Peak stuff

We work jobs we don’t like – to buy things we don’t need – with money we don’t have – to impress people we don’t know. This is how I recall the lives of people in the developed world described, rather lugubriously, on a radio program some years ago.

I think I first heard the phrase “peak stuff” in 2015. It was around this time that I remember taking a flight from New York to London on Black Friday and discovering, to my dismay, that the hysteria had crossed the Atlantic. At that moment, it felt strangely personal. It was as if the heinous concept had trailed my flightpath, like a jet-propelled albatross intent on defecating on the culture of my homeland. As the cab pulled away from the Heathrow rank, the driver lamented: “Everyone’s gone bloody mad!”.

The phrase “peak stuff” struck a comforting chord amidst the discombobulation. Peak Stuff is the idea that consumerism has run its course; that the endless accumulation of material comfort increasingly fails to cut any ice as a proposition to which people are prepared to orientate their lives. I thought the phrase neatly captured an idea that would steadily work its way into a wider consciousness. But so far, this peak stuff prediction has been wide of the mark, or at least slow off the mark. 

It is becoming increasingly obvious (I hope!) that we can’t go on consuming like this. So, in this essay I try to imagine a world in which we slow down a bit with the consumption. Well, a lot actually!

I attempt to sketch out a model (I will explain what I mean by a model a little later on) that might enable societies and economies to function happily and productively with much less stuff. I consider why we are so wedded to consumerism, the role that stories play in shaping this matrimony and the part that new stories might play in reshaping the relationship we have with one another and with the planet. Finally, I consider, what all this might mean for the innovators and the entrepreneurs. How does entrepreneurialism adapt, and in some instance lead, in this reimagined world?

A thought experiment

Some years ago, rummaging at a book stall, I came across The Little book of Buddhist Smiles. Contrary to what you might be imagining, this was not a pocket-sized photographic study of the facial expressions of the enlightened; rather it was a collection of apparently profound proverbs and maxims. The book did succeed in raising a smile or two in the years that followed. Until I accidentally left it on a train. I suppose that’s Karma!

One laconic Chinese proverb has stuck in my mind. It read: Debt shortens time. The words are both gnomic and economic; perhaps the meaning is intended to be mysterious. However, I have always understood (or perhaps misunderstood!) the proverb to mean that once indebted a person’s time ceases to be their own. On this reading, I love the mischief in the humour: the implied warning is easy to intuit, but fiendishly hard to heed. It mocks us and insinuates a challenge; it is this challenge that prompts the thought experiment that follows.

I recall Christopher Hitchens describing Buddhism as something like… that health spa where people go when they have exhausted the monotheisms. Let us consider a counterfactual scenario in which our worship of consumption has run its course and we have opted for a different path.

Some “economics”

I will start with a little “economics”. The quotation marks should be read as if laced with a heavy dose of self-deprecation. What follows is embarrassingly simplistic, but I hope will suffice to lay a coherent enough base.

One way to think of an economy is as an exchange of work. As we sit at our desks, heroically wrestling with the day’s tasks, we are monetising our own work. We stop to take a sip of coffee and in doing so we are consuming the work of all the people involved in the supply chain of the product; a chain that reaches all the way around the globe, to the person who picked the beans. In this sense, the interaction each of us has with the economy forms a simple cycle of exchange.

When thought of in this rather idealistic way, an economy becomes a framework for cooperation and money the medium for this cooperation. It is a framework that enables each of us to specialise in the work we do, in a manner from which we all benefit. It is this free exchange that Adam Smith argues is the basis upon which the “Wealth of Nations” is created. Indeed, Smith saw work (rather than money) as the fundamental unit of economic exchange and the benchmark against which the value of this exchange should be measured.  

However, this simple model is not unadulterated. The cycle is turbo-charged by the intervention of debt and data in ways that have become increasingly significant over the decades. 

As manufacturing and services have migrated to the developing world, debt and data have become the preoccupation of capital in the developed world. The defining products of the era aren’t the smart-phones and plasma TV’s shipped out of China - these merely serve to bait the hook. Rather it is debt and data that are the unseen and pervading products, traded as near ubiquitous and embedded components of our interactions with the economy. It is an economic model that postulates perpetual growth. The circle must spin faster and faster. The value of debt and data, manifest in the assets on bank balances sheets and the market capitalisation of the big tech corporations, must rise for ever.

I don’t know about you, but the thought of global economies spinning faster and faster makes me feel dizzy and frankly a bit depressed. It is a proposition that leaves us a lot to quarrel with. For one thing, there is the insoluble question of how a planet of limited natural resources sustains ever increasing levels of consumption. For another, we might wonder how far economies can travel propelled by credit growth, before the road runs out (again!).

But for me, it seems to keep coming back to the impish humour of the Chinese proverb: Debt shortens time. Debt creates the malaise of an unresolved present; a current existence bought with future work. Time indebted becomes time accounted for and often time wished away. Debt takes away our freedom to imagine whatever future we want. It condenses our perception of the time to come.

Our time is precious. So, how do we place a higher value on it?

Let’s imagine a world in which the revolutions of this frenetic cycle begin to slow down. It’s a world in which we consume less (and with more discernment), borrow less and work less.

There I feel better. Don’t you?

But, how do economies and societies transcend to this enlightened state?

I’m not sure.

Could it be by way of the incremental spread of the principles of better living, or could it be the product of economic implosion or environmental disaster? Either way the change is inevitable; a future in which this transformation does not take place, with all its concomitants, would be unimaginable.

Therefore, let us try to imagine a different future.

Pandemic news flash!

I wrote all of that at the very start of 2020 and then put the piece on the backburner.

The pandemic subsequently proceeded to shut down the most significant components of our social and economic existence. It rendered the hypothetical question a real and confronting one; the thought experiment became a crude empirical experiment. We were forced to slow down. We have apparently experienced living on just the essentials. There are clues in the experience as to the scale of the challenges that transitioning to lower consumption would pose, as well as some of the opportunities.

As the public discourse shifts slowly from mitigation to rebuilding (and I hope by extension rethinking), it remains to be seen what lessons have been learned and whether we will look to the future with a new perspective.  

A different model

Let us take another look at that whirling economic model. How is it serving us? How can (and should) the model be adapted to address the challenges of building a happy and sustainable future?

Before we go further, I think it would be helpful to explain what is meant by a “model” in this context.

For our experiment, a model is simply a framework for exchange. In a social and economic sense, a model enables the exchanges between people, capital and technology to become coordinated - aligned to some principle and employed in the service of some purpose. With the existing model we have seen how people’s work and consumption patterns interact both with those of other people and also with debt (capital) and data (technology). Ostensibly the guiding purpose of this model is to enable an effective and mutually beneficial exchange of work. However, the intercession of debt and data distort the picture and we might question how effectively this model continues to serve its putative purpose.  

If a model is calibrated to principles and purposes, then it follows that resetting the model requires some rethinking on the subject of these principles and purposes. We must try to imagine some new orientating purposes that are actually fit for purpose (if that’s not too confusing!). In the Picture of Dorian Gray, Oscar Wilde writes, “We live in an age when unnecessary things are our only necessities”. The “age” to which Wilde was referring is not our own, but we might recognise something pertinent in the remarks. The scenario we are trying to imagine requires us to cast off the contrived necessities of consumerism. This challenge has the potential to be liberating and inspiring, but it can also seem daunting. Discarding the postulates of consumerism presents us with a blank sheet of paper and with it the potential for anything or nothing.

What I hope I can offer you with this piece is at least something. A basic and optimistic picture of a viable model and the axioms upon which the model is built. Let’s refer to it as our sustainable scenario. It is of course, only one of an infinite number of ways in which a future of sustainable consumption can begin to be sketched out. However, what has struck me in writing this piece, is that many of the changes it identifies look like extrapolations of developments that are already afoot and that have been accelerated by the pandemic.

I wonder if you will agree?

All about stories

I want to embark on this journey by talking about stories.

The consumerism problem was framed by the introduction as a social and economic problem, but I wonder if the problem is cultural. Our compulsion to consume is driven by the surrender of our own stories. We allow others to imagine our lives and lend us the story. The debt is serviced by consumption - however, our interest in the narrative is compounded so that we can never quite extinguish the indebtedness. We become stuck in an endless rut of dissatisfaction, indentured to our own confected and insatiable wants. We have moved beyond (or sunk beneath) Macbeth’s existential lamentation – “life is a tale told by an idiot”. Life is a tale told to an idiot.

How about this from Vladimir Nabokov:

The rich philistinism emanating from advertisements is due not to their exaggerating (or inventing) the glory of this or that serviceable article but to suggest that the acme of human happiness is purchasable and that its purchase somehow ennobles the purchaser.

Thinking about consumption as a creditor seems just a little unsavoury. However, it can be comforting too. The thought of having a sense of purpose foisted on us by the clever storytelling of marketeers may be unedifying, but the prospect of having no sense of purpose is worse. And so, we are ready to accept these stories, however absurd they may be, and live our lives as if they were true.

What is a story?

The scenario demands that we change these stories. Let us just take a moment to think about what stories are and why they are so important to humans. Why do they have such an effect on us? Why are we wedded to stories - for better or for worse?

In much the same way as an economy can be thought of as a framework for the exchange of work, stories can be thought of as a framework for the exchange of ideas. In essence, a story is an attempt to arrange events into a pattern so as to give some interpretation to the progression of these events. It is through this exchange that humans have sought to make sense of the cosmos and our place in it - that we seek to give meaning to what would otherwise be a shapeless soup of singularities.

From T.S. Eliot’s poem, Little Gidding,    

A people without history

Is not redeemed from time, for history is a pattern

Of timeless moments.

