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Intelligence, Strategic Foresight and Warning, Risk Management, Forecasting or Futurism?

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Our focus is usually strategic foresight and warning (SF&W) for national security, the latter being understood in terms of traditional and non-traditional security issues, or, to use a military approach, in terms of conventional and unconventional security.[1] Building upon Fingar, Davis, Grabo and Knight, we define it as “an organized and systematic process to reduce uncertainty regarding the future that aims at allowing policy-makers and decision-makers to take decisions with sufficient lead time to see those decisions implemented at best.”

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Broadly speaking, it is part of the field of anticipation – or approaches to the future, which also includes other perspectives and practices centered on other themes. SF&W can and does borrow ideas and methodologies from those approaches, while adapting them to its specific focus. For example, a country like Singapore with its Risk Assessment and Horizon Scanning (RAHS) Programme Office, part of the National Security Coordination Secretariat at the Prime Minister’s Office, uses a mix of most of those perspectives, reworks and combines them for its own needs, while creating and designing original tools, methodologies and processes. Furthermore, various actors also use different names for SF&W, or very similar approaches. It is thus important to clarify what various labels and names mean, even if borders between categories are often fuzzy. We thus find, by alphabetical order:

  • Futures Studies (also futurology), practiced by futurists, have been developed since the 1960s. It has, initially, as main market profit organizations, i.e. companies, although it also tends increasingly to provide services to territorial collectivities and state agencies, generally in fields unrelated to security (e.g. urbanism, education). Considering the outlook of its founding fathers and texts, it tends to be characterized by a pro-peace utopian outlook, an emphasis on human intent, a specific multi-disciplinarity focusing on economy and business, technology, some parts of sociology and anthropology, literary criticism, philosophy and to have been influenced by post-modernism. It is most often taught in business schools or part of business programs, such as the Wharton School, Oxford Said Business School,  Turku’s Finland Futures Research Centre, or the University of Houston. Hawaii Research Center for Futures Studies seems to be an exception to the rule as it is part of the department of political studies. It tends to be heavily grounded in a post-modern approach.
    The Clingendael Institute, a leading International Relations and Security think-tank also uses the term Futures for its specific focus.
  • Forecasting usually refers to the use of quantitative techniques, notably statistics, to approach the future. This is however not always the case and, for example, Glenn and Gordon in their exhaustive review, Futures research methodology, tend to use indifferently forecasting, futures methods and foresight. Understanding forecasting as quantitative techniques seems, nevertheless, to be the most generalized and clearer meaning. It is a tool that is or may be used in any discipline, for example demographics. It is also sometimes considered as the only proper way to anticipate the future. It then tends to ignore what has been developed in other fields and the reasons for this evolution such as the complexity of the world. Many approaches to forecasting are mostly business and economics oriented, although some parts of political science – notably those dealing with elections – or more rarely parts of international relations also use forecasting. Here, we may notably refer to the work of Philip Schrodt, of the Political Instability Task Force - PITF (funded by the CIA), as well as to Jay Ulfelder’s blog (who worked for SAIC as Research Director for the PITF).
  • Foresight, notably in Europe, tends to be used for approaches to the future focused almost exclusively on science and technology, innovations and research and development e.g. the European Foresight Platform which replaces the European Foresight Monitoring Network (EFMN), but also elsewhere in the world. If foresight is meant to be used for other issues, then it is spelled out: e.g. Security Foresight.
  • Intelligence: For the CIA, “Reduced to its simplest terms, intelligence is knowledge and foreknowledge of the world around us—the prelude to decision and action by U.S. policymakers.” (CIA, 1999: vii). Note that Michael Warner (2002) references eighteen different definitions of “intelligence.” It is thus broader than SF&W and should ideally include it, although the SF&W function may or not be part of the intelligence system. A major difference that may be underlined between intelligence on the one hand, SF&W on the other, is that the first starts with and depends upon decision-makers or policy-makers’ requirements while the second does not (see the SF&W cycle).
  • National Intelligence Estimate and National Intelligence Assessment: In the US, “National Intelligence Estimates or NIEs ”represent a coordinated and integrated analytic effort among the [US] intelligence enterprise, and are the [Intelligence Community] IC’s most authoritative written judgments concerning national security issues and estimates about the course of future events” (ODNI, 2011: 7). NIEs are produced by the National Intelligence Council (NIC).  The NIC is heir to the Board of National Estimates created in 1950, that was morphed into National Intelligence Officers in 1973 and finally became the National Intelligence Council, reporting to the Director of Central Intelligence, in 1979. They, however, result from a collective effort and process. ”The NIEs are typically requested by senior civilian and military policymakers, Congressional leaders and at times are initiated by the National Intelligence Council (NIC)” (National Intelligence Estimate – Iran: Nuclear Intentions and Capabilities, November 2007 - pdf). They may use or not Strategic Foresight & Warning methodologies, and usually are concerned with a medium term (up to ten years) timeframe. Most of the time NIEs are classified, however some are public and can be found in the NIC (public) collection. For more details on the NIEs process, read, for example, Rosenbach and Peritz, “National Intelligence Estimates,” 2009.
