Society & culture

China Syndrome

As I've noted elsewhere in this issue, China is at something of a cross roads when it comes to future growth. It has enjoyed double-digit growth for almost a decade but there is a school of opinion that says this cannot continue hand in glove with the country's resolutely communist regime. The argument against China becoming a sustainable power is based on the fact that most of its economic growth presumes state investment in huge infrastructure projects under pinned by cheap labour. Out of a total Chinese workforce of 760 million, 260 million are migrant peasants with no secure property rights (until last week) or the right to strike. The economy is also based upon exports, which some people argue must have a ceiling and surely Western markets will eventually defend themselves with economic protectionism? Some Chinese mandarins would dearly love to restrain the growth rate but many of the tools available to other nations are simply not available - raising taxes, cutting expenditure or lifting interest rates, it is argued, are not options within a system based on Leninist Corporatism. We'll see. Then there's the argument that inequality will produce rural revolt or that environmental destruction will limit growth. Again time will tell.

In defence of China the policy of over-saving and under-consumption is not unique. Japan and South Korea were both built using a similar model. Moreover, while China is growing at 10.4% year-on-year with 44% savings as a percentage of GDP, India isn't that far behind (8% growth and a 25% savings rate). The Chinese banking sector is being reformed - slowly - and capitalism does not necessarily need democratic institutions to succeed. Today the countries that everyone seems to be worried about are China and India. Tomorrow they could be Kenya and Ghana. China's strength is not proof positive of the West's weakness either and to some extent both are economically interdependent. If one fails it is highly likely that the other will fail with it. Moreover, China's insatiable appetite for energy and raw materials and its fondness of dictatorships that can supply these resources is hardly new. The West has been engaging in these activities for well over a century.

2007 global trends

According to the Worldwatch Institute rapid urbanisation and natural risks are among the key trends to look out for in 2007 and beyond. Over the last 50 years the world's urban population has grown by 400% from 732 million in 1950 to 3.2 billion plus in 2006. Africa now has more people living in cities than the US and Canada combined (and now has less wilderness than the US) and by far the greatest increase in global population between now and 2030 will occur in cities. On the risk front, the number of individuals directly affected by natural disasters has increased from 177 million in the late 1980s to roughly 270 million today and this is likely to increase still further.Eight of the world's ten largest cities lie on or near earthquake faults and 60% are also highly vulnerable to storm surges.

Worrying about the wrong things

Anxiety about the future is a significant trend. But are we are worrying about the wrong things? For example, in the US people worry about a future Avian Flu epidemic whilst at the same time largely ignoring the common flu that kills 36,000 Americans every year. In other words we worry about future possibilities whilst simultaneously ignoring present probabilities.Our contradictory behaviour is everywhere. We buy anti-bacterial soap and worry about plane travel whilst eating salt-encrusted fast food and driving without a seat belt. 20% of US drivers and 30% of backseat passengers do not wear seat belts. An even better example of this behaviour is the fact that immediately after 9/11 people decided that it was safer to drive than fly. Unfortunately so many people thought like this that road fatalities in the two months following September 2001 exceeded the number of deaths in the twin towers by a third.So why do we do this? The best explanation I've come across is that whilst we live in the twenty first century our brains are somewhere else. There are two ways that the human brain has evolved to deal with risk. This first is automatic and intuitive. The second is measured and thoughtful. Unfortunately the former is usually dominant although thinking too much or too little about future risk are both a problem. Another issue is something that's called probability neglect. This is the idea that the more we fear something the more anxious we become and the less we sit down to calculate the odds of the actual thing happening.

