It’s September 24, 2012, and I just finished the most interesting week I’ve had since I started writing these weekly articles.
I spent last Friday evening, part of Saturday, Sunday, and Monday responding to over forty initial comments that were made to the article entitled, “The Irony of my life, Part 2.” Most did not agree with my point of view, but the back and forth was lively, and most importantly enjoyable.
This experience has motivated me to share with you where I’m coming from intellectually. People, like myself, who make their living helping corporations throughout the world understand social, political, and economic trends, try to create “models” into which they can press data in order to come out with reasonable predictions.
My Global Model
In 1999 I created a model that has served me well in spotting and understanding trends.
The model sets up two assumptions. One, the world is going global. And two as the world does, there will be negative reactions. Many people will become more “tribal and fundamentalistic.”
These two assumptions will cause tensions around the world, which will last for a good half century (2050). Over this fifty year period, globalism will eventually become the leading principle around which our new world will be governed.
A global world will be almost universally democratic. Economically, it will function under a capitalistic system, and science will play the major role in being the engine of progress.
Tribalists and fundamentalists will work to thwart this global movement. Their main thrust will be to fight for local control. Although there will be many targets, there will be one common thrust of attack. That will be against the federal government of the United States Of America.
Tribalists are defined as those people who are loyal to their racial and cultural identity. Fundmentalists are those who believe that their religious views should govern society.
Today, you can see these forces pressing up against each other. The Arab Spring is a movement towards universal democracy. On the other hand, the burning of our Embassy in Libya is a religious fundamentalist move.
If my model is correct, over time the forces of democracy will be stronger than the forces of fundamentalism and tribalism.
However, people at all levels of life have become very concerned when they see what appear to be random acts of violence and destruction. Businesses, especially, are reticent about investing in plant and equipment when they are unable to see an end to the upheaval that besets the world.
That’s why they bring in people like myself to help them see and plan for the future.
Questions That Are Asked
One of the first questions I’m asked is, “with all the problems going on should we invest in new business opportunities?”
My answer is unequivocally YES. Your local markets will become global markets. Your investments will continually be protected by the democratic rule of law that holds inviolate the need to protect the personal and property rights of the individual, irrespective of geography and ideology. Democracy, I tell them, will become stronger not weaker over the long run. Hence, your business decisions need to be made with that in mind. Hesitation now will not allow you to benefit strategically.
The more pressure tribalists and fundamentalist feel, the more isolated and strident they will become. The terrorist attacks of September 11, 2001 were the most glaring example of extremism offered by a fundamentalist group. Their assaults were attacks on democracy and capitalism. For that act, Islamic fundamentalists have been hunted down and eliminated. From this, democratic nations have learned how to defend themselves in a global world. A global infrastructure has been slowly erecting.
For example I sit on several corporate boards, one of which deals in billions of dollars of securities (stocks, bonds, etc.) Over this past decade our ability to monitor fraud, hacking, and sabotage has grown exponentially. Science has helped us install state of the art digital systems that apprise us of extreme acts of cyber terrorism from any part of the world. Compared to ten years ago, a person’s investments are locked down and safe.
Protection for those participating in democratic and capitalist lifestyles are safer than they have ever been.
I am frequently asked why my model has such a long time horizon. Fifty years is a long time. It took me about ten years to develop the model. I started thinking about this in 1990. By 1999, I was ready to roll it out to clients. More than anything, companies need to be forced to look at the long term, not just a monthly, quarterly, or annual income statement.
If you get caught up in what’s happening right now, you often make snap decisions that turn out to hurt you in the future. That’s why I try to let them have a long, long view of the future.
I am also asked why I think my particular model is correct. I believe that the best indicator of the future is the past. Over the last two hundred years democracy, capitalism, and science have been assaulted in many different ways. For example Soviet Communism, Italian Fascism and German Nazism all attempted to overthrow democracy, capitalism, and science for almost the entire twentieth century, but failed. There is no reason to believe that will change over the next fifty years with the new threats of tribalism and fundamentalism. If anything, the larger world cries out for more democracy, more capitalism, and more science.
Five Major Trends
It’s now 2012 and I have been using this global model for the past thirteen years. I’ve become better at predicting short term trends using my long term model. Here are some short term predictions for the next ten years that I have been sharing with corporate clients worldwide.
1. Over the next decade debt levels in America will come down both for the consumer and the government. Two reasons will be at work. One, home values will continue to recover, and unemployment will go from 8% to 7% over the next two years, and from 7% to 6% over the remaining three years. Two, as a result of the above, tax coffers will fill up, making it easier to come to grips with deficits.
2. Over the next twelve to eighteen months, banks will begin to loan money more aggressively to small businesses and to first time home buyers. One of the encouraging signs is that average mortgage payments are cheaper than rental rates.
3. Programs will be started worldwide that will make it affordable for every child to have a free quality education from kindergarten through college. Examples abound. Kahn Academy offers free education worldwide to every area of the earth over the Internet. Princeton University recently joined a consortium of universities including Stanford University, the University of Michigan and the University of Pennsylvania, which offer free online classes to anyone who signs up. In the first eight days, 78,000 people worldwide enrolled in the Princeton courses.
4. Strong democratic bureaucracies will begin to consolidate the success of the democratic revolutions in Arab nations, which will have the effect of checking radical Islamic terrorism. Public services will be built around equality and merit. This will do much to cap privileges dished out due to religious affiliation or family ties. This as much as anything will dampen the effect of tribal and religious manipulation of the larger democratic system.
5. An integrated world wide web will continue to expand creating more trans-border global relationships than tribal or fundamentalist local relationships. Loyalty will shift from local tribal and religious affiliations to global network relationships.
The Tea Party
One of the more controversial issues my model deals with is the creation of the Tea Party movement in America. This movement has successfully moved the traditional Republican Party to a far right position. At its very core is an ideology based on interpreting the American Constitution through fundamentalist Christian theology. Over time this trend will not hold up if the Republican Party wants to remain a viable political party capable of helping to elect candidates to national office. If it is incapable of adjusting, it will splinter and a new conservative party will be formed that deals more specifically with issues centered on business and commerce.
A World View
All in all, I can’t see any government or people who will not employ the basic ideas that encompass some form of democratic government, open market place economics, and the powerful effectiveness of science. Cultural loyalty will be protected, but not used to blunt the forces of global progress. Likewise, religious worship will continue to inform people’s spiritual lives, but not employed to destroy the institutions that give us maximum global freedom.