This moment in time is historically quite bizarre. Perhaps the deep pessimism that pervades the European mindset is that secretly they love the vision of a dystopian future and soon perhaps this will actually become realized. Then the critics of American positivism can be right after all as the EU brings down the global economy. I don’t think that is going to happen but then this futurist is a Yank.
The current conflict in the EU, with Greece threatening to spread their contagion of economic unsustainable finances and bring down the rest of the EU, if not the world is, in a Connected Economy actually today possible. This is the irony of the Connected Economy–connected for good or worse. The US has not dodged the bullet fully here but has experimented with bailouts already and headed off further financial contagion for now.
One of two scenarios will play out. Greece will accept the bailout package and basically push off the fiscal responsibility (with the EU cheering on) to future generations, hoping that growth in GDP and productivity will outpace their debt. This is magical thinking as Greece has no productive industrial sector and has no plan to invest in one like in the US, Germany or England. This of course is not a fix to put off the payment of debt and forgive some, but institutional denial of the inevitable, downgrading of Greece, then the EU as well or the prelude to either a Greek default or a downgrade of Greek status as a full EU member is the second scenario which is more real-politic but not likely.
As I wrote about in my book the Extreme Future, all markets, asset classes and economies are linked via globalization and technology in a one huge global network topology is like a Internet network, chaotic yet linked in various and intimate interconnected ways. Most experts could not agree on the various types of interconnections that have created this accelerating connectivity. I am grappling with this concept in my next book.
The Connected Economy is a recognition that validates when Greece falters on accepting the bailout deal as they did, the EU central bank reacts and cuts rates, the US Federal Reserve goes with a gloomy forecast, the US and Asia stock markets decline, MF Global with its sovereign EU exposure files for Chapter 11, major banks and securities worldwide lose billions in value all happening in ONE 24 hour period. If anyone does not believe the Connected Economy is real, they must have missed the last 15 years. Notice I did not evaluate or judge this phenomena as being good or bad for the global or sovereign economies, which is still very much a mixed bag to be analyzed later.
This is simply not an intelligent path to creating a sustainable global future for the EU or the world. Everyone knows it. Putting off to the next generations our problems because we have not the courage or intelligence to fix them now, is a recipe for more chaos. I cannot fathom our children approving of our cowardice in the future.
What kind of future do we want? One in which we deal with crises as a global commons with leaders telling citizens the truth and working to manage the future or to persist with the same old tired ideas and paradigms of the past? This is the strategic issue that faces business, society and individuals–what is our Connected Future going to look like?
The key issue of course is about the clash of civilizations: two vastly different models of the future based on different models of economics. The free enterprise capitalist and innovation based consumer economy versus the social welfare state of entitlements economy are as different as day and night. The free enterprise economy is driven by growth from consumer spending, innovation, investments in technology and business. Social entitlements such as education, health care, retirement and jobs represent a radically different model of incentives, competition, innovation and society.
How does this clash of civilizations play out? Well, what economic and social paradigms will create a better future is my question. Is growth and productivity as a panacea even possible long term in social welfare economies? I don’t think so. Is rogue capitalism that serves special interests better? I don’t think so. A balance of models including social accountability and free enterprise can and must be crafted for the future prosperity and security of the planet.