[The following is an unedited, stream-of-thought for a Sunday afternoon, summing up in fairly broad strokes many of the trends in socioeconomics and geopolitics that I’m currently tracking. This is a rough forecast for the next 3-5 years.]
The present arc of instability & change is driven by massive shifts in economy, ideology, connectivity, and trust. Many deeply entrenched behaviors and the institutions built on them are grinding up against social & environmental feedback, bloated bureaucracy, unsustainable growth models, and the interface of global transparency and closed power structures. On the global stage the myth of America is fading, it’s dematerialized information economies eroding it’s own industry, having financed the rise of it’s greatest competitors. The center of economic power is shifting to the East, into the EU and China, though it’s reasonable to suggest that the center itself is distributing across the primary northern actors. The perceived decline of the US may simply be the effects of capital normalization in a globalized world.
American governance continues to lose it’s ability to effectively manage the needs of it’s citizenry. This will shift governance to local and regional bodies mixing public sector legislators, corporate leaders, and empowered citizen groups & lobbies. Loyalties will trend towards those organizations most capable of meeting the needs of people, eg. stable employers, effective community groups, capable local civic leadership, familial & tribal affiliations, and gangs & insurgencies. As top-down national management weakens, corporate NGOs will play an increasing role in managing civil and socio-economic development.
For better or for worse, Google is a good example of an emerging NGO world leader. Google is financially strong, employs thousands, and is actively engineering & underwriting the development of a more prosperous and sustainable future in both it’s information and energy operations. For it’s employees, it’s business partners, it’s ecology of developers, and the many CSR organizations Google works with, they are a more reliable and trustworthy patron than the State of California or the US Gov. Likewise for Microsoft or, more specifically, the Bill & Melinda Gates Foundation that has sent billions of dollars to help African poverty and fight AIDS (as with Google, questionable strategic intentions and pragmatic implementation failures aside). In an age lit with corrupt politicians and bankers, it’s easy for corporations & NGOs to look good by spending money on non-profit causes. In some ways, the market is more effective at getting things done than government these days. Expect to even see investment firms making similar overtures to social and environmental responsibility as capital begins to redistribute in emerging opportunistic investments. The new titans of the information, green tech, and biotech industries will continue to be the powers that are most capable of managing change effectively, though this posture will be both at tension with and an outcome of their need to manage growth and profit for their shareholders. Local and regional investments will inevitably be balanced against the global workforce. Corporate loyalty and integrity will only go so far as outsourcing draws jobs and money away from the locals.
As states risk bankruptcy through bloated bureaucracy, mismanagement, and endless partisan deadlocks, regions & local communities will organize & collaborate to pick up the slack or else decline into economic and social turmoil. This pattern is reflected at the level of national governance, increasingly beholden to global financial centers, extended across the globe in multiple unfavorable & expensive conflicts, and crippled domestically by oppositional bickering in Congress. All these trends reinforce the gap between State & Citizen, Wall St. and Main St., further de-legitimizing traditional governance. With spiking unemployment and the growing commercial credit crunch, the street-level effects of the Great Recession will continue to deepen for some time in spite of Wall St. indicators trying to stoke a rally back to an outmoded growth model. This effect will not be universal but unevenly distributed, reflecting the distribution of innovation, resources, capital, and climate.
For California, some regions, such as the San Francisco Bay Area, are poised to maintain strength and innovation, particularly in the new information economy but also, perhaps more importantly, in the coming biotech revolution. Meanwhile, Fresno, Riverside, Bakersfield, and Los Angeles counties will deteriorate further. Fresno’s fate as it resets against failed housing speculation will be determined primarily by shifting weather patterns. If the region dries, expect even greater flight. Riverside and Bakersfield will likely follow the lead of Los Angeles which seems to be destined for greater chaos, particularly if water supplies are threatened. Expect continued regional migration into LA as extended families draw together to fight unemployment, and job seekers are drawn on hopes of legitimate and criminal financial opportunities. Gang violence will rise as illicit drug and weapons networks stake out territory, increasingly mixing with Mexican and Salvadorean criminal networks. LA and San Diego demographics will continue into a Hispanic majority as people flee a Mexico torn apart by it’s own narco-insurgency. But again, great opportunities exist in the San Francisco region provided the high cost of living and salary requirements do not scare away the most able and potentially benevolent corporate kingpins. The California Bay Area is one of the most innovative and productive centers of US business and will continue to build the information age for the foreseeable future. If not for deeply intractable water issues, one could imagine a Northern California statehood.
