The year 2012 is drawing inexorably to its close and the Mayans have failed in their inadvertent bid to end the world. So far so good.

In a world dominated by talk of climate change, population explosion and sustainability, I want to highlight a few positive counter processes that put such undeniable woes in a broader context. These are, permanently low interest rates, the emerging superabundance of goods and services, population collapse in the advanced industrialised countries, downward pressure on populations in the rest of the world.

Apart from the usual rag-tag-and-bob-tail of fundamentalists, religious and otherwise, for whom sin and retribution in a thousand different forms is an article of faith, there remain the great unwashed masses of humanity for whom climate change, sustainability and population explosion have ascended the throne of moral imperatives.

These are the commandments at the heart of our new covenant with nature.

With sin and retribution safely out of the way we must now grovel before the altar of the scientific method and, if decent manners and polite society are to be preserved at all, sacrifice ourselves upon it.

There is now one and only one acceptable way of thinking, one and only one allowable logic. To believe otherwise is regarded, at best, as simpleminded and at worst as heresy.

In my first blog I mentioned that sea levels are approximately in the middle of their 120 metre range, and could rise or fall, as they have in the past, by around 60 metres. The climate change lobby does not contemplate more than a very tiny proportional change in sea levels over the coming century and says that the expected tiny change is both man made and recoverable.

On the upside, we may be entering a period of permanently low interest rates. Some countries, such as Japan, have been enjoying, or living with, an effective zero official bank rate for over a decade. Australia is heading towards a decade of low interest rates, and the USA and Europe are likewise experiencing low interest rates. Demand for money, for capital, seems to be at an all-time low. That is why its price, the interest rate, is so low.

In the advanced, industrialised countries all around the world, native population numbers are falling as people have children later in life and have fewer children. Where populations are growing in these countries, the increase is largely due to immigration. This is so starkly evident in Japan, that the country’s legislature is becoming alarmed that Japan’s culture may be diluted by foreigners.

In the two countries contributing most to global population increase and to global pollution, China and India, there is evidence that population growth may begin to tail off and may even stop in the next few decades.

This is more evident in China currently than in India, but the causes are the same.  Firstly huge numbers of people are leaving the rural areas and moving to the cities as these countries become more industrialised. If mum and dad are both working long hours to make ends meet, and the kids’ education has to be paid for privately, there is a natural downward pressure on population growth.

Secondly, in both countries there is a large and growing middle class and the middle class is becoming a powerful force for change.

The Russian born, but naturalised American economist, Kuznets, developed the so-called Kuznets curve that describes a trade-off between, variously: industrialisation and flow of population to the cities, increasing city populations and growing middle class and a growing middle class and decreasing environmental pollution.

Right now China and India, amongst the most polluted countries on earth, are experiencing the largest growth in the middle class and the largest shift in employment to the towns from the country. The stage may be set for these emerging middles classes to do their stuff.

There is a second, equally interesting phenomenon emerging all over the world but most strikingly in China and India, and that is superabundance of goods and services.

We saw superabundance in digital form with the emergence of the World Wide Web some twenty or so years ago. Digital recordings of music, books and movies are, in effect, superabundant as they can be copied almost infinitely at minimal cost.

This superabundance is now beginning to emerge in manufactured goods and in services, led by China.

China plans to create two hundred new cities along its Pacific coast. Each of these cities would become a centre for some specialised form of production.  The most famous of these is the popularly named ‘Sock City’ Datang that produces 9 billion socks per year or around 60% of all socks purchased in the industrialised West.

Near to Datang is the ‘Button Capital’ of world, Qiaotou which likewise dominates the global button market.

In the current economic uncertainty China’s plan has been slowed, but we may yet see emerging ‘Jumper’ and ‘Trouser’ cities.

The effect of this is to produce these items in such abundance that their wholesale price per unit becomes increasingly low, tending towards, but never quite reaching, zero.

Consider that in 1909 the USA was still pretty much at the horse and buggy stage, and that a mere sixty years later they put men on the moon.

In Asia, if we look at the meteoric rise of Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan, Thailand between 1965 and 1995 and of the Shanghai region of China in less than a decade, it is evident that the shift from large rural population engaging in agriculture to large urban population engaging in manufacturing and services, can now be achieved in a few short years.

Evolutionary stages that we might have once believed mandatory can now be leap-frogged with the latest technology and know-how. In India the HP Company will build a gas powered electricity generation plant next to a new Data or Call Centre so that the very latest technology can be used.

If the population of the industrialised countries is shrinking, and that of the rest of the world may be levelling out, and if superabundance continues to spread, sector by sector, we may one day see a sustainable future driven at this stage by capitalism itself.

Who knew?

Oddly enough it was Karl Marx’s view that superabundance would be achieved under a capitalist economic system and that it would pave the way for communism. Watch this space…

Poppy

Punchbowl, if by chance you may not know it, is a suburb ten miles south west of the Sydney Opera House and Harbour Bridge.

It is also, according to Einstein’s thesis on ‘the observer’, and given the fact that the rest of the universe is moving away equally in all directions, the centre of the universe.