    National Intelligence Assessments or NIAs are products such as the US Intelligence Community Assessment on Global Water Security (Feb 2012), or the 2008 National Intelligence Assessment on the National Security Implications of Global Climate Change to 2030. In the words of Tom Fingar, former chairman of the NIC, “The short explanation of the difference between an NIA and the better-known National Intelligence Estimate or NIE is that an NIA addresses subjects that are so far in the future or on which there is so little intelligence that they are more like extended think pieces than estimative analysis. NIAs rely more on carefully articulated assumptions than on established fact.” (Fingar, 2009: 8). Both the NIEs and NIAs emphasize and rate the confidence they have in their own judgements and assessments, which is rarely done elsewhere and should be  widely adopted.
  • La Prospective is the French equivalent, broadly speaking, for both futures studies approaches and strategic foresight (or Strategic Futures).
  • Risk Management (initially known as risk analysis[2]) is an approach to the future that has been developed by the private sector in the field of engineering, industry, finance and actuarial assessments. It started being increasingly fashionable in the 1990s. The International Organisation for Standardisation (ISO) now codifies it through the ISO 31000 family under the label of Risk Management.[3] Risk management remains primarily a tool of the private sector with its specific needs and priorities, however those approaches are now widely referred to, incorporated and used within governments. Risk management includes monitoring and surveillance, as  intelligence, strategic warning and SF&W.
    Risk Assessment is, as defined in risk management, the overall process of risk identification, risk analysis and risk evaluation. It tends also to be used in a looser sense, as in Singapore RAHS, or in the US DIA five-year plan, when the latter mentions that it will “Provide strategic warning and integrated risk assessment” (p.3).
  • Science: Although this tends to be forgotten in “anticipation circles” – or refused by part of the academia in the case of social sciences for various reasons – the first discipline to deal with the future is science as it can qualify as such only if it has descriptive, explanatory and predictive power (of course with all the necessary and obvious specifications that must be added to the word “prediction,” considering notably complexity science and the need to forget the 100% crystal ball type of prediction for the more realistic probabilistic approach).
  • Strategic Analysis is a term that can be used by various institutions, for example by the Situation Awareness unit of the Finnish Security Police (SUPO), and is defined by them as a “general assessment of changes in the operational environment, incidents, phenomena or threats” for decision-makers.” We find it also mentioned in the DIA five-year plan as part of the strategic warning responsibilities. It can thus be seen as a part of SF&W.
  • Strategic Anticipation is a loose term that can be used to cover all strategic activities related to the future.
  • Strategic Futures is a term that is used in the American intelligence system, for example with the Strategic Futures Group of the NIC. Prior to 2011 the Strategic Futures Group was named the Long Range Analysis unit. According to Global Trends 2030, the Strategic Futures Group is now considered as an Office; it is however headed by a director and not by a National Intelligence Officer. It contributes, besides the National Intelligence Offices, to the overall process that produces the Global Trends series of the NIC, which remains orchestrated by Counselor Mathew Burrows (GT 2030, 2012). Global Trends uses all available methodologies according to needs.
    Intelligence, warning, Strategic Futures may be considered as synonymous with strategic foresight, in its exploratory dimension. It may also integrate a warning dimension, and in this case, would be equivalent to SF&W. Indeed, it is interesting to note that the National Intelligence Council used to have among its National Intelligence Officers a National Intelligence Officer for Warning (as shown here in the cached version of its public website for 22 August 2010 – This office had been created by the Director of Central Intelligence Directive NO. 1/5, effective 23 May 1979). This Office then disappeared (compare for example with cached version for 10 April 2011), while the Long Range Analysis Unit was renamed in Strategic Futures Group.
    If the National Office for Warning disappeared from the NIC, Strategic Warning (also known as Indications and Warning), and which aims at avoiding surprises, remains nonetheless crucial within the US Intelligence system, as reasserted notably by the DIA in it latest 2012-2017 plan (read also Pellerin, DoD News, July 2012). It covers notably “necessary collection and forward-looking analytic methods and techniques, … to ensure warning is conveyed accurately and in a timely manner.” (p. 6). It is very similar if not identical to SF&W, but emphasises the warning aspect.
  • Strategic Intelligence is a widely used but rarely defined term that Heidenrich (2007) describes as “that intelligence necessary to create and implement a strategy, typically a grand strategy, what officialdom calls a national strategy. A strategy is not really a plan but the logic driving a plan.” According to the way intelligence and security are understood, strategic intelligence and strategic foresight, or rather in this case strategic foresight and warning will more or less largely intersect; to the least they will need each other.

