January-August 2003

Newsletter of the Acceleration Studies Foundation, a nonprofit corporation.

Part 1  Part 2   Part 3   Parts 4-5   Parts 6-7

4. Global Dialog: Governance, Peace, Globalization, & Environment

20. World Governance, Peace, Globalization, Development, International Ethics
21. Environment, Sustainability, Ecological Ethics

5. National Dialog: Politics and Economy

22. Security, Law, Social Welfare, Individual Rights, Political Ethics
23. Trade and Economic Policy, Business Ethics
24. Business Highlights and Investments

Global Dialog: Governance, Peace, Globalization, and Environment

20. World Governance, Peace, Globalization, Development, International Ethics

The Consequences of Current Telecommunications Trends for the Competitiveness of Developing Countries, Simon Forge, Information for Development Program, World Bank, 1995
An older 31 page PDF that makes a compelling case for the flattening of global wealth disparities due to the emerging affordable telecommunications network. From the abstract: "What are the long-term consequences of a major price fall in telecommunications, from the point of view of developing countries? An acceleration of the rebalancing of wealth between nations in the various stages of economic development is the fundamental effect. Taking a ten to fifteen year perspective, this can be expected to radically affect global patterns of employment."

The paper states that fiber optic capacity doubles annually (still true?), and that overcapacity is expanding faster than installed capacity (foreshadowing the financial debacle that was to come!). They note that the cost of fiber optic cable fell by a factor of thirty between 1985 and 1995. Concludes with suggestions for investment priorities on pages 29-30.

Forecasting Lesson: They were too indiscriminate in their presumption that cost would rapidly drop to the perception of essentially free network access. They projected a transatlantic call supporting full video and costing 3 cents per hour in 2005, for example. Today in 2003, only broadband leaders like Japan (Yahoo BB) have 12 Mbit/s fat pipes for $20/month, with call rates of 3 cents a minute to first world destinations like New York. The majority of the world, including the poor old U.S., is going to have to wait a lot longer to get that kind of data wealth. And when will a Rwandan be able to pay an equivalently small percentage of their wages for such connectivity? 2010 seems far too early for present real world estimates, unfortunately. Thanks to David Forrest at Innovation Watch.

21. Environment, Sustainability, Ecological Ethics

The Good Life is No More for Argentina, Hector Tobar, LA Times, 2.18.03
"More than any other developing nation in the 1990s, Argentina embraced the free market and the global economy." "Many Argentinians believed that their country, already the most prosperous in Latin America, was finally graduating into the First World." Today, "Argentina's official unemployment rate stands at 22%, about the same as in the United States during the Great Depression." "How Argentina came to suffer such a fall is an emblematic tale of the global economy's power to spur sudden prosperity in developing countries, and then, even more swiftly, to bring disaster." Interviewing top economists, Tobar tells the sobering story of Argentina's wild decade 1991-2001, and its subsequent meltdown.

Global economic regulation provided by such institutions as the IMF and World Bank is often of a very primitive nature. Human systems, at every level, are amazingly simple systems. We continually make momentous decisions based on very limited cues. In this case, international lending institutions wire Argentina 8 billion and they run through it in a week. Again and again we see compelling examples that social structures like capitalism, deregulation, and democracy are dependent on the complexity of the socioeconomic and politicolegal systems already in place. Privatization is great, but always traumatic, and corruption doesn't necessarily disappear with economic reform. Even our cherished Adam Smith-style free market theories, such as those embraced by Harvard-trained Domingo Cavallo, can easily backfire without fiscal restraint, tax reforms, and periodic devaluation of currency, something Argentina was never willing to do. Until the market did it for them.

At the same time, imposing rigid policies, like 100% convertibility of the Peso with the U.S. dollar, for all their tempting simplicity, often create unnecessarily brittle systems, setting them up for failure down the road. Economic, social and political reforms always come slowly, even as our technologies continue to quicken their pace. Perhaps the most interesting quote came from Argentine congressman Mario Cafiero. "The IMF is the Arthur Anderson of Argentina. They saw the crash coming, and they had the obligation to warn us." With great power comes great responsibility. We can learn from Argentina and hope for better globalization in the future, and perhaps also for reform in the IMF and World Bank, which are themselves still largely undemocratic institutions, even if they've done their best at some very difficult tasks to date. Thanks to Jose Cordiero.

RedefiningProgress.org, Sustainability Portal
Ecological footprints are a wonderful metric for the kind of food you eat. How much impact did you make on the environment to get the fats, proteins, and carbs you just poked down your gullet? Such numbers, in addition to health reports, are another argument that all first world societies can now afford to move beyond beef. There are certainly many places in the Third World where cow economics are remain ideal, but here in the U.S., we seem to be nearing the end of the road for beef, as we learn the existence of various forms of healthier, more humane, and more ecologically responsible forms of protein. White meat and fish continue to take over in the first world, as we collectively choose to be healthier and live with less environmental impact. Cheese and milk alternatives (soy cheese, rice milk, etc.) help us graduate from cow dependence. Tofu is vat-grown protein, a very technological concept. Nanobeef in a few more decades? We'll see. Thanks to Katherine Searcy.

