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A Perfect Societal Storm

How society operates is a fundamentally important question. Now, it's more important than ever to work together.

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System Out of Control

We can all agree, I hope, that things are not going as we might wish. The specific reasons behind the problems that we face are complicated and divisive—everyone has her own opinion and many can back their opinion with persuasive facts. Complexity is evident in that widely-different opinions can also be backed by equally valid facts.

In this article, I will propose that we made a misstep in the 18th century, which opened Pandora's box of problems and directly led to the formation of a Complex Adaptive System (CAS) that is beyond control.

There was no malice behind the misstep. Indeed, it has brought untold benefits and was based on sound economic principles. It is still the dominant force behind the world economy and has considerable support from politicians, businessmen, and economists.

So what has caused today's dire problems?

Free trade.

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Beautiful Day, Isn't It?

Slowly but surely, skeptics are coming around to the idea that climate change is real. And, lagging a little behind, that human activity is the main cause.

Since the industrial revolution, we have pumped ever-increasing amounts of CO2 into the atmosphere from our factories and land clearances. There is today the highest level of carbon dioxide in the atmosphere than at any other time in the last 2 million years.

We are losing over a trillion tons of ice every year from the polar ice caps. This melt-off causes sea levels to rise and threatens coastal areas from Bangladesh to Florida.

Industrial production has increased to meet market demand, and land clearances have increased to meet the demand for food from our increasing population.

Torrential rains are causing problems in some regions, while others, such as the American Southwest are running out of water.

In the United States, Los Angeles, Phoenix, and Miami-Dade have appointed chief heat officers as temperatures climb.

Once fertile areas will become too hot for much agriculture. Good news for areas further from the equator that will take up some of the slack, very bad news for some of the most populated areas on the planet.

Climate refugees are on the move, seeking areas free from drought or constant floods. Conflicts will occur as a matter of course because government policies cannot stop desperate people.

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All This Can Be Yours

The American politician, Jack Kemp (1935-2009) said:

"There's no limit to what free men and free women in a free market with free enterprise can accomplish when people are free to follow their dream."

Five repetitions of the word "free" in a 28-word sentence certainly hammers home his point. We all value freedom and free markets have brought us benefits that would have been unimaginable just three or four generations ago.

This is the core of the problem. Markets that operate largely free from government control can meet our demands and provide us with all sorts of goods that would once have been luxuries but are now seen as essentials.

There are two fundamental problems. Firstly, that no single person, academic institute, or government body understands exactly how the modern, globalized market operates. It is a complex adaptive system in which a small change in one aspect can have unforeseen consequences in another, seemingly unrelated segment.

A pandemic creates pent-up demand, causing supply-chain problems that lead to inflationary pressures that, in turn, cause a drop in demand.

The second problem is related to so-called future discounting. Essentially, people disregard future consequences for immediate gratification. This is why we drink too much at a party even though we know that we'll have a hangover tomorrow.

More seriously, it means that people will buy things today without worrying about having to pay more for them tomorrow. It's a very human failing that lies behind credit card debt and unaffordable mortgages.

Associated with these problems is the determination of developing economies to catch up with the richer nations. They don't see why they should curtail production in carbon dioxide-belching factories to tackle global warming when the hypocritical rich world has gotten away with it for years. Their populations want goods and services—a demand that must be met in order to stave off social unrest.

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Let the Market Decide!

Free market economists from Adam Smith onward have largely won the argument in the capitalist world about the necessity of leaving markets as unrestrained as possible.

Most of these economists will allow that certain laws need to be observed (the validity of contracts, for example), but don't believe that markets should be skewed by excessive outside interference. Hayek made a convincing case that markets are too complicated to be understood by one agency.

Yet some people swear that they believe in free trade but, at the same time, demand protection for their own country's industries. This reflects the short-term nature of democratic politics and a misunderstanding of the essential consequences of free trade.

A manufacturer will make its product where it is cheapest to do so. The effect is a change in the nature of a developed economy as it switches from large-scale manufacturing to services.

Inevitably, this leaves some workers high and dry as they can't adapt to the new labor market. "Adapt or die" may be appropriate in evolution and the cutthroat commercial world, but it is hardly a humane way to deal with those individuals who can't make the change.

The observation that people drive home in their Japanese car, switch on their Korean TV, relax on their Swedish sofa, and call out for Chinese food is true enough and shows how interrelated the world economy now is.

I repeat, this has brought many benefits but it does tend to undermine the authority of individual governments that find that they have little say in how international, interconnected economies affect their individual society.

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There Will Be Wars and Rumors of War

The world's population will level off at around 10 billion people sometime in the relatively near future. All of these individuals have an equal claim to life, liberty and the pursuit of happiness.

With so many people living on a planet with dwindling resources and increasing pressure on habitable zones, conflict is inevitable. There will be clashes over access to water and food, massive population movements, and futile attempts by governments to protect their own borders.

Can anything be done? I am not optimistic. In 1798, Thomas Malthus wrote An Essay on the Principle of Population in which he forecast that food production would shortly fall behind demand. He was wrong in his timing, but right in his pessimism.

I don't believe that science can save us this time—unless we are willing to give up a lot of what we take for granted.

This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.

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