What the Future Holds: Insights from Social Science. . - book review

Business Economics, July, 2002 by Edmund A. Mennis

Edited by Richard N. Cooper and Richard Layard. 2002. Cambridge, MA and London, England: The MIT Press. Pp. 285. $29.95 hardcover.

The authors in this interesting book of essays repeatedly emphasize that forecasting is difficult, especially when the time horizon is a quarter century or more into the future. But, as the editors point out in an introductory chapter, most human decisions, whether by individuals, businesses, or governments, involve making judgments about the future. "The oracles of today are science, which generates the new technology, and social science, which evaluates its impact upon human society." Forecasts go wrong, but forecasting should not be abandoned; "systematic study of the future leads to clearer understanding."

The origin of this book was a conference held in Oxford in July 1999 to address how to think intelligently about the future. The editors are outstanding scholars. Richard N. Cooper is Maurits C. Boas Professor of International Economics at Harvard, and Richard Layard is Director of the Center for Economic Performance at the London School of Economics. The book is composed of a series of essays by specialists writing about specific areas in viewing the future: the use of scenarios, population, energy, climate, work, monetary policy, government, and cybernetics (the science of communication and control in animate and inanimate systems).

Because of the difficulties in predicting the future with any precision, the first section discusses the use of alternative futures, or scenarios. Scenarios must have their roots in the present or represent patterns that have been observed elsewhere. Demographic developments are considered next. Today's population and age profile tell much about the next two decades, yet a Twentieth Century Fund forecast made in the early 1950s that the world population in the year 2000 would be 3.6 billion was too low by an estimated 2.5 billion! Nevertheless, a forecast for the world population for 2050 places it between eight and twelve billion, with accompanying developments such as changing attitudes and the role of women, pressures for migration, and adaptation of agriculture and extension of aquaculture. Also, as the population ages, it increases at a decreasing rate and becomes more urban.

The section on energy cites past forecasts of total energy and oil consumption that were significantly wrong, both underestimating and overestimating the actual results. Most forecasts for the early twenty-first century indicate a world still dependent on fossil fuels, although some hope is held for creating incentives for alternatives through taxation and regulation. Climate change is considered because one of the undesirable effects of the heavy use of fossil fuels may be a significant change in the global climate. The discussion in this section is quite technical, as forecasting here is a complicated process using mathematical models of the earth's climate that reflect basic principles of physics and are fitted to historical data. These models are "shocked" with growing emissions of carbon dioxide in the atmosphere caused by use of fossil fuels. Then the next century of climate is simulated to discover what would happen to surface temperature, precipitation, wind velocity, and other variables. Translating these developments into public policy depends on assessment of the social impacts of climate change, as well as the costs and benefits of taking particular actions.

The section on work identifies several qualitative trends in the workplace. Those trends are: increased employment of women in higher paying jobs, the increase in average skill and age of workers, the shift in the world labor force to developing countries, the shift in manufacturing to these countries, the decline in manufacturing employment in rich countries, growth in employment in health care and personal services, and the widespread use of information technology at the workplace and in the market. The practical significance of these trends leaves room for continued debate.

New technology makes it easier and less costly to make payments electronically, with balances or lines of credit extended by many commercial institutions other than traditional banks. Such a development would undermine the ability of central banks to steer the economy by means of monetary policy, requiring possible alternative ways to influence the economy.

Government is discussed in terms of the way technological change impacts political life, as an increasing number of problems can be dealt with only by international cooperation (e.g., climate change, transboundary pollution, financial stability, trade policy, labor migration, and capital mobility). But "the logic of greater economic interdependence may move us to a more diffuse structuring of political authority."

The final chapter considers placing future forecasts in their intellectual and historical context. In the 1960s and 1970s, three schools of thought emerged. The first school focused on technical achievements, that is, "the influence of new technologies on the change and continuity of social and economic structures in the highly industrial countries (above all, the United States), predicting the post-industrial society as a kind of information or knowledge society primarily based on the innovative potential of pure scientific knowledge as well as on the new information technologies." The second school applied the cybernetic approach to global politics and global interactions, predicting the emergence of (or the hope for) a kind of planetary society. The third school focused primarily on the role of values and social norms as crucial factors of change, predicting ( or hoping for) the emergence of a trans-industrial society, which would bring the dominance of a new collective consciousness of social integrity b ased on a (spiritual) unity between man and nature.