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Agency in the knowledge society

Agency in the knowledge society

The question of who or what is an agent underpins much modern political theory. Here, we ask this question for the period around 2040. We do this in five steps, each accessible through links shown immediately below. We begin by finding three agents that will stand in place of the current nation state, and assign roles and attitudes to these. We then have another look at the archetype scenarios in the light of what we have found about this.

One of the things that we find is that geography matters, and the section that follows looks at this in more detail. It transpired that global connectivity emphasises the importance of the local, particularly in respect of the use of knowledge. (However, local may not refer to physical space, but to the space of connectivity.)

We then look at knowledge and what it can do for an economy. We find that exploitation of knowledge is essentially local, and move to consider the economic geography of talent in this light.

In our conclusion, we find that this is of great relevance to access to one of the scenarios, the Oh My Gawd (OMG) archetype. We assess the necessarily intensely elite but non-hierarchical nature of this.

You can jump to any of the sections, as follows:

    Agency in 2040: nations or something else?
  The archetype scenarios revisited.
  Physical geography.
  The impact of knowledge.
  Conclusion.
  Comments.

Agency in 2040: nations or something else?

Agency in 2040: nations or something else?

The question of agency is central to the scenarios. That is, who is an agent, and with what other agents do they interact to bring about events? Traditional nation states have, of course, been the primary agents in international affairs: they go to war and make peace, trade and exchange ideas. However, the future may not be so straightforward. for agency that exists at both the sub- and supra-national levels may become more important. This section is long and soemwhat technical, and readers may wish to read the interim conclusion - here - before embarking on it.

When we say that a country is an agent, we somewhat equate it with a person. It is supposed to have views and values which it projects and defends, physical and abstract mechanisms for projecting power and legal and other grounds for resting on precedent and ownership. Above all, these things are supposed to constitute a unity: that "France" does this and "Egypt" does that, as as a single entity represented by certain symbols, by law, by tradition. All of the people within the nation are supposed to fall into line if the matter is important enough - war, for example - and dissent is managed at a level below the nation as actor.

All of this was a reasonable approximation when nations were important to other nations primarily for what they did at this level: went to war and so on. Industrialisation and trade has, however, meant that what "France" does is a part of a regional economic effort, the consequences of which are felt far and wide but through no particular effort of French leadership.

The Peace of Westphalia comprised two treaties signed in 1648, between them bringing to an end two exceedingly long European wars. The details are much concerned with dynasties and religion; but the overall thrust was to recognise the sovereignty of individual states, and the rights of the rulers of these to set local standards. Nations were identified by geography, by the ruling elite and by what they did to and with other nations. Commerce was a poor second to all of this coarse power.

Modern nations, of course, support an increasingly internationalised commerce, a force which is relatively unconcerned by political borders. That commerce requires that economic parameters remain within relatively standard conditions. Many other aspects of life are subject to similar benchmarking: how to run a welfare system a central bank or a military infrastructure are issues with relatively common answers. Individuals follow broadly similar life trajectories, supporting similar aspirations, and holding broadly similar views. Democratic politics deliver generally similar kinds of politics argued over by political parties with increasingly common dimensions of disagreement. Indeed, politics has become too complex to support clean party brands and the fight is for the middle ground of opinion and action.

As with the example of France, therefore, agency occurs through many channels. Much of it is additive: France contributes to the overall prosperity of Europe but its economy is less and less of a self-referential network. And France is, of course, one of the most autarchic of European nations. The connectivity that affects it is not solely trade, but extends through the the many impacts of the world financial system to issues of confidence and uncertainty.

Away from Europe, similar things occur. America is a major power, but whilst it may on occasions act in ways that seventeenth century politicians would understand, it is also increasingly a part of a world consensus as to ways and means for progress. It is an important part of an economic structure that reaches across the globe, and reaches into its heartlands.

Industrialising nations are, for the most part, less integrated with this system, and also more inclined to autarchic and eccentric political positioning. The poor nations are the least integrated and the most inclined to act as states were formerly accustomed to act, but often without the necessary power.

There is something of a paradox in what has happened in the industrial world. State spending has risen from a few percent of gross product at the beginning of the twentieth century to around a half of all added value at the end of it. Welfare spending has made a significant fraction of the population permanently dependent on the state, and almost everyone a client of it for a significant part of their lives. The defining character of a nation had once been thought of in terms of the qualities of the people who lived in it. The state – that is, the administrative aspects of government – largely supplanted this, and became increasingly equated with the nation, precisely at the time when the ability to act distinctively has begun to be weakened by the forces of global homogenisation, which we have already described.

The twentieth century was a literal battle ground between rival views of the state. Was the "state for the people or were the people for the state"? A hot and a cold war never answered this question. The contemporary consensus seems to be the following. Viable states have strong commerce, a society that is more or less at peace with itself, mechanisms for dispute settlement and governance that is distributed, mutually watchful and open to perpetual challenge. Most people value a safe framework in which to pursue little ambitions: a house, a job, a family. Change is necessary, however, and best served by the free competition of ideas and innovation, with flows of capital and labour being allocated in ways which seems to offer potential.

Some details within this consensus are contentious. How much of what goods and services should be delivered by the state or by competitive commerce? What fraction of social discipline should be handled by social consensus and what fraction by fiat? The major divergence occurs between nations which believe in collective support and individual self-reliance. Health care, for example, can be paid for by general taxation or from personal resources or personal insurance. The first solution leads to free delivery, but to all manner of distortion in the delivery mechanisms as they have to manage rationing, respond to political interference and strive of national uniformity. The second leads to bad health care for the unlucky and the poor. There are no industrial nations which have chosen either the one or the other, and it is the precise balance (of "fairness", of cost-effectiveness, of individual desire to make their personal dispositions) which is contentious.

One should note that the argument is not about about the nature of the desirable deliverables - those of cheap and high quality services, of social tranquility - but entirely about the nature of the mechanisms that are to be used to deploy these. The difference in emphasis varies from nation to nation, but the deliverables do not. Nevertheless, these positions necessarily entail trade-offs: in strict economics, between unemployment and inflation, for example. Societies can consume or can invest, can strive for personal excellence or for collective equality.

Some topics tend to attract political attention - education being one of them - not least because everyone fancies themselves an expert on the subject. Others - such as health - are a political focus because they are both expensive and a sensitive focus for the electorate. That said, politicians may (marginally) alter how health care is delivered, but the content of that care depends on international best practice, over which they have no say whatsoever. Much the same is true of education, defence and the myriad less obvious components of modern life, such as effective drainage.

As a consequence, politics live on, but it now acts within a framework that is set by common expectations, a common model of a successful society and an enormous body of experience as to what does and does not work. Industrial nations have taken marginally different positions in respect of the outcome, but states spend the approximately the same proportion of their wealth on the state, they all have a broadly similar state engines which employ very similar tools towards virtually identical ends. Japanese social security faces similar challenges to that of Spain, and uses similar tools to address these.

Industrial nations may differ somewhat at the level of national priorities and character, therefore, but the underlying state engines do not. These entities are administrative necessities, and their administrative regions and boundaries are essentially arbitrary. The US and Canada could probably merge most of their practical operational engines - structures through which traffic is kept moving, sewerage is managed, food is kept hygienic - without much impact being noted at the "national" level. Equally, the actions that emerge from Canada and affect the US are chiefly social and commercial, with only a small amount of traditional statecraft being involved.

This international entity - the industrial state - is no monolith, comprised as it is of many highly dissimilar activities. It is, however, vast: it spends half of all value added, it touches every life and proceed towards an increasingly self-defined, common set of goals. For example, the is a consensus amongst educationalists (in the industrial world) as to what they should do for their pupils: fit them for life, build up strengths, lessen weaknesses, deliver a range of basic and common skills on which higher capabilities can be built. All branches of state education of the industrial world therefore pursue (roughly) the same mechanisms in order to deliver this. This vast degree of parallel international effort cries out for integration in order to deliver economies of scale. Indeed, there are many measures which are being undertaken in this direction: - collective purchasing of health products, procurement of military equipment, unification of IT systems, productivity benchmarking and so forth. Added to this, regional accords of everything from the environment to health and safety enforce common standards and thus convergence. These are, however, minor initial steps in what could be a major step forward for efficiency in government.

To summarise what we have found so far:

There are two ways in which this may develop. As we have seen, there are a range of factors which will force national policy into a common response, at least for the rich nations and for those which choose to be long-term, open partners.

However, it is possible that we may discard the standard model. There need not be a single model of social and economic progress, and we may rediscover ideology. The US, Switzerland and Japan may diverge sharply as to the values they adopt and the goals that they set for themselves. Equally, however, it may be that the international arena is simply not conducive to collaboration. It does not make national sense to be anything other than self-protective, or perhaps to pursue differentiation for competitive reasons. Some nations may make themselves into havens for this or that activity that others deprecate: for example, human-optimising medicine that is based on invasive IT and biotechnology. It may be appropriate for at least some nations, of sub-national regions - to pursue stances that perfectly enable one industry at the expense of more general choices, and more general partnerships.

Convergence or fragmentation?

The centre of weight around which the advanced nations will revolve will, unquestionably, change over the next thirty years. At issue is whether these nations (and new additions) will orbit this one unique centre or, perhaps, come to cluster around several different centres.

Let us begin with a re-examination of the forces that promote homogeneity. There are two, qualitatively different forces at work.

We have already met one of these, which relates to objectively effective procedures within the state. As we have already noted, experts know their field, study other practitioners and aspire to best practice. However, as the century progresses, so we shall know more about anything from economics to education. The social sciences may become highly predictive and become more of an engineering discipline than an art. All of this will operate under a mismatch between ambition and resource, implying that pressure towards best practice will be unremitting. Also as previously noted, this allows relatively little room for political initiatives, except for those of an eccentric nature or which follow other models than the default one.

The second factor relates to the operating environment in which the rich nations will have to make their way. Led by technological change, by the number of educated people, by the connectivity of the world, commercial competition will be extraordinarily intense. The commerce of the day may owe little to any one location or government, and nations will have to compete for highly mobile resources. States may well be forced to adopt very similar economic policies, not least if "what works" is understood as a science. Equally, there will be common, systems-related issues, ranging from economic stability to collective security, and extending to issues that involve the rest of the world, such as the living environment.

All of this couples states together, makes them partners in a single enterprise and makes them increasingly similar to each other. Attitudes are also likely to stratify on international frameworks, with political differences echoed across many nations.