This makes it a splendid spot from which to comment on the various matters and goings-on that concern mankind.

We need a baseline. We should begin by summarising where we are now.
A Bit of History
The great empires of the last few hundred years, the Spanish and Portuguese and later the French and British, have passed into distant memory.

Their scars are fewer than before and their taste while still occasionally thickening the tongue, has become less bitter.

The American Empire has, with a massive explosion of creativity, innovation, energy and self-righteousness, shattered the old world and raped the new.

Whatever one’s point of view, such an empire could not burn so fast and so very hot, without at last succumbing to the collapsing vortex of its own expenditure and consumption.

America has gone broke, its power is waning and the old-new powers of the Pacific and Indian Oceans are edging out of the wings.

A Bit of Geopolitics
China and India are growing in confidence and vision.

This year, the Year of the Dragon, China for the first time, and in an unambiguous, if subtle, statement of intent, published a series of postage stamps bearing the Imperial Chinese Dragon, rampant, facing outward at the rest of the world, claws raised to strike, fangs snarling – at us.

The ferocious image caused a stir in China, but passed all but un-noticed in the West; too subtle perhaps. (See http://news.yahoo.com/chinas-dragon-stamp-breathes-criticism-fear-100045118.html)

The stamp’s designer, Chen Shaohua, is quoted as saying the image is symbolic of China’s mounting confidence.

Yahoo quotes his blog saying “As a large country which has major influence in the world, China is ushering in the restoration of national confidence.”

“From sternness and divinity, to a representation of China’s self-confidence, a dragon which is tough, powerful, stern and confident is an appropriate choice”.

Powerful, stern, confident and tough – please take note.

India, a step or two behind China and a little smaller geographically and in terms of population, is also beginning to flex its geopolitical muscles.

A recent spate of attacks on Indian students in Australia sparked a strong and confident response from the Indian government.

India is now less concerned about Europe, American or even tiny Australia, and instead is fixing its eye on its local rival, China.

China provides India with a camouflaged umbrella under which it can hide, for the time being.

While all eyes are on an increasingly strident China, India is putting its house in order and growing politically, militarily and economically.

This is the broad, highly simplified context in which various hanger-on states (Australia and Israel come to mind) are hurriedly repositioning themselves in an attempt to chart a safe course between Atlantic and Indo-Pacific rivals.

For Australia it means attempting to utilise its new found observer status on the UN Security Council without annoying America or China too much. One might wonder why they wanted the Security Council observer seat in the first place.

For Israel, in the aftermath of its failed attempt to re-occupy Gaza after the Palestinian state was given UN Observer status, it means gauging how long they can depend upon America to protect them in the face of growing Arab and particularly Hamas political and military confidence.

Some pundits have suggested that building in the zone known as E1 would effectively preclude a two-nation settlement between Israel and the Palestinians as it closes the potential Arab corridor to Jerusalem.

If that is so, and Israel does build in E1, the dice may have been cast and ultimately only Palestine or Israel will survive.

A Bit of Economics
Economically the world has suffered a terrible catastrophe in the form of the Global Financial Crisis and is only now beginning to come to terms with the sovereign debt crisis that Keynesian economic stimulus engendered.

America, as appears to have become its habit, is prancing theatrically towards its very own fiscal cliff.

Some economists and banking types have begun to suggest that the sovereign debt crisis might be settling down and Greece, followed by the rest of the Mediterranean countries, would not have to default on its debt and leave the Euro zone, precipitating the world once more into economic and financial chaos.

A Bit of Science
The climate too is misbehaving. More and more evidence is accumulating that climate change is real and that the effects will be significant and unpredictable.

There appears to be no evidence at all that change, when it comes, will happen in a polite, linear manner, i.e. that an ‘x’ per cent increase in global temperature will lead to a ‘y’ per cent increase in sea levels, or anything else.

There is plenty of incontrovertible evidence that temperatures and sea level have in the past been both very much higher and very much lower.

On the lower side, sits the fact that several cities lie approximately 200 feet under water off the coast of India.

This became known when fishermen complained of catching their nets in roof tiles and other submerged structures.

If one accepts the assumption that these cities were not built underwater in the first place, then either the land level has gone down or sea level has gone up two hundred feet since they were built. I am assuming the latter.

At the same time, it is known that the 200 feet tall cliffs of the Great Australian Bite were once under water.

So taken together it seems that sea level has a range of at least 400 feet or approximately 120 metres.

A Little Bit of Medicine
In terms of global health it appears that smallpox, polio and malaria either have been or will probably soon be wiped out and at the same time we have bred several penicillin resistant diseases (what the newspapers call ‘super bugs’) most notable of which is probably tuberculosis, that we may no longer be able to cure.

So What?
So where does that leave us? It is my belief that we are on the cusp of major change. Everyone I speak to about it has this feeling that something major is about to change, and to change fundamentally.

This blog, which I hope to update at least monthly, will examine some of the major (and some of the minor) political, economic, social and techno-scientific issues and developments of our times.

This is all my opinion, and you are welcome to comment.

This is post No.1, December 2012.

See you in January 2001, Poppy.