Stories are not exclusively retrospective; they connect the past with the present; and the present with visions of the future. Stories can bring about change – they are the medium in which history is shaped by those who are living through it. Perhaps the greatest paradigm of the period that can still be considered that of living memory is Dr Martin Luther King’s cultivation of the Exodos story (minus the unsavoury demise of the Canaanites) as a means of envisioning the advance of civil rights. It is a story that continues to unfold, its progress tortuous, but the indubitable standing of its message undiminished. In this sense it is also a paradigm that reminds us of the capacity of stories to serve as an ark for identity and culture - a medium through which foundational ideas are themselves able to arc through the generations. Simon Schama writes in his Story of the Jews,

Thus encoded and set down, the spoken (and memorised) scroll could and would outlive monuments and military force of empires. It was fashioned to be the common possession of elite and ordinary people, and for the vicissitudes of political and territorial impermanence. 

Stories have great utility to the species at this juncture of the perilous human adventure. Stories are the vehicle with which we might come to understand our present situation from new perspectives, to seek out different pathways and pass on our learnings to future generations.   

T.S. Eliot’s Little Gidding continues,

We shall not cease from exploration

And the end of all our exploring

Will be to arrive where we started

And know the place for the first time.

The challenge of the experiment is neatly captured in these words - to try to undertake a little of the exploring that might enable us to see the way we live now as if from the retrospective (and presumably mordant) gaze of the people of a sustainable future. From this vantage point we can try to sketch out some components of the stories that might shape a new way of living - to see our current predicament as the beginning of a new story and to elevate the principles and purposes to which we might align a new model. 

A new principle and new purposes

Impactful stories are built on simple yet profound postulates. They are often conceived in tumultuous times, through which established ideas become strained. I want to approach the experiment from first principles and look at what the foundations of a new story might be. To do this, I will need to borrow from a man from my native Norfolk in England.  

This exert from Barack Obama’s inaugural speech of 2009 channels beautifully the capacity for confronting times to force a return to first principles and to catalyse change.    

Let it be told to the future world ... that in the depth of winter, when nothing but hope and virtue could survive ... that the city and the country, alarmed at one common danger, came forth to meet it.

In case you are wondering, I am not about to make another tawdry and unscrupulous claim pertaining to the former president’s place of birth. The excerpt is itself a quotation from Thomas Paine – the prolific pamphleteer of the late eighteenth century of whom John Adams allegedly said, “without the pen of Paine, the sword of Washington would have been wielded in vain”. Paine was (undisputedly) born in Thetford, Norfolk in 1737 and his writing did much to guide the ongoing experiment in liberalised human exchange that is manifest in the foundation and evolution of the United States.

In 1791 and against the backdrop of the French Revolution, Paine published the Rights of Man. The thesis of this (then radical) pamphlet rests on a simple observation and it is from this base that I want to begin.

Every history of the creation, and every traditional account, whether from the lettered or unlettered world, however they may vary in their own opinion or belief of certain particulars, all agree in establishing one point, the unity of man; by which I mean, that all men are all of one degree, and consequently that all men are born equal, and with equal natural right, in the same manner as if posterity had been continued by creation instead of generation

Building on this premise Paine sets out a framework for civil rights. He argues that the basis of civil rights is in the social contract that gives force (where force is necessarily established by civil means) to the natural rights of humans, “That every civil right grows out of a natural right; or, in other words, is a natural right exchanged”. Paine was writing from a time and place in which the ultimate and long-established authority of hereditary monarchy had started to fray. Liberation from this hegemony was envisioned to lead to the building of a new society through the medium of unfettered exchange between individuals. In this way, Paine’s arguments are the antecedent to another arresting question: how exactly to utilise this free exchange to build that new and better society. 230 years after Paine’s publication, this question needs new answers if the problem of how humans live sustainably is to be answered.

This is a daunting question. Like Paine, I will begin my attempt at an answer by positing a simple idea, one that builds on the axiom of human equality. It is this: that the reset of the model would rest on replacing the principle of mutual benefit with that of solidarity.

What do I mean by solidarity? And how does it differ from mutual benefit?

Solidarity is a principle on which shared purpose can be established. The same is, of course, true of mutual benefit, but there is an important difference between the two. Solidarity determines that we enter into exchange not to enrich ourselves in the singular, but in the plural. Shared purpose is established by identifying shared identity and shared interest across communities, societies, economies and globally, not by identifying the intersection of individual interest through bargaining. Solidarity is something that seems to be highly evolved in us (at least in most of us). At some point our distant ancestors came to realise that surviving was necessarily a group endeavour. This was our ethical ground zero: the conception of the first social contract. If you were to make a case for ethical progress or moral evolution across human history, I think it would be mapped through the rippling expansion of what is meant by “we” or “us”.

There are two ideas that I want to extract from the principle of solidarity that I think have great utility for the shaping of a sustainable future. The first is the idea of Equity. This is the idea that everybody has a stake in the economy, society, culture, politics, the community and the environment. It must be a universal stake; there are no preference shares and no voting and non-voting stock. As Paine has it “Every man is a proprietor in society, and draws on the capital as a matter of right”. The second is the idea that the solidarity is extended not only to contemporaries but to posterity. We must reflect on what it means to be a good ancestor and think beyond our own lifetimes. Most pressingly we must reflect on the impact we are having on the planet.

The aforementioned Dr King’s Mountaintop speech is possibly the finest rhetorical proclamation of solidarity framed in these terms, capturing in a single metaphor both the undeniability of human equality and a prophetic vision for posterity. It was a speech that proved to be eerily prescient on one level: Dr King was assassinated the following evening, shot from across the street as he smoked a cigarette on the balcony of his room at the Lorraine Motel. The year was 1968, a tumultuous year that actually makes our recent short passage of history look fairly tame. Dr King had been in Memphis to lend support to protesting civic workers. Observing history from 2021, we are reminded that the principles espoused by King and Paine (in 1775 the Pennsylvania Journal, of which Paine was the editor, is believed to have become the first US publication to advocate for an end to slavery) remain elusive to the building of a society and an economy, no matter how intuitive they may be.

The point of entrepreneurialism

Before I get into the meat and drink of the essay, I will offer a few words about how entrepreneurialism might play a role in our sustainable scenario.

At one stage in its meandering etymological journey the term entrepreneur denoted the proprietor of a musical institution – an orchestrator or a connector, bringing together talents and connecting their work with an audience. We are looking for a new model that connects people, technology and capital with purpose. I think entrepreneurialism has a key role to play.

No surprises here, I suppose, given the themes of the blog.

However, the question of purpose is a tricky one for entrepreneurialism. Like all those engaged in the arts, the entrepreneur must go where the patronage is. One suspects, for example, that the motivations that lead Michelangelo to paint the ceiling of the Sistine Chapel, rather than some other worthy edifice, weren’t purely devotional. In many ways, consumerism can be seen to have offered some productive patronage to the entrepreneur over the decades. However, there is an argument to be made that says the relationship between entrepreneurialism and consumerism has run its useful course and become subject to the law of diminishing returns. Our sustainable scenario demands that we relook at this relationship and consider the opportunities and the threats to entrepreneurialism that it poses.

The transition to a lower consumption economy would undoubtedly be a painful one for the entrepreneur. However, a degree of decoupling from consumerism might also be a means of liberation, enabling the innovators and entrepreneurs to attack a broader range of bigger problems.

Now on with the real work of considering the concomitants of our move to sustainably low consumption!

The changing place of work

In this 1960 interview, PG Wodehouse chuckles at the suggestion that by the year 2000 every middle-class family will need to have four servants “just to keep people employed”. I suppose the domain of domestic service has changed dramatically in the hundred years or so since the fabled days of Bertie Wooster and his impassive gentleman’s gentleman, Jeeves. An uber eats delivery won’t necessarily be served with the accompaniment of a sublimely wry quip. This said, it’s not hard to see something prescient nestled in the joke. The return of the domestic servant in the gig economy guise is a poor answer to the work question that Wodehouse foresaw.

A great deal has been made of the impact of the pandemic on the place of work (in the physical sense). Does this miss the point? The where and how seem to be trivial concerns in comparison to the why.

Work is a problem!

In 1930, thirty years before Wodehouse gave his interview, John Maynard Keynes wrote an essay entitled Economic Possibilities for our Grandchildren. Writing amidst the fallout from the Wall Street crash, Keynes had come to imagine that within a hundred years, mankind would have solved its “economic problem”. This is to say that technological innovation would have relieved us of the need to work in order to meet the basic needs of subsistence. As we enter the final decade of Keynes’ contemplated century, it is interesting to look back on his writing.   

We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come--namely, technological unemployment.

But this is only a temporary phase of maladjustment. All this means in the long run that mankind is solving its economic problem.

I draw the conclusion that, assuming no important wars and no important increase in population, the economic problem may be solved, or be at least within sight of solution, within a hundred years. This means that the economic problem is not-if we look into the future-the permanent problem of the human race.

A good thing – unemployment is a solution rather than a problem.

Thus for the first time since his creation man will be faced with his real, his permanent problem - how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.

This last paragraph doesn’t sound much like a description of the 2030 we are heading towards to me!

The course of history has veered away from Keynes’ imagined pathway on several counts. I can think of at least three deviations that are of interest to us. I will name two of these here and come back to the third. First, Keynes underestimates our capacity to contrive needs and to co-opt the role of work into servicing these needs. Second, he did not anticipate that the carbon intensity of the technologies he was talking about would create the very challenges that would occupy (or ought to occupy) future generations for many decades beyond 2030. I hardly need to say that there is serious work to do. We are less than ten years from the end of Keynes’ imagined century, but the end of work probably looks further away to us than it did to Keynes.

Indeed, I wonder if Keynes has things the wrong way around. He envisaged that a change in our relationship with work would enable us to rethink how to live well. Perhaps the reverse is true: that a rethink on how to live well will enable us to change our relationship with work. 

How do we ensure our talent and effort is well directed to important problems?

If we agree that living wisely, agreeable and well involves seeking to make the world a better place not only for our contemporaries, but also for those generations that will follow us, then we must consider how we ensure that our efforts are well directed to addressing important problems, not only individually, but as a society and as a species.