Moreover, the more perceived pain or suffering something causes the more we tend to fear it, whereas once something has happened we get used to it. In other words the strange and unexplained is more scary that the known and familiar. A good example of this is Avian flu again, which had most of the British media running around like headless Chickens before it appeared in Britain, but which garnered hardly any reaction once it actually arrived. We get agitated for a while and them we forget about it. We also fear things that happen to a lot of people at once (e.g. terrorism) more than things that affect people over time or in a more distributed way. Contrast for example the fear of AIDS with the fear of having a heart attack when heart attacks kill fifty times as many people. Equally we misread risk when we feel that we have some control over things. Again an example is air travel where we have no control versus driving where we do. 500 times as many people die on American roads (44,000) as in American skies (a few hundred) but people don't see it that way.Finally there's what's been called the optimism bias. This is where people think that the consequences of risky behaviour don't apply to them (e.g. "But I'm a good driver"). This can be compounded when risky behaviour (e.g. drinking) provides immediate gratification followed by delayed penalties. So what are the implications here? One thing to think about when making forecasts is not to underestimate human nature, which is ruled by feelings and can be highly illogical from a distance. Experts use logic whereas the general public uses feelings. The second point is that most risks are obvious and hidden in plain site.

The fad of online collectivism

The idea of the wisdom of crowds has been around for a while but it is gaining momentum thanks to web 2.0. Most people think this is a good thing. Take Wikipedia for example. The issue is not Wikipedia itself but the way in which the site has become regarded and used. This is a point made in an essay by Jaron Lanier. His point is that the idea that the collective mind is all wise is a fallacy - or is at least exaggerated. This would not necessarily be a problem except for the fact that there is a frantic race going on online to become the most Meta site or the highest-level aggregator on the Internet. According to fans of crowd intelligence it doesn't matter because in the long term the system is intelligent and will self-correct. This view is analogous with the belief of hyper-libertarians that the free market is all-wise and ultimately benefits all. But there are serious problems. The first is that information has value when it has a source and is placed in context. Anonymous information - like that contained within Wikipedia - is faux-authoritative and anti-contextual. We do not know who has written what and it is impossible to argue with the writer or writers responsible. The trend here, as Lanier points out, is to "remove the scent of people".

This is where the trend connects with artificial intelligence. To quote Lanier again" The beauty of the Internet is that it connects people. The value is in the other people. If we start to believe that the Internet itself is an entity that has something to say, we're devaluing those people and making ourselves into idiots". Heady stuff. In other words there is a real danger that the aggregator will become more important and influential that the aggregated. Some people would say that this is happening already. This is not to say that collective intelligence doesn't exist or cannot be useful but we are losing our sense of proportion once again. Taken to the extreme collective intelligence would mean that individuals would not be required to make individual judgements or take on responsibilities. Instead we could all hide behind the aggregation ritual. This would undoubtedly appeal to many individuals and organizations, especially those that are risk and liability phobic, but it would be a very big mistake.Online collectivism is thus a very old idea dressed up to look good by technology. In the wiki world, ideas are likable, not because they are good but because they are the least objectionable. But this is akin to a world where crowds follow trends but nobody invents anything. Innovation and change depend very largely on an individual that has an idea in the first place. In other worlds the world needs clever individuals to ask the questions which collective behaviour then answers.

Unconscious thinking

If you have a problem to solve you should think about it right? Not necessarily.The conscious human mind has a very limited processing capacity. The traditional solution to this problem is to limit incoming information to only the most relevant data. It is also conventional wisdom that the longer you think about something the better your response. However, a recent experiment found quite the opposite. The more that people thought about something the more inclined they were to assemble irrelevant information and the less accurate their predictions became as a result. The implication is obviously that we should think about things less, either meaning that we should rely more on instant feelings and intuition (see Malcolm Gladwell's book 'Blink') or else defer to our unconscious mind. In other words sleep on it. The power of intuition is of course nothing new. The question here though is whether extensive unconscious thought can make our intuition more reliable. It's still early days (and nights) but the initial research seems to be saying yes. So what's the takeaway here?Simply that we should use our conscious mind to collect data but then not think about it. We should allow our unconscious mind to digest the information and then follow our gut feeling.

