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Will governments lead or follow finance’s future?

Posted By Alex Floate, Tuesday, May 28, 2019

Alex Floate, a member of our Emerging Fellows program examines the governments’ potency in leading finance futures through his fourth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

           

Solving big problems has never evaded the human spirit. Ferocious tigers and bears led to spears and group tactics. Episodes of famine led to granaries for storing against future hunger. Following that came the domestication of the cat to protect against rodents feasting on the stockpiled bounty. In just the last century we have overcome distance with advances in communications, heavier than air flight, and even leaving earth’s atmosphere. As problems have become bigger in scale and cost, we look to our governments to take the lead on solving them. That we can solve big problems and overcome the constraints of our environment is not in doubt; that we have the will to do so is.

 

Continued financialization may create a dystopian-tinged future of financial feudalistic lords, while nationalistic oriented systems may reverse global gains and destroy the value of national currencies. Fortunately, neither future is set in stone and the opportunity to create a different one is possible, but dependent on current governments choosing a different direction and using the tools at their disposal. The mechanisms available include monetary policy for expanding and contracting money supply, fiscal policy to set taxing and spending priorities, and regulations on financial investment and exchange.

           

How should they deploy these mechanisms, and for what end? Should the government pursue a policy of continued economic growth, or one that favors renewing the social contract to favor all citizens? Should we create rewards for sustainability and disincentivize consumption? What system best emphasizes personal initiative and innovation, while caring for the least of us? Although this is a political exercise more than a financial one, the answer will determine which mechanisms are put forward as solutions.

           

If we decide that economic growth and consumption is not as important as sustainability of resources, then systems that favor labor and saving over those that promote investment churn and profit will be needed. However, just as this will call for increased taxes on investment and capital, higher taxes on consumption, which disproportionally affect the poorest, will also be required.  Should we decide that social programs, especially in a possible future of large-scale human obsolescence, to ensure an economic floor for all citizens is vitally important, then investment and tax mechanisms will need to be balanced to provide revenue while maintaining risk incentives for growth of capital.     

           

Before we can fully and rationally answer those questions as a society, the greater challenge is confronting the myths of both capitalism and socialism. Believing that free markets and privatization are always the best method for delivery of goods and services ignores that many needs are basic for life, and costs are not always inherent in the price. Conversely, believing that governments are always honest managers that efficiently gauge the needs and wants of their citizens and deliver accordingly is also not supported by history. The answer lies somewhere in between with a need for a new folklore and heroes to provide a basis for a future that tempers the worst of these extremes while balancing the best of them. The question to be answered is whether governments will work to balance these needs and forge a new story for the future, or abjectly acquiesce to the myths of the money changers.

 

© E Alex Floate 2019

Tags:  finance  future  government 

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Will technology enable more socially beneficial patterns of consumption and production?

Posted By Esmee Wilcox, Friday, May 24, 2019

Esmee Wilcox publishes her fifth blog post in our Emerging Fellows program. She investigates the possibility of applying technology to socially beneficial production and consumption. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

I have a stack of letters beautifully written and illustrated in a box at home, that represent a different world of communicating through my teenage years. With the technologies I have to hand today, the breadth of my network is vast. I can easily access individuals to work with, to share ideas, to tackle problems together. But the polarisation of views from vast echo-chambers is undeniable. These are the issues of trust we face by connecting more virtually. By 2050 we’ll have entered another paradigm shift from now in how and who we connect with and what technologies we use for this. So what can we do now to ensure that the technologies we design help us connect and organise in socially beneficial ways? What patterns of consumption and production would start to emerge if we did this? Why is this important?

 

Communities have always self-organised around the problems they notice. Whether child-rearing, food distribution, flooding or fracking. The intractable social and environmental problems of our time are also forcing state hierarchies to look more to community networks as better routes to tackling them. Social media ‘influencers’ are ahead in capitalising on technology enabled networks to commodify their personal social capital. Their skill is in making you feel personally connected whilst accessing vast networks. State actors are starting to look to their community equivalents, individuals who use social media to connect younger, apolitical audiences. Access to community grants is no longer dependent on institutionally biased, lagging processes, but the social capital that these influencers have accrued persuading funders of the local impact.

