of the passenger transport business.  Where passenger volumes warrant it (eg Europe, North America), there might also be a place for the increasing use of advanced high speed ground transport such as maglev trains.  Notwithstanding, road traffic, with its relatively high emission levels, is set to rise dramatically in some regions, notably Asia (excluding Japan) (GACGC 1993).  Whether total vehicle emissions improve or worsen in first world countries depends on the outcome of a race between increasing traffic volumes and improved emission control technology.

Note that there is a natural limit to travel speeds, at least on Planet Earth.  Given the time it takes to reach cruise speed and slow down for landing, it makes little sense to travel at speeds much above Mach 2.5 on a planet the size of Earth (S. Singer 1994).   ‘The most optimistic date for putting a man (sic) on Mars is 2020,’ says Dr Richard Zurek of the Jet Propulsion Laboratory, California (The Australian, 18 July 1996).  Given the 2050 horizon of this book, issues of  space travel and colonisation will not be discussed.

Computing and communications

It is the capacity to (a) manipulate and (b) transfer information ever-faster that lies at the heart of the electronics-based communications and information industries which are set to be the dominant drivers of the world economy in the next Kondratieff cycle or the next long wave of economic growth if you prefer.  Around 20% of world trade, $740 bn a year and growing rapidly, is in intellectual property.  The information industry revolves around the creation, organisation, distribution, storage, retrieval and use of information.  It has two key components: electronic publishing and information retrieval for business, entertainment and research (OSCA 1996).  The key hardware that both depend on, for the moment, is silicon microchips, the heart of every computer.  Fabrication of microchips is a massive global industry, currently increasing its output at the rate of 15% a year.  Foreseeable developments in superconductors could see them rivalling semiconductors in computer processors and boosting operating speeds, in theory, by a factor of 50.

The Internet provides a dramatic example of the growth occurring in electronic-based communications---at the present rate of connection, everyone in the world would be on the Internet by 2003 (Negroponte 1995) !!  Perhaps 200 million actually will be.  What Rowland Hill did for letter-writing by inventing the penny postage stamp, the Internet could do for inter-personal communication in the next century, provided that access is cheap enough.  Along with accessibility, the big issues in Internet management are likely to be accountability (in a quality control sense) and privacy (William Gibson, in an interview with the magazine 21C (Issue 2(1) 1994).  Protecting the integrity of traded knowledge stands to become more difficult (OSCA 1996). 

Arguably, the single most important thing about the Internet is that it has the potential to increase the power of the individual in relation to the State and other authority structures.  For example, dissenting views can be published world-wide instantaneously; electronic discussion groups and petitions are possible; direct democracy becomes more feasible vis-a-vis representative democracy.   More widely recognised though is the potential of the Internet to continue carrying an increasing fraction of global commerce and, by increasing personal productivity, to expand global commerce.

Beyond the Internet as we know it, broadband optical fibres and direct-to-home digital satellite broadcasting  stand to allow real-time multi-media communications.  This is the heart of the communications revolution---the ability to communicate one-to-one in video, audio and data.  Multi-media technology is driving convergence of the publishing industry, the computer industry, the broadcasting industry and the recording industry (OSCA 1996).  But not the travel industry; contrary to conventional wisdom, Marchetti (1991) suggests that communication advances (ISDN, local area networks, cellular telephones, faxes etc) may change the way travel budgets are spent but not the amount; that transport and communications are not substitutes.

Social technologies

The loss of the stable state requires that we shift from the rational model to a model of learning, both personal and public.  Our concern, then, becomes not only that of finding right answers or solving problems but of developing continuing processes by which problems can be solved and answers found (Schon 1974).

Capitalist economies require a supportive physical, social, cultural, educational and organisational infrastructure (Thurow 1996).  Social technologies are the building blocks of that infrastructure.  These are new and imaginative ‘recipes’ deliberately developed to solve social problems, meet a social need or achieve a social objective.  Some are developed for profit, others by government acting in the public interest.  Social technologies appear in various guises.  Some work, metaphorically, by creating roles for people and then issuing stage directions for playing those roles; think of the legal system.  All are practical applications of ideas for structuring classes of directed interactions between people and parties, 'rules of the game' if you prefer.  They are institutional changes in the sense of either changing these rules or setting up new 'games'. 

In The step to man, John Platt (1966) addresses the problem of deliberately developing social technologies, or social inventions (his term).  He points out that we have many organisations searching all the time for new inventions and combinations of these to solve technical problems.  The research and development teams of industrial and government laboratories do nothing else and every few years new technologies change our social structure and our ways of living and working.    But we have no corresponding organisations that spend all their time searching deliberately in this way for new inventions and combinations of ideas for solving social problems.  There are no national laboratories with full-time research and development teams assigned to come up with ingenious ideas for improved social organisation and communication and interaction, and to set them in motion. 

Nonetheless, while little progress has been made in developing a generic understanding of how to develop social technologies for particular tasks (Cocks 1992), proposals for and experiments in trialing  ad hoc social technologies abound.  Interest in the use of so-called economic instruments