[1] “’Unconventional,’” from a Department of Defence perspective, connotes national security conditions and contingencies that are defense-relevant but not necessarily defense-specific. Unconventional security challenges lie substantially outside the realm of traditional warfighting. They are routinely nonmilitary in origin and character.” Nathan Freier, Known Unknowns: Unconventional “Strategic Shocks” in Defense Strategy Development (Carlisle, PA: Peacekeeping and Stability Operations Institute and Strategic Studies Institute, U.S. Army War College, 2008), p.3.

[2] Note that the Society for Risk Analysis considers risk assessment and risk management as part of risk analysis.

[3] The ISO31000 was first published as a standard in November 2009. The ISO Guide 73:2009 defines the terms and vocabulary used in risk management (accessed 2 April 2013).

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Central Intelligence Agency (Office of Public Affairs), A Consumer’s Guide to Intelligence, (Washington, DC: Central Intelligence Agency, 1999).

Davis, Jack “Strategic Warning: If Surprise is Inevitable, What Role for Analysis?” Sherman Kent Center for Intelligence Analysis, Occasional Papers, Vol.2, Number 1 https://www.cia.gov/library/kent-center-occasional-papers/vol2no1.htm;

Fingar, Thomas, “Anticipating Opportunities: Using Intelligence to Shape the Future,” and ”Myths, Fears, and Expectations,” Payne Distinguished Lecture Series 2009 Reducing Uncertainty: Intelligence and National Security, Lecture 3 & 1, FSI Stanford, CISAC Lecture Series, October 21, 2009 & March 11, 2009.

Grabo, Cynthia M. Anticipating Surprise: Analysis for Strategic Warning, edited by Jan Goldman, (Lanham MD: University Press of America, May 2004).

Glenn Jerome C. and Theodore J. Gordon, Ed; The Millennium Project: Futures Research Methodology, Version 3.0, 2009.

Heidenrich, John G.  “The State of Strategic Intelligence”, Studies in Intelligence, vol51 no2, 2007.

Knight, Kenneth “Focused on foresight: An interview with the US’s national intelligence officer for warning,” September 2009, McKinsey Quarterly.

Pellerin, Cheryl, DIA Five-Year Plan Updates Strategic Warning Mission, American Forces Press Service, WASHINGTON, July 18, 2012.

Rosenbach, Eric and Aki J. Peritz, “National Intelligence Estimates”, Memo in report Confrontation or Collaboration? Congress and the Intelligence Community, Belfer Center for Science and International Affairs, Harvard Kennedy School, July 2009.

Schrodt, Philip A., “Forecasts and Contingencies: From Methodology to Policy,” Paper presented at the theme panel “Political Utility and Fundamental Research: The Problem of Pasteur’s Quadrant” at the American Political Science Association meetings, Boston, 29 August – 1 September 2002.

Warner, Michael, “Wanted: A Definition of “Intelligence”, Studies in Intelligence, Vol. 46, No. 3, 2002.

Useful Rules for Foresight from Taleb’s The Black Swan

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This second post on The Black Swan: the impact of the highly improbable by Nassim Nicholas Taleb emphasises some of the author’s points that could be useful to foresight and warning and all “predictive work. Many of those themes are not really new, but already integrated in F&W and, more broadly, analysis. Nonetheless, it is always useful to underline them, as it is so easy to forget best practice. (The first post can be accessed here).

Humility

humility, doubt(Notably pp.190-200) Considering uncertainty, but also our imperfect condition of human beings, the complexity of the social world, feedbacks, our more than insufficient knowledge and understanding, we must be very humble, accept our partial ignorance, our imperfection and mistakes (and make sure those essentially human flaws are accepted by others, which may be more difficult). Yet, we must also struggle to improve ourselves, increase our understanding and our capability to foresee the future. Doubts, humility, real dialogue between those different communities which try to understand the world, reflection upon mistakes – to correct what can be identified as wrong or inefficient – and successes – to reproduce what worked (according to conditions) – are keys for this improvement.

Taleb’s use of and reference to Montaigne’s wisdom also points to the importance of struggling against the loss of memory - institutional, scientific and general – that plagues us. Some things that were understood in the past are now misconstrued or ignored. It would appear, sometimes, that we are part of a race where youth, novelty, fads and shortening of time rule as masters. Yet, shouldn’t we pause for a while and wonder about this behaviour, and its origin. Should we not question the results stemming from this new race forward? For example, in science (soft and hard), it is not because something has been understood, discovered or written decades or centuries ago that it has become wrong. On the contrary, good science starts with knowledge and understanding of past scientific discoveries. Some understandings are outdated, but some are not. Novelty and justness of analysis are not synonymous, while discarding all the past only makes us lose time. Consumerism cannot and should not be applied everywhere.