 

By 2050 we may be much more dependent on our ability to consume and produce locally with the environmental economics of long supply chains having long been unviable. We can imagine having to produce technology that we can degrade locally without poisoning the land we rely on for food. We can imagine the expansion of communities that are designed to enable consumption and production of food to connect people in socially beneficial ways.

 

But how might our ‘socially beneficial influencers’ design and make use of new technologies that make these patterns of consumption and production all pervasive? Influencers can readily participate in thematic and place-based communities, keeping the boundaries porous to access and welcome in new ideas. It’s not exclusively the proviso of the elites to have access to a range of networks. It’s not just the cities where the scale and movement of people brings in new ideas. Our influencers might look to technologies that can track and display the impact of communities’ collective behaviour to make it easier and more rewarding to see progress towards different social norms. That also make it easy for everyone to participate, countering the social gradient.

 

The more expansive social networks of local technology-enabled influencers should make it easier to readily connect our needs to produce with our needs to consume.

Co-housing developments and intergenerational living schemes are already in existence. These provide connectivity in place of privacy that help us produce and consume efficiently. We might not want to live that closely with each other but influencers can open up our private networks and build trust by proxy to put in and take out without high transaction costs. So the network that we utilise in creating closed-loop systems is expansive. We’re re-imagining closed-loop systems with technology that enables us to splice together as specialised units of consumption and production.

 

This is, of course, dependent on access to technologies that are being created by corporations and governments. To what extent will it remain in the interests of corporations to encourage over-consumption, and trust in our fellow citizens to be eroded by trust in the ‘brand’?

 

This is where social entrepreneurs have an interesting locus. They already successfully harness the technology of our day to create policy changes as well as changes in consumer behaviour. In what ways might social entrepreneurs persuade corporations that create technologies to move production and consumption into the hands of communities? Can our ‘socially beneficial influencers’ trade their social capital with corporations? Why would corporations be interested?

 

The potential is there for technologies to enable communities to self-organise systems of consumption and production that are no longer dependent on the arbitrary assets that they find within their local boundaries. We can imagine a shift in motivation to do so as we look ahead to 2050. We can imagine social entrepreneurs having a role in helping communities align their assets. We need to think further about the relationship between those who create the technologies and the communities themselves.

 

© Esmee Wilcox 2019

Tags:  corporation  society  technology 

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Will automation do away with markets?

Posted By Tim Morgan, Tuesday, May 21, 2019

Tim Morgan devotes his fifth blog post in our Emerging Fellows program to the role of automation in new dynamic systems of social self-governance. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Markets are social systems which facilitate transactional exchanges of property, goods, services, and information. Markets reallocate resources and enable distribution. Exchanges within and between markets broadly establish the expected value of subsequent transactions. Markets can span the globe or a single neighborhood. Markets have created widespread material wealth by spurring economic growth via productivity. Markets are the social structures which define the modern industrial era.

 

Markets in toto form the social system known as the Private Sector. The Private Sector defines a sphere of control over a vast section of human affairs, one that frequently jousts with the older Public Sector of government institutions.

 

Markets benefit society by creating more prosperity for more people than is possible by the Public Sector alone.  However, the Private Sector’s flaws are now obvious. Markets have no inherent systemic mechanism for mitigating the problems they cause, such as environmental harm or social divisiveness. Markets cannot price or own non-market externalities, so they try to ignore them. Markets simply want to do Market things and consider anything else to be a distraction or interference.

 

Markets only price in externalities when they are forced to via constraints like taxation, regulation, legal liability, or mass social pressure. The strength of the Private Sector lies in its ability to create economic value for individuals via Markets. Its weakness is that it is systemically blind to non-economic value.

