Backcasting
The 2010 Annual Report Of The International Commission On Wealth And Well-Being

by Arthur Cordell

This was published on the Futurework and CED-NET internet list conferences. Backcasting can be a powerful technique ... at the very least it makes more interesting reading than most forecasting.

LOOKING BACK from this year, 2010, it is a good time to review some of the events leading to our founding in 2002.
It is now clear that the stock market collapse of 1998 was the final straw for many. While the mutual fund mania was bound to end at some point, many middle class investors who had been downsized, rightsized or otherwise bought off were content to leave their permanent jobs and invest their cash settlements in pension schemes. With the stock market collapse came the realization that something had clearly gone wrong.

The recession that seemed to last forever, got worse as a host of economic numbers spelled out a gloomier future for all. The riots and loss of life in Paris, London, Berlin, Tokyo, Toronto, Amsterdam, Bombay and Los Angeles led directly to the emergency meeting by nation states. There is still much discussion whether the riots and loss of life could have been prevented. Did nations have to wait for a crisis before acting? We'll leave that up to the historians. The fact is that action has been taken and the results are good.

Back in January 1996, the World Association of Art and Science noted in its newsletter, 'All around the world, the arts and sciences and technology of information/communication are raising productivity while reducing employment.'

WAAS was not alone. Many voices were heard. Some noted the end of work with applause, some were wringing their hands. Some called for still more competitiveness in the face of rising unemployment. The fact is that in the last decade of the 20th century few were unaware of the great changes affecting the workplace. The western world was coming to the end of the industrial era: an era of traditional scarcity, of people having to work in one job or another to earn money for life's necessities.

Other fundamental changes were taking place. During the 1980's and 1990's the developed world was shedding many of the hard won gains of development.

Universality, a hallmark of economic development was challenged. At first it was nibbled at by the de-regulators championing competition in telecommunications and transportation. Soon it affected education, libraries and water supplies. De- regulation was based on a simple premise: let the market decide price and allocation. Avoid cross-subsidization in markets, nations, and communities. De-regulation took on a life of its own. University fees skyrocketed, public libraries were closed, private schools mushroomed for the rich, bottled water became the norm--the poor either boiled water or adopted the lifestyle of their third world brethren. The 'gated' community, private security forces...We created a society of haves and have-nots. The middle class was barely hanging on--but the stock market collapse put an end to that final hope. The plunge in housing prices followed soon after.

The 90's were an odd time. In the face of so much evidence to the contrary, nations continued with policies of Economic Growth and Jobs. Despite the ecological and environmental evidence, governments continued to hope that still more growth would produce the jobs that would keep their populations happy and vote them back into power.

ENOUGH LOOKING back. What are some of the accomplishments of the past 8 years and the outlook for the future?

• 1. Productivity is now measured differently. It used to be output per unit of labour input. With the rise of self-serve banking, shopping, and just about everything else on smart digital networks, new measures of productivity were proposed and adopted. Productivity now includes quality as well as time savings. The new approach shows that productivity growth in the 1980's and 1990's was greater than thought. Understating productivity caused us to understate the wealth being created. National economic accounts understated growth and there was less money in circulation. With higher productivity, the returns to labour, to governments for re-distribution, etc., are now higher. Since productivity was understated for so long, the higher re- stated growth is non-inflationary. We are wealthier than we previously thought.

• 2. In the 1970's the Club of Rome issued its report The Limits to Growth. As the environmental movement exploded, one of the sayings was 'Growth for growth's sake is the ideology of the cancer cell.' Well that era is now over. Growth as a political ideology has run its course. We are still growing, but the growth is more balanced. Growth is aimed at achieving specific objectives. We are happy to note that the OECD, or the Organization for Economic Cooperation and Development changed its name 3 years ago to the OECSD or the Organization for Economic Cooperation and Sustainable Development.