The future of plastic

It is fashionable these days to be a merchant of doom. This is partly because we feel atomised and isolated despite all our newly found connectivity. As a result anxiety dominates our everyday thinking, whether this is expressed as a distrust of science or, as Guy Rundle has pointed out, an appetite for worst-case scenarios.A case in point is a recent article by Bruce Sterling in Newsweek magazine. Now I like Bruce's work a lot but I cannot help wondering what the brief was for this particular article. I suspect it was something along the lines of "scare 'em silly".The article itself is actually about scenarios for the future of plastics. Sounds pretty dull. It isn't. Plastic is a disruptive material if ever there was one. It has replaced wood, metal, rubber, cotton, wool, leather, paper, glass and even cement as the material of choice for much of the modern world. Plastic is a US$ 310 billion global industry with one general ingredient - oil.

So what if oil were to run out or become too expensive to be used as an ingredient? The answer, long term, is probably not much because plastic can be made from a whole host of other organic materials including sugar and alcohol. Nevertheless, in the short term we could witness some rather interesting shocks. If the price of oil rose a bit but manufacturers were unable to pass increased costs onto their consumers certain cheap plastic products would start to disappear. Rubbish bags could get even thinner and we would develop nostalgic memories of plastic Christmas trees. Hike the price of oil a little further and things like clothing and footwear would rapidly increase in price. Food would also come wrapped in paper or not wrapped at all. Moving further up the calamity scale plastics could be rationed with hospitals and the military receiving vital supplies first. Stores buying old plastics would appear and landfill sites would be mined for methanol or old plastic bags.Of course at this level of crisis plastic is probably the last thing we'd be worrying about. If oil were to hit say US$150-$200 a barrel or more global companies (e.g. retailers) that rely on worldwide supply chains would have to switch to local alternatives. Telecommuting would become ubiquitous as the cost of travel skyrocketed and we'd all be growing our own food on any spare plot of land. Globalisation would in effect come to an abrupt halt until such time as alterative fuels and technologies were available. But like I say, it's only a worst-case scenario.

The future is not Orange - it's black

Here's another happy forecast. According to a policy review paper by the Cabinet Office (UK) called 'Britain in the world' the future is looking bleak. Future prospects include threats from foreign and 'home-grown' terrorists, countries turning to nuclear technology as a way of combating climate change (and hence potentially passing the technology into undesirable hands). Russia and Iran already control 40% of the world's gas supplies and the paper predicts that by 2020 50% of the world's oil production will come from potentially unstable regions. If that's not enough to worry about Africa could be devastated by the social effects of HIV/Aids (I thought it already was) and there is a high risk of an influenza pandemic. In other worlds the future is a dangerous place. Obviously many of these issues are deeply connected and therefore any strategies and solutions must be closely linked. The Government calls this joined up policy making. I'd call it obvious. I'm all for forward planning but isn't this yet another example of worrying about things that haven't happened yet and ignoring the good things that are happening? Or perhaps the sub-text here is that the future is a dangerous place - so stick with us and we'll make you safe. But them I'm just an optimistic cynic.

Ref: The Guardian (UK) 4 February 2007, 'Britain's bleak vision of the next decade'. N. Temko. www.guardian.co.uk
See also The Guardian (UK) 20 December 2006, 'Drought, pandemic and waste mountains - a future that science may help us to avoid', I. Sample. www.guardian.co.uk
Search words: risks, threats, forecasts
Trend tag: pessimism
Source reliability: *****

No end of religion

The highly regarded Edge magazine (edge.org) recently asked 150 eminent thinkers what they were optimistic about - which I suppose largely means... in the future. Philosopher Daniel Dennett foresaw a world where religious fanaticism is in decline because the spread of information will undermine the mindset necessary to support such beliefs. The biologist Richard Dawkins saw another problem for religion - physics will produce a unified theory of everything, which will destroy juvenile superstitions such as religion (his words not mine). Finally Harvard psychologist Steven Pinker thought that violence would be in overall decline. I don't agree. In my view religion will strengthen the more that technology and science take hold. The more change there is the more that people will seek certainty and the more that life becomes uncertain the more that people will seek out safety, comfort and guidance.As for a decline in wars and violence, there is a strong argument that says the exact opposite will happen. Globalisation, mixed with a general feeling of powerlessness and anxiety, will drive tribalism, nationalism, protectionism and xenophobia. Also growing inequalities of wealth and opportunity will quite likely create chasms of resentment and bitterness within societies.