I think, the answer may lie in shifting the paradigm for the attribution of value to work. In the introduction I described an economy as a framework for the exchange of work. But this is not always true of our existing economy - a great deal of very valuable work remains outside of the framework of recognised economic exchange. Think about somebody caring for a relative at home: their work is not attributed an economic value, while the work of a paid worker in a care home is assigned an economic value. Work that is very similar is attributed economic value in one context and not the other. Indeed, one of the absurdities exposed by the pandemic is that the people who emerged as the “essential workers” are, in many instances, not very well paid. The model needs a reset and I wonder if the sheer quantum of work displaced by the assumed decline in consumption in our sustainable scenario would force this system to break down and open-up new possibilities.

We could rethink the attribution of value to work in a way that embodies new principles – those of solidarity. In doing so, the object of our endeavours begins to shift: we move away from a model that focuses on the individual and on short-term value creation (which sounds like an oxymoron) towards a model that does the opposite – postulates long-term value creation and creates universal equity in the exchange of work.

Purpose or posturing?

How is this new connection between work and purpose going to be achieved? Where is the entrepreneur in this?

We might say that the entrepreneur is already at work. Increasingly it seems to me that money is seen as just one of a number of the rewards of work; words like culture, purpose and passion feature ever more prominently in the entrepreneurial pitch for talent. However, some pitches are more successful than others and some are more authentic than others - the correlation between success and authenticity isn’t always apparent to me. If you occasionally feel a little sceptical towards all of this posturing, I understand. I suppose there must be a temptation amongst those building enterprises to employ a little casuistry to appeal to the quixotic mindset of the talent. Casuistry may be overstating the case - sometimes a gimmick is enough; some kombucha, beanbags and plywood will do the trick. Just stencil words like “innovation” onto your walls to remind your innovative people to innovate. 

I think our sustainable scenario changes all of this. We are imagining that there will be a shift in (actual) culture that elevates the principles of solidarity. I don’t think it is too daring to suppose there would be a spill-over for organisational culture. The reason we have entrepreneurs contorting to confect a sense of purpose amongst their workers is ultimately because they are creating products which the consumers place some sort of value on. An app that provides slightly faster and cheaper takeaway food at the expense of the livelihoods of the workers in the supply chain does not, I would submit, really make the world a better place. And yet the organisation can point to the customer experience ratings and convince its people that somehow it does. If what the consumer values changes, the thinking of purpose must change with it.

Greed is dead

There is one nagging doubt: is this really an alternative that would work? Isn’t greed and competition an indispensable expedient?

The short answer is No!

For some interesting arguments that amount to an approximation of a longer answer, you might try the book Greed is Dead by Paul Collier and John Kay (if you haven’t already). 

The apprehension of climate change and pandemic expose the luxurious naivety from which the arguments for greed are made. The competition is not between us. It is hard, for example, to imagine that the various teams of scientists that raced to develop a vaccine thought more about claiming all the rewards for themselves than they did about beating the virus. In fact, I think human nature is on our side. This is the third contention I have with Keynes’ speculations: I think he underestimates the visceral importance of work. His view was that the work instinct would disappear in a few generations, once the need for work had subsided. He talks about the species graduating to “living well” but does not consider that working might be part of living well.

To quote Noel Coward, “work is more fun than fun”. Maybe in our sustainable scenario we would stop spoiling that fun. 

Thinking about artificial intelligence

Science is more than a body of knowledge; it is a way of thinking. I have a foreboding of an America in my children or grandchildren’s time – when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness.

Carl Sagan The demon-haunted World – first published in 1997  

When it comes to artificial intelligence (“AI”), it sometimes seems as if one person’s wildest dream looks a lot like another’s worst nightmare. How does the seemingly inexorable rise of AI impact upon our attempts to construct an optimistic narrative that leads to a sustainable future? What role remains for human intelligence? And can we really create a future in which human intelligence and AI enjoy a symbiotic relationship?

To frame these daunting questions a little differently: how do we achieve a future that aligns the technology to the principle of solidarity? This is to say how can we enable the benefits afforded by AI to be equitably distributed and how do we ensure that the relationship between humans and the technology is forged in a way that leaves a workable legacy for future generations?

The capacity for technological unemployment that Keynes anticipated ninety years ago seems quite trivial in comparison to the impact that we might imagine AI (and accelerating technological change more generally) will have in the coming decades. The World Economic Forum 2020 Future of Jobs report predicts that 40% of core skills will change for existing roles over just the next five years. Over the same period, 85 million jobs are anticipated to be displaced by the division of labour between humans and machines, while 97 million new jobs may emerge. If these projections are proven to be anything like realistic, it all points to an enormous set of challenges. How do we enable the generations living through this disruption to deal with the rapid change? How should education be adapted for future generations, who will know nothing but a very different future?

In responding to these questions, it is easy to be drawn towards a focus on developing the skills involved in building and using new technological products. As these products evolve, through ever shortening cycles of innovation, so the need to promulgate new technical knowhow must keep pace. However, in the grand scheme of things I think these are ephemeral issues. The workforce cohorts of the pre-digital era are working their way through the system. In twenty years, the kids that spent 2020 in virtual classrooms will have jobs. One presumes! It seems unlikely that these future generations will need high levels of structured learning to get to grips with evolving technology. A 2016 survey of over fifty thousand programmers in the USA, for example, was already finding that 69% of respondents were at least partly self-taught.

Indeed, a crude internet search for “coding learning resources” (or something similar) will reveal a plethora of schemes aimed at children. Below is an extract from a pitch for one such scheme, aimed at children between the ages of seven and ten.

Your child will then learn how to use engaging virtual projects to create fun, interactive and animated applications and games.

Once this online coding class is complete, your child will be an expert in coding with Scratch!

As an aside, I wonder how effective parental controls are proving to be in curtailing the online mischief of such technologically advanced children. Ironically, it may be that the thwarting of these controls is being dismissed as “child’s play” by our digitally advanced progeny.

In short, the sort of technical skills that currently seem so scarce in the face of the demands of digital transformation, will ultimately become abundant - the equivalent of basic literacy and numeracy. And so, we might fantasise about a workforce blessed with technological intuition that can evolve constantly and incrementally, making use of digital learning resources that are cheap and widely accessible. In this fantasy, the supply/demand dynamics of the market for skills become increasingly manageable through the data. Essentially, workers are able to cultivate a live CV, obtaining and validating skills and seeing the value of their skills portfolio rise and fall like the price of a commodity on a trader’s terminal screen. The Google Digital Garage programme looks a little like this. So too does IBM’s open P-TEC model, which enables secondary school students to gain digital badges in professional competencies and emerging technologies.

Of course, enabling the cultivation of technical skills is a good thing, but there are at least two things that I dislike about the idea of tilting the focus of education too far in the direction of such commoditisation. First, is the assumption that the value of learning must be a derivative of technology; learning is attributed no intrinsic value, only the value it achieves in enabling the development and application of technology. Second, is the idea that what we learn is driven by economics rather than curiosity.

The problem of forging a symbiotic relationship between human intelligence and AI needs a better answer!

The opportunity for thinking

There is an opportunity presented by our sustainable scenario. If the cultural disposition towards consumerism were to change, then maybe, we would stop thinking of education as a service and students (or more realistically parents) as customers. All of which leads me to wonder whether thinking might have a chance of coming back into fashion as a skill.

When I talk about thinking I am really focussing on those areas of intellectual capability that seem to be most insulated from the emulation of AI: empathy; language; argument; imagination; and creativity. This blog being what it is, I might opportunistically try to bundle that little list together under the umbrella of “humour” - though I wonder whether Carl Sagan’s formulation “science… is a way of thinking” is more compelling. For Sagan the essence of science is in the marriage of curiosity and scepticism – this seems to me to be a good foundation on which to build the case for thinking.  

The problem with thinking about thinking as a skill is that it’s not really a skill that can be learned. It seems more appropriate to use the analogy of thinking as a muscle - a muscle to be exercised playfully and energised by curiosity.

At this point I start to find the prospect of a bit of coffee-table aphorism irresistible.

I never let my schooling interfere with my education – Mark Twain

Education is an admirable thing, but it is well to remember from time to time that nothing that is worth knowing can be taught – Oscar Wilde.

The entrepreneur should tread carefully

The idea that the purpose of education is to enable us to develop our ability to think is difficult in a cultural environment that encourages people to feel they should get what they want. Developing an ability to think is hard to sell. Thinking can be difficult and confronting, the benefits tend to flow unpredictably and only when we are patient enough. The opportunity to develop an ability to think can’t be commoditised. It has undoubted value, but no price. All of which is to drop a big hint in relation to the role of entrepreneurialism – tread carefully around education and learning.

Now, excuse me while I have another aphoristic burst.

An education obtained with money is worse than no education at all – Socrates

Education is the kindling of a flame, not the filling of a vessel – Socrates

Squirrel AI is a Chinese tutoring company that looks to me like an example of entrepreneurialism overstepping the mark. Tutoring programs are delivered in part by teachers, but in the main by smart machines. The company has enrolled over two million students, each of whom works their way through a series of digital learning programs geared to boosting test scores. The company’s founder Dereck Haoyang Li is quoted as saying “Imagine a teacher who knows everything and knows everything about you”.

I think it is fair to say that the Squirrel AI approach, not to mention the takes of its founder, are not particularly attuned to the Socratic method. They certainly don’t work for me in the context of our scenario. Aside from the creepy totalitarian vibe, we might wonder, how the symbiosis with AI is achieved if human thinking is being trained by AI?  

All of this is not to say that there is no role for entrepreneurialism. The entrepreneur is positioned to make a very positive impact, generating content and resources and connecting people to opportunities to learn. I think there is also a great deal to be said for teaching people about entrepreneurialism. Entrepreneurialism is essentially the action of enabling through connection. It is a universal skill and one that will become even more important in a world in which the connections between people, technology and capital will need to be adapted.