Nevertheless, Asia is leading the global economic recovery, not America, underscored most recently by China’s founding of its own NASDAQ-styled ChiNext market, as well as its recent ASEAN attendance. Increasingly, Asian economic bodies are calling for lessened reliance on Western markets, supplementing their currency investments with Euros, Yen, and RMBs. These two features of marked Asian economic growth and increased global currency diversification will inevitably soften the national power of the US, itself holding on by it’s handful of primary innovation centers (increasingly isolated from and at odds with middle America and the south), as well as its absolutely indomitable military force. While it is not in China or anyone’s interest to dump US debt and cause a dollar collapse, it will be interesting to see how an economically weakened and politically fractured America will rely on its military to save face as the global economy becomes more evenly distributed towards Asia & the EU. Similarly, India’s contribution to the region remains unclear as it tryies to resolve it’s hunger for modernization with a huge population mired in poverty and caste culture. Caught between the US & China, India’s primary role in the foreseeable future is to put pressure on Pakistan, forcibly enough to encourage the Pakistani military to put down the Taliban, but subtle enough not to provoke an all-out Pak-India conflict.
However one regards India’s contributions, the rise of Asia will not be easy. There are huge populations but their level of industrial & technological education still lags behind many western nations. Likewise, their financial centers (and political focus) will continue to be challenged by the much larger depressed rural populations still struggling out of feudal poverty. Any attempt to form an Asian counterpart to the EU will be challenged by such vast inequity across many proud and nationalistic cultures that have been traditionally very averse to cooperation. Asia has been at war with itself in some form perhaps as long as the Middle East. Indeed, the rise of the EU was only possible in a post-WW2 reunification towards cooperative economics (and against a rising USSR), and this cooperation remains tenuous at best. Russia itself is a major wildcard sitting between Asia & the EU & the Middle East, economically and politically crippled but still heavily armed with ICBMs & natural resources and making regular overtures to get the Soviet band back together. While the US is only slightly concerned about its southern neighbor, Asia is beset on all sides by nuclear powers, militant Islamists, and strategically-critical but highly chaotic regions. America travels to its conflicts while Asia need only look in its own backyard. Thus, the rise of Asia will be significant, primarily due to the inertia of China (itself in large part buoyed by unsustainable business trickery) and the flocking multinational business interests attracted to its present shininess, but any coherent China-JPN-ASEAN strategy will be beset by many challenges. Indeed, Japan itself will remain heavily dependent on the West, both economically and militarily, with everyone in the region hoping the US will keep North Korea in check. (As an aside, the US military is the *only* military capable of deploying 100,000+ troops anywhere in the world. No other country can move forces globally, control the world seas, and reach any nation with a nuclear strike.)
Either way, there will continue to be a fractured US polity, a weakening dollar, and a lackluster system of state and national governance. Some regions will descend into chaos and become truly feral (eg Detroit, parts of LA), while others will route around bureaucratic impotence with community co-ops, participatory local governance, regional corporate sponsorship, and virtualized global information & content cooperatives. The tensions between neighboring regions will be amplified by ideological and socio-economic differences arising from their respective abilities (or inabilities) to provide for their populations, as well as the presently unforeseeable impacts of climate change and pandemics. One neighbor’s fecundity is another’s reason to migrate or invade.
None of these shifts will radically alter business as usual, in that trade of goods and services will persist. The current global financial paradigm will not likely come crashing down though it will be forced to evolve towards greater transparency & liability. Wall St. can post great numbers but if communities are wracked by unemployment, crime, and dying lands, so-called economic recovery won’t make much difference, especially as the anticipated uptick in business sees more global outsourcing and contract work with diminishing quality of life for the expensive regions. In the near-term, these trends will put pressure on many local communities to fend for themselves (or align with corporate, government, and/or military interests in the region) though some will be uniquely positioned to build local resiliency and self-reliance while remaining highly competitive in a dematerialized global information marketplace.
The next stabilization will likely come on the back of green industry, dematerialized technology, and new energy abundance, all of which will emerge from a deepening understanding and engagement with natural systems & the biochemical world. The present instability is a direct result of an unsustainable resource model kicked off by the industrial revolution. The shift we’re in is driven by the necessity to bring human systems in line with living, natural systems. This is a deep, deep evolutionary priority working it’s way through the human species in ways we don’t even see. But in short, things are shifting quickly. The idealistic paradigms of How The World Is are changing before us on the tide of globalization and instantaneous communication connecting all corners of the Earth. Yet, change is typically not monolithic but is scattered and unevenly distributed. There are many more players on the board now and the myth of US dominance and the ideal of Democracy is challenged on many sides. The system is unlikely to crash but it’s certainly entering a phase of high instability. But don’t under-estimate the collective effort to keep things moving forward. The interconnected web of globalization may actually be the saving grace against system collapse, tying all nations together in mutual reliance.