National Dialog: Politics and Economy

22. Security, Law, Social Welfare, Individual Rights, Political Ethics

"World Class" CCTV (Surveillance System) Launched in Johannesburg, SABC News, 8.3.2001
A fascinating article on the birth of the Johannesburg closed circuit TV system. The hardware was locally designed and implemented (politically smart not to buy your surveillance equipment from another nation). Note the law enforcement goal was to be able to track suspects from camera to camera, and to achieve a response time of "less than 30 seconds" to get to the location of any incident. So far they've installed over 350 cameras covering a multi-block area of Jo'berg, operating 24/7. It's called the Business Against Crime Surveillance Technology (CCTV) Initiative. They claim a real-world response time to the scene of less than one minute. They also claim an 80% drop in street crime in Cape Town, the first implementation, and a 50% drop in street crime in Johannesburg so far (the system is still being built out there). Impressive, if true.

Here's a fascinating story ("Bridge Gives New Lustre to the City of Gold," Guardian, July 2003) on what we might call the "Johannesberg Effect." Johannesberg is responsible for 1/5 of the GDP of the entire continent of Africa, so that it has been called "Africa's Capital." Given its reputation, it has seen a strong influx of underemployed rural poor in the last ten years. For years now, businesses have been fleeing to the suburbs in anticipation of increasing crime, as squatters moved into abandoned downtown buildings in the city core. But in those areas under surveillance in the last few years there has been a flourishing of arts, and a return of business and pedestrian traffic, revitalizing the city and taking everyone by surprise. This sounds like a repeat of the CCTV surveillance experiences in Britain and Ireland, but with even more powerful and immediate positive social effect. This initiative will undoubtedly roll out in other South African cities as well, and they are even hoping to export their surveillance technology to other nations as well (that may be overly optimistic, we'll see). Thanks kindly to Ken Novak for the reference.

Commerzbank, A Sustainable Skyscraper

Here's an 11-page PDF on the innovative structural details of Commerzbank in Frankfurt, Germany, at 53 stories Europe's tallest office building and at the same time one of the most enjoyable high-rise work environments that has yet been created. A central atrium runs the entire vertical length of the building, piping in air and light, and "winter gardens" occur every eight floors, rotating around the building all the way up, so that there is always a garden in direct sunlight. Climate control is primarily passive vs. energy intensive. All occupants have lots of light and windows that face either to the outside or to the atrium. Pritzker prize-winning architect Norman Foster did the work, from 1991 to 1997. Here's a good brief article at Architecture Week on this impressive building, and more on Foster's other work. It took Germany's sustainability culture to induce this major creative effort. I hope the U.S. can replicate this (ideally with less regulation) in coming years! Thanks to Katherine Searcy.

23. Trade and Economic Policy, Business Ethics

The Greatest Century that Ever Was: 25 Miraculous Trends in the Last 100 Years, Stephen Moore and Julian Simon, 1999
Be sure to download this 32 page PDF from the Cato Institute.

In the United States, "Almost every indicator of health, wealth, safety, nutrition, affordability and availability of consumer goods and services, environmental quality, and social conditions indicated rapid improvement over the past century. The gains have been most pronounced for women and minorities."

Now we need to replicate this for the bottom three billion in the coming half century, as our technologies begin to wake up all around us. Thanks to David Forrest at Innovation Watch.

24. Business Highlights and Investments

The Info Tech 100, Business Week, June 2003
Excellent series of articles on our slowly rebounding information economy. In a recent Wired article, Brad De Long proposed that  in the U.S., inflation-adjusted purchases of information technology (IT) equipment and services this year has already exceeded our previous Summer 2000 peak (by 1/5, or $300 billion, in his own estimation). That would be great if true, but Business Week's picture is not nearly as rosy.

In 1985 and 1990 they estimate we experienced 5% drops in IT spending, and each downtrend took six quarters to regain their previous peaks. But since Summer 2000 we've dropped 15% (from 453 billion) in IT spending. Now, ten quarters away, we appear to have bottomed out (IDC estimates a 2.3% increase next year) but are still a long way from regaining the peak. Nevertheless, they still see major innovation all around us and a high level of ongoing IT investment even with the downturn. No matter how pessimistic the short term outlook, $380+ Billion a year can't be dismissed.

At the same time, massive consolidations are underway as market sectors mature and business models continue to shift. Dell and HP slug it out for peripheral dominance, Oracle tries to take over PeopleSoft, IBM is making major new initiatives in autonomic and grid computing, Microsoft is investing billions in Longhorn, their 2005 operating system that will finally allow us to find things on our computer (What a concept! We're so tired of watching that little dog scratch the ground ineffectually!). In short, a lot of technological productivity coming our way. Stay tuned.

Part 1  Part 2   Part 3   Parts 4-5   Parts 6-7