Educate yourself – be your own entrepreneur of learning

With this I will segue into my final point. Ultimately, I think that that we each must cultivate an entrepreneurial mindset towards our own learning. We should be prepared to search out our own educational pathway - be the subject of our own educational enterprise. In this BBC Question Time appearance, the British politician David Lammy, speaking about ignorance and racism, implores the listener to “educate yourself”. This exquisitely timed punchline hits the nail on the head, highlighting the imperative for a rethink in how we endeavour to learn. Education is, by definition, self-education and anyone committed to self-education is, by definition, making a lifelong commitment.

Why?                  

In the purest sense, education is a response to curiosity; and curiosity is, by its very nature, both subjective and insatiable. We cannot delegate the question of what we should be curious about to others - who do we trust to determine this question on our behalf? We have created a world not only of constant technological evolution, but also of alternative facts. It is a world of heightened uncertainty and infinite information, in which the offer of false positives is seductive and dangerous.

One last brace of indulgent citation. I promise.   

The more I know the less I understand - Paul Weller, Changing Man

The fool doth think he is wise, but the wise man. knows himself to be a fool – William Shakespeare, As You Like It

I wonder if Messrs Weller and Shakespeare have provided something prescient for our times. The capacity to contemplate one’s own ignorance is uniquely human, but essential for the advancement of knowledge and understanding. Machines cannot think like this. They may be intelligent, but they are not humorous or wise.  

In the era of consumerism, the customer is always right - in our sustainable scenario humans are always curious.

An agile work economy

If you are thinking that the title to this section sounds like the kind of tedious and slightly tautological proposition offered up by management consultants – I agree. I will get to this in a bit, but first a little recap.

We have looked at the way in which our sustainable scenario accelerates changes around the exchange of work, both in relation to the motivations with which people approach this exchange and the skills people will need to participate in this exchange. Let us think more carefully about the nature of the exchange itself and how this exchange might adapt to the challenges presented by our scenario.

The scenario anticipates a significant disruption in the distribution of work: certain sectors shrink as consumer demand withers and employment in alternative sectors would need to grow if this loss of demand is going to be replaced. We view these problems against a backdrop of rapidly accelerating technological change, in which cycles of innovation (and by extension obsolescence) shorten. A good outcome is one in which people are able to work less and more productively, with productivity gains distributed equitably and sustainably. The frameworks for the exchange of work must be able to facilitate this.

The challenges are immediately familiar to us in 2021. The pandemic has had the effect of instantly and drastically reducing the demand for work in sectors like hospitality, retail and travel. These sectors will almost certainly employ fewer people in the future. This issue has received insufficient serious attention. It should have done: we may not know precisely the extent of the displacement, but we know that responding to it will be one of the most (if not the most) significant of the long-term economic challenges resulting from the pandemic.

Attempts by the UK government to “innovate” in response to the challenge in 2020 were met with a great deal of ridicule. A government app that sought to recommend alternative careers reeled off lamentable advice to bemused users. I was reminded of my own encounter with careers advice at school in rural England in the 90’s. We were given some forms to fill out; very carefully marking a series of multiple-choice boxes; and then the forms were fed into a computer somewhere. A couple of weeks later the results arrived. Perplexingly, around two thirds of the boys in my class were informed that they were well suited to a career as a shepherd. It seemed ironic to me that this humourless technological process, that I imagined had forced some kindly careers advisor into an early retirement, would point to such an anachronistic path. I now wonder if the advice was in some way metaphorical. Perhaps my classmates were being directed towards a career in politics, where the ability to communicate in dog-whistles and to fleece any poor creature entrusted to ones’ care are well thought of.

I will snap out of the nostalgia. The point is that economies lack the capacity to allocate work and talent to important problems in the dynamic way that is demanded by rapid and fundamental change.

So what is agility?

The idea of agility seems to have taken hold of jargon obsessive managers and consultants everywhere and seeks to address this challenge at the organisation level. Stripped to the bare bones, the concept of agility (in this tedious incarnation) centres on deploying small teams of people, with diverse sets of skills, to work together to solve problems. When the problem is considered solved the team members move on to new teams and new problems. There is, I suppose, not much to quarrel with here – just that it’s hardly a revelation. The idea of solving problems in small cooperative groups has been a persistent feature of hominin development for several million years. To the extent that our might-have-been ancestors did not catch on to this way of thinking, we might presume that they fared the worst in the evolutionary contest.

The more interesting question for this piece is how to achieve agility at the economy level. The gig model certainly allows for greater fluidity, but it brings with it challenges in terms of work security, progression and development. The people who tend to do well in the gig model are those who have already established a corpus of skills and a network of contacts.

Indeed, where are the entry level jobs in an increasingly “gigified” economy? People, almost by definition, can’t enter the workforce skilled (though some young folks may be refreshingly good at thinking). The automation of tasks, eliminates what might otherwise be treated as opportunities to learn on the job. Moreover, the increased transience of a more dynamic workforce disincentivises private sector investment in entry level development.

So, how can a ‘best of both worlds’ evolve in which security and development can be achieved alongside fluidity?

Step forward the entrepreneur (or maybe not)

Entrepreneurialism obviously has a huge amount to gain from an economy that can achieve a more dynamic exchange of work and potentially a lot to give in terms of building frameworks that facilitate such an exchange. Technology and data are vital to achieving agility - connecting people and problems and (as identified in the last section) understanding the dynamics of supply and demand.

But, there is a problem! There is a tendency for technologically driven exchanges to become monopolistic and to extract rather than create value – in short, the problem of Uber-fication as viewed from the perspective of the worker.

Entrepreneurial blasphemy!

I wonder here about the role of something a bit like a reimagined trade union. I feel a little sheepish bringing this up in a blog about entrepreneurialism. Trade unionism is, after all, an anathema to entrepreneurialism. Or so the story goes. However, even if the adversarial characterisation of this relationship is fair, we need to accept that the world is changing and changing at an accelerated rate in our sustainable scenario. There is an obvious win-win to be sought between workforce organisation and innovative business; both are concerned with skills, productivity and the creation of quality work.

So, what might a future-proof workforce organisation (dare I say trade union) look like? A few thoughts on the characteristics and functions of such an organisation: 

-         a conduit for financial support through periods of unemployment and re-skilling

-         a coordinator of investment in learning, matching the needs of business and workers and optimising the deployment of resources

-         a means of managing the relationship between the workforce and business

-         an agent that smooths the passage of disruption and softens the seemingly inevitable transition to reduced work (the dreaded/exalted ‘four-day week’) 

-         owned and managed by the members – a mutual structure

-         invests in partnerships with business and innovation

Lurking amongst these considerations is the spectre of universal basic income (“UBI”), a concept that seems to be simultaneously inevitable and yet widely unpalatable. Potentially this changes in our sustainability scenario, particularly with its assumed cultural shift towards solidarity. I wonder if pairing UBI with frameworks geared to constant learning, innovation and productivity gains might improve its marketability.

Can’t we make better use of all this data?

In 2017 the Economist published an article that claimed, “The world’s most valuable resource is no longer oil, but data”. Is the comparison really sensible?

Like oil, data has become the seminal input into a huge range of products. It has the potential to spark diplomatic tension - witness the USA’s stand-off with China over TikTok. Indeed, concerns around the monopolisation of data by a handful of gigantic companies are often compared to those that eventually precipitated the break-up of Standard Oil in 1911.

However, the attribution of value to data is fundamentally different to that of oil. In an economic sense data is non-rival. This is to say that the value of data is not consumed or diminished through its use. Unlike a chain of hydrocarbons, a chain of zeros and ones can be utilised infinitely and by an infinite number of people simultaneously. For this reason we might see data as a fitting foundational resource for our re-imagined model, with its grounding principal of solidarity; the value of an infinitely usable resource has the potential to be both distributed equitably and preserved for posterity.

In our sustainable scenario many of the most prevalent means by which data is monetised would dimmish or simply cease to exist. Much of the existing exchange of data takes place between consumers and companies, often very large technology companies, with the ultimate aim of selling us stuff. The way in which so much of this data is directed towards selling seems wasteful; might therefore our sustainable scenario point the way to a more productive path?

The landscape is already changing, with the value of consumer data shifting from the new customer to the existing customer. A shift towards lower levels of more discerning consumption would catalyse this shift, with players becoming even more focused on trying to personalise their customer experience and enhance loyalty, rather than to lure new customers. There is an interesting dynamic here, that sees a push-back against the annexation of the value of consumer data by big technology companies. As Martin Sorrel puts it, 

Today, brands are getting into retail, starting new companies, or implementing other forms of change; not merely to compete with someone else, but to collect information about their customers. This first-party data is driving the creation of digital advertising content being pumped out programmatically. You must have it, synthesise it, and control it.

He adds with characteristic pugnacity,

Brands must collate then synthesise the data. Control of that data is the critical battleground we’re going through.

All of this sounds alright to me. Trying to understand the customer better and to offer them products that are actually well suited to their needs seems a lot more wholesome than bombarding people with messages about products they don’t want. I also wonder if such a shift has the effect of levelling the playing field – enabling smaller niche brands to leverage their natural advantages of customer proximity and trustworthiness.  It is better form of exchange – and creates equity of a sort. It is also a model less disposed towards planned obsolescence and waste.  

But a few smart people are reverting to dumb phones!

However, if the prospect of building value on the back of consumption plateaus, will big tech simply focus its attention elsewhere? Is this not already happening?

In a fascinating and scathing piece, Naomi Klein highlights some of the lobbying endeavours of Eric Schmidt. Schmidt, the former CEO of Google and an Alphabet (the parent company of Google) shareholder to the apparent tune of $5.3bn, now sits on two government advisory boards: the Defense Innovation Board; and the National Security Commission on Artificial Intelligence (NSCAI). In a 2020 New York Times op-ed headlined I used to Run Google. Silicon Valley Could Lose to China, Schmidt called for “unprecedented partnerships between government and industry”,

A.I. will open new frontiers in everything from biotechnology to banking, and it is also a Defense Department priority. … If current trends continue, China’s overall investments in research and development are expected to surpass those of the United States within 10 years, around the same time its economy is projected to become larger than ours.

