• Tuesday, Sep 21, 2021
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OP-ED: An accelerating crisis

  • Published at 09:15 pm June 21st, 2020
dominos falling

What are the major challenges facing humanity today?

This article is the first in a series covering what I believe is a hinge crisis in human affairs. A hinge crisis is one that brings fundamental changes in the way the world is organized and the distribution of wealth and power. 

Some of these articles will take a really macro view of key issues and developments; others will cover quite specific issues that clarify the macro issues. Some will look to the problems of the contemporary hinge and some will look backwards. 

The crisis that we are in is accelerating, leading to greater challenges, threats, and opportunities.  

The last hinge crisis was World War II and its immediate aftermath, a period of 10 years: 1937-1947. Another hinge crisis began around 2017 and I expect will continue until 2027. A hinge crisis defines a small number of key issues that shape the following 60-80 years.   

After World War II, there were four major issues before the world: The rising conflict between the Soviet Union and the United States allied with its Western European allies; the existence of nuclear weapons and nuclear power; the mastery of quantum mechanics to the extent it had become a usable theory for technology; and the Asia problem, the existence of a mass of humanity living with destroyed political systems all in deep poverty.

75 years after WWII

  • The Soviet Union and the totalitarian state it represented, contrasting democracy, free markets, and freedom with rule by the Communist Party, planned economies, and very limited freedom, has vanished. The Soviet Union was a failed state unable to deliver orderly and just government, economic welfare, and an acceptable level of personal freedom.
    The USSR, to the surprise of most, simply fell apart. The liberal Western democracies, powered by free markets, carried the day. Eastern Europe and Russia were freed from oppression.
  • Nuclear war was avoided with one very close call. Although the number of counties that had nuclear weapons increased from three (the US, the UK, and the USSR) to 19 (the original three, France, China, India, Israel, North Korea, and Pakistan), there has been no further use of these weapons after those dropped on Japan by the US.
    On the other hand, nuclear power, the potential source of reliable, low-cost electricity, has failed to emerge and the percentage of power generated from nuclear power plants is declining.
  • The impact of inventions based on quantum mechanics has transformed our lives through computers, medical technology, drug creation, communication systems, creation of new materials, robots, and low-cost transportation systems.
    The educated man in 100AD must master geometry; in 1800, calculus; in 2020, quantum mechanics. The consequences of this knowledge are just beginning.
  • An ungovernable mass of poverty-stricken Asians has made remarkable progress. Three countries are developed (Taiwan, South Korea, and Japan) along with two city states. China, Malaysia, and Thailand are one-third of the way to becoming advanced economies. 

Indonesia, Vietnam, and the Philippines are one-fifth of the way. Bangladesh, India, and Pakistan are about one-tenth. In 1945, Asia was perhaps one-fiftieth of the advanced economies. It is a remarkable thing what has been achieved with the development of successful governments and competitive markets, leading to record-breaking outstanding economic progress. 

Of the nine countries making the most progress, seven have competitive market economics, and one is partially competitive. China remains a planned, controlled economy but most of its progress was achieved when a large percentage of the economy functioned in a competitive mode.  

Just as World War II was a hinge when the world changed, I consider 2017-2020 with the emergence of Covid-19 and the potential collapse of the United States democracy as the first part of another hinge when the future will be shaped. 

What are the major, highest-level challenges now before humanity? Again, I select four: The conflict between the Western democratic nations and China; the now evident global threats of global warming and pandemics; the emergence of three inter-connected new generation technologies following from the quantum mechanics revolutions of the past, which has provided the ability to manipulate the genetic structure of life, the development of AI, and the promise of quantum computing; and, finally, the question of whether continued progress towards poverty reduction and achievement of real progress towards higher incomes in Asia and Africa is possible. 

What now? 

  • The conflict between the liberal Western democracies, the three advanced Asian economies on one side, and China on the other is taking shape virtually daily. This is a very foolish path for both sides. The American aggressive stance is matched by the Chinese, showing all how tough they are.
    We have two amoral, immature political leaders harming both countries. Xi’s authoritarian mind-set, determined to control, is leading the Chinese economy to destruction. Trump’s desperate effort to blame the Chinese for all bad things in America convinces his core supporters but no one else.
    Xi knows he will not do well in a military show-down with the Americans. Trump is firm in rejecting large-scale commitment of the US military so we will likely keep the peace, despite the threats.
  • Covid-19 was an expected development; it has long been clear that a major pandemic would hit the world. Despite adequate warning from public health officials, no sustained preparation was made by either the Chinese, the Europeans, or the Americans.
    Trump’s rejection of global warming is one more signal of the non-scientific presidential mind. The damage to the world done by those who deny the well-established science is criminal.
    The American story is that the corporations that fought against recognition of the need to manage global warming have done so for their corporate interests, fully recognizing the consequences of their actions.  
  • The three technologies waiting for explosive growth carry hope for the future. Most difficult is the genetic modifications that will begin in the next two decades to lengthen the lives of human beings. How long can we live in a healthy state?
    A modest 120 years for the select few that can afford it. But it will go beyond that. The second type of technology in the early stages of development is artificial intelligence that enables computers to carry out more and more tasks. AI introduces improved outcomes for almost every process.
    The third advance is the prospect of the quantum computer that will permit more of such rapid analysis of problems and make present methods of encryption simple to break. The implications for our society are difficult as these will be available to the rich first. They also function as weapons in a world of conflict.
  • The fourth great challenge is whether there can be continuation of the closure of the comparative wealth and human welfare among countries. The closure achieved so far has rested on the economic stimulus from expanding international trade.
    Will international trade continue to grow?  Is there another strategy, other than export-led growth, for rapid economic growth?

I define the current crisis as how these four areas will emerge over the next few decades.

Forrest Cookson is an economist who has served as the first president of AmCham and has been a consultant for the Bangladesh Bureau of Statistics.

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