 

The Public Sector is failing to moderate the externalised damage created by Markets. Luckily the same information technologies which accelerate Markets are also enabling the emergence of a new sector centered around non-economic value. Digital networks and automation are allowing people to connect in new ways towards common interests. What is emerging is a new Social Commons Sector. Shared information is their resource, automation is their tool, and enhancing common social value is their primary concern.

 

This new Social Commons is forming because networks and automation can connect anyone into new dynamic systems of social self-governance. It has been increasingly disruptive to business-as-usual for years. The Arab Spring, #MeToo, and recent schoolchildren climate change walkouts are just a few examples of its ad-hoc social organizing power. Networked social power is also influencing how Private Sector market entities work. Social enterprises like Benefit corporations measure themselves by both fiscal and social bottom-lines. Publicly held corporations are increasingly being held to diversity and sustainability standards by their shareholders and customers.

 

Other groups are automating acts of public good. Custom smartphone apps schedule free pickup and delivery of excess restaurant food for the homeless, coordinate community composting, report pollution, or alert virtual guardians to watch your GPS-tracked walk home. The Social Commons is an automation-enabled sector which is filling-in the small gaps and beginning to take big swings at big problems. This nascent sector is poised to interpenetrate and rewire the other sectors to solve the wicked problems they have created.

 

Markets are not going away any more than Institutions went away when Markets bloomed into power two centuries ago. Both the Public and Private Sectors are necessary and are here to stay. But both will have to reckon with the rising influence and power of a new networked Social Commons.

 

© Tim Morgan 2019

Tags:  automation  society  technology 

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What is driving inequality?

Posted By Felistus Mbole, Friday, May 17, 2019

Felistus Mbole a member of our Emerging Fellows program investigates the causes of inequality in her fifth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Global inequality has been on the increase for decades. There are fewer people living in poverty today yet global society is probably more economically unequal than at any other time in history. This trend poses obvious threats such as lack of social cohesion and sub-optimal economic performance. What is driving this inequality? What does this mean for the future?

 

There has been a continual shift from agriculture to other sources of livelihoods, accompanied by urbanisation.   The economic opportunities created by this shift require more skilled labour than agriculture. This has made it harder for the less formally educated to engage economically. If they manage to find employment in industry, the disparity between their pay and that of the more skilled is stark. The trend is likely to worsen as urbanisation increases.  

 

The constant today is the rapidly accelerating change in technology. Currently, skill-based technology is a key driver of income and economic growth. Sadly, the poor who have less skill are not benefitting as much from this technologically driven economic growth. The inequality gap thus continues to widen. The situation is likely to be sustained into the future unless remedial action is taken.  The introduction of simpler forms of technology such as use of mobile telephony presents hope.  

 

Closely accompanying this technological change is globalisation. Technology has enabled economic integration at a speed which was unimaginable a couple of decades ago. In pursuit of greater efficiency and effectiveness, organisations can open business offices in faraway countries for both production and distribution of goods and services. Offshoring of production to low-income countries creates employment opportunities, improving incomes and decreasing income disparities across states. This could, however, generate income disparities in the target country as the more skilled get a premium on their labour. A reduction in trade barriers and emergence of regional trade agreements has also played a role in expanding globalisation. Globalisation and technology are self-enforcing. Firms and individuals who have the resources to take advantage of globalisation and technology benefit most from it. This further compounds the inequality gap.

 

Another driver of inequality is government policy. Countries that have reported decreased inequalities have implemented policies that promote redistribution of income through social protection transfers and progressive taxation.  A significant share of national revenues in such states is spent on public services such as education and healthcare, and infrastructure. Sectors which support the livelihoods of the majority such as agriculture in agrarian economies are sufficiently funded. Such policies empower most of the citizens rather than benefiting a small minority. Although an effective driver of equality, government policy is highly subject to political will. Public corruption on the other hand acts as a tax on the poor. 

 

What does this mean for inequality? Not much can be done to slow down globalisation or the rapid change of technology. These trends are not negative in themselves. They present opportunities for realising a more equitable and sustainable society. Technology such as digital infrastructure can be used to effectively deliver public goods such as health and education at scale. In addition, progressive taxation and a clamp on public corruption could create a more equal society.