Unless these trends change, in the 2030s we will be competing with a country that has a bigger economy, more research and development investments, better research, wider deployment of new technologies and stronger computing infrastructure. … Ultimately, the Chinese are competing to become the world’s leading innovators, and the United States is not playing to win.

Klein’s article references a NSCAI presentation that advocates for surveillance as a fertile provisional use-case for break-through technologies, “surveillance is one of the “first and best” customers for AI”. Brazenly, the presentation goes on to claim that, “It turns out that having streets carpeted with cameras is good infrastructure for smart cities” and speculates, seemingly rather covetously, “In the near future, it wouldn't be a surprise to see the Chinese government require every single citizen to have their DNA sequenced and stored in government databases, something nearly impossible to imagine in places as privacy conscious as the US and Europe”.

There is something that feels odd to me about the way in which these arguments are couched within a narrative of geopolitical rivalry. The USA traditionally frames its international ambitions in terms of exporting democracy, rather than importing totalitarianism.

Building partnerships between big tech and government, of course, does offer very considerable opportunity. It brings with it the prospect of directing data and technology at serious problems: healthcare; financial inclusion; energy use and climate change responses. Partnership with government has the potential to better democratise and render equitable the benefits afforded by technological advance and data. It also enables the alignment and aggregation of the activities of private sector players in a way that would not otherwise be possible.

However, we might reasonably ask how equitable the partnership would be. It seems natural to be concerned about either party becoming too dominant. The ongoing anti-trust altercations between the big technology companies and various governments might be seen as a test of this balance of power. Indeed, there is a chronic (and I sense growing) issue with trust. In straying away from commercial territory, these data giants exacerbate insecurities around privacy. There is a degree of comfort to be gained from being able to recognise a plain commercial motive in our digital interactions. Yes, it is logical to wonder how far companies will bend the rules to make money and how much we really understand about how they harvest our data, but there is reassurance in being able to see an obvious motivation when the ad pops up.      

A few years ago, I stayed at a refuge in a national park in Chile, owned by a man who had been a journalist in Santiago through the overthrow of the Allende government in 1973 and many of the subsequent Pinochet years. He was more than happy to stick with an unsophisticated device that did not perpetually connected him to the internet. A smart man with a dumb phone! One of the guests extolled the array of “free” services proffered by smart phone apps. Didn’t he think he might be missing out?  “Free” he laughed, “You must be kidding!”

Whose data is it anyway?

Indeed, it can be easy to conflate the issues around privacy with those around data ownership. The transactions, in which the user exchanges data for services (or distractions), are often surreptitious, poorly understood (by the user) and almost entirely one-sided. Amid the disquiet and occasional furore surrounding privacy, it can be easy to forget to ask a simple but important question- who’s data is it?

I suppose, in some ways, it is a moot point. If only one of the counterparties to the exchange has the capacity to behave as if they were the data owner what does it matter? It’s a bit like buying a barrel of oil, only to realise that the person you have bought it from retains ownership of the barrel and has a monopoly on barrels. The oil can be tipped out onto the floor or the seller can remain the ‘custodian’ of the oil on whatever terms they choose.  

It is this imbalance that seems to occupy much of the time of Tim Berners-Lee, creator of the World Wide Web. Berners-Lee’s Solid project seeks to provide internet users with a pod for their own data. A pod is a bit like a data suitcase: a means of portable storage, that enables users to take possession of their data, carrying it with them around the web and opening and closing compartments to exchange (or not exchange) information as they chose. It is an interesting idea in the context of our thought experiment, since it does provide the individual with some greater equity in the exchange of their own data and probably enhances the capacity of this data to be directed at a wider range of purposes.

The Solid project places the individual at the centre of its data story – a good thing in many ways, but there is an argument to say that data that has broader social application ought not to be controlled by the individual. This is of course allowing for rights of individuals to confidentiality. The pandemic provides a pertinent example, in that patient data (assuming an untraceable form) has considerable utility in informing future public health policy.

Sustainable data use

The prospect of decoupling the value of data from consumerism, combined with some disruption to the means by which data might be ‘possessed’ looks a bit disconcerting for the entrepreneur. Consumerism has provided the entrepreneur with ample low-hanging fruit for the monetisation of data. Moreover, the annexation of the control of data has made a handful of entrepreneurs very wealthy, not to mention very influential.

However, I think that there is opportunity in separating the baby and the bottle. Ceasing to think about data as a commodity (like oil) unlocks its broader potential. I prefer to think of data in terms more analogous to renewable energy than to fossil fuels. Data is like the radiation of the sun: a source of light and energy that can be harnessed and utilised without being owned or monopolised. If the value of data is rendered a function of its utilisation rather than its monopolisation then we might actually make better use of all this data.     

Democratising the exchange of capital

“short-term greedy, long-term stupid” is how one James Anderson, manager of the Scottish Mortgage Investment Trust, described the City of London’s investment culture. It’s a rebuke that sits awkwardly next to the principle of solidarity that this piece has been attempting to elucidate and advance; a principle that demands that we approach our economics with an equitable mindset and with a long-term gaze. What if capital exchanges actually did function in accordance with this solidarity principle?    

Consumers have generally become more conscientious in their buying choices over the recent decades, having been encouraged, by both campaigners and marketeers, to think of these buying choices as the means by which they can align their money with their principles. This evolving consumer zeitgeist is all very well, but it is prone to sophistry; the distinction between campaigning and marketing has sometimes become hard to discern. Moreover, we might wonder about effectiveness: switching to (apparently) eco-friendly cotton buds can feel a bit like micturition (or just pissing) in a rising ocean.

Our sustainability scenario jams this wellspring of commoditised consolation; ironically the consumer who buys less stuff might find there is a hole where the cathartic indulgence of ethical buying used to be. I wonder if these former consumers might increasingly come to see themselves as conscientious and impactful investors. To give a sense of the scale of the economic fire-power that is there to be wielded: total UK pension wealth was estimated by the Office of National Statistics to be in excess of £7tn for the years 2016 to 2018. I wonder if these asset holders really understand the potential influence they have? They are saving for a future and yet failing to grasp the potential they have to save this future from the perils that threaten it.

Free markets – free from social context - free from transparency – free from purpose

There is an absurd comparison to be made between the investment manager and the political representative. If you entrust your vote to a politician, you expect to know the principles of their politics and their position on important issues. Parties set out how they will raise and spend money. Voting records are made public and are scrutinised by the press. The same cannot often be said of the investment manager. This opaque custodianship undermines the equitable distribution of market power - however, it is best not to ask too many questions if you are a mere saver. The unseen hand of the market must remain unfettered; markets must operate in total detachment from social context and principles, driven by their own autonomous, dispassionate and inerrant logic. The alternative is an inefficient allocation of capital - no one wants that!

The dysfunctionality of capital exchanges has been exposed (again!) in the pandemic. One aspect of the pandemic’s financial story that puzzled some is the apparent disconnect between financial markets and the “real economy”. As economies were paralysed by containment measures, stock markets traced the most remarkably acute “V-shaped” recovery. Of the range of explanations on offer for this disconnect, the one I find to be the most persuasive, largely by virtue of being the simplest, is Paul Krugman’s proposition that money continued to flow into equity markets largely because there was nowhere else for it to go. A great deal of the money pumped into economies in response to the impacts of the pandemic in fact served to pump up asset prices – or more realistically to depress further the value of money in relation to the value of other assets.  

Think of the system as a network of pipes designed to fill a series of buckets. Capital is poured into funnels at the top of the system and flows down through the pipes to the buckets below. Each bucket represents a different demand for capital. If the system is well calibrated, capital will flow as a priority into the buckets that are marked for uses that optimise the payback. If the system is poorly configured some buckets will start to overflow (the equivalent of exorbitant assets prices), while others are barely filled. When you have a lot of overflowing buckets (and for that matter, a lot of underfilled buckets), you have financial markets that have become dislocated from the real economy.

How depressing when there is so much important work for this money to do.

The funding gap

The 2020 Future of Growth Capital report estimated that the long-term, structural growth funding gap for UK businesses was between £5bn and £10bn each year. This is to say that the capital made available to businesses deemed to have good growth prospects was falling short of what these businesses require by £5bn to £10bn. The pandemic was estimated to have pushed this funding gap out to £15bn. Remind yourself that the total value of UK pension assets is somewhere in the order of £7tn. All of this looks very avoidable.

Indeed, the interests of most savers are served by steady and sustainable growth, which demands a closing of this funding gap. Steady economic growth means sustained productivity growth and, by extension, patient investment in technological innovation, social wellbeing and environmental sustainability. The UK’s woeful record on productivity growth is sometimes referred to as the “productivity puzzle”. It ought not to be a puzzle – not to an actor as inerrantly rational as the unseen hand.

The demise of public markets

The decline in the significance of public capital is salient sub-plot to this narrative. There are far fewer companies participating in the public markets today than there have been over recent decades, shrinking the opportunity for ordinary folk to gain a direct stake in the organisations that have a profound impact on the world in which we all live. The number of companies on the US exchanges peaked in 1996 at 7,500 and has declined 40% since then. Over the same period the private market assets (including private equity, venture capital, real estate, private debt and infrastructure) rose to $6.5 trillion in 2019, which is the highest level on record.  

The tendency of many “public” technology companies to configure their share structure in such a way as to maintain control for the founders compounds this development. Facebook’s mission is supposedly “to give people the power to build community and bring the world closer together”. However, if you were to buy stock in Facebook, your sense of shareholder empowerment might feel a little underwhelming. Facebook has two classes of shares: “A shares”, which are those traded on the exchange and which carry one vote; and “B shares”, which are held by a small group of insiders and carry ten votes. Mark Zuckerberg is estimated to control 60% of the voting rights by dint of the arrangement and with it.