There are, therefore, two interpretations at work. One, the default and probably necessary condition, is that the state "engines" become more and more similar to each other, both at the level of mechanism and goal. The other accepts this, but believes that there is more to geopolitics than clean drains and excellent education. It is this divergence that the next sub-section will examine. One should also note that specialisation and differentiation are powerful tools in commercial competition, and that regions - and even cities - may be expected to adapt themselves to this. In turn, being excellent in - for example - banking, will - indeed, does - carry with it a range of implications as to how the host location organises itself, and the values which it emphasises and suppresses.

Why might nations thwart the homogenising tendencies which the previous sections outlined? There are two obvious possibilities. First, all of the preceding discussion was limited to the industrial nations of the time. Little if any of the analysis applies to the poor nations. If the world became divided into blocks, as it probably would in the case we called "Fearsome Chaos" (FC), and which it might under some flavours of "Yesterday's Future" (YF), then it might not pay to collaborate with your peers. It might be better to form bilateral deals, to differentiate yourself as discussed above, to avoid commitments.

Second, the death of political ideology has announced on many occasions. It tends to re-appear, doing so in a new form perhaps, but fulfilling the same role. Ideologies provide anything from a comfort in uncertainty to a career structure, and therefore have their friends. There are authoritarian psychologies enjoy clean, simple ideas around which they can marshall their forces and lecture others on how they should live. In situations of tension, such as stresses between the rich and the poor world, when the overall system is trying to support 9 billion people, ideologies will thrive. We look at historical roots of both nationhood and ideology in the next sub-section.

Both of these factors interact. It may be appropriate to collaborate with your peers, or the environment may be so unstable and unclear that it may pay to tread carefully and not to venture too much. Equally, the powerful may fall into a single ideological camp - agreeing about both means and ends - or there may be significant differences. It may be necessary to pick your friends and steer clear of those with who you disagree. Viable combinations may be as follows:

The "peer group" are here taken to be the dominant powers, plus those orbiting them and those seeking to join them. There may, of course, be powerful groups - such as terrorists with weapons of mass destruction - who are hardly peers, but who need to be taken into account. Such a situation might describe either the second or fourth combination, depending on external factors.

The unified goals which the combination describes comprise a largely domestic agenda, of the sort discussed earlier as the consensus model. It does not necessarily encompass open internationalism, or the unmitigated acceptance of the principles of individual liberty, democracy and open choice. All that is needed here is that the narrative be sufficiently clear that people can follow it, and that rewards flow to them from doing so. The realistic relationship between China and the rest of the world is a clear example of how this can be achieved, without the parties completely aligning their politics and ethics today or even necessarily intending to do so in the longer term. The consensus goals will depends what works for the people and economies of 2040, and we must be careful not to project contemporary values on what will be a world as different from today as, perhaps, the late nineteenth century.

Political divergence, archetype political narratives

The idea of the tribe as being ethnically and in other ways distinct from strangers is deep in the human (and animal) being. At various stages in history, more or less egalitarian collaboration was transformed into hierarchical possession, with the people and the lands which they inhabited being effectively owned by an elite. The transformation that led to the state being "for" the people, rather than the people possessed by the state is something still in dispute. Totalitarian ideologies saw the achievement of the collective as a goal in itself. Less single-minded perspectives saw value as vested in the individual, and society as a machine that would generally enable individual potential. Neither have yet found a perfect solution, but the latter is definitely in the ascendant, insofar as educated individuals are needed for innovative tasks, and as machinery, banking and a changed economy has enabled grand projects. Today's Great Wall of China would now use highly mechanised third party contractors, finance itself through tourist revenues and display advertising along its length. Perhaps that is exactly what the contemporary virtual wall in fact achieves!

Nationhood is generally thought to be a combination of three things: sovereignty, within defined geographical boundaries; a distinctive ethnic or other social identity and the ability to defend these things against invasion and erosion. What is done with sovereignty is diverse, and has just been discussed. The degree to which identity is a genuine feature of a geographical block of people is a function of history, but almost always owes a great deal to the active construction of a narrative. The defensibility of geography is plainly important, and many current nation states survive as independent entities because it is of no benefit to others to annex them, or actively unattractive to take them on. In this sense, they exist by default.

The threat to their identity comes from another quarter. The narrative - the tale of who we are and what we are about - is everywhere under pressure from global commerce, culture and consumer aspirations. Large entities, such as India or the Islamic umma, have the weight and the historical depth to generate their own cultural message. Indeed, Indian movies outstrip the rest of the world's production volume, and Islam is everywhere engaged in active propagation of its customs and beliefs. For others, however, the erosion occurs rapidly and ceaselessly, with smaller and small islands of life being insulated from these influences.

The influence occurs in a particular manner which religious orders call "syncretic". That is, there are of course urban groups who have completely adapted to international standards, and there are people in the hinterland who live by traditional means. However, the urban group may well adhere to traditional customs across a wide range of their life outside of business and the public eye. They may marry as their parents did, seek psychological or medical health from traditional healers, and so forth. Syncretism consists of the blend of formal religion with ancestral traditions, so that - for example - Catholic saints take on the attributes of local Latin American deities. Similar things happen across these lives in transition: astrologers advise boards, feng shue practitioners arrange office furniture and new cars are blessed with flowers and alcohol blown from shamanic lips.

Narratives change quickly or slowly in different aspects of a society: very fast in commerce, slowly in society. Institutions that have an explicit purpose tend to alter quickly, because their deliverables - better highways, fresh water - is obvious and the tools well known. Institutions in which the deliverable is unclear - religion, for example - or else wrapped up in convention and power - political structures, property laws, caste and class - are generally much slower to alter: measurably much slower than, for example, individual social adjustment to change. This creates a tension that is added to the basic tension that is generated by change.

The ostensible and more covert values which govern any society are the consequence of extremely complex processes. Nations like to believe that their values system has a centre of weight, a consensus, but the reality is that there is no requirement for unity or coherence and no mechanism - other than propaganda, education and enforcement - to ensure it.

History has created national boundaries that are an unruly mixture of the consequences of conquest and purchase, physical geography, ethnicity and random chance. As we have seen, the narrative coherence experienced by those who live within any one of these units is not always strong and always under intense erosion from change. Historically, however, the narrative was assumed to be whatever the elite said that it was, and the national purpose was whatever that narrative spelled out as goals and mechanisms. Most people lived lives as farmers and labourers and followed pragmatic local rules until events at the national scale impinged upon them: in times of war, for example. Societies were vulnerable to disruption, but whatever affected them would be ultimately more of the same with a different label: Hapsburg or Bourbon, life in general would feel much the same at the local level.

The idea of progress came to complicate to this. The Enlightenment crystallises the idea that society could, should strive to become 'better'. This, of course, begs the question of what is meant by "better", but poses an unambiguous challenge to the elite, and demands that the narrative both questions and somehow justifies itself. Is building an illiterate and famished urban proletariat to be considered 'progress'? Is extending our national boundaries, at the expense of others, 'progress'? Do the various flavours of progress fit together in a harmonious way?

For a century the answer to this was positive and certain; for progress equated to national strength and the propagation of the national narrative. Life was a matter of winners and losers, and if you were not the one, the assuredly you would be the other. Existence was rooted in commercial and military competition between nations, and in personal wealth accumulation within them. Not to play by these rules was to lose one's position in a terminal manner. There were unfortunate side affects, but these were merely the prices to be paid. The agents of change were usually elite figures - great scientists, conquerors, industrialists - who brought down the temple in order to built a better one.

The flowering of Imperial rivalries found this a convenient narrative. 'Lesser peoples' were to be removed wherever they proved an obstacle to trade, mining and general economic progress. In some cases, conquest was in fact followed by the delivery of real material progress: economic engagement, transport, law and security; always in those areas conquered by nations with a narrative that spoke also of social progress: freeing slaves, bringing 'civilisation'. By contrast, for example, the Spanish conquests in Latin America saw progress as being equated only with religious conversion, and made no attempt to extend the narrative beyond this. The results lowered Quechua numbers in a century from 11 million at the time of the Incas to perhaps one million at the beginning of the eighteenth century, for example. The narrative has a major consequence for the outcome.

The contrasting idea of 'social progress' matured in the late nineteenth century, growing from seeds sown fifty years earlier. The idea of the nation as a family, within which a duty of care was owed from the powerful to the dependent was an old one, honoured more in theory than in practice. China, for example, viewed the population as owing filial duty to the Emperor, and in times of scarcity, those least worthy provinces were raided for grain to feed those deemed most worthy. Thus social control and the collective were woven together. In Europe, the French rising and the formation of the brief Republic had provoked much thought. The rise of the urban proletariat, and its ancient capacity to become a mob, had further sharpened such ideas. Additionally, the industrial economy needed to manage large conurbations, to create educated populations for its commerce and to keep civil order. Linked to this, but separate from it, were older ideas about social leveling.

Cutting across these views of progress were two further ways of thinking that were less concerned the goals of progress than the means by which progress was to be brought about. The first of these believes that good things occur chiefly as a result of fine leadership. Individuals or elites command, and the masses fulfil their orders. Some statist ideologies said that there was nothing but the state. Others made the state a subset of religious belief, and said that there was nothing of significance but that.

The second view is distinct. It is both less personal and more systems-related. It is concerned with productivity and adjustment to circumstance. It looks analytically at current procedures, and asks whether these could individually and technically be made more fitted for purpose. Progress was seen to be identical to the use of human and economic capital in order to further increase economic and other potential. Progress was seen to work through piecemeal, market-driven steps that were individually small but cumulatively hugely beneficial. One could know that they were beneficial because people demonstrably wanted what they delivered. This approach could also lead to conquest, but it was meticulous, costed conquest that was intended to achieve specific outcomes.

This second approach had limited ambitions and no grand theories, and it was deeply suspicious of grand reforms, political or religious enthusiasm, acts of industrial or any other kind of conspicuous heroism. It approved of organic development, rooted in pragmatism and in what worked.

We have seen four components of the national narrative. Progress is identical with the achievement of great objectives, of climbing the peaks, or it is a quieter business of social progress and harmony. Cutting across this were the rival views about the mechanisms of progress: that change had to be directed by elites, or that change emerged from the workings of markets and other local, statistical activities.