• 3. The K-12 education system was one where children went so that they could learn how to make a living. Today we are changing. The new trend is to educate children to coping with living. Coping with living is appropriate to a time when nations have moved from the goal of full employment to the goal of full engagement. In a fully engaged society, citizens have a life- long task of being able to choose among a set of competing areas of interest. Educated with a love of learning, a sense of awe and a knowledge of the role of community, individuals are better able to allocate their own scarce resource: personal energy and time. Educating students to know their interests and strengths is at the heart of the new coping strategies.

• 4. The 25 hour work week is now standard in G-7 countries. An attractive course of action, even as far back as the 1990's, we couldn't shorten the work week until global agreements were negotiated. We are pleased to note that workers in developed countries are no longer threatened by low-paid labour abroad. The HUT agreement, or Harmonize Upward Together, in 2006, appears to be holding. Standards for health, occupational safety, housing, environment and education are all being raised in most parts of the world. Of course voluntary controls on population were part of the HUT agreement. (It should be noted that the G-5 trading nations--Malaysia, Korea, China, Indonesia and India still maintain a 30 hour work week, but their trend is to bring working time in line with the G-7 nations).

• 5. Using a variety of fiscal tools especially created to get at the productivity of the information economy, governments have been able to raise taxes with the consent of the governed and are now able to fund many areas of public interest. A new social contract, a sort of global new deal has been struck. Using the 'bit tax', the Tobin tax and taxing the wealthy, governments have been able to provide the BES, or Basic Economic Security, in all but a few countries. Chambers of commerce and business associations everywhere were at first wary of these new fiscal tools. But appeals to enlightened self-interest quickly bore fruit. It was clear that without income, consumers could no longer consume and effective demand in the economy would sag, putting the global economy into a recession or worse. (It might be noted that it was just such a sag in consumption during the late 1990's that finally caught up with the stock market; as earnings dropped, so too did stocks.)

• 6. Universal access to communications networks means that people are able to learn, transact business, converse, etc., using a range of media. Ideas and images move rather than things. The global economy has moved away from using polluting scarce fossil fuels. A parallel development is that the downtown cores of most cities can be revitalized and re-invented. No longer is it necessary to have millions of people moving in and out of the world's cities each day. Road building has been frozen. Commuting, once the great time waster, is on the decline. In fact the car itself has moved from status symbol to mere utility. The 3000 pound steel and plastic vehicle of the past has given way to today's personal transportation super-light vehicles weighing between 800 to 1000 pounds.

• 7. The International Commission represents the symmetry needed to meet the globalization promoted by multi-nationals and trans-nationals. With new institutions such as our own the nation state is now no longer among the endangered species. Checks and balances have been restored to the international arena and helps ensure healthy global governance.

• 8. We have re-learned the need for regulation in our economy. At a particular level, isolated tele-workers have the right to work in safe conditions and not be exploited. At a more general level cross-subsidization is essential to the nation, city, community and to the family itself. Letting the market make all decisions led to an outcome of isolated individuals; an outcome that threatened social cohesion. Universality is now embraced once again as a measure of how the fruits of economic progress are being distributed. One other note: just as it was with the railroad a century ago so too is it with the Information Highway today: universal affordable access has been achieved through regulation and cross-subsidization.

• 9. We have accomplished much, but there is still much to do. With a re-definition of work has come a re-valuation of what people are doing each day. There is also a re-definition and re- valuation of self and self-worth. Less and less do we find people asking of others, 'so where do you work?' More and more, people are asking each other 'so what are you interested in these days?'

• 10. The International Commission has not changed fundamental human traits, and doesn't intend to even if it could. Human ambition, greed and the need to be noticed are fundamental to the human character. They are among the driving forces that fuel economic and cultural development. But there are other human characteristics that have been overlooked. I speak here of compassion, caring, community, and empathy. As we look forward to the future our challenge is to forge stronger and more balanced links between these many human attributes.

• 11. I close now with a restatement of the core values of the Commission on Wealth and Well-Being. First, we support the World Academy of Art and Science in its quote of Albert Einstein:
  'The creations of our mind shall be a blessing and not a curse to mankind.'