Finally, these developments have an impact on the tax take from large corporates. The extended period of low and (often) negative real interest rates that has followed the 2008 financial crisis, together with the proliferation of private equity ownership and the propensity of these investors to leverage the businesses they invest in, has seen many large corporates engineer their capital structure in such a way as to use interest charges to reduce taxable profits.  

Doing things differently

What solutions exist that might reset the basis on which capital is exchanged? What role does the entrepreneur play in enabling these changes?

Are the answers to be found amongst the gaggle of FinTech disruptors, that promise to change our relationship with money? Certainly, the FinTech space is attracting a good deal of attention. However, the big FinTech successes have tended to have little impact on the fundamentals of the relationship between people and capital. Essentially these companies make it quicker, simpler and cheaper to use money. These all seem like good things, but fundamentally they continue to view people as consumers rather than investors, and certainly not as active investors.

Those concepts that do seek to alter the picture in a more fundamental way, fall a long way short of solving all the problems at the same time. Crowdfunding is not scalable. Retail trading platforms are often geared towards volume; they do not particularly encourage long-term investment (to put it mildly). Crypto coin offers (where investors buy crypto tokens a little like shares) are not regulated and prone to fraud.

The problem needs a deeper rethink than this. We need to think about the social function of capital markets – to try to develop a framework through which capital can be exchanged to address the needs of people and the planet. It must be a framework that provides the opportunity to fund the development of a broader range of organisations; one that is more accessible; more transparent; and facilitated by intermediaries whose rewards are far better aligned to social principles.

However, democratising the means of capital exchange is not a simple problem to solve. Maintaining a social function for markets becomes harder to do at scale, since the operation of markets necessarily becomes more abstract and remote as scale increases. And scale is important if you are tackling big problems. There are certain fundamentally advantageous characteristics in the existing framework, which would need to be retained in a reset. First, there does need to be some professional intermediation. Investment can be complex and even the most conscientious investors are unlikely to want to navigate these complexities in order to put their money to work. Second, there needs to be sufficient liquidity to ensure that organisations can access capital efficiently and investors can extract their invested capital when they need. Third, large scale curated markets facilitate the kind of wholistic view of investment opportunity that enables the allocation of capital to important missions to be effectively assessed.

ESG investing (Environmental, Social, Governance) is an attempt to solve the problem by adapting rather than replacing the existing model. ESG is an umbrella term for investment practices that screen investment opportunities on the basis of environmental, social and governance criteria. It is an initiative that seeks to align the workings of the existing capital exchanges to social purpose and has some potential to help retail investors to exert influence. While ESG investing is growing, it seems to me to be a concept that remains vague. There are no widely recognised ESG criteria or standards and to a large extent, investment firms are able to mark their own homework when offering ESG investment products. I hope (and expect) this will change if demand continues to grow

Even if these issues can be addressed, the efficacy of the concept remains subject to some inherent limitations. ESG investing does not do a great deal to broaden the range of organisations that people can transparently take a stake in. As remarked upon earlier, the shares and bonds that are traded on public exchanges are themselves a fairly selective (and diminishing) cohort of investment opportunities; the opportunity to gain exposure to earlier stage enterprises remains concentrated in the hands of private equity and venture capital investors. These investors may ultimately play with large amounts of retail capital (via pension schemes and so forth), however they have little (if any) obligatory regard for the social concerns of these investors. This issue of earlier stage exposure becomes increasingly significant as innovation cycles shorten and innovative earlier stage companies are increasingly influential at the frontiers of the most important problems.

What I am wondering about is a sector of thematic growth and innovation funds, offering direct participation to retail investors. This would be a little like the Business Development Companies (BDC) listed on the US exchanges. These investment companies offer retail investors exposure to a portfolio of underlying investments in high growth enterprises. The difference I am envisioning is that these new investment funds define their investment themes in accordance with specific purposes: decarbonisation; clean water; access to healthcare; and so forth. The funds would seek to engage investors not only around financial return, but also around the broader impact of their investing. Performance benchmarks for the managers of these funds would reference long-term measures on impact as well as financial return.

Returning to first principles

Having emphasised the importance of being able to operate at scale, I will round the section off by looking at the potential for the exchange of capital to work differently on a small scale. How about community ownership of a renewable energy asset? There is an obvious role for the entrepreneur here in facilitating the development of these localised capital exchanges, where they can serve a productive purpose; in creating the technologies that enable the shared ownership and economics to function. In Kenya household investment in off-grid solar is growing rapidly. Households are using mobile financing solutions to access small scale solar installations and ultra-efficient appliances to access electricity, in many cases, for the first time.

Perhaps herein lies a valuable perspective: thinking about the fundamentals of financial markets as if their financial exchanges were analogous to those enacted within communities. At this point, I will invoke one of the core arguments set out by the economists Paul Collier and John Kay in their recent (and previously mentioned) book Greed is Dead: namely that markets necessarily operate within a social and cultural context. The book points neatly to the Agora, situated on the northern slopes of the Acropolis and having served as both civic meeting place and marketplace, as a reminder of the deep historic precedent for the social character of markets. If we think about financial markets as a means to an end, rather than an end in their own right – and create frameworks that enable people to pool financial resources to bring about good outcomes (however these might be defined) – then we might have the basis for a greater democratisation of the exchange of capital and with it an answer to “short term greedy, long-term stupid”.

The entrepreneurial state

To some it might seem counterintuitive to associate governments with entrepreneurial agency. If we were to anthropomorphize the putative character of the state, we might picture an individual that is at once an anathema to the entrepreneurial archetype; an intransigent and humourless bureaucrat in a crumpled grey suit spoiling all the innovative fun. Does this characterisation stand up to scrutiny? Does our sustainable scenario force us to think more broadly about who the entrepreneurs are?

If you have read this far you will no doubt appreciate that the job of creating a new social and economic model is quite a big one. Just to recap: by a new model we mean a new framework that aligns people, technology and capital to a reimagined social and economic paradigm. I have tried, at various junctures, to make a case for the entrepreneur as the orchestrator of this realignment, but it seems inevitable, given the scale of the challenge, that government would need to play a critical role. Our sustainable scenario, by definition, contemplates a significant decline in demand; it is inevitable that governments would step in to cushion the blow, intervening in economies to create and stimulate alternative forms of demand. How can this intervention be made to work? Does the adoption of an entrepreneurial mindset hold the key for governments?

The economic impact of the pandemic gives us a clue as to the scale of the issue and the profound nature of the challenge. The cost of interventions by the governments of the G20 nations was estimated at $5tn in March 2020, which equates to around 7% of 2019 GDP. By May 2020 estimates had increased to $7tn, or over 10% of 2019 GDP. However, the impact of the pandemic is a mere tremor in comparison to the seismic shift that would occur in our imagined scenario. The losses in output arising from the pandemic are not permanent – the expectation remains that economies will eventually return to some state of comparative normality. However, in the scenario we are imagining this is not the case - the lost demand never returns.

The challenge for governments lies in making higher levels of intervention sustainable. Announcing that you will “do whatever it takes” as the turbulence is unfolding is the easy bit. Dealing with the subsequent debt overhang and determining how to withdraw emergency measures is much trickier. One enduring lesson from the 2008 economic crash is that emergency policy settings have a habit of becoming the new normal.

What would an entrepreneurial state look like?

The economist Mariana Mazzucato argues for an entrepreneurial state; or rather she argues that we already have an entrepreneurial state, but that we are unwilling or unable to fully acknowledge and embrace it. The point I hope I can emphasise in the references that follow is that, armed with an open mind, it is possible to picture a dynamic state, enabling innovation and economic development. There are two themes of Mazzucato’s arguments that I want to highlight here.

First is the idea of “mission-orientated organisations”. In a 2019 interview Mazzucato explains,

When I use the word ‘state’ I am talking about a decentralised network of different state agencies. When such agencies are mission-oriented to solve problems and structured to take risks, they can be an engine of innovation.

The response to Covid-19 might well be seen to have forced a “mission orientated” mindset to the fore. The UK’s chief scientific advisor, Patrick Vallance wrote in April 2020,    

Helping get a vaccine is rightly one of the government’s biggest priorities, which is why we have brought together scientists, industry leaders and the government under a single taskforce. This will ensure vaccine discovery is funded, clinical trials can be done quickly, regulators help speed the path to a safe and effective vaccine, and we develop manufacturing capabilities to ensure that we can make and access large quantities of vaccine.

The development of the Oxford/AstraZeneca vaccine and the effective distribution of vaccines have undoubtedly been bright patches in an often dim UK response to the pandemic.  

A second theme is the advocacy for more varied and effective models for state investment. In many cases this is an argument for state agencies taking equity positions in the innovations they fund, enabling these agencies to share in the upside from subsequent value creation. To give a taster: the US Department of Energy injected $465m into Tesla in 2010, mainly in the form of low interest loans. In the same year, the company’s stock floated at around $17. The stock is currently trading at $1,109 (an uplift of over 325x allowing for stock splits). Of course, successes like this are rare - but that’s fine. If government agencies are participating in the phenomenal upside of the rare successes, they are in a good position to create a broad and (crucially) self-perpetuating platform for sustained strategic investment.   

I am doing a great disservice to Mariana Mazzacato with this fleeting and unsophisticated introduction to her work. If you are not already familiar - I encourage you to look it up.

Parallels with the pandemic

Our sustainable scenario hastens the shift to a more entrepreneurial state, in much the same way that the pandemic has done. The pandemic has given rise to a passage of history in which the apparently impossible becomes possible. Witness, for example, the EU’s huge rescue package agreed in July 2020 and financed by common EU debt issued by the European Commission. An unprecedented act of financial solidarity, though perhaps bitter-sweet to the Greeks.

Indeed, the economic effects of the pandemic may well continue to redefine the role of the state, particularly as the response shifts in focus towards the longer-term. By way of an example: governments will eventually have to confront the long-term implications of the legacy of debt-overhang for businesses. Many otherwise viable and strategically important businesses are emerging from the crisis with considerable levels of debt, unable to invest, evolve and grow as they would otherwise have been able to. Governments may well have to take equity (or quasi-equity) positions in these companies; they will be forced to pick winners and by extension seek to maximise the return on investment. The UK government’s Future Fund is an example of this: the UK government is already reported to have converted loans to equity for stakes in 37 high growth companies. Perhaps more significantly, governments will need to deal with the large-scale displacement of work. If they are wise, I think they will invest strategically in the technologies and innovations that create new and alternative livelihoods.

The principle of an entrepreneurial state

However, I don’t want (or need) to rely on these economic arguments alone. The concept of an entrepreneurial state seems to me very much aligned to the principle of solidarity and in this respect, it can be argued for on cultural and ethical grounds too.

The concept of an entrepreneurial state enhances equity in the economy in a very literal sense. Governments take strategic stakes in innovation and enterprise and seek to develop these assets and extract returns on behalf of citizens. Economies are guided by this strategic investment and wider state agency to develop in ways that distribute the benefits of growth and development more equitably.

Moreover, the concept of an entrepreneurial state lengthens investment horizons. It enhances the prospect of purposeful innovation supported by patient capital. It has the potential to optimise long-term returns on investment and thereby to render state intervention more sustainable. Indeed, it may ultimately prove more effective for governments to extract revenue streams as an equity holder as opposed to a tax collector, especially for those technology enterprises that have a mercurial disposition towards the concept of tax residency. In short, an entrepreneurial state would be a good legacy to create for future generations.

The political context

Finally, there is also a political context: the challenge of reconciling the relatively short election cycles of democratic nations with the need for long-term thinking on policy and investment that is demanded by so many of the world’s most pressing problems is a real and important one. The prospect of non-democratic government as a response to this challenge is probably not particularly appealing! The establishment of state agencies and private sector partnerships, backed by cross-party consensus, to attack long-term problems looks like an effective third way, combining democratic oversight and guidance with long-term commitment to investment. The UK’s Green Investment Bank might have been seen as a good example, that is until it was sold to the Australian bank Macquarie in 2017, with scant commitment to remain aligned with the UK government’s climate change goals. Never mind! In the wake of the pandemic, the UK government now plans to establish what looks a lot like a successor in the National Infrastructure Bank.

What was that about long-term strategic thinking?

The developing world

If you have ever flown into Mumbai airport you can’t have failed to be taken in by the vast slums, with their distinctive seas of blue tarpaulin roofs. Like me, you may have wondered at the sheer scale of the talent not given the basic nurturing that many take for granted. What if the opportunities for people living outside the developed world could be elevated, supported by patient and equitable investment? Does our sustainable scenario, in which servicing the rapacious consumption of the developed world ceases to be the primary object of a globalised economy, lay a foundation for such a goal?

Everything I have written up to this point is entirely a reflection of my own experience and frame of reference. I read recently that if global GDP were distributed in a perfectly even-handed way, it would mean that every human would need to live on around $5,500 each year. Admittedly I haven’t interrogated the basis of this claim or thought about what such a redistribution might mean in terms of current global disparities in buying power, but as an opening bid and in the context of our thought experiment it is an uncomfortable place to start from. The proposition of levelling economic opportunity and experience across the globe at a sustainable level is an incredibly difficult one. I feel better taking my existence on the buy side of the global labour equation for granted. I suspect I am not alone. Sitting in a comfortable Melbourne home, typing on a laptop (I guess assembled in China) and sipping tea (harvested in Sri Lanka), I have to accept I am out of my depth. Should I say even more out of my depth than usual! The challenge of global inequality is already formidable enough. Contemplating the same challenges against a significant decline in global demand is something else.     

So what?

I suppose one question that might be posed is why even worry about this? Our experiment poses quite enough challenges that are closer to home. Shouldn’t such a problem be put back in the draw marked “too hard”.

Here, I would have to invoke the principle of solidarity. The apprehension of issues like pandemic and climate change expose the connectedness of the human race. The problem of developing new models for sustainable living is a global problem and the solutions must be equitable from a global perspective. Moreover, a concern for future generations necessarily focuses attention on developing nations. The developing nations are overwhelmingly young nations. The median age of people living in the African nations (for example) is 19 and the UN projects that the population of the continent will almost double to 2.5bn by 2050 in its current base forecasts.

However, there is also a compelling argument to be made that focuses on opportunity. Towards the start of the essay, I quoted Oscar Wilde, “We live in an age when unnecessary things are our only necessities”. This playful maxim sits awkwardly next to the proverb, “Necessity is the mother of invention”. It seems to me that many of the solutions to the most pressing problems of the twenty-first century will be imagined and developed by the minds of people who have grown up with more than first world problems to contemplate.

All of which enhances the leapfrogging potential, latent in the developing world. To reconnect with an example used earlier: the essay referred to the rapid growth of off-grid solar in Kenya; the nation currently generates 97% of its energy from renewable sources and has the opportunity to connect its entire population to electricity from renewable sources. Indeed, sub-Saharan Africa is set to be the first region to experience a seminal burst of economic development that lifts-off in a digital era; it has the potential to develop in a way that is smarter, greener, faster and fairer than the route taken by much of east Asia in the twentieth century.

A sobering look at the scale of the challenge

It goes without saying that this potential is difficult to unlock. As with everything else, there are clues in the pandemic as to how our sustainable scenario would play out for the developing economies. These economies have had to to contend with significantly reduced demand for natural resources and exported goods and services; devalued currency; decreasing capital inflows; and significantly reduced remittance from citizens working in developed economies – all of which are also concomitants of the reduced consumer demand in the developed world that our sustainable scenario assumes.

The risks have been exacerbated by rapid increases in emerging market debt over the last decade – increases accelerated by the pandemic. An increasing proportion of this debt is owed to private sector creditors and to the Chinese government and its connected financial organisations, which complicates the process of negotiating debt relief. The IMF have extended emergency financing to 76 countries in the wake of the pandemic. The G20 is promoting its Debt Service Suspension Initiative in order to freeze debt for 73 eligible countries.

The pandemic risks reversing decades of attritional progress in lifting living standards and life-chances for the people living in these nations. Of the 73 nations eligible to participate in the G20 relief scheme, 43 are scheduled to spend more on debt servicing than on healthcare in 2021. The world bank has estimated that an additional 88 to 115 million people will have fallen into extreme poverty in 2020, with the total potentially rising to 150 million by 2021. This represents a significant reversal of the pre-pandemic trends; it means that the proportion of the world’s population affected by extreme poverty is projected to reach between 9.1% and 9.4% in 2020; this proportion had been forecast to fall to 7.9% before the pandemic.

A predictable response to the challenge!

So how is this potential going to be unlocked in a way that works equitably for the people of the developing world? How are the exchanges between people, technology and capital going to be developed in a way that maintains the advancement of living standards in a sustainable way and against the backdrop of declining global consumption?

The risk in building the model for developing economies is that these economies are excessively dependant on the technology and capital of the developed economies – and therefore that the exchanges between developed and developing economies remain extractive rather than equitable. In some ways this is a cautionary component of the China development story. The Chinese economy still retains a low share of the value many of the goods that it exports. By way of an often-cited example, one estimate put the share of the value of an iPhone 7 attributable to the Chinese economy at $8.46, or 3.6% of the total factory cost. China continues to wrestle with the legacy of manufacturing growth that has been built on cheap labour, is heavily dependent of foreign intellectual property and is heavily geared to western consumption. The Chinese state is able to address this imbalance with levels of intervention that simply cannot be contemplated by other developing nations.    

In response to these challenges, I would argue very simply (and you might feel predictably) that the answer lies in patient investment that is grounded in the principles of solidarity. This is to say, the cultivation of investment that is both long-term in its purpose and equitable in terms of the allocation of risk and return.

In what remains of this section, I will set out a few considerations on the way in which people, technology and capital can be aligned to create an optimistic response to our sustainable scenario and the important role that entrepreneurialism has to play.

It starts with people

Education is a natural starting point for this sketching out. The great opportunity for the 21st century’s developing economies is grounded in the potential for the people of these economies to participate in the global exchange of digital products, technology and knowledge. The people of these economies must be equipped to develop their own intellectual properties and commercialise their own innovation. Innovators need access to learning and research capability and entrepreneurs need to build skilled teams.

Trying to apprehend the level of lost opportunity from lack of investment in education is mind blowing. For example, in the year 2000 over 40% of the Indian population had no formal education. The numbers for children receiving education have improved significantly in the two decades since then, both in India and globally, but the economic benefits will lag.

The investment logic for education is obvious and the economic research is beyond compelling. Investing in education and closing the educational gap between males and females generates arresting returns. A 2016 report cited in report published by the Malala Foundation, Safer, Healthier Wealthier: how G20 investments in girls’ education improve our world, found that every $1 invested in an additional year in school for girls in low-income countries returns $10 in earnings and health benefits. The report goes on to cite a 2016 UNESCO study that finds if all children in low-income countries were to complete upper secondary education by 2030, per capita income would increase by 75% by 2050.

Progress on education has proven to be fragile. The pandemic has disrupted the education of vast numbers of children around the world. In many parts of the developing world children have been forced into work and girls into marriage. UNESCO have estimated that there are 30 million children at risk of never returning to school. Intertwined with these considerations is the pandemic’s exposure of the links between learning and access to the internet, as well as the vulnerabilities that this creates. Even in developed countries, significant inequalities in educational opportunity have been exposed around online connectivity.

Equity necessitates connectivity

In 2014 Tim Berners-Lee, inventor of the World Wide Web, called for the internet to be recognised as a basic human right. The United Nations has targeted global broadband user penetration of 75% by 2025. This mission is clearly critical to the capacity of the developing economies to participate in a reset global model.

The pandemic experience provides a clue as to the extent to which evolving modes of living are dependent on digital access. A report from the World Economic Forum found that during the disruption, internet use has increased by as much as 70% and that use of some digital collaboration tools has increased by more than six times. But not everybody has the ability to distance themselves without isolating themselves. Research from the IMF shows that less than half of the population in developing countries have internet access, with countries in sub-Saharan Africa and many of the emerging economies of Asia having the lowest levels of connectivity. The problem is not just one of coverage. The internet usage gap has been estimated at four times the coverage gap; this is to say that only a quarter on the people with no internet access live in areas with no internet coverage. Closing this usage gap also means making devices and services affordable, connecting households to electricity and developing the basic skills and knowledge that enable people to connect to the web. 

The US tech giants are throwing some of their weight behind the problem. In 2013 Google launched its Loon project that is currently piloting a network of balloons to relay internet signals to some of the remotest communities. Facebook has proposed a 37,000km subsea cable that will encircle the African continent and enhance capacity and availability for hundreds of millions of people. I suppose that this connectivity drive is Silicon Valley’s belt and road initiative.

The connectivity gap is closing steadily; since the early 2000’s internet use in sub-Saharan Africa has increase by ten times, compared to three times for the rest of the world. Unsurprisingly the IMF research finds that connectivity has a significant impact on development prospects: a 10% increase in internet connectivity drives an increase of 1%-4% in per-capita GDP growth for sub-Saharan Africa. Moreover, business that are connected to the internet average revenues that are three times those of unconnected businesses. Indeed, in many instances digital connectivity is synonymous with connection to the financial economy and the exchange of money (financial inclusion).

Access to capital – financial equity

Connecting talent with patient and equitable capital in developing economies is necessarily challenging. The domestic investment ecosystems offer far more limited: liquidity; expertise; operational scale; and legal and regulatory protection. Foreign investment may be fickle and, at times, disinclined to compound emerging and frontier market risk with early-stage risk. Our experiment presents a scenario in which there would be a fall in the value of exports and commodities, undermining the stability of many of the developing economies and deterring foreign investment.

An upbeat report by the investment firm Partech identified $2bn of venture capital investments into African focused technology enterprises in 2019, which amounted to a 74% increase on 2018. However, to put this into some context, this amounts to about 3% of the value of Apple’s share buy-backs for 2019 alone. Of the investments identified, 55% were into financial inclusion enterprises and the main driver of growth was investment into later stage enterprises. A more sombre 2020 report from the World Bank Group report identifies a “valley of death” for entrepreneurs building enterprises in developing countries. The report refers to a lifecycle phase during which the enterprise is too big for microfinance, but too small for venture capital (VC). The report describes a nascent early-stage investment sector struggling to plug the micro-VC opportunities in a number of the developing economies.

So, I’m not sure that the Partech findings speak of a metamorphosis from valley of death to Silicon Valley just yet. Perhaps this is the point. The 2019 Africa Early Stage Investor Summit key findings, while anticipating major increases in early stage investing, emphasise caution against holding Silicon Valley as a paradigm. Actors on the continent need to identify their own models and build their own ecosystems. Indeed, it is natural to be sceptical about foreign investment into the developing world and logical to suppose that this investment is largely driven by self-interest. Will the tech giants and venture capitalists, not to mention the Chinese development banks, eyeing up Africa really prove to be so different from the natural resource companies that proceeded them?

More entrepreneurial states

All of which prompts questions around the role of strategic public sector investment - the potential that this might unlock and the vital role that the public sector might play as a marshalling counterweight to the inevitably self-interested involvement of other players. Let’s think again for a second about South African entrepreneur, Elon Musk, whose enterprises have benefitted from support of around $4.9bn from US government agencies. What might a generation of ambitious African entrepreneurs achieve with patient and strategic investment of this kind?

OECD data places total research and development expenditure for Sub-Saharan Africa at 0.5% of GDP. The figure for Nigeria, for example, is 0.2%. By contrast the metric amongst the OECD nations is 2.4%. Korea invests 4.5% of GDP into research and development and Israel as much as 4.9%.

I wonder if Israel’s success in cultivating its own investment ecosystem might provide some lessons. The role of the Yozma venture capital program through the nineties is an interesting case study. The organisation sought to catalyse and canalise private, and largely international, sources of capital; effectively acting as a public co-investor to private capital and underwriting much of the risk of earlier stage investments. Simultaneously the Israel Innovation Authority facilitated pathways from primary scientific innovation to commercialisation.    

One of the interesting things about Yozma is how little public money was involved at the outset. This is interesting because I suspect that not many of the governments of developing nations are in a position to make the kind of investments that the US government has made in Elon Musk. The first Yozma fund was created in 1993 and capitalised with $100m of government investment. This money was compounded over time through a combination of partnership with private investors, the growth and follow-on investment in successfully backed enterprises, as well as the wider spill-over effects of this growth.

The issue of investment is far too delicate and important to be allowed to be determined by way of a contest (or carving up) between global corporates and an expansionary China. It underlines the need for multi-lateral action on debt relief and economic stability to enable the governments presiding over developing economies to act as the strategic cornerstone of their own economic development.

the end of our exploring…

With that I shall prepare to make some concluding remarks. There is, of course, so much I have not even touched upon in my writing up of this thought experiment (and I have gone well beyond the two thousand word limit I originally set myself!). I can only plead that at the start of this essay I was careful to promise something rather than everything.

I think it is apt that the essay is finishing so far away from what I would consider home. The writer L.P. Hartley famously quipped, “The past is a foreign country, they do things differently there”. It follows that the future is also a foreign country, one in which the foundational ideas and culture are different to those which we recognise in own time. I hope that in trying to imagine what it would be like to travel to this foreign land – a land in which the human race has found a way to live happily and sustainably – this essay has managed to do some productive exploring that enables us to take a new look at the world around us and “know the place for the first time”.  

Conclusion: Debt shortens time

I’ve tried throughout this thought experiment to imagine an optimistic outcome, one which I hope looks achievable and desirable. It is an outcome that centres on a new model; a model built on rethinking the basis of exchange between human beings. Really there is no point looking at our experiment in anything other than an optimistic way. What can’t go on - won’t go on. There is no choice but to embrace a lower consumption future and look for the happy ending.

I have also tried to imagine an important role for the entrepreneur, as the themes of the blog oblige me to do. The big problems of the 21st century require an evolved global entrepreneurialism: one that imagines a new model for equitable and far-sighted exchange between people, technology and capital and that orchestrates the talent and perspective of the entire human race. This is to say that entrepreneurialism must align itself to the principle of solidarity.

So far so utopian, but there is a problem with transition. It seems to me that the journey will be painful whichever way you look at it.

Why?

Well, it all comes back to debt and data. Both have powerful self-perpetuating and reactionary properties.

Let me explain.

Starting with debt. The prevailing financial systems lack agility. These systems have evolved to function in a way that necessitates constant expansion of debt and money supply. Growth cycles are necessarily self-perpetuating, they gather considerable momentum and cannot change course or be meaningfully rebooted. To take an arresting statistic from the UK: £1.3tn of the total £1.7tn of commercial bank lending stock is geared towards property. This is a little over a decade after a monumental failure of the global financial system precipitated by the collapse of markets for mortgage securities and a dismal decade for house building.

To build a new model it is necessary to kill something of the old model. But this paralyses the financial systems that we have: killing the old means deflating established assets, deleveraging and shrinking the supply of money. The system must therefore seek to evolve more slowly, the pace dictated by the old modes rather than the new.

Elements of the anticipated long-term impact of the pandemic illustrate the absurdity. As the lockdown measures have been rolled back, in many ways remarkably little has changed. The pandemic has not fundamentally affected the skills of the workforce, the capacity of productive assets, the availability of technology or of natural resources. In short, the productive capacity of the “real economy” is unaffected. And yet we are bracing ourselves for long-term “economic scarring” - a prolonged period of being less productive in certain sectors as we contend with the millstone of debt overhang weighing on businesses and investment. If money is a medium for human cooperation, then shouldn’t the relationship between the “financial economy” and the “real economy” be a servant-master relationship, not the other way around? Indeed, it seems more appropriate to see the pandemic as exposing rather than creating the economic problems often attributed to it; it is a trigger rather than a cause.

All of which brings me back to the Chinese proverb: Debt shortens time. Modes of existence built on debt are deviously hard to escape from. The challenge implied by the mischievous proverb seems insoluble. Who knows, maybe this proverb has informed the Chinese state as it has sought to guide its vast economy through multiple phases of rapid development, for the most part succeeding in making the financial system the servant of the strategic objectives of the real economy.

So, if that’s the case for debt’s stymying role, what about the charges against data?

Let’s go back – almost to the start of the essay – to the section that talked about the importance of reimagining our own stories. If the transition to a happy and sustainable existence is ultimately a cultural one then it is a transition that begs a bold exodus story. The problem is that so much storytelling has itself become commoditised as content and its exchange canalised by algorithm. A great deal of content is ultimately funded by advertising – meaning by consumption – the very thing we want to dissuade. The stories that imagine a sustainable future must be bold, by definition they must break the mould. It seems to me we will not find these stories, directed by the record of our past interactions or financed by our own excessive buying.

The pessimist in me wonders if we would spurn this opportunity to re-imagine our lives; ultimately marking time by bingeing on more content, stupefied through a passive and slothful relationship with the same stories, endlessly fed to us by reflexive calculated curation. Living would be reduced to a contest, in which we try to hold off the atrophic effects of our sedentary existence for long enough to exhaust the entire Netflix catalogue!

If our species cannot build consensus around bold stories that imagine a sustainable future, then the future may become unimaginable. We are in debt to the planet. Our depletion of natural resources and degradation of ecosystems borrows from tomorrow. The longer it takes for us to reverse the deficit the sooner the day arrives when outcomes are beyond our control.

The proverb has it right: Debt shortens time.