 

© Felistus Mbole 2019

Tags:  inequality  rights  society 

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Is trust an endangered species?

Posted By Robin Jourdan, Tuesday, May 14, 2019

Robin Jourdan examines the contemporary status of trust in her fifth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Globally, self-serving politicians undermine trust in government. Is trust on the decline today? For a long time, trust has been imparted to CEOs, experts, academics, economists and the like. Now that’s being turned sideways, extending instead to individuals, “friends,” and peers. As children, we’re told to avoid strangers, yet today Uber, Airbnb rentals flourish.

 

By 2012, on average only four out of ten people in OECD member countries expressed confidence in their national government. Populism versus progressivism in any of their flavors is merely insufficient to the anti-politics conversations. Both rely on the fantasy of public interests’ importance. Broadly speaking, trust in government requires both: 1) social cohesion, citizens’ confidence in their communities and 2) political confidence, citizens’ rankings of government and its institutions.

 

The following is a series of mock interviews with representatives of three government systems. The question: “why should we trust you?”

 

Interview with Technocracy: why should we trust you?

Technocracy is essentially when political outsiders, technically skilled, become the leadership for society. It protects the interests of priorities in service of the many. In a true technocracy, the leadership is unelected. Still, it determines the path for the society to take, like a board of directors. Its best quality is competence to decide. Technical expertise becomes essential as our lives become increasingly joined with technology. Technology has nearly always improved the lives of humans throughout history. Why slow that progression?

 

Interview with Autocracy: why should we trust you?

What societies hunger for is security in this volatile and chaotic world. Maintaining order and stability are an efficient means to remain committed to custom and tradition. During the 20th century, autocratic leadership was often the norm in most administrations. Autocracy optimizes efficiency. Here, culture is often homogenous. Changing away from this system can be unpredictable. However, this governance model is very appealing when it builds inner confidence and serves its people. The deeper worry for trust is in countries where autocrats silence opponents, damaging cohesion. When an autocracy reinvents its future and governing persona with trust concerns safeguarded, its long-term success increases as is evidenced by Singapore today.

 

Interview with democracy: why should we trust you?

Accountability and growth are the hallmarks of this system. Here, leadership represents and works for the interests of the many. Society honors the rule of law, unambiguous and impartial. No one, including government, is above the law, where laws protect fundamental rights, and justice is accessible to all. Society can be either homogenous or heterogeneous by culture, creed, religion or other measures. Political leadership and stability are maintained mostly on an appeal to reason and experience. As of the end of 2016, a majority of nations were democracies, a post-World War II record. 

 

Besides freedom of speech, other human rights are no safer in democratic countries than they are in autocratic countries. The rights one enjoys in any country depends on several factors, but most importantly whatever rights a person has is at the mercy of the government in power at the time. There are very few if any pure democracies at this time in the world. As is often the case in our history - perfect democracy is an ideal.  In the cases where a government calls itself representative and simultaneously it does not serve its people, that condition speaks to a failure of the leadership not a breakdown of the governing methodology.

 

Finally, at the local level, trust in any government refers to its impact on people’s daily lives. Is trust an endangered species? It’s a complicated question. Confidence in governance reinforces the social contract between people and the state. As importantly, trust is like energy; it changes form rather than be destroyed. Like energy, it also means people have more influence in the trust pact than they may realize.

 

© Robin Jourdan 2019

Tags:  confidence  rights  trust 

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Does religious freedom constrain liberty?

Posted By Administration, Friday, May 10, 2019

Ruth Lewis a member of our Emerging Fellows program examines personal liberty in the light of religious freedom through her fifth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.


In today’s world, people of faith are seeking to preserve their practices of religion. These practices are generally based on conservative traditions and observances developed over hundreds, even thousands of years throughout various geo-political settings. They are often based on the belief in a higher purpose, being, god or gods and the commandments to behave in a certain way, and to educate their children within the religion.  They seek to protect their own against a confusing and threatening multiplicity of opinions and lifestyles. This is against typographic negative portrayals of the ‘other’, clinging to the mythical stories that they were raised with to cope with societal change.

 

Enshrined Human Rights practices allow freedom of religious thought and practice at the individual and collective level, as long as that practice does not interfere with the individual’s other human rights which may be encoded in law.  This sets boundaries for religious freedom, with many modern examples highlighting conflicts such as religious recognition of contraception, honor killing and non-heterosexual marriage.  In the eyes of the law, freedom to hold a view is absolute, but freedom to act on that view is constrained by other Human Rights. A ‘free society’ is one that allows freedom to think, debate and challenge the dominant beliefs system without fear of reprisal, as long as individuals and collective groups are not harmed as a result. 

 

In today’s society, the more conservative religious viewpoints argue that past traditions provided guidance and wisdom for current practice and lifestyle, carried through generations. These practices of faith are derived from divine providence or right.  These beliefs may provide protection against the uncertainties of change, as they have ‘stood the test of time’. Where this leads to crisis is where the conservative religious belief specifically rejects change and this may put it into conflict with changed societal views of morality and human rights. A resilient society will allow adaptation, integration and growth of belief and practice where these make sense, to support future generations’ health and well-being. A healthy society is one that looks to the future for sustainability. It derives wisdom from the past on what worked or didn’t, and is guided from a mature integration of cultural, social, intentional and behavioral practices and beliefs, rather than setting absolute rules on that basis.

 

In the post-scarcity future, it is postulated that the current resource crises may be overcome, and people’s basic needs will be met. Such a society may support the freedom of association of individuals with collective beliefs without the necessity to band together over scarce living supplies. This society may move beyond the need for the human rights recognition that the historical Enlightenment gave rise to.  Evolved from the separation of Church and State, the common law provided protection of individual rights and promotion of individual liberty of belief.

 

Such an evolutionary society will promote wisdom beyond the traditional tribal and magical worldview of religious belief and practice.  It will evolve into

a society that promotes a common recognition that the core of all religions and beliefs contain a series of trans-personal, trans-rational practices that seek a higher level of wisdom and being. With this evolution, true freedom will be found through individual and collectivist transformation to a holistic worldview of human flourishing. This will promote liberty of the mind, soul and spirit in the pursuit of higher purpose for being. But in this scenario, will we still need to define and enforce Human Rights?

 

© Ruth Lewis 2019

Tags:  liberty  religion  rights 

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In a fully digital economy, will you need the same things as you do today?

Posted By Administration, Monday, May 6, 2019

Paul Tero a member of our Emerging Fellows program thinks that in a fully digital economy we won’t be needing the same things as today, but we will be needing the same types of things. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

We produce goods and services and we trade in those goods and services because we either want them or need them. There is a market for them. But in the decades ahead, in a market of bits rather than of atoms, will we still be using the same things we do today? From a final consumer perspective, will the digital economy of the future be unrecognizable compared to today's economy?

 

Consider the retail sector. Where it’s all about the creation and trade in products for the home, for our relaxation, for our sustenance. Or the business sector, where that same dynamic of creation and exchange can be used to drive innovation, to improve operational efficiency, or to maintain a market profile. Or even the public and the not-for-profit sectors, where those same market mechanics apply. That is, in order to provide services, products are purchased. And where nascent product creators are supported.

 

Reflect too on the structure of this global production and trade system. At over $80trillion dollars, the global economy is broadly comprised of agriculture (primary activity) at 3%, industry (secondary) at 30%, and services (tertiary) at 60%. An important factor in all of this are the sources of government taxation. A third of government revenue is from income, profits and capital gains and a third from taxes on goods and services.

 

Assuming ceteris paribus, in the coming decades you and I will still have need for shelter, for food, for companionship and relaxation. The same argument can be made for business, for government and the third sector comparing the needs of today and tomorrow. Of note, however, is the form through which the need is satisfied. We no longer desire, for example, to take our family in a horse drawn buggy on a holiday to the sea-side, or to join with family and others to around a wireless set listening to the latest play. Nor do businesses require a typing pool for the efficient production of company memos and customer missives.