“Black Swans events” (unpredictability, outliers)

As underlined last week, Taleb makes a distinction between “Mandelbrotian Gray Swans” (rare but expected event that are scientifically tractable, pp. 37, 272-273) and real “Black Swans events,” which are never identified in advance. From that we could make the following “rules”:

  • Making swans gray

Try to imagine as many improbable events as possible, initially suspending disbelief. This is already done; methods, however tentative, exist: wild cards scenarios (e.g. James A. Dewar, “The Importance of “Wild Card” Scenarios”); brainstorming; what if stories and narratives; use of alternative thinkers and thinking.

innovative idea, dangerous idea, wild card, gray swan

The key, here, is imagination and allowing oneself to go beyond groupthink, norms (institutional, social, cultural), belief-systems, even if ideas may feel dangerous (read for example “In defense of dangerous ideas” by Steven Pinker, Harvard college professor, cognitive scientist, July 2007). Then, and as suggested and explained by Dewar, because resources are limited and also because even Swans have to follow a few rules, those potential “gray swans” should be examined in the light of all the other rules. The least likely (or the most absurd) should be discarded. For example, we may always assume that gravity on earth could disappear, or that lambs will become carnivorous, yet, the chances are so minimal that we may choose to dispense with these situations. For those events that remain on the gray swans list, potential impacts can be estimated and highly improbable-high impact scenarios developed.

  • The absence of certainty

Because we may assume that the likelihood of the existence of Black Swans is very high, then we must consider them. This will influence our estimation of probability. We may just forget certainty. This may look like nothing, but I suspect that in the world of security and politics where the issues of power and control – including in personal terms – are so crucial, truly accepting uncertainty and insecurity is a major effort.

Continuing the struggle against biases

(pp.1-164) Cognitive biases being a fatality of human beings, the least we can do is being aware of them, and persist in our struggle against them. Using our increasing knowledge and awareness of cognition, we may continue applying and creating specific training and systematically incorporate related safeguards in methodologies and processes, from organization (for example people joining the exercise at different stage) to teams-composition (people with different background, psychological makeup, etc.).

Meanwhile, introspection and reflection should be promoted by and for those who deal with foresight, forecast and prediction, as, exemplified (here on the question of ethics and potential biases induced by “conflict of interests”) by this very recent post by Jay Ulfelder. “Introspective phases” could and should be included at different stages of the foresight process.

Opium, Dutch East Indies, anachronistic projectionThose phases should notably fight against the known phenomena of anachronistic projections and cultural projections. Anachronistic projections are usually done with regard to past history (judging past actions from the point of view of today’s moral norms; understanding the past through today’s lenses), which obscures understanding. For example, we currently struggle against drug trafficking, notably because this endangers our societies and is seen as morally bad. Yet, opium has been an accepted state activity at least from the 19th century to well into the 20th century. This does not mean going backwards in terms of norms or accepting things that are seen as morally reprehensible or are damaging or hurtful, but would help locating phenomena in their proper context, and thus focusing on dynamics, processes and understanding. This would also (ideally) help us move from an attitude that favours judging and casting blame, with all the power struggles and violence that this implies, towards a much more constructive behaviour, promoting understanding, preventing and healing.

A political scientist* gives somewhere a great trick that we could usefully apply: if you read (we can change it to think/say) somewhere the word “always,” then stop and think.

Not being prey to anachronistic projections would imply considering too the evolution of ideas and norms and setting time-dependent struggles within historical processes. Coming back to foresight, anachronistic projections may as well be done regarding the future. What does this imply? Can we devise methods to try minimizing them? How can we best proceed to include ideas, norms, and beliefs in our models?

Cultural projections are even better known and may be easier to consider. Not falling prey to them will demand knowing our own cultural sets of norms on top of, or even prior to, those of others (e.g., in the anticipation field, Werther, 2008). Just asking ourselves this question during foresight exercises could improve results. Similarly we must struggle against being victims of ideology. This does not mean rejecting this or that belief, just being aware of what influences us.

Finally, the impact of emotions on our cognition, emotional biases, should be considered, as human beings are definitely not rational, emotionless beings.

Falsification rather than confirmation

(Notably pp.55-61) The risks of induction, which are so important to us because so many of our analyses come from collected evidence, are linked to our tendency to seek confirmation rather than falsification (looking for an element, a fact, an event that would prove our hypothesis or explanation wrong). All our analyses – this is valid for all our explanations and understanding, not only for foresight and warning – should include an effort at falsification, however without denying confirming facts. We should always wonder:  which evidence, fact, should I look for to disprove my theory, analysis, estimation, conjecture?

Furthermore, this effort should be mentioned in the final anticipatory product (potentially in an appendix, according the specificities demanded by the delivery needs of the customer) to allow for follow-up and update. Meanwhile, indicators, specifically designed for falsification, should be created. For example, in foresight, if we have concurrent scenarios, the happenstance of an event or any indication showing that one scenario is becoming less likely should be considered and the set of scenarios should be revised accordingly.

Careful causality: “silent evidence”

silence, National Security, silent evidence, causality

(pp.100-121) Taleb starts first by cautioning against the dangers of applying causality when there is none or when “silent evidence” could potentially distort causal reasoning. “Silent evidence” is what we don’t know, cannot know, cannot hear, do not hear. To explain “silent evidence”, Taleb uses Cicero’s story: “Diagoras, a nonbeliever in the Gods, was shown painted tablets bearing the portraits of some worshippers who prayed, then survived a subsequent shipwreck. The implication was that praying protects you from drowning. Diagoras asked, ‘Where were the pictures of those who prayed, then drowned?’” Taleb, however, does not reject causality but encourages to use it with care and caution, trying to think about the possibility of existence of “silent evidence”.

Creation of new adapted quantitative tools

(The whole book) Except in the cases when they can be applied, the author warns us to distrust correlations, which furthermore do not allow for understanding (according to the famous “correlation does not imply causation“), linear trends and Gaussian distribution. Instead, research involving fractals and scalability, complexity theory (as done for example by the New England Complex Systems Institute) should be favoured. Building upon this, we can imagine creating new tools allowing for multi-disciplinary research, articulating, when necessary (there is no need to use something very complicated if a simple analysis or logic are sufficient), complex modeling, agent-based models, and mixing quantitative and qualitative assessments (notably including processes and feedbacks), and integrating within foresight methodologies. What should guide us is always the issue or the problem at hand.

* Unfortunately I cannot remember who wrote this, nor in which book or article. Initially I thought it was Benedict Anderson in Imagined Communities but after having skimmed again through the book, I cannot locate the citation, thus it could be Anthony Smith, or Eric Hobsbawm, or… if anyone knows, I would welcome the reference!

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References

Dewar, James A. “The Importance of “Wild Card” Scenarios,” Discussion Paper, RAND.

Pinker, Steven, “In defense of dangerous ideas”, July 2007.

Ulfelder, Jay, “Advocascience“, 27 January 2013, Dart-Throwing Chimp.

Werther, Guntram F. A., Holistic Integrative Analysis of International Change: A Commentary on Teaching Emergent Futures, The Proteus Monograph Series, Volume 1, Issue 3, January 2008.

Taleb’s Black Swans: The End of Foresight?

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Meteorids and Earth, Taleb, Black Swan Events, Black SwansSince Nassim Nicholas Taleb published his bestseller The Black Swan: the impact of the highly improbable back in 2007, “Black Swans” and “Black Swans events” have become part of everyday language. They are used as a catchphrase to mean two different things. First, as was the case recently in the Brookings interesting interactive “briefing book” Big Bets and Black Swans: Foreign Policy Challenges for President Obama’s Second Term, “black swans” represent high impact, low probability events, what is also known as wild cards.[i] Second, “black swans” refer to events that could absolutely not be predicted, as, for example for the Economist in ”The prediction games: Our winners and losers from last year’s edition”. Unfortunately, in this case, the label “black swans” excuses foresight errors. It tends to stop explanations and evaluation. Similarly, some will make statements along the line of “oh, but there is no point to do any foresight (or futures work or forecast), did you not read Taleb’s Black Swan? One cannot predict or foresee anything.”

This is a rather crucial assertion for us and it needs to be investigated.

What are exactly those Black Swans about which Taleb writes: they cannot be absolutely unpredictable and low probability events at the same time? Thus, what did Taleb really describe? After having read this book, should we just resign, abandon any work related to anticipation, and, instead, do something else? Or is there more to Taleb’s argument than that? Can we use this book to improve our foresight methodologies, consider deep uncertainty, yet without giving up?

This first post will review the whole book and see if it really points to the absurdity of foresight. The next one will outline some of Taleb’s points that could be more than useful to foresight, forecast, warning, and more generally all anticipation methodologies.

Black and Grey Swans

Taleb is interested in understanding better uncertainty and randomness, notably those “Black Swan events” defined as unpredictable (outliers), with an extreme impact and which are, after the fact, revised as explainable and predictable.

The existence of black swans is logical and even may be seen as obvious, but it does not imply that foresight is doomed, only that it cannot be 100% certain (for the anecdote, the ancient Chinese divination method, the Yi Ching, which used the tossing of yarrow stalks, always removed one stalk before the cast, to account for this unpredictability).

Black Swans and Pacific Black Ducks East Basin Lake Burley Griffin Canberra by Celcom, GFDL or CC-BY-SA-3.0, from Wikimedia CommonsIn a nutshell, The Black Swan denounces the problem and risks of induction, building upon David Hume and Karl Popper. Extremely briefly, an inductive reasoning runs as follows: all the swans observed are white, thus all swans are white… which is proven wrong when one black swan is spotted. Hence the danger of this reasoning, if it is not done cautiously. Incidentally, this is quite crucial for us as so many of our analyses come from collected evidences, and we should always keep the danger of induction in mind, but more on that with the next post.

The Black Swan attacks quantitative predictions made with a Gaussian distribution (or normal distribution or bell curve) when applied to a world that is increasingly complex, notably because of the evolution of social interactions, and includes unexpected events. Such a world should rather be understood through fractals, that would then allow us to anticipate those events that Taleb names “Mandelbrotian Gray Swans.” Here I trust the author because of the consistency and logic of his argument, while I don’t have the mathematical knowledge necessary to go more in-depth into fractals.

The Economist usage is thus correct, whilst Brookings foreign policy experts’ actually refer to ”Gray Swans.”

All doomed: forecasting, prediction, foresight, and also meaning

Taleb’s attack is directed at statistics and quantitative methodologies (correlations, trends, statistical forecasts, etc.), NOT qualitative ones, thus concerns only one part of “foresight.” Nonetheless, we are not safe yet, as Taleb also denounces a “narrative fallacy” and underlines various cognitive biases, which make us believe we can understand history or the present or try to anticipate the future, when, according to him, such endeavours are near impossible as everything is “ruled” by randomness or luck. For Taleb, most historical events with large impact are Black Swans, thus could not be predicted, not even with a low probability of success.

This brief summary would let us believe that, indeed, prediction, forecast, foresight, and even worse understanding and finally meaning are impossible human endeavours. Those stem from our human needs and cognitive make up. To believe in their possibility emerges from our lack of introspection and reflection.

This book is thus not only about anticipating the future, and more broadly the philosophy of science and epistemology but also about meaning. The specific narrative Taleb uses – intertwining personal experience and stories as examples, with logic, (sceptical) empiricism and references to philosophers, novelists and scientists – is part and parcel of the demonstration. Don’t even hope to skim through The Black Swan to understand it. It is here in the literary part of the book, in its very construction, that we find the key to Taleb’s work and to answering our question “is foresight doomed?”

The choice of hope over despair

The demonstration made by the author is extremely well done, very consistent, save for one single paragraph. Our very smart author could not be unaware that someone, somewhere, would tell him: “Hey, wait a minute, if you say that nothing can be predicted and understood, that something random and unexpected (the famous black swan) may always happen, then it may also happen that your argument will be proven wrong by something unexpected or something you do not know.”

Taleb had thought about that, but used something quite akin to a sophist argument (p.192-193, hardback edition): He started by explaining the “Black Swan asymmetry,” which allows you only to assert, for example that “all swans are not white” (nothing more but nothing less), stops his reasoning and then quotes Popper, who, asked about “a possible falsification of falsification,” answered that his questioner was an idiot. Conclusion, the reader does not dare anymore to question Taleb (or Popper or anyone for that matter) for fear of being an idiot. Well done, but unfair, and somehow a shame to use such a device because some new insight could have emerged. Actually, I don’t really care about being named an idiot, but as a reader, I would very much prefer, if I don’t understand, to be explained why, and if I do, to see the author pushing his argument further.

This does not challenges most of the points made in the book, but allows questioning its overall conclusion. Thus, foresight might still be possible, should the impossibility to understand the world, the “narrative fallacy” be questionable too.

If human cognitive biases are numerous, witness the amount of research and findings of cognitive sciences, and as wonderfully synthesised by Heuer, if indeed our knowledge and understanding of the world through historical, political and more broadly social science is most of the time imperfect and still minimal, Taleb here, despite his huge erudition, seems himself to be prey – as all human beings – to the problem of induction, to generalization and to seeking confirmation as validation. Only one properly foreseen event should be sufficient to make foresight and understanding not impossible.

I’ll give here an example (because it is simple, but we could quote many others, as Jay Ulfelder correct 2012 forecast of coups in Mali and Guinea-Bissau or all the correct Economist 2012 predictions etc.). In 1919, Max Weber explained and underlined the main characteristics of the State, including the crucial importance of the legitimate monopoly of violence.[ii] Armed with this knowledge and common sense, and referring to the second Iraq War, it comes that if one destroys the State, it is very highly likely that civil war will occur. It could thus have been (very easily) anticipated that if one destroyed the Iraqi State (through the Ba’ath party), then civil war would more than probably occur, something that was carefully avoided in Germany after WWII despite the “denazification goal.”[iii] This is NOT a reinterpretation of facts after the events, but could have been made beforehand. Why this was not done or rather not heard is another story, let’s not confuse issues. We have here at least one instance of a potentially accurate anticipation (actually many with the other examples). Thus foresight is not impossible.

Of course, something completely unexpected may always happen, forbidding certainty. Of course, our imperfect knowledge and understanding will only at best help us outlining possible futures. Yet, in the meantime, do we have the right to disregard an understanding that could save lives and protect our security (individual, national, and global)? Using our previous example, the knowledge on State and its processes could definitely be helpful in assessing needs and potential impacts before to decide about austerity policies and IMF backed structural adjustment policies as was done worldwide with disastrous consequences, before to enter post-conflict countries and determine strategies. It would be crucial in evaluating what is happening in countries such as those that made the Arab (winter)-spring, and the evolution of situations where the international community intervenes,  such as Afghanistan.[iv] Do we have the right not to work towards improving our understanding? We have to live with uncertainty but isn’t it our job? We have to live with incomplete mastery and imperfection, but isn’t it what it is to be just human?

despair, black swan, TalebWhat seems to me to lie at the core of the book and to lead to Taleb’s overall conclusion, is a very deep despair and a revolt when confronted to uncertainty, to the unexpected, to unfairness, to death and war and suffering (hence the importance of the autobiographical and literary part of the book). For the author, the world has become meaningless, and he finds hope only in the miracle of being alive and of building upon the opportunities of “positive Black Swans.”

Someone else could very well use similar valid points (the problem of induction, the risk of anachronistic projections, etc.), but also see and emphasize connections (even hidden ones, or different ones, for example the probably not yet completely understood fractals, where one can also marvel at the self-similarity property) rather than disconnections, meaning rather than meaninglessness and reach a different conclusion. From a physicist such as Omnes, you would get a completely different outlook on life. This is often the same with astrophysicists, who truly wonder (in both meanings of the word) about the world.

Berlin Cathedral (Germany). Altar area – Stained glass windows ( 1905 ) shwowing an angel with banner of victory als allegory of hope by Anton von Werner.Thus, ultimately, there might be an individual choice to be made on the way one approaches the world.

If we choose not to despair but, on the contrary, to wonder and hope and work hard, we may and even must continue our foresight and warning endeavour, assuming that a few rules are respected, those very rules that Taleb underlines (common sense, humility and using the right causality or the right tool for the right problem, etc.), as we shall see next.

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[i]“A wild card is a future development or event with a relatively low probability of occurrence but a likely high impact on the conduct of business,” BIPE Conseil / Copenhagen Institute for Futures Studies / Institute for the Future: Wild Cards: A Multinational Perspective, (Institute for the Future, 1992); then popularised with John L. Petersen, Out of the Blue, Wild Cards and Other Big Surprises, (The Arlington Institute, 1997, 2nd ed. Lanham: Madison Books, 1999).

[ii] For those interested in comprehending the modern State and its processes, here are a few enlightening works by social scientists, among a more detailed biography:

Ertman, T., (1997), Birth of the Leviathan: Building States and Regimes in Medieval and Early Modern Europe, (Cambridge, Cambridge University Press).

Mann, M., (1986), The sources of social power. 1, A history of power from the beginning to A.D. 1760, (Cambridge: Cambridge University Press).

Tilly, C., (1990), Coercion, capital, and European states, AD 990-1990, (Oxford: Blackwell).

Weber, M. (1919) Le savant et le politique, (Paris : 10/18, 1963) Paru originalement en allemand «Wissenschaft als Beruf » & « Politik als Beruf » 1919.

[iii] Nina Serafino, Curt Tarnoff, and Dick K. Nanto, (Foreign Affairs, Defense, and Trade Division), U.S. Occupation Assistance: Iraq, Germany and Japan Compared, CRS Report for Congress, March 23, 2006,http://www.fas.org/sgp/crs/natsec/RL33331.pdf

[iv] For example, one may wonder, considering that the modern state is essentially a territorial state, if the necessary resources to build or rebuild a state should not be proportionate to territory. If this is correct and if the amount spent on Germany is a good indication, although approximate, then the amount needed for Afghanistan might have been closer to 76 billion USD rather than to the 14 billion pledged. The way to implement a reconstruction, as well as the time necessary to succeed, would most probably have to be revisited. Hélène Lavoix « La construction de la paix et l’estimation des besoins et de l’impact, » Policy paper, Centre d’Etudes et de Recherches Internationales (CERI – Sciences Po) programme on « Peace and Human Sécurity » (CERI-CPHS), April 2008.

Scenarios: Improving the Impact of Foresight Thanks to Biases

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Alternative worlds NICForeseeing the future, whatever the name given to the endeavour*, faces two major tasks. First, we have the analysis, the process according to which the foresight, forecast, or, more broadly, anticipation will be obtained. Second, the result must be delivered to and understood by those who need it because they will act on it, to the least integrate the new knowledge received in the decisions they will take**. A huge challenge runs across both those tasks: overcoming the various natural and constructed biases that limit human understanding.

Much thought is usually given to analytical methodologies, which may be seen as nothing else than ways to overcome biases. Analysts commit themselves to many years of study, and force themselves to struggle against those biases, including through their own research and reflections. Managers look for ways to support them through training and constitution of best teams. Teachers and research institutions contribute to this generalised effort, as with, for example, the recent ongoing experiment funded by the Intelligence Advanced Research Projects Activity (IARPA), the “Good Judgement project“. Those enterprises are necessary, even crucial, if we want to improve our foresight, as underlined, for example, by political scientist and forecaster Jay Ulfelder.

We tend, unfortunately, to devote fewer efforts to deal with biases related to the second part of our work, the delivery of the anticipation to and its understanding by the recipients or customers.

This is certainly no easy task, as, there, we must deal with an “other” or worse with others. We have no power on their willingness to make an effort to overcome biases, assuming they accept being also prey to biases.

Results may also be obtained through the use of participatory methodologies, such as, for example, scenarios-building, where classical or analytical ways to mitigate biases are sought. This approach, despite its virtue, is limited because of the often busy agenda of decision-makers, or plainly impossible because of the sheer numbers of recipients. In those cases, only remains the final product that must, alone, reach the customer, be read, viewed or listened to, and understood. The strategy regarding biases, thus, must change. Rather than only focusing on struggling against biases, we may as well accept them and, even better, use them to our advantage.

The biases detailed in Heuer’s masterwork Psychology of Intelligence Analysis show us that fictionalized scenario narratives*** are perfect products to take advantage of some of those usual human cognitive traits to achieve our objectives, even more so if they are adequately combined with visual tools.

Playing with the “vividness criterion”

Crisis in ZefraFictionalized narratives obviously directly use this bias that Heuer describes as follows: “Information that is vivid, concrete, and personal has a greater impact on our thinking than pallid, abstract information that may actually have substantially greater value as evidence.” Heuer, p.116, knowing that, according to Nisbett & Ross, vivid information is information that is concrete, imagery-provoking, and emotionally rich (1980).

Among many, one interesting example is the narrative written by Karl Schroeder for the Directorate of Land Strategic Concepts of National Defense Canada in 2005, Crisis in Zefra. The four fictionalized scenarios of Global Trends 2030, use fiction characters and real or fictional organizations that will be familiar to their main readers, U.S. policy-makers, and a type of narrative as well as a design format that will similarly correspond to something very concrete and real for their clients.

Below are two examples of short fictionalized pieces, created out of material generated during a workshop, and aiming at making real threats related to algorithms.

Black out scenario, fictional narrative, algorithm based threat, threat scenario, futures, foresight scenario, fictional narrative, algorithm based threat, threat scenario, futures, foresight, intelligence, spy,

Emphasizing “consistency”

Any good narrative will pay attention to consistency and thus will use the human “oversensitivity to the consistency (absence of contradiction) of evidence and insufficient sensitivity to the reliability of evidence.” (Heuer, pp.120-122)

Using our flawed perception of cause and effect

As Heuer describes throughout chapter 11, generally, story-telling and thus story coherence is usually wrongly favoured over scientific method and scientific findings/research. Meanwhile we display a need for causal explanations, that is indeed best served by this story-telling. Thus a fictionalized scenario narrative built upon a proper scientific model will allow us transforming scientific research into a product that can be attractive to and believed by customers.

This is what led me, among other motivations, and once the model built for the scenarios on the future of the nation-state, to develop the Chronicles of Everstate in a serialized way, rather than to adopt a more classical and shorter form.

Tweaking the “availability rule”

This rule refers to one of the components that leads us to reach flawed estimates for probabilities. Heuer, using work by Tversky and Kahneman (1973), underlines that “’Availability’ refers to imaginability or retrievability from memory. Psychologists have shown that two cues people use unconsciously in judging the probability of an event are the ease with which they can imagine relevant instances of the event and the number or frequency of such events that they can easily remember.” (Heuer p. 147).

Thus, