Time to strap on the Futurist Cap for some serious speculation.
Although it's easy to think otherwise, the structure of the modern global economy is not terribly old, arguably dating back to the collapse of the gold standard in 1971, or the post-World War II "Bretton Woods" conference in 1944. Earlier versions of what we would nonetheless still call "capitalism" had very different degrees (and kinds) of government intervention, roles for labor and capital, even rules about currencies. Add to that the mention more extreme variants such as socialism and communism, corporatism (fascism), and the sundry experiments in anarchism, and you have quite a menagerie of all-but-extinct economic models.
The social and economic structures underpinning the modern world are constantly evolving, and there will very likely soon come a point—probably in the next generation or so, if history is a guide—that we no longer see the socioeconomic world as belonging to the same "species" as back at the beginning of the 21st century. Instead, we'll probably see a period of experimentation with diverse economic forms; indeed, the mid-21st century could well be a truly exciting time for wonkery.
Speaking as a social futurist, not an economist, the three emerging conditions that ride high on my list of potential breaking points for the modern economy are as follows:
- Brittle Strength: The current global economy seems to exaggerate booms and busts, and the ongoing consolidation of corporate actors into "too big to fail" entities means that when busts happen—and they do—the system tends towards failure rather than "soft landing." It's getting harder and harder for governments to step in and serve as safety nets to prevent total collapse; the current economic downturn may well be the last one the system can stand.
- Griefer Economics: Information is power, especially when it comes to finance, and the increasing use of ultra-fast computers to manipulate markets (and drive out "weaker" competitors) is moving us into a world where market position isn't determined by having the best offering, but by having the best tool. Rules are gamed, opponents are beaten before they even know they're playing, and it all feels very much like living on a PvP online game server where the referees have all gone home.
- Robots Stole My Job!: Think you can't be replaced by a machine? Think again. Robots are becoming more dextrous, able to do a growing number of tasks requiring precision and strength, and computer systems are becoming smarter, able to tackle jobs needing pattern-matching and creative skills. Humans are still cheaper, for now, but this puts downward pressure on wages—and the old rule that new technology opens up entirely new fields of human labor won't hold true forever. Smarter, more capable machines will snap up those jobs, too.
All exaggerations, to be sure, but indicative of where trends seem to be heading. All are issues that could, over the next decade, explode in a way that pushes us to try innovative economic and social models. So what might those new models look like?
Here are some examples, each a counter to a particular issue:
- Resilience Economics: The closest of the three to the current model, Resilience Economics employs a mix of regulations and norms (i.e., non-regulated but expected behavior) to shift standard business processes away from a focus on efficiency towards a focus on flexibility. I previously explored this concept a bit in this post at my main blog.
Pro: Weathers economic cycles well.
Con: Less profitable than current model when current model is working well.
- Just-In-Time Socialism: This economic model takes advantage of the increased power of digital information systems to provide much more effective demand projection and cost transparency, using just-in-time production and delivery systems to make an evolved form of socialism work. This would be a heavily top-down model, but would theoretically do away with many of the misfeatures that caused 20th century communism to fail.
Pro: Better equity and transparency.
Con: Still a brittle system, when it fails will fail hard.
- Robonomics: If robots and digital systems can do everything, let them—but let human society skim value from the result. This becomes a technologically-driven version of the Basic Income Guarantee model, where citizens are given a basic above-poverty income guarantee and are free to explore education, entrepreneurship, or even a life of indolence. Or they can get one of the remaining human jobs, jobs that may pay much more than they do now in order to attract people who otherwise wouldn't want the work.
Pro: This is what we all want, ultimately. C'mon, admit it.
Con: Hard to implement in one country/region without very strong migration controls.
I'll explore each of these in more detail next week. For now, I welcome suggestions as to what other new economic systems we might have in store for us over the next decade or three.
Read more of Jamais Cascio's Open the Future blog.