Saturday, 28 April 2007

Water Wars?

John Petersen of the Arlington Institute recently brought to our attention an article on Live Science that forecast a future in which nations across the globe would compete for water as a scarce resource (see article). This would result, the authors claim, in a world in which was "even more prone to wars, terrorism and the need for international intervention". Is this something that should worry us?

It would seem that the forecast relies upon two key assumptions. First, that water will become more scarce in the future, and, second, that conflict will be the appropriate response to water shortages. Each of these assumptions deserves further scrutiny.

Much of the argument that has been applied to Peak Oil is curently being applied to water as a resource. If the current rates of growth in demand and the current rates of growth in supply continue, then water will become a very scarce resource. Of course, in reality, this is unlikley to happen in quite this way. The models that predict this future tend to be linear and static, whereas the future is very often better explained by non-lienar and dynamic models. Our future may involve a scarcity of water, but the forecasts of desertification may prove to be a little too exaggerated.

Even if the linear forecasts are correct, does it necessarily follow that violent conflict will result from competition for water as a scarce resource? One the one hand, we could argue that it will. We could point to events of the summer of 2006, when many commentators felt that the Israeli push towards the Litani River was more to do with securing a watershed than anything else. Indeed, we could argue that the Israeli occupation of the Golan Heights is about securing a key water source.

On the other hand, we can see that violent conflict will not necessarily result from competition for water as a scarce resource. For example, if we take a nation in water deficit (e.g. the United States) that has a common border with a nation in water surplus (e.g. Canada), then surely it would be absurd to suggest that the water shortage in the US will result in military intervention in Canada to secure water assets? This might provide an interesting wargame, but any serious proposal along these lines is based in a world of fantasy.

It is easy for those who think in linear terms to arrive at a future that is quite undesirable for us all. However, there are feedback loops in the system, such as market based pricing mechanisms, which ensure that the system behaves in a non-linear way. Those golf courses in Arizona may well stay green through the use of Canadian water, but just how expensive will that water be?

Friday, 20 April 2007

Peace In Our Time?

I was attracted to an article in the Economist that reported on a thawing of diplomatic relations between China and Japan (see article). In recent years, relations had not been as cordial as we might have hoped them to be, and the apparent thaw may imply a significant change that will impact upon the future.

In our work, we have come to the conclusion that the relationship between China and the US is highly likely to be the most important relationship for America over the next two decades. This view of the US, however, is not likely to be reciprocated as the most important relationship for China is likely to be that between China and Japan.

Both nations have a contiguous border in the East China Sea and the Yellow Sea. The borders in that area (which has Taiwan at one end and North Korea at the other) are not settled by treaty, and contain islands over which sovereignty is claimed by both nations. A factor that is complicated further by the presence of oil and gas deposits around the disputed territories. In our simulations to 2025, this area is one of the key flashpoints to disrupt the global system.

In recent years, Japan has become a major contributor to the flow of Foreign Direct Investment into China, and China has become an important supplier of manufactured goods to Japan. In our model of globalisation, the development of a harmonious relationship in East Asia is quite an important factor in the further development of the global economy over the next couple of decades.

In our scenarios, the more nationalistic either China or Japan becomes, the more political conflict is likely to prevail. Equally, the more liberal each nation becomes, the more the process of globalisation is strengthened and deepened. If the story does signify a move towards the liberal, this bodes well for us because it diminishes the liklihood of the process of globalisation being derailed.

We shall carefully watch how events unfold in the coming months.

Thursday, 19 April 2007

Living In The Age Of Spin

In the book '1984', George Orwell introduced us to the concept of 'Newspeak' - a language where everything was turned around. The Ministry of Peace was the Ministry of War and the Ministry of Truth simply told lies. I reflected this week on how prophetic this book was. In the UK, we now have hospitals that cause rather than treat illness (see Article) and we have a popular party that redistributes wealth away from the poor to the benefit of the rich (see Article). How could this have come about?

In many ways, this is the result of moving towards a post-Information Age society. In a very prescient book, Rolf Jensen of the Copenhagen Institute of Future Studies introduced us to the idea of the Dream Society (we reviewed the book at In the Dream Society, appearance takes precedence over substance. It is not what we are that is important, it is what we appear to be. We prefer the exclusive to the ordinary because of what it says about us as individuals.

In the public services, a consequence of this is that services are now judged not by what they deliver, but by what they appear to deliver. This is why targets and key performance indicators are so important. They create an illusion of achievement and distract us from the unintended consequences of that achievement. For example, we have greater throughput to our hospitals, which creates the illusion of achievement. It is illusory because the cost of greater throughput is the development of strains of disease that medicine cannot cure. Hospitals now cause rather than treat illness.

Of course, there is a reaction against the world of spin. This is the world of 'authenticity' and 'originality'. However, it can be hard, at times, to discern the authentic from the apparently authentic. There is a tide moving against spin, but it has yet to achieve critical mass. When it does, we are likely to see a substantial change in the paradigm of organisations.

It is worth looking out for signs of this change.

Monday, 2 April 2007

Alternative Futures

The BBC have recently run an interesting set of documentary programmes under the label of 'The Trap'. In the programmes, Adam Curtis argues that much of the current malaise in the West is the result of becoming seduced by the Thatcherite (read Reaganite in the US) agenda of the 1980s. It uses this analysis to chart the rise of political extremism throughout the world and the rise of militant Islam inparticular. (See Wiki for an article about the series, which links through to the BBC site, which has clips well worth watching).

The show started me to think about the idea of alternative futures. For example, had both Reagan and Thatcher lost their respective elections, how would the 1980s have developed? How would it have changed what we are now and how we are today? I was tempted to dismiss this as idle daydreaming, but, as I was working on the China chapter of my current book, the whole idea came into focus.

How do we classify the Chinese economy? It is certainly a market economy, but it is hardly a capitalist economy - the means of production are still, largely, owned by 'the people' and controlled by the Communist Party of China. In squaring this circle, I went back to some work from the 1930s undertaken by the Polish economist Oskar Lange, who developed a theory of market based socialism. This was really instructive in understanding how an economy could allocate resources using the markets, whilst organising the ownership and control of the economy as a collective vehicle.

Why is Lange so obscure? He published at about the same time as Keynes published his General Theory. In our interpretation of events, we rather take the view that Keynes saved market capitalism from itself (the Great Depression being a classic example of market failure), and so Lange wasn't needed. It is so interesting that he pops up again 70 years later just as, according to Adam Curtis, the whole system is starting to falter again.

If so have we always been destined towards market socialism? That would please the Marxists! Or do we chart our own unique path into the future? In which case history can't repeat itself.