 
  Progress consists of winning on your own terms in a competitive world Maintaining and extending social harmony equates to national progress
Commanders and small elites define goals and manage progress towards these
(1) The economic romantic narrative sees a world of winners and losers, with great leaders steering the nation to winner status. Often coupled to religious 'mission'.
(2) Social class warfare: differences in privilege are seen as more important than absolute standards of living. Political narratives focus on victims and villains. Can also employ other ways of categorising people into classes: eg race, caste, ethnicity, religion.
Progress occurs through piecemeal adjustments, in which individual firms, people seek local optima
(3) Grand achievements: success equates to defining and achieving major goals: feats of commerce, engineering and exploration, or activities of an artistic, scientific, military, economic nature. Also equates to conquest, display and grandiosity. Equivalent theocracy seeks state-religious unity, missionary expansion.
(4) State shapes society: society is seen as a collection of problems to be solved in rational ways. Wealth must be generated to pay for this, and the ability to motivate individuals to create this wealth limits the ambitions of the state. Secular-participative style of governance, but with a technocratic elite element.

Table One

This table is interesting for two reasons. First, each nation necessarily organises its politics in ways that places its overall space to manoeuvre into a quite small subset of the table. As many recent political leaders have found out, one cannot play the Economic Romantic in a society which is firmly positioned so that the State Shapes Society. However, individual countries are scattered all over the table as their position shifts over time. Almost all of the industrial countries have drifted down and right on the table during the twentieth century. Naive nationalism tends to reach for Grand Achievements - Sukharno, Nyerere - and end up somewhere in the upper right.

Second, whatever their leaders may wish, nations do not in fact comprise a single agent. Consequently, whatever the official style of the moment may be, there will be islands of other styles in play. Every democracy has its crypto-fascists, its class warriors. There are, however, at least three generic sub-agencies at work in any one nation. The narrative which each of these adopt are often different and they may have different goals.

These sub-agents are:

First, the logic of the state apparatus predetermines much of what a politician can do. Most assets with which the state can work at committed years in advance or to unavoidable costs. Only a small proportion - as little as a few percent - of any one year's income is open to discretionary use. Tax increases are political death, and probably harmful to the economy. This means that most initiative have to be gradual re balancing acts, which seem to the electorate to deliver very little. Once borrowing limits have been reached - or surpassed, as generally true at present - all that politicians can do is squeeze the state entities for efficiency gains. That squeeze will be a relentless and routine feature for the next generation of politicians.

Second, party politics is moribund. It remains a convenience and a career structure for politicians, but parties were once brands which captured the gamut of opinions from two or more significant fractions of the population. Parties were, essentially, rival narratives which offered choice between two clear ways of addressing national potential. People are to disparate and problems too complex for this to work any more. Party boundaries are therefore constructed brands, and political change is mandated chiefly fatigue with the current incumbents.

The table contrasts these three sub-agents with the four values styles that we have already seen, as above. (The numbers refer to the those shown in that table).

 
1
Economic romantic
2
Class warfare
3
Grand achievements
4
State shapes the society
Enveloping state
'Privileged' entities
General population
/

Table Two

Ticks imply the enthusiasm of the stakeholder for any one particular style, crosses their tendency to avoid it. There are national differences: the Chinese and Russian populations would probably tick the box under 'State shapes the society' in some numbers, whilst the American state often sounds like an Economic Romantic.

What is striking about this table is the degree to which the population adheres to the older, simpler archetypes. Politicians, noting this, tend to speak in similar terms: moneyed classes are variously called "wealth generators" (Economic Romantic) versus "the rich" (Class Warfare). The corresponding terms in "grand achievements" and "state shapes society" narratives would be too complex for political sound bites. Thus the electorate of the rich world carries out its political debate using obsolete terms and outdated narratives. For its own purposes, however, the state and commerce both have internal dialogues that use a more nuanced and complex language which reflects realities as they see them. This produces disjoint politics, insofar as policy for public debate is a crude sketch of what is actually done when politicians are in power. This divergence can only get worse, lessening confidence in public governance still further.

Do all of the agents feel equivalent mutual solidarity when viewed as a nation, as being assigned to an identity and a chunk of geography? The general public, and claimants in particular, still feel that the nation means something. However, individuals are significantly more exposed to information about international affairs, and to the consequences of international events, than probably at any time in history. This trend is likely to increase very strongly. Whole populations are engaged in unprecedented diasporas, either as temporary workers or as permanent migrants. Such populations collectively bridge and fuse cultures in syncretic ways that would have been unthinkable a hundred years ago. Huge masses of people are also experimenting within the international social space through electronic and print media. Such experiments range from immersive environments that permit transgressive and alternative ways of living to real world protest, activism and simply making friends.

Companies and other 'Privileged' entities are much less rooted in geography, and this trend is also likely to increase. If the environment becomes uncompetitive - let alone hostile - then they will leave, or at least fail to invest further resource in it. Extended welfare buys votes, but the consequent taxation has the potential to generate a flight of talent, investment and innovative enthusiasm. Many who live in New York or London feel more connection with their international peer group - or perhaps to their root ethnicity - than they do to poor or elderly people living in the national hinterland. As more and more of the world becomes attractive as a place to live for the affluent middle class, so mobility away from high tax areas will be hampered only by language, by outstanding claimancy - pensions, health entitlements - and by laws relating to citizenship: to taxing native citizens wherever they choose to live, for example.

The State agent is, of course, innately less international in scope than this. Nevertheless, it draws on and therefore imports best practice from wherever it is found in the world. The state is both the defender of national interest and the agent through which abstract international benefits - such as stable economics and security, movement and trade - are brought about. It imports internationalism on a huge scale.

It seems extremely likely that the expansion of the role of the state will continue unless, of course, events - but what events? - dictate otherwise. What does seem much more likely is that the other two agents will discover their power and freedom to act. Which boxes they then tick remains to be seen.

 

Interim conclusion

Nations are changing very rapidly, both in what they are and in what they wish for and are able to achieve. The old model, of a self-contained ethnically-defined geographical 'box', is on its way out. What will replace it is not clear. We find three agents that interact within the national framework. Two of these carry transnational ideas and best practice. One of them is essentially reactive to this, and obfuscated by the nature of competitive democratic politics.

These are, first, what we have called "privileged entities" - skill clusters, organised religion, aspects of commerce, activities such as science - all of which operate to rules that transcend and, to a degree, evade the limits to individual lives. These agents owe little to territorial solidarity. They are concerned with extremely local conditions - life in this city, access to this or that pool of talent - and value the political process only insofar as it affects these.

Second, there is huge expanse of state activities, which spend roughly a half of all value added in the industrial world. These are duplicated in each country internationally, all striving for broadly common ends whilst using the same techniques and capabilities. They share information and best practice and they use common tools and shared ways of thinking. This is, therefore, an increasingly international entity has deep implicit goals and values built into it. These render it unconsciously - and sometimes overtly - authoritarian, and certainly increasingly authoritative. As knowledge advances, and as fields such as social science become increasingly predictive, this innate authority will increase over the claims of political policy to be taken seriously. We will just know how to educate a child or organise a health service. Equally, as expectations rise, but relative resources do not, so pressure to find best practice will increase. Consequently, the correct outcome to any challenge to state management becomes less an issue of politics than one of applied expertise, however much the result has to be packed for political acceptability.

Third, there is the broad public and its formal political representation. Many are directly dependent on the state. They see nationhood as a bulwark against a variety of erosive forces, ranging from the actions of the privileged entities to the results of international competition. National solidarity is important to them. The national narrative embodies historical identity and character, and guides conduct; but it is weakened by cosmopolitan influences and many sense a lack of national identity and unity. Political representation tries to reflect and manipulate this narrative. However, as noted above, arbitrary ideas and emotion-based politics is increasing subsidiary to a demonstrable understanding of what makes a nation work. Resources are anyway committed well in advance, and there is consequently very little room to manoeuvre when following the default model of good governance.

Progress under such a standard international model of best practice is, however, complex, constrained and composed of technical minutiae. The nineteenth century offered many opportunities for nations to take adventurous steps and so to win a place in the sun. Those opportunities are simply not there in today's closely-coupled world. Politicians have extremely powerful tools with which to do catastrophic things, and undramatic actions which they can take these same tools towards useful ends.

There are, however, dynamics which draw politicians away from that path of gradual improvement. It is necessary to simplify complex issues if the electorate is to hear them. Indeed, the political narrative usually owes much to obsolete ways of thinking. (The preceding section assesses the archetypes around which the narrative tends to pivot. This is too complex and lengthy for this summary.) Some narratives appear extremely attractive in difficult times - for example in assigning blame, or in pointing to the "out" group.

Equally, politics can be reduced to the simple, essentially value-free matter of winning: of getting elected. The politician or party is a brand, and this is developed and sold much as would any marketer selling a product. Reality is to be cloaked with micro-managed, ephemeral communications - with spin - something that is usually deemed necessary in order to manage the unruly mass media.

Political brands are innately weak, however, for three additional reasons.

The key to managing a brand is to differentiate it from the competition. This virtually forces politicians to depart from the standard model in their rhetoric, whatever they do in practice. The promise "change" or take gaudy positions which crumble alarmingly when put to practical tests. As one simplistic message is replaced by its successor, the political narrative becomes unstable and trust is lost. Copy-hungry media are omnipresent and issues can become seemingly all-dominant within days. The national narrative can shift from 'nurturing' to 'bellicose' in days, and reverse as quickly. The media have a vested interest in building heroes and then dismantling them, to the general loss of trust in political leadership.

It is easiest for politicians to broadly follow the standard model in times of relative tranquility. If the international arena rewards collaboration, so accords and agreements will develop. However, the temptations to look for dramatic postures are always there, and the audience for these becomes greater when times are difficult. It may be that the international arena becomes difficult, or it may be that fast change disrupts domestic life. This is particularly marked for traditional societies which are undergoing industrialisation, where the mix of improvements, negative consequences and simple bewilderment creates opportunities for populism. China is, in some views, in exactly this situation.

It is not hard to see how a world that headed for Fearsome Chaos would, therefore, undergo political forces that rapidly made matters worse. Political narratives would splinter into rival populisms, collaboration would be punished, and scarce resources would become even more scarce.

The tendency for popular politics to blur issues, to set up false trails and dichotomies make it equally hard to see a unified thrust into the OMG environment. Instead, the privileged groups will will use its tools and the state will adopt these and make use of its efficiency. The general population, however, will neither recognise nor probably value what they see. Conventional politics would need to present OMG as a "better" YF, which - as we have seen - the world's populations whole-heartedly want, but which systems issues dictates that they may not have. We look at the nature of the OMG case in the next section.