Trends and predictions for Indian and China

Recent articles about trends influencing Asia over the coming years include the following predictions:
1. Indian companies will start to acquire global scale. For example the telecom market in India was 5 million connections 15 years ago. It is now more than 180 million.
2. The spread of connectivity. Imagine the societal consequences where phone connections rise from 5 million-180 million, where the number of television sets increases from 10 million-120 million or where the average traffic speed for freight doubles almost overnight.
3. The growth of the middle class. Five years ago 61 million Indians earned more than Rs 200,00 per year. Last year this figure exceeded 100 million.
4. Problems of growth. Like China, India is growing fast but this causes all kinds of environmental problems from falling groundwater levels to air pollution, all of which have the potential to trigger social unrest.
5. Openness to the outside world. The number of US visas granted to Indians in 2006 doubled to 800,00 - a number second only to Mexico. About 55% of Indian GDP is now foreign trade and 25% of the Indian stock exchange is now owned by foreign investors.
6. The dominance of youth. Half of India's population is aged under 25-years of age.The consequences of this include a more mobile society and potentially a more volatile one too.
To this list Business Week adds another five trends of which I think two are worthy of comment. The first is social unrest in China. A report by the China Academy for Social Sciences last December said that 20% of China's poorest people received 4.7% of total income versus the top 20% that received 50%. Not surprisingly 37% of government officials cite keeping a lid on social unrest as the top problem facing China. The second trend is inflation in India. Wholesale and consumer price inflation rose by 5% last year but wages in services and manufacturing increased by 14% with a forecast of 12-15% for 2007.

Why you need to get lost to find yourself

Apparently around 20% of children in Britain cannot find their own country on a map of the world. According to Rita Gardner, president of the Royal Geographical Society (UK), satellite navigation is ruining our ability to read maps. It is also destroying our own sense of self. I predict that maps and other forms of data visualisation will make a come back in the future because our present is too full of information and we need to find ways of graphically representing complex information. In the meantime we will continue to buy in-car satellite navigation systems and loose both our sense of discovery as well as direction.

Reasons to be cheerful

If various predictions about our future demise are getting your down, take a slow stroll to your nearest second-hand bookshop and take a look at some of the titles.In contrast to bookshops selling new books about calamity and the end of the world, second-hand bookshops are full of titles from a gentler and seemingly more certain time.But look a little closer and you will see shelves of books predicting the end of everything, from the end of the family to coming alien hordes. Only these books are now gathering dust and few, if any, of their alarmist predictions have come to pass. Take the family. It was widely predicted in the 1970s, 1980s and 1990s that the family was in terminal decline. Now it seems stronger than ever albeit a bit different in form in some respects. In Britain there is currently widespread hysteria about binge drinking - especially amongst women - but this is nothing new. Look on those bookshelves again and you might find various references to the impact of cheap gin on women in 19th Century Britain. We worried about it for a while, found a solution, and moved on. The phrase 'Plus ca change, plus c'est la meme chose"(the more things change, the more the stay the same) is a cliche but it's a cliche largely because it's so true. We should also not forget that much of what's being written about the present day, particularly the impacts of technology, is being written by relatively young people that do not posses the experience and perspective that comes with age. Many of the things that are currently happening are simply part of a cycle, a circle of action and reaction. The lesson here is that we don't know what's next, but it's reasonably certain that whatever happens it will, at a deep human level, seem a lot like what's happened before.