 

Nowadays digital channels of communication are usurping long establishing temporal forms of connections. Nowadays, micro-targeting of marketing messages is more effective at driving trade in goods and services than legacy mass media. Nowadays, there is a greater level of involvement and transparency with those that are served by the public and third sectors compared to times past.

 

And tomorrow? Through a utopian lens we could see life being further enhanced by digital technology. It could be argued that just like today, where a life stage for an adolescent is marked by receiving a smartphone, that same transition for a teenager in 2050 could be celebrated by receiving their own life-enriching wearable AI tech. A world, for this teenager, where the uncanny valley is no longer a limitation in media and entertainment channels. A world, as teenagers look at the career paths of their parents, that is dominated by the output of firms that have put a high priority on employees with first rate people skills and thinking skills.

 

Likewise, through a dystopian lens, life for that teenager in 2050 could be one that is further controlled by digital technology. AI implants mark the adolescent life transition. Options for entertainment and other daily choices are slanted toward optimal social outcomes. Beckoning career paths are with firms that are aligned with forms of surveillance capitalism.

 

The threads that are common to both scenarios are the changes in social structure and the innate desire to make things easier for ourselves. Over time our social institutions change and the people to which we ascribe status. It could be argued that in recent history major sport clubs and/or political parties have supplanted religious groups as our common social institutions. It could be that the realm of the AI and quantum computing scientist and engineer becomes the new sanctum. A new standard of social acceptance that leads to the erasure of the barrier to all forms personalised AI tech.

 

Regarding the desire for making things easier, the so-called “efficient transaction hypothesis”, witness the smartphone. We embraced it because it made complex or time-consuming tasks (personal transactions) more efficient. It made communication easier, information gathering easier and entertaining easier. A significant factor of human nature that will drive the future acceptance of technologies that we perceive today as pervasive and distasteful.

 

In a fully digital economy we won’t be needing the same things as today, but we will be needing the same types of things. The world of atoms meets our needs today; the world of bits will meet our needs tomorrow.

 

© Paul Tero 2019

Tags:  digital economy  economics  service 

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Can Disembodiment Fuel Equality?

Posted By Administration, Friday, May 3, 2019

Charlotte Aguilar-Millan examines the effect of disembodiment on equality in her fifth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

The gig economy is often hailed as the future of work. It offers more flexibility than standard roles to both employee and employer. It offers greater independence. It offers more variety in roles. Yet with all these benefits, the workforce is experiencing inequality within corporations that is increasing exponentially. Over the past decade in the UK, corporations have seen CEOs’ earnings in the FTSE 100 increase four times as much as national average earnings. It is much higher in other countries including the US. It is little wonder that employees are seeking to take more ownership through contracting or temporary work. Employees do not want to represent corporations that demonstrate eye watering CEO pay and lavish corporate greed. Examples of this were seen during 2018. This includes Credit Suisse’s CEO who received a 30% pay rise whilst the share price fell by 38%.

 

Progress, however, has been made in legislation for greater transparency. From January 2019 within the UK, legislation now requires disclosure of the CEO to employee pay ratio for all companies employing over 250 staff. The inequality within one’s own company can now be brought to light. This will enable easy comparison of companies to measure inequality.

 

Such transparency has already caused staff to act. The CEO of the Financial Times, John Ridding, received a 25% pay increase in 2017 to £2.5m annual salary. Staff within the Financial times, were made aware of this and a revolt took place which saw his salary reduced to less than £1.2m in 2018. Progress in transparency reporting has enabled both consumers and employees to demonstrate their discontent with excessive boardroom pay.

 

This does not solve inequality in companies with no employees. Examples of this include UberEats and Deliveroo who will not fall under this legislation. They have few staff as they resource through contractors rather than staff. For globalised companies whose staff are often located separately from the client, such as Upwork or Gigster, there are no reporting requirements on transparency. Gig work provides no safety nets that accompany being an employee. This includes medical insurance, parental leave or pensions. Legislation has not placed a responsibility on companies to provide these benefits. Unions have developed to protect the gig worker. In February 2019 the union GMB agreed a deal with Hermes, a delivery company, to give enhanced rights to gig workers.            

 

There are other industries from which inspiration can be sought. Acting, historically, has been an industry with many employees on short term contracts. To future proof their careers, the Screen Actors Guild Benefit Fund allows actors to pay into a progressive form of union. This provides a safety net for insurance and healthcare by gig workers earning credits each time they work that are used to contribute towards healthcare and retirement funds. However, organising a global contractor workforce who are located globally is difficult without the contracting party’s support. The gig economy represents a work force who have different expectations in working conditions.

 

It is up to legislators to protect the disembodied workforce. Disembodiment can fuel equality if the appropriate support is in place. Disembodiment gives the worker control over how they work in a way that employment cannot offer. Legislation is being considered to ensure the advantages of disembodiment are equally shared. As detailed in the Taylor Review of working practices, disembodiment benefits need to be two ways. Therefore, two-way flexibility should be in place. This could take the form of holiday pay, healthcare fees, and retirement funding. In this way disembodiment could fuel equality.

 

© Charlotte Aguilar-Millan 2019

Tags:  disembodiment  economics  rights 

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How much of our stuff is Stuff?

Posted By Administration, Tuesday, April 23, 2019

Tim Morgan publishes his fourth blog post in our Emerging Fellows program. He assumes that the digital ecosystems are leading us towards a new form of autonomous capital. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

Virtualizing the real world through abstractions is as old as humanity.  Stories helped humanity thrive for tens of thousands of years by virtualizing knowledge about the world in a way that could easily be shared and remembered. The Sumerians of ancient Mesopotamia created the oldest known writing, Cuneiform, over five thousand years ago. Scribes recorded everything from astronomical calculations, to sales transactions, to battles, to ownership records, and lineages. They recorded significant stories such as The Epic of Gilgamesh and the great flood story Atrahasis. Over a thousand years later King Hammurabi of Babylon wrote one of the earliest and most complete code of laws. Much later Gutenberg created the printing press, which ultimately broke the elite stranglehold on writing and literacy. This in turn lead centuries later to the Enlightenment and the modern era.

 

Humans have virtualized experience by encoding it wherever they could via every means available, from pre-history to modern day. We have now expanded that virtualization via digital information technologies. We encode and store vast quantities of information, moving it around the world at will. Users upload over 300 hours of video a minute to YouTube, and individuals watch over 5 billion videos on their website every day. That is just one example. Development of information technologies is being driven by a very old human need to record.

 

What is new with digital technologies is execution. Ancient stories recounted person to person empowered action via hard won storified knowledge. Writing allowed civilization to further develop via persistent storage of accumulated knowledge. Printing allowed us to grow more complex societies by capturing more knowledge and widely distribute it. At each step, virtualization allowed us to manipulate the world in more complex ways. Our ancestors were living information processors. They transformed virtualized knowledge in the form of stories, writing, and print into actions.

 

Use and control of property has always had a virtualized information component. What is unique about digital technologies and automation is that humans are no longer the sole processors of information for creating value. We learned a clever new trick: how to encode our decision-making capabilities into our machines. We have created a new level of abstraction, one where not only information is virtualized via encoding, but the process of use itself is virtualized in the form of applications and networks. Digital automation is a form of virtualized human judgement.

 

This is increasingly tipping the balance between the value of things and the value of the knowledge about things. Farming was the foundation stone of early capitalism and government. It relied on human judgement, and human muscle. Today it is a technologically intensive enterprise. Modern farms heavily rely on GPS-guided autonomous robots, which still happen to be called tractors. Experienced farm-hands once drove the tractors. Now the tractors are the farm-hands.

 

Even purely virtual economies have arisen with the rise of digital information technology. The online battle game Fortnite made a profit of over $2.4 billion dollars in 2018 purely off the sale of virtual goods like character “skins” and clothes. Other games like World of Warcraft have thriving black-market economies composed of gold-farmers who sell in-game currency for real currency.

 

Virtualized knowledge and judgement are increasingly becoming the key source of new value across all economic sectors. This is creating an unprecedented situation. The physical value of capital is being superseded by its informational value. We are beginning to mimic how nature creates abundance via biological ecosystems. We are creating new interactive digital ecosystems of virtualized information and decision-making entities which are connected to real things. As they become more autonomous agents, more of our digital infrastructure will shift to become a digital ecosystem.

 

Capitalism and markets are facing a new era, one they created but not one they expected. It will be dominated by the ecosystem-like complexity of increasingly autonomous information entities blurring the lines between real and virtual goods. We are instilling a technological version of our anima into what was once passive capital. Ultimately, we may be evolving a new form of autonomous capital. The question remains, will markets co-evolve with it or will they transform into something else?

 

© Tim Morgan 2019

Tags:  capital  digitization  economics 

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Can democracy solve our wicked problems?

Posted By Administration, Thursday, April 18, 2019

Robin Jourdan checks the possibility of solving wicked problems by democracy in her fourth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.

 

We are living in an age of wicked problems. These are problems that generally have a social or cultural component that makes it difficult to solve. They’re more often complex, connected to other grand-scale issues, a substantial economic burden, and often incomplete knowledge. Wicked problems as a marketing concept didn’t come into being until the early 1970s.

 

Historic wicked problems would include polio, cholera, typhoid, cancer, poverty, and more. Often these problems created a sense of fear, vulnerability, uncertainty, chaos, and ambiguity. Out of control societies witnessed break-downs in politics, economics, and culture. What these problems had in common included a lack of knowledge over things like hygiene, sanitation, microbes. In other instances, what was lacking often was the political willpower to create the needed changes.

 

Democracies haven’t yet solved these problems due to many factors, some technical, some social, some political. For example, approached with caution and skepticism, often analysts tackle the wrong question in such a complex challenge set. In the West, think tanks and research laboratories are most often charged with finding an answer. Problems and solutions can be overly politicized and at the mercy of wrong motivations. Science and education can be discounted as elitism and fakery. This adds to the challenge.  The same people who would doubt climate change science will stop eating broccoli when science says it’s contaminated.

 

Technocratic and autocratic strengths and weakness are the reliance on technological solutions. If based on short-term incentives, these technologies allow us to continue in our ignorant ways. Then we blame the technology when they fail. Thus, devices alone are incomplete solutions for global woes. Overreliance on this path alone may also widen the gap between solutions and willingness to implement them. Incremental thinking relying on today’s think tank structure will continue to face skepticism from the general public.

 

Short-term thinking spurred by economic priorities will compete for resources in these systems as well. Governance systems that can marshal enormous amounts of resources are likely to be positioned well for moving the needle on solutions as is seen by China's checkbook diplomacy and internal focus on climate change solutions. This assembling vast amounts of resources itself isn’t the lone tool, as squandering resources will increasingly be frowned upon.

 

A key lesson from success over these past wicked problems is the need to get to a long-term, root cause understanding. Systems thinking is a tool that can support and enable transitioning to that longer-term thinking.  Root cause understanding and multi-nation cooperation often result in action.  Such will no doubt be aided by technologies, perhaps yet to be discovered. This complements a most significant ingredient to past victory over specific wicked problems: diligence and resilience during the sometimes-long journey.

 

As the future is further transformed, the longevity economy will likely have specific influences as well. When people live longer, the higher the chance they will face the outcomes of decisions guided by short-term thinking. Having the ability to simulate results by way of systems thinking and problem-solving, but not acting logically regarding them would reveal illogical mindsets.

       

Democracies as a social construct rather than a governance system support the conditions to share what is learned on the march. This is not to suggest that the steps nor the efforts are easy or linear. Adequate investment and emotional diligence are needed are not traits ascribed to a single governance system. However, in a democracy, people can create a groundswell of interest, urgency, and memory to challenge political priorities accordingly.

 

© Robin Jourdan 2019

Tags:  democracy  governance  wicked problems 

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