The diagram is modeled on one found in an earlier paper in this series. The three agents occupy the corners of the triangle, with white arrows showing their connectedness. Two agents have strong natural agendas, and strong working relations. The linkage between the general population and the privileged groups is generally weak, however, and the politics of the general population is consequently only weakly linked to the standard model of minute optimisation. As we have seen, political forces accentuate this weakness. The capacity to embark on adventures and costly mistakes is ever-present, and in what may be an unforgiving environment.

In the situation in which nations are "friendly" to commerce and to elites, then the feeling will be reciprocal. Equally, if the international arena becomes unstable, then nations which shape themselves as havens from the storm will become attractive. However, if national politics becomes demanding of the "Privileged entities" in situations in which their international mobility is not affected - that is, if there are growing welfare demands that force up taxation - then their solidarity with geography will quickly evaporate.

The archetype scenarios revisited

The archetype scenarios revisited

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This analysis has considerable relevance for the scenarios. It may, however, be helpful to review what we have learned about these.

The path from the present is firmly rooted in the current economic situation. A reasonable rapid resolution of the debt issues points to one path, whilst much slower growth – perhaps modulated by "events" or a negative nature – take us onto another. General aspirations remain set on a consumerists future for the bulk of the world's population, with the emerging new middle class placing its imprint on global values. The elites of the industrial world retain their authority, but it is progressively less able to counter materialistic values as the period progresses.

The connection of the world – and the weight of economic activity – implies that sooner or later, steps will have to be taken to manage these. Sovereignty will have to be pooled, in a world with more or less trust in it. The lower of the two paths noted above will not be prone to much trust. The upper path will tend to bring on systems issues more quickly.

It is unlikely that the lower path will allow transnational systems to develop for more than a minority of the world's population. Failure to manage issues such as financial stability and military security will lead to a much divided world, at least a part of which earns the title of Fearsome Chaos (FC).

We have discussed the upper path in some detail. The model of nation-based consumerism and tranquility, which we called Yesterday's Future (YF), remains the implicit ambition of the industrialising nations, and of many in the industrial powers. If the onset of 'systems issues' is relatively slow to arrive, then this may be viable to far into the period that we are discussing. A nucleus of nations may take further steps, and more nations may agree to more abstract accords that impact only indirectly on the population as a whole. That, however, if the limit to the art of the possible.

If the systems issues arrive early and in a dramatic manner, however, we may see a break. If they arrive late but in a predictable way, we may also see a break in this trend, but it will be a very different kind of break.

The dramatic and early break – as a result of precipitate climate change, epidemics or terrorist attacks, for example – would force attention to these issues. It would do so when the industrial powers were still in a position to dictate their wishes. However, they would be relatively weaker than they were in the aftermath of the Twin Towers attack, and the response could not be as unilateral.

To adapt an old adage, diplomacy then becomes 'force by another means'. It is a paradox that to use force quickly and unilaterally may ultimately set people against you but, insofar as action has preceded words, the matter is by then settled and resistance largely symbolic. Political diplomacy, by contrast, relies upon a war of words and ideas, interests and collaborations. As a consequence, it always becomes ideologically polarised. Adversarial camps emerge, to which groups and nations are assigned often without much consultation.

A world that is following the lower path - low collaboration, low growth and disappointed hopes - will be easily prone to polarisation. An early challenge to the lower path may well push much of the world into actual or potential FC.

A similarly early challenge to the better-performing path would trigger more or less authoritarian responses across much of the world. Some parts of the world will resent this, reject it and form their own nucleus, which may or may not look like FC, rather depending on who is involved. However, the world does acquire the state as an agent, using the terminology that we developed above, and this is now a transnational state, coordinating with its fellows and dictating the rational allocation of resources and freedoms to the other two players: privileged entities and the demos.

This plays to the lower right hand corner of Table One, above. To quote the caption: "The state shapes society: society is seen as a collection of problems to be solved in rational ways. Wealth must be generated to pay for this, and the ability to motivate individuals to create this wealth limits the ambitions of the state. Secular-participative style." However, this is now the internationalised State.

There is, of course, the possibility of an late-arrival of systems issues. Here, the key concern of all of the three agents which were described in the preceding section is that of economic performance, access to assets and general freedoms. Competition implies relative losers and winners, of course, and the attitudes of the new middle classes are not those of the caring parent towards the losers. These may or may not find solidarity, but will have an FC element to them.

The word "sustainable" has been so over-used as to have lost useful meaning whilst, for some, acquiring priggish overtones. Nevertheless, in the pure sense of the word - that an action or systems cannot run indefinitely as it does at present - the YF future cannot be sustained. Ultimately, if we do not crash into a permanent FC - and, by implication, a consequent sharp drop in both the global population and overall economic activity - then we will have to find different ways of operating.

We do not know what these ways might be. However, one arm of them is concerned with the coping within the limits that the biosphere imposes. The other is the management of human systems, such that we feel less friction with others, work more effectively and handle complexity with grace. Science and technology will play a major role in enabling both of these. All of this impies major institutional changes, as all of this is to do with power and agency.

This is, therefore, a world under management, rather than a world running on its own emergent systems. That management is not authoritarian, imposed, an emergency structure that limits human potential but rather an opening up of new choices, of new ways of living and working. The true Oh My Gawd (OMG) scenario is grasped by billions of hands because this is what they want.

There are two approaches into the scenarios which have emerged from our discussions. One of these consists of a bottom-up movement based on a nucleus of high capability agents. It is not clear if these are populations, privileged entities or states: certainly, they are not chunks of geography.

The other approach has a more certain actor: a transnational consensus amongst the powerful states. Above, we discuss the shape of an early challenge to the status quo. The response is led by powerful nations, and leads to entrenched habits of state management, reigning over a disciplined population. And, of course, opposed by a disaffected group of agents which have excluded themselves politically from this transnational consensus.

The unified state consensus is, however, only going to remain acceptable as long as the problem that its confronts remains important. It will not be something greeted with anything other than grudging consent, much as we greet climate change mitigation costs. We may be buying civilisation, but it still feels like paying taxes. OMG needs something more: it must open a door to a better future, something which we want to enter of our own accord, not to be herded towards as hapless sheep. The implication is that a considerable proportion of OMG has to be the outcome of many, many products, techniques and technologies that create delight, solve problems and generate enthusiastic acceptance. The fact of these being in existence allows arms of the state to make use of them, much as the military today use commercial off the shelf (COTS) products in place of purpose-designed kit. For example, hundreds of millions of man years of camping and hiking have generated better, cheaper boots, sleeping bags, jackets, tents than the army can usually procure on its own. State software implementations (should) ride on the achievements of civil systems.

We have discussed an early crisis as a mechanism by which national power is transferred to new international bodies. It is extremely unlikely that this will happen when the issues are abstract and slow to arrive. What is much more likely is that accords will be formed that are policed nationally, coordinated internationally and handled by a large number of parallel state agencies.

These agencies will be deeply inter-aware, probably motivated to make a difference and extremely keen to exchange information: in short, the outcome will be further informal reinforcement of the State machinery that was discussed in the previous section. As with all state-mediated interactions, the process will be legalistic, granular, shot through with compromises and enforcement clauses. It is a mistake, however, to see this as primarily about solving expensive of liberty-denying problems, of sharing out a burden. It is much better thought of as creating a better way of life, of opening up liberties. Some of these will be liberties "from", others will be liberties "to" do things which we cannot yet imagine.

Many of these things are enabled by complex systems, often invisible to the casual eye. A good example of this is the evolution of the shop, from how someone in the 1930s would have seen it to the supermarkets of today. The historical shop would have sourced locally, carried a few hundred lines, were privately owned and managed their finances chiefly in cash and probably recorded only a few details in a ledger. Products had no date stamp, little quality control and pre-preparation was limited to tinned food and products such as jams.

A current supermarket handles 40-50,000 globally-sources product lines, under rigid quality control and absolute standards of hygiene. A vast logistic and information infrastructure underpins this, integrated from the manufacturer through break bulk warehouses to the shelf. Real-terms prices are generally lower than in 1930 for like products. A huge number of products - frozen vegetables, prepared foods, washing machine detergents - had not been thought of in the 1930s. Further complexity arises because these are public companies, paying dividends and pensions, training employees, managing legal challenges, handling regulations; and an army of state employees check their performance and cope with the issues which they raise. The OMG world is as different from today as the 1930s - perhaps earlier - and following trends towards the development of complex structures that make the achievement of complex things seem simple.

This is not a linear process. Politicians do not point to a bright future, the population agree, the state sets up the conditions and commerce and others deliver it. It is a much more mixed process than that, and the role of popular politics is more to explain what has been done than to seek permission to do it, to solve issues that are raised by new capabilities rather than to invent or permit those possibilities to form. Once again, we see a parallel process at work that largely leaves out the population and its political government.

Bottom up processes generate tools, capabilities, insight. They will also generate activism and political pressure. The arts, perhaps, help to change the narrative, crystallising views that have yet to find a clear popular expression. Leadership may advance or retard this. However, these are going to be technical issues which demand technical solutions, and the agencies that addresses these reach for the best tools to hand, to insight and to a large international peer group with which to talk. The consequence is the by the implementation stage, nations retain sovereignty but have the same agencies doing the same things with the same tools, talking amongst themselves across international boundaries. It feels sovereign, but is not.

The figure repeats something of what we have seen before. The vertical axis has been changed on your recommendation, however, from the 'capacity to manage complexity' to the 'ability to manage', or perhaps to 'the scope of what we are required to manage'. The time axis remains the same, and of course non-linear.

The gray line that drifts down into FC is never expected to be global, but rather to represent the fate of some national agents; and some people within nations afflicted by poor government. Parts of the public could be in FC while the elite live in YF, for example: welcome to Zimbabwe.

The dark green line represents the case in which the systems challenges are early and intense, and the state takes up the common baton across many countries. Directed systems are always able to accomplish wonders in the short term, but prove inflexible in the longer period. The line rises, and then drift down. Defections occur to FC, for the reasons which were discussed above. A dotted line suggests a path from state-mediated solutions to OMG, and the red cross dismisses this,. Also for the reasons already discussed.

The orange line symbolises the comfortable glow of consumerism that draws the emerging middle classes to YF. A green(-ish) line separates from this, symbolising the problematic birth of OMG. The shaded area between the two suggests a continuum, with a constant migration upwards as issues become more acute, as wealth brings with it a degree of material satiation and as the rewards for playing by the new rules become apparent. Once again, OMG is not to be equated with the solution of environmental or other problems. It does this, but it does a great deal more than remove problems: it presents unbounded potential. People might like to read Bruce Sterling's 1996 Holy Fire (ISBN 0-553-09958-2) to get a feel for what this might resemble. It is reviewed here.

The role of physical geography.

The role of physical geography.

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How much of a role will geography play in this world? We are all aware of its much-prophesied death, and continual importance. Oil production is where the oil is, ethnicities cluster even if they do not strictly follow political borders. There has been considerable academic work on this issue. "Distance elasticities" measure how economic activity falls with distance, and the prime finding is that this varies with the matter to hand. High specified things, such as currency trading, is weakly affected by the distance between the parties, whilst other activities – notably, innovation – are intensely local.

An interesting approach to this is used by Hidalgo et al (Science 27 July 317 2007). They consider not physical space but rather the closeness with which certain activities are co-located across the world. That is, banks are usually locatd close to major company head quarters and the places whcih attratc able people to live, to each other, to appropriate legal, IT and other services. Textiles cluster close to fibre production - cotton, wool - and to cheap labour, clothes manufacture and large domesitic markets. The figure which is shown below shows how around 700 such activities tend to cluster globally in what they call "product space". A short distance in product space between any two activities shows their tendency to cluster together.

Nations which have a small sub-set of these, or are located on one of the tendrils, in a state of high specialisation, have to migrate to the core, which the industrial nations fully occupy. (This related to work that we have done elsewhere, in which we show that low income nations handle only relatively low complexity economic activities, and that both wages and economic weight grow not with the absolute scale of economic activity, but with the capacity to handle complexity.)

Hidalgo's group look at how certain industries respond to distance when examined in this way. The figure shows the outcome for four categories. The vertical axis is a measure of the clustering of activities in product space (as above) and the horizontal axis, physical separation of the same activities. The error bars show the scattering due to national differences.

Oil is weakly co-located when physical distances are short, but with the probability of co-location rising as distance also increases. It behaves as though randomly scattered in space. The manufacture of machinery follows exactly the inverse, being intensely co-located when distances are short. The co-location of capital intensive activities decline even more sharply with distance, with a long tail. Labour intensive activities are clustered at the very local, dip and then rise to show globally random distribution, as with oil. The dip may well correspond to national boundaries.

Distance is not dead, therefore, either when measured physically or in more abstract terms, reflecting clusters of capability. Clustering has, in fact, increased as urbanisation proceeds and as more and more nations move from an agrarian base to a centralised industrial one. To maintain any one industry, a relatively enormous infrastructure is needed, ranging from intangible matters such as policing and law to the provision of everything from transport to intermediate components. To be able to build a passenger jet, for example, an industry needs to be able to call on something in the order of 700,000 separate capacities – precise grades of specific metals formed into particular shapes, for example, or electronic, software and other components. A modern passenger aircraft contains in excess of ten million separate physical components. Its internal computing power may exceed the total available to the entire planet a generation ago. Such things and capabilities can, of course, by imported, but nations which have this infrastructure already in place - and, at least in potential, serving a host of other industries - plainly gain great advantages of cost and agility.

They gain another kind of advantage. This is connected to networks of knowledge and experience. It is known to be difficult to innovate within a team that is physically dispersed. That is because innovation is a journey from the wholly unspecified to something that is actual and tangible. The journey requires continuity, gradual cohesion around solutions that answer to a wide range of issues, input from often many disciplines held in several heads. It requires iteration, non-verbal communication, arm waving and frequent diversions into analogy and parable. It is possible that the IT of the next thirty years will make this accessible to globally-dispersed teams, but that is certainly not the case today. Consequently, urban specialist clusters are the fount of innovation, and poor rural areas are on the whole, not.

That points us to an important conclusion, which is that OMG-like centres will arise within not merely clusters, but activity-specific clusters. It may be that some of these are clusters in cyberspace, and that people live OMG-ish virtual lives long before they do so in the physical world, but clusters of interest and expertise these remain.

It also tells us that YF centres will look and behave very much like cities do today. They may be cleaner, safer and less noisy, but what makes people wealthy will remain organised in much the same way, based upon complex infrastructure, stable systems and predictable rules of conduct.

The impact of knowledge

The impact of knowledge

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In its 2000 study, the US think tank Funding First examined the returns to investment in medical technology. The conclude the health improvements account for about half of the increase in living standards enjoyed by people in the US over the preceding fifty years. Based on conventional actuarial measures, cardiovascular disease management was worth about $30 trillion, whist the overall gain in economic contribution and costs saved was about $57 trillion in the 1970-90 period. Focusing on cardiovascular disease prevention, and making conservative estimates on the proportion of what has been achieved that was due directly to new knowledge and tools, they estimate that returns are some twenty times outlay over twenty years. Research that prevented one cancer death in a thousand would be worth more than the then-current US expenditure on health research. The average new drug produced in 1990 saved 11,000 'life years' every year thereafter.

Returns to research and development are extremely healthy. Edwards (1996 Discussion Paper No. 4, Foundation for Research, Science and Technology, Wellington.) published a review of previous studies on the economic return of investment in applied science.

Author Year Industry Rate of return (%)
Terleckyj
1974 33 mfg and non-mfg firms 28
Mansfield
1977 16 significant innovations 25
Nathan
1978 20 significant innovations 35
Foster
1978 17 significant innovations 24
Griliches
1979 80% of US industrial R&D 32
Griliches
1979 Metals 23
Griliches
1979 Machinery 24
Griliches
1979 Motor vehicles 25
Mansfield
1982 20 mfg innovations 25
Link
1982 Petroleum 21
Odagri
1983 370 Japanese scientific firms 26
Clark, Griliches
1984 924 business units 20
Odagri, Iwata
1986 135 Japanese firms 20
Suzuki
1989 Drugs (Japan) 42
Suzuki
1989 Electrical (Japan) 22
Lichtenberg, Siegel
1989 5240 firms 13
Goto, Suzuki
1989 50 industries (Japan) 26
Griliches, Mairesse
1990 525 firms 25
Hall, Mairesse
 1992 196 firms (France) 22

The results seem to cluster around a 25% discount rate, which is attractive by any standards. Kuznetz (1966) and Nelson and Romer (1996) argue for a much higher "social" rate of return. In essence, whilst the owner of the research may make these adequate returns - 25% or so - but the society as a whole makes very much more: typical numbers quoted are around 40-70% per annum. Such knowledge is essentially delocalised with respect to the clusters which can make use of it – see above. Work commissioned by President Clinton's science advisor showed that US research was more effectively exploited in Japan that it was by its US investors, for example.

A highly technical paper from Fischer, Scherngell and Reismann (SSRN 2008) looked at the role of local knowledge in the growth of productivity within 203 European regions between 1997 and 2003. "Productivity" here means what economists call 'total factor productivity' (TFP), which is the growth in output attributable only to efficiency, insofar as the effect of changes in labour and capital inputs have been removed.

This research showed was that the difference in knowledge between two regions was extremely important in explaining the region differences that were found in in productivity growth. A 1% increase in knowledge implied a 0.2% increase in TPF, meaning that a region that is 1% better informed would have grown 2% more than its less informed peer after 10 years. Real differences in knowledge base are, of course, much larger: a 50% initial difference implies over two and a half times more growth over ten years, all other things being equal. They were also able to show that there was considerable spill-over of knowledge between adjacent regions, with the impact of this falling exponentially with distance, essentially ceasing at 300km.

It goes without saying that the pace of science, technology and other sources of knowledge advance at an exponential pace. A common guess is that the base of scientific insight doubles every two years. That would put 2040 – or at least, a non-FC 2040 – at a level 33,000 times higher than 2010. In truth, however, some knowledge is rendered obsolete by new work, and much that is published is dross, or highly detailed and seldom-referenced specialist work. Estimates that are based on the expansion of the currently-cited knowledge universe give a smaller but still highly significant doubling rate of five years, or 14% per annum growth. That places 2040 six doublings from 2010, or a science base that is sixty four times greater than today. The impact of this on factor productivity, using the elasticities mentioned earlier, is to drive TFP at 15% per annum, amounting to a net increase of 68 times the present by 2040. This is the potential implicit in OMG.

Two findings flow from this. First, getting wealthy and staying that way will depend on generating an absolutely high and differentially excellent flow of innovation. Knowledge does not use itself. It needs to be put to use. Thus, increasing efforts will be put to making use of what is known, and cultivating the garden of knowledge in an increasingly purposeful manner.

Second, economic geography matters and it does so on a small scale. That is, the natural boundary for competition is a city or a sub-national region, not an arbitrary national boundary. Clusters of competence and specialisation also matter, and as the world becomes more complex and competitive, so the intensity with which clustering occurs will be likely to increase. Encouraging clusters and inhibiting diffusion become an active part of civic policy.

In the Economic Geography of Talent (Carnegie Mellon 2005), Richard Florida looked at what made capable people come to work in technology-using clusters. The study – which mixed focus groups with statistical surveys – started from the hypothesis that what would bring talent together was a mixture of economic opportunity, diversity and amenity, including climate, housing costs and the like.

The conclusion was that talent was intensely concentrated geographically; that the single greatest attractor to talent was the presence of other talent; and that high technology industries attracted talented people, who in turn drew in more of their fellows, which in turn created more high technology industry. Regional income levels were important, but probably a consequence rather than a cause of talent clusters. Social factors had some impact on this. Specifically, tolerance for diverse life styles was significant, with the density of gay-related facilities proving particularly important to the statistics and interviews.

The figure shows the significant variables, with the arrows indicating the suggested direction of influence.

What we should take from this is the following. Clusters of talent matter, the density of knowledge matters, and the exploitation of knowledge matters to economic performance. Each of these exist in a self-reinforcing structure in which concentrations of talent create and use knowledge, thereby attracting more talent. The unit at which this occurs is much smaller than the nation state, may become less a matter of geography than of access to networks and facilities, and whilst it can be disabled by the state, is no more than enabled by it. States which wish to prosper must cherish their clusters.

The following has been added since publication.

An extraordinary paper in AAAS Science (Eagle N, Macy M, Claxton R, Network diversity and Economic Development Science 328 1029 (May 21 2010) has an additional take on this issue. The researchers were able to access data on telephone calls for the month of August 2005, in which 90% of all cellphone calls and 99% of all land line calls were monitored for location, duration and destination. The resulting network has 65 million nodes.

Two indices were calculated from these data: one relating to the geographic dispersal of the calls made from any one telephone; and the other to the 'social topology' - essentially, the breadth or narrowness of the range of people who were called by it.

The UK Government had meanwhile assembled an index of "multiple deprivation", indexed by postal code area. This could, of course, be correlated against the two indices already discussed. Doing so shows a strong correlation, explaining 73% of the variance in the deprivation index when the social topology index is used and 58% for the spatial diversity figure. Talk volume had a negative correlation: that is, the more deprived areas tend to talk more than the national average, but also locally and always to much the same people.

Combining the two indices provides a 78% correlation. The data are shown in the figure below. The vertical axis shows the deprivation index, treated as socioeconomic rank with the least deprived postal code areas lying at the top. The horizontal axis is the composite index that has already been mentioned, with positive numbers showing highly diverse communications, both socially and geographically, and negative numbers indicating narrow, stereotyped communication patterns.

The authors are careful to state that the causal direction of this relationship is not clear from the data. However, they say that "social network diversity seems to be at the very east a strong structural signature for the economic development of a community."

In respect of the broader argument in this paper, therefore, we should consider 'clusters' in two additional ways. First, they have acquired the critical mass and characteristics of complex network transactions, as evidenced by the wealthy and rapidly growing English postal districts that show these characteristics.

Second, by no means all such areas exist in clearly defined clusters. That is, there are clusters that occur in connectivity space and clusters that occur 'on the ground'. A highly structured corporate network, for example, may be globally dispersed by a "place" in the space of connectivity - think of one of the major consultancies, for example which has no true base but merely large numbers of people leaping on and off aircraft, tapping frantically at the Blackberries in order to maintain connections. Clustering and connectivity go together, and the fast growth foci of the future - and probably the present - are those which connect knowledge holders in ways that 'local' institutions can support.

Conclusion

Conclusion

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We have been for a long journey. First, we have noted the likely agency of the world in prospect: states as engines, rather than as political powers, 'privileged' entities, of which the talent clusters just discussed are a central example, and the people resident in geography but without access to these privileged entities. Each of these agents have very different levels of internationalisation, and respect national political boundaries to differing degrees. Political forces are innately structured to obfuscate the issues and, where the situation becomes generally difficult, to press for actions that will make bad into worse.

Second, we have looked once again at the archetype scenarios, modified in response to previous critique, and added another trajectory. The way that the three agents interact with these ways forward is shown to be distinct. Entry into YF is what he bulk of the industrialising economies want, and their opinion will probably have much influence in the period 2020. Transition from YF to OMG is problematic, and must occur chiefly because this state of being appears even more attractive – and incidentally also necessary – as compared to YF.

Third, the heartland of OMG is the use of knowledge. We have looked at two aspects of this. We have note that knowledge translates into economic performance with huge efficiency and into social goods with even more. In addition, we have seen that the exploitation of knowledge is intimately bound up with geographical and organisational proximity. Talent tends to attract more of its fellows, and these generate innovation and growth.

The core of OMG will not be the state-as-agent nor the broad population. It will come from geographically defined clusters of capability, and also perhaps other forms of association, such as cyberspace groupings. The essence is les the form of connectivity than the way that they filter entry by ability and compatibility. In this, it has much in common with professional sport, the arts, science and other contemporary elite activities. It is unlike contemporary commerce in that it is not organised top-down and that it is not much concerned with routine. The world will have huge capacity to perform routine tasks, much of this in automated or semi-automated form. Finding new things to do with this capacity will be where the value is added, and it is on this which the clusters focus themselves.

An analogy is the "three core" company. It is conventional to see a firm as having a core set of abilities which it can do better than others. People invest in the company to gain access to these distinctive capabilities. However, firms in practice should have three cores: one to do with relationships, one focused on product innovation and the third on infrastructure. Each uses different criteria, employs different kinds of people who are distinct in their motivation, and operate to different time scales. The past two decades have placed enormous emphasis on low cost, high quality delivery: that is to say, on infrastructure. Relationship management and innovation are now beginning to return as matters of great importance. However, we tend to think of these are being innately linked, in that a relationship business without products or infrastructure, for example, is of no value.

Or should we ask if this is an unjustified assumption? Much of what we have seen earlier would suggest that our clusters are as much dissected between these cores as they are between industrial sectors. An advertising company 'does' relationships, not either cars or else toothpaste. Finance is both specialised in offer and promiscuous as to sector. So is IT, security, other service functions. So, too, knowledge.

The roots of OMG are therefore to be found in local, specialist, intensely connected networks of capability. They are defensible against erosion because they continually grow and change. They are defensible against the state and the spending ambitions of the demos because they are inalienable: people need them, and they are easily hurt, and easily mobile.

Access to them has much to do with track record, with ability, with friendships and social skills. It has very little to do with hierarchy, with obligations to employ or rights of access, with formal qualifications or with power. To play, you have to be reliable, personable and world class; and that is all. To be inside the magic circle is to be guaranteed a fulfilling and well-rewarded life; at the penalty of continual challenge, self-renewal and hard thought.

Such people form the nucleus of the future, for they are inventing it. They are doing so with tools and specialised languages that are inaccessible to the rest of the population. They are afforded some trust, but are more tolerated than loved and, as bankers have found recently , such licenses are often revoked. Being brighter than bankers, they are careful with their external relations, foresightful in their activities and always aware of the fragile surface on which they (and the rest of the world's nine billion) tread.

Responses and comments

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Response 1: Metcalfe's Law was much-touted during the dot.com boom. It states that the value of a network increases with the square of the number of nodes attached to it. Thus a rapidly growing web application was supposedly creating value on a square-law basis.

Metcalfe's Law received a great deal of revision when this did not seem to happen. The obvious modification to make was that the nodes had to be interacting, and interacting usefully. This last steers painfully close to tautology - value creates er, value - and needs qualification if it is to be useful. Studies of Web 2.0 applications show that the same software works in some social circumstances and fails in others. Studies show that the distinction lies in the informal institutions that characterise such spaces. Without happy accident, such institutions do not seem to arise spontaneously. Networks become drown in loud self- or special-interest voices, chatter and flame wars. Volume - either as quantity or as shouting - does not add value. It removes it.

Informal habits have thus arisen to fill the gap which such interactions represent. Teenagers are awkward in social situations. They are desperate for a strong narrative about how people like them are 'supposed' to behave. Typically, therefore, they adopt group standards, which are at best ad hoc. Much the same is true of on-line communities, except for two factors. First, these start with no existing narrative, no play ground norms. Second, the on line experience excludes a great deal of social signalling and feedback that normally modifies behavior. One thus finds mild adolescents engaged in deadly flame wars, idle chatter and conscious attempts to hijack serious discussions. this is infuriating, and thsoe with real things to do tend to leave.

By contrast, there is a population who has learned how to act and work through such systems. The chief dynamic in such networks is respect for reputed and actual capability. They rapidly form nuclei which exclude the chatters and those who have not won respect. "The awesome are in, the boresom are out."

This is a primitive form of organisation, not a new and sophisticated solution to a new age. It is the playground clique, writ large. It is not at all the way to run a knowledge economy, a company or a state. Art Kleiner talks about the 'inner group' in a company that makes all the decisions: these exist, but their existence does not make them an ideal solution, or even a good one.

The OMG networks are not, therefore, of this nature. They do not exclude. What I suggest that they have is an active mechanisms that understands the problem and the quest for a solution, acts as chair, interlocutor and guardian of the debate. It fires up small group parallel meetings, one-on-one discussions and necessary tutorials for laggards. We do not have the technology to do this today, but it will exist. It is too potentially useful not to exist. Imagine the hybrid descendent of a visionary leader and a spam filter, an excellent meeting chair and an encyclopedia, and social networker and a social worker.

Response 2: Awesome, dude ;=) You said Mexicans - how many guys were you to put all this together? The really new thing for me is the economic value of knowledge, and particularly the value of science and technology type knowledge. We create a lot of that here, but we are not too good at making it into things that actually add value - or in our case, hit targets that we want them to hit. My point is that just piling it all up does not make it valuable: you have to use it. The OMG scenario has to be particularly and especially good at doing that - why is it, though? - or else it is just a techie YF

Response 3: Are you guys connected with that right wing Bohemian Grove thing? I mean this is just too elitist to be real! Yourre saying that people dont matter and that politicians just are like useless and so its' all the state. So what's the state when its' not politics? the way I read you the state is separate and just runs on its own, like it dictates to politicians what the answer is.

Well maybe thats so but you cant just leave politics out of it because people matter and its" not right to think of a good future where they dont. Or thats what I think.

Response 4: I found this quite remarkable. The idea of the state as a sort of golem, programmed by its assumptions, is completely novel (to me) and seemingly accurate. Illuminating therefore when thinking how to position some parts of a political party for the next election. Your view - Mexican-inspired or no - is that the politicians can go along with this self-defining rationalism or go populist, and that there is truly no other choice to be found.

Looking at today's party base, I have to concur, for there cannot be a health strategy that both makes sense and is not evidence-based 'rational'. Thus UK NICE* can trump an elected UK Minister on any specific question that is tractable to analysis. However, my question is whether all issues of health policy - or defence, or economic policy - reduce to tractable analytic questions? It is clear that today, this is not the case. Our recent Lords' debate on assisted suicide made this clear: obviously, the economics are clear - in the sense of their being no resource-related show stopper - and the mechanisms are clear, meaning that we can reliably deliver what (some) people are asking for. Thus, a NICE-type assessment would give this the green light. However, there is huge non-rational reserves of emotion around these issues. This stems from both from the protagonists and from those who, for reasons of personal religious conviction or from what they say is a desire to protect what they are please to describe as the 'less able'. It is impossible to counter such positions with 'evidence': they are not open to debate, and are intractable. Thus, political decision-taking is needed.

Look at Obama's health reforms in the US. Health chews up 12% of US wealth today, and a fifth in prospect. It delivers poor results, both in terms of its social catchment and its costs effectiveness: it is notorious that a terminal illness consumes a life's savings. Lobbies which represent health industry-related interests have not been idle, and represent the (rather weak) attempts that the President has put forward to counter this trend. They have told the elderly that doctors will be able to kill them if they become a burden - dressed in finer phrases, of course, but no less potent for that. They have called it 'socialism' which, I thought, mean the public ownership of the means of production, but never mind clarity. What you get is not problem-debate-agreed solution, but a mad scaring of the birds and the consequent impossibility of debate.

What I want you to grasp is that yes, the state will become more and more of a self-determined collectivist golem unless it is checked. What checks it is leadership. The YF world is the one in which the golem marches, deciding what is best for your and you and you. I do not doubt that the OMG leadership looks different from what we see today, but it still leads. Perhaps we need a debate on the nature of leadership?

* NICE: National Institute for Clinical Excellence, here, an allegedly non-political body that estimates the consequences of various health-related options and their respective call on resource. "Allegedly" as highly political assumptions are smuggled into its very mission.

Response 5: A lot of what you describe is going to happen in both YF and OMG. Excellent people will attract others, cities will specialise, nations if not fade away, become less relevant that core groups and tight bits of urban landscape. What happens to everyone else, though?

I ask this because if you are in rich Holland, which I am, then you get lots of rights just by being a citizen. So people come over from Suriname and they get all the rights of Holland, and draw social security and so on. If it is all global, though, who has rights to what? Obviously not everyone can come and claim on the rich places.

If you work in a big company and have a pension and so on, then the state is really irrelevant until the guns come out. States are there to make things work and keep life safe, healthy, efficient. If you have no big talent and are just like 80% of the world except that you were born somewhere rich - or with rights on somewhere rich - then what does that mean in 2040?

The thing that keeps states serving their electorate is that the electorate votes the government in and out. If you are saying that states are all the same and no political government will have much influence on this, then what is a vote good for? The electors have no real power, so what is left for them? "Class warfare", only?

Response 6: This 'use of knowledge' thing is the centre of the debate. How do people effectively use knowledge? Assuming that they have knowledge understood, and assuming that they have access to the necessary resource, then it comes down to knowing what you want, or knowing what you want to do. Those are big assumptions, but sticking with them, my experience is that it is not at all clear that companies know what they want to do - except the obvious like make money, keep down costs - and that much the same is true for other social groups. they know what they don't want, but that's about it.

So there is something here about how people come to cohere around a goal. The goal does not exist at the start, and they have to think of it. It has to match their abilities and their general wants. Somehow that has to get sold into the system, so that it recognises this goal as better - more practical, more fun, more what? industrially heroic? - than others. Then all of that has to be made operational, so that people get rewarded for doing things that are helpful to the goal, opposing stuff get shot down and so on.

That's obvious, but at the same time really difficult to see happening without some degree of management. The weakness of how we do that now is very obvious. If you do it in a small group, people feel left out, ideas are out of date, and much too grand plans can creep in. If you include everyone, you get smothered, like Response 1 says.

That says to me that OMG is a style, and the style is about how to talk about complicated ideas in a purposeful way. Not everyone gets to talk about everything, but if you are evidently good in a certain area, then you have the right to be heard and the right to be pissed if you aren't. Who say that you are 'evidently good'? The evidence - it's up to you to sell your abilities. So this particular kind of track record and the trust that it brings is pretty basic to OMG. Response 1 bad-mouths the Web 2.0 'elitist' style, and Response 3 shows what happens when this is managed badly. :-> I cannot tell you what this style looks like, but I can tell you that it is very important.

Response 6: There is considerable evidence how 'sticky' knowledge is. Once generated, it does not travel far from its point of origin, or at least, not to start with. However, some other kind of knowledge travels very fast and very far: Michael Jackson coems to mind, so celebrities and dead film stars, disasters get around the workd very fast. The reason for the difference is that knowledge transfer is a transaction: there is a benefit to getting it, and a cost. Like any other transaction, we judge the probable benefit against the likely cost. The dead film star is really easy knowledge - acquiring it requires no effort at all, and it having it feels important and desirable for many people. Ote rknowledge requires a lot of effort - often udnerstanding a whole discipline - and the benefits are not clear, so this transaction stalls.

There are two variables that we need to think about. One is how hard or how easy it is to take the knowledge on board. The other is the assessed potential value. Neither of these have anything to do with distance.

Knowledge that is hard to acquire and of no obvious use once taken on board - the syntax of a dead language, let's say - is not attractive, so it doesn't travel. However, there may be a coterie of dead language enthusiasts (they exist!) for whom the discovery of a forgotten phrase book from 1750 comes as a bolt of lightning. They burn to see it, touch to, read it. The knowledge spreads; but the spread is only incidentally geographic. Instead, it percolates through a social structure, for each of these enthusiasts are connected to libraries, university departments - God knows, perhaps wives. Global diffusion comes when knowledge percolates through a wide enough social framework for it incidentally to touch the entire planet. Like H1N1, it doesn't have a passport or an airline ticket, but social connections move it around.

If talent co-locates, then so too does knowledge. By that I mean that if all the people who know about III-V strained solar photovoltaics structures live in Arizona, then all the people who are going to propagate a remarkable insight also live in Phoenix, or thereabouts. The knowledge pools in the locale, or a set of equivalent locales. Then, something happens and that something is journalism.

Journalists are lots of things, but the main role that they occupy is that of translators between social reference frames. Why should an oil company executive be interested in the doings of a bunch of people in Phoenix? "Because..." "Oh my Gawd..." and so on. That is, they drop the learning barrier and increase the potential reward. In doing so, they inject the knowledge into a whole new social group through which to percolate.

Half the reason why companies are so bad at picking up knowledge is that nobody performs the journalist function within them or for them. The trade press is not a substitute for internal searching out of interesting things which other people - them and them! - ought to know; and then turning the knowledge into something palatable for them.

The Oh My Gawd scenario is pitched 30 years away. In the last paragraph of Response 1we saw the the likely nature of the IT systems with which we will be blessed. I think he is being conservative. However, these gadgets will do exactly what I have just discussed. They will 'do' journalism, 24/7, nagging at you to 'just look at this'. What it offers - animation, text, who knows? - is set in language precisely tuned to your knowledge and interests, and it is quick to tell you something utterly fascinating, useful and without pain. Ideal advertising, ideal corporate help-meet, ideal catalyst for revolution?

Response 7: Yes, I truly like that (Response 6). The difference between YF and OMG is essentially one of scale, the scale of networks of people who are passionately interested in expert topics and who are also tied together into issue-spanning networks.

Some will be physically adjacent, but the clustering is really in - to create a new phrase - socio-space, rather than cyber- or geographical space. OMG focuses will revolve around groups of people who have commercial, social and personal motives to accept and develop ever-closer ties.

I am not at all sure where that puts companies. Are they the principal 'shell' within which such networks evolve?

After all, a company is a convention that formalises ownership ownership and liability. Who owns a network? Those who own the physical and organisational structures in which the network exists? No, or Google and Facebook would own the world. Perhaps those who employ the people who are involved? That would be hard to manage if the whole point is sprawl across intellectual boundaries: biochemistry, as opposed to this company's few biochemists.

Perhaps, in the manner of intellectual property, it is those who have caused this to come about, and registered the outcome? Is this a new kind of intellectual property, the 'fertile network' that we have made and keep running'?

If this last was legally viable, they there should be an interesting business model in simply making and maintaining such networks. What you own is self-evident, although how it makes a cash flow is less clear: a percentage on the IP so generated? My point is that if this was valid - and the IT described by Responses 1 and 6 could keep track of it - then the advantages to this style are self evident. People would flock to it, countries would have to adopt it; it would be self-generating.

Response 8: It is late at night and I am tired, so perhaps this well seem less interesting in the morning. The OMG 'thing' has not been properly defined. YF is a sort of intelligent consumerism adapted to a planet of 9 billion and an economy several times larger than that of today. It is a style, not a global phenomenon, and can co-exist with the other (four?) cases. Only the nameless "early crisis and state dirigism" (Ecstasy? - I think not!) has pretensions or drivers to be global. OMG is the same: a local flavour and expanding trend, not a global imposition. But a trend towards what, doing what?

Here is my take on this. There are three dimensions in which OMG is different from YF.

I may have strained a metaphor too many. What I have been trying to make clear is how the OMG style differs from the 'sensitive consumer' of YF. The YF core know what is right, because it is what the state tells them. They conform not because they have any particular ethical commitment, but because they have a high chance of getting caught if they default. And if they do not stick to their diet, take their pills, fulfil their recycling norms or be polite to their neighbours then a person in a neat suit will be knocking on their door and issuing warnings. And if they do not heed those warnings, then they go down the priority queue for rejuvenation or whatever goodies the state dishes out.

OMG is not like that. It is fascinated by potential, its own personal capabilities and entrees, that of technology and of human groups. It pursues what you termed 'industrial heroism'. The state pursues optimisation through social engineering, and OMG people have no problem with that; but see it as background.

Response 9: You have four archetype narratives about aspiration: the economic romantic, states shapes society, class warfare and grand achievements. I want to think about the validity of these. The narrative of Islam, for example, is more that Allah through society shapes the state, and the state is there to help us in submission to Allah. That does not really fit with any of the archetypes. Therefore, I look at the axes.

You contrast two facts, which I do not debate for themselves, but which I see as inadequate. You say that some values are biologically innate to us. Other values are generated by abstract thought and historical processes, because they are needed for a functioning complicated society. Islam, though, would say that values come from Allah. I understand that many who talk of 'spiritual values' in the West mean by this the positive parts of their experience of the world, such as family love, natural beauty, social harmony. I can see how you can call these 'biological' because of course we use biology to sense them. But you must understand that many more people see these things as a part of creation, as the gift that makes man different from the animals.

So that is one axis, with what many would see as a gap in it. The other axis asks how we define 'progress'. One approach to this is to create a powerful, capable society that and perform great works. You define the other as progress being perceived in terms of collective social betterment. I feel uneasy with this.

I think my concern comes from there being several things buried in here. You are clear that the capacity to deliver 'great works' requires complex, knowledgeable societies. So it follows that making such a society is itself a part of a 'great work'. I think that the issue is that there is much more to what most Western societies mean by 'collective social benefit' than just building the value creating structures of this sort. They mean welfare, subsidy and the whole paraphernalia that some Westerners call 'social justice'. It implies a whole new set of values, under the heading of 'rights'. And these rights apply to geography, or are universal and apply to everyone, irrespective of what their national standards might be. So not everyone has a right to come to live in the US, but every person is supposed to have a range of other rights: freedoms from this and that bad thing, access to this or that good thing.

The raw price of progress is not acceptable. Neither is slatternly consumption and unbounded social support. Elites which extract of all of the benefits of progress are not acceptable, but neither is an egalitarian extraction of benefits that defeats enterprise and generates equality of misery and national weakness.

The YF world seems to have all of the weakness of the present built into it. It does not see these hard choices and it wants everyone to be the same everywhere. At the same time, it preserves national privileges, and uses them to indulge tiny proportion of the world's population.

OMG has a different text, therefore. It is not egalitarian. It puts the indulged sub-populations of the rich nations into much more direct competition with the lower income areas. It subsidises social goods in order to set the sick on their feet and to help the fallen on their way. It does not subsidise idleness.

Now I go back to my gap in the 'values' axis. There are things which many societies see neither as individual drives nor as theoretical necessities, but as truths given by Allah, by God; what Kant called 'categorical imperatives', things that they know are central and right. These have been in existence throughout human history. Not all of them are pleasant, for they speak of power, discipline, submission, cleanliness, character. Do we believe that these can be dissolved into a democratic solvent, where everything mixes and where nothing except consumption has predominance?

Traditionalist viewpoints are often more concerned with what they want to stop than what they want to make happen. However, it is a mistake to assume that all strong views are traditional. Groups which seize upon an idea and demand that it be made real are a potent force. They are not socially 'rational'. The knowledge of the next 30 years will overturn many certainties, and it will open up many possibilities. Clearly, some of this will motivate traditional groups to oppose change and these radical groups to make it. What they want is unknowable, from our perspective, or we would want to make it or oppose it, too. But do not forget that these groups will come to be, with powerful tools and gleaming eyes. OMG may be driven by such.

Response 10: That was a breath of fresh air (Response 9). I don't agree with much that underlies your analysis, but it is truly great to hear something expressed in a way that is so different to what I hear all day here in a US university. We have shut ourselves into a box where only certain ways of talking are permissible, and it comes as a shock and a refreshment to hear something that jars this.

Look, I don't want to argue with your position. Your view of a virile society and the default easy consumerism come down to the issue of what society is "for", and who says. You are right to say that if it is "for" politicians, then the default outcome is the consequence of generations of electoral bribery. But is this really bad? People have houses, water, power, entertainment, food, health care, none of which they had 50 years ago. So it could be better, but it could be a lot worse. The issue for nations setting into industrialisation is to learn from the examples of mature - senile? - societies and decide which model they want to achieve.

Getting to the scenarios, though, I wonder if the old industrial nations are capable of reform? Perhaps we need to look to aware young societies for the OMG leap of faith? Trouble is, by 2040 the young will be old and the old societies, demographically young. So I pin my hopes on the next but one generation in what will then be the industrial world.

Response 11: A brief note to thank you for a fine analysis. It has taken me a week to read it properly and I am not sure in the actuality if I am understanding all. You are saying that states all get like each other except some are still poor. The rich ones are the same because they all want the same things and use the same knowledge to get to them. Politics is like a passenger on this train. Then you have commerce and things like it, the 'privileged entities'. These can get into nodes of capability, knots in the web of the world's ability. The knots are often close together geographically. But also there are virtual elites that are segregated because you need to earn a place in them. They make all the new things.

Your driver for OMG is these knots. They get their own logic and values, needs and so on and then they dictate to the state. The state obeys because they are where the goods things come from. They are not just about commerce, because they are also about interests and a very focused kind of politics. They are the people who think most about the big systems - lot are scientists, for example - and so they have a handle on what states need to solve, too.

Which is all great. I just have kind of heard this before. Clever people get what they want, but everyone else gets the powerboats and world trips that they also want because the clever people make the wealth and all the others spend it. And for why? Because the control the governments through democracy, and what the voters want is generally like powerboats and ice cream. So the OMG is a little but important bit that gets strong on OMG but is also there in YF, otherwise YF is dead. It's the balance that makes the difference. It's that balance that is very, very political and how these knots put themselves about in public is going to be important, like bankers building up hate today by paying themselves silly bonuses right in the crisis.

Response 12: Your rainbow scenario chart does not have a time axis. Note that even the poorest countries will have near-zero population growth by 2040. Whenever peak oil comes, it does so before 2040. No major energy breakthrough is going to be significant at world scale in under 20 years. Water and food will be tight, as the good soil is all used already. So I am saying that a 'fleshy' YF is not going to happen: people will be richer in money and choices, but what they get to choose is going to be services and intangibles, not energy intense new physical things.

Part of the move to OMG could just reflect this: you can't properly consume a virtual world without a great deal of effort. It's like learning a language - a steep curve before it allows you to have fun in it. Or sex. What I mean is that the elite structure is intrinsic to the kind of economy that we will have. The entry barriers are higher, and take more effort to surmount. The people on the other side of the barriers know this, and they have a defensible competence which they will defend - like plumbers of doctors today, literal or figurative trades unions that limit entry. But here we have a world of earned entry - very egalitarian in the sense that you have to impress to get ingress, but harsh for those who lack ability or application.

Not a world for slackers, then; more like the Victorian work ethic. Novelists grinding out 80-90 books in their lifetime, endless feats of endeavour pushed along by a social consensus that work is good, that effort is good, that excellent things are earned by individual and collective endeavour. Not a world that will have much patience with the work shy, or much time for the lazy. This dynamic, on its won, can make OMG happen.

Response 13:  Earlier comments mention "the willingness of societies to consciously take themselves towards OMG". I would be extremely skeptical about such a mechanism, but in my view this is not what brings OMG about. OMG describes, in my view, a world where the formal institutions remain crucially important for administering people's rights and duties, etc., but not for telling them what to do. That will increasingly be the domain of numerous self-organising networks, which are issue-related and see no need to stop at the borders and boundaries of the traditional institutions.

Change, in the sense of aspirations, priorities, ideas about a better world, will then be driven by "the people" and not the experts (this is what I call "amorphous change"). I think that we are moving rapidly in this direction already. The military campaigns of Israel, the turmoil in Iran, the election campaign of Obama, the problems of the EU, the worldwide campaigns re. climate change, the rise and fall of Gordon Brown, etc., are a reflection of what large numbers of 'ordinary' people consider acceptable, desirable, credible, legitimate, etc. This is not the same as the elite forces, but more socially-centred.

In OMG, we enter a world where these trends accelerate, not least because we will experience genuine globalisation that far exceeds the narrow field of investment and trade. Genuine globalisation will imply that also other continents start writing world history, will be more explicit about their culture and norms, and expect to be taken seriously as equal partners, not as pupils or protegees. The difference with the other two scenarios would be that these are driven by centres of power, made stronger by control over technology, resources, or the latest weapons. These are therefore not different outcomes, but different types of futures. (EG Response 9?)

Response 14: I read Response 13 and though "Gee, wouldn't the media stop amorphous change"; or aren't they right now the way that amorphous change gets its voice. Didn't someone say that journalists have to be translators? (Response 6).

Well, perhaps. But we need to rethink the media because they are so important to the future of democratic politics. Here are some thoughts, therefore.

First point: the media of today are still oriented around the conduit, not the content. They are set up that way by history and by the demands of advertising. If you owned the presses, or the satellite, then you had a conduit monopoly. Still, most of your money came from Rupert Murdoch's "golden river of advertising", and that meant pointing the conduit at specific consumer groups. The result was the branding of newspapers and TV channels to specific target audiences. (Plus other reasons as well, of course.)

By 2040 the notion of a conduit monopoly is laughable. Whatever you want will be assembled for you, on demand, and piped to you in a dozen ways. Computing power is going to make for very smart clients, and I would expect most of a 'movie' - whenever that looks like in 2040 - to be assembled at the point of delivery. What that means is that content providers become the golden children, not the conduit owners. You the customer will have preferences as to cost, quality, content and pitch that are personal to you. Content will be "tunable" - perhaps actively, so if the eight year old gets bored with the love scene, it is skipped. Cost is important. You may pay not to see advertising, or get things free but heaped with extremely targeted advertising. By "extremely", I mean that the systems will know all about you, and troll for relevant advertising material and then pitch it at exactly the level and style that you will actively enjoy. The best advertising is stuff you want to know, in a form that charms you.

Second point, what does that mean to politics? Primarily, that conduit providers cannot stir things up as they do now. Build Obama up, bring Obama down: it all sells column inches. Political comment will be much more like blogging, I suspect, with very extreme opinions being followed by some and the mainstream by most. However, recall that you have the intermediation of your friendly system, which knows what you need to know and makes sure that you understand it. How does it do that? I have no idea, but the civic need is plainly there, and it would be as sensible a thing to mandate as the inclusion of Iodine in table salt.

Response 15: You assume that there is no such thing as civil society. The community is more than a bunch of people in the same place, with added commerce and welfare. This network elite stuff is kind of eighteenth century - "La, Mr Darcy I cannot abide such persons" - with Lunatics doing this and the Masons or the RS doing that. I don't deny that it may happen in one corner of the room, but as well as that there will be a lot of bright people with really good speaking platform, education and, from the sound of it, time on their hands. The age of the Indie movie, 2040 style.

Putnam and his people have shown that civil society adds a huge amount of value. But just like we don't value the environment we don't see it because it is like a natural background. Just carers I think are worth tens of billion to the US economy but they don't get counted in GNP. Now, YF doesn't sound a vary caring society, consumerist-lite, someone called it. It does sound very fragmented. But maybe not. Our EPA have been pushing the idea of "densification" on our urban planners. The idea is to reverse the 1950s trend to put residential, heavy and service industry and retailing in different places,and then use the car to tie them together. So now we put work and shops and homes and schools all together in one place, and make a lot of urban 'villages' served by just-in-time everything. Sounds cool, although the 24 hour city idea could be rowdy. Perhaps you have young people villages and old ones, techie, gay and breeder villages. Or just brands, and you tie in with a brand you like.

Anyway, these are exactly what brings back the community, brings back reputation, street control of crime and so on. One thing we tried here was to give residents a free internet chat system so that they could discuss odd people on the street. We made sure with CCTV and wardens that these were picked up quick and if suspicious, interviewed. The result was that before we began around 10% of people said that they would challenge bad public behaviour, and at the end, around 70% said they would do so. And we know that peer pressure - dirty looks, 'remarks' more than actual interventions - are extremely potent in keeping communities well behaved. Graffiti vanished in the experimental area, for example. OK, some of this is bird scarer and the badboys went down town; but most of it real and lasting. Same in malls: clean them up and they stay clean, let then degrade and they get worse.

One thought I think I got from you was this about IT. Your reputation will follow you everywhere. Today, it's your credit card and stuff. By 2040, it's just about everything about you, so you worry about keeping a good rep the way people worry about credit worthiness today. Of course the sub primers don't have a credit rating, and the badboys have a negative rep that they work hard on to make worse. But the average citizen cares, when they know they are being seen. That will be just about all the time in 2040. And just think what intelligent, aware CCTV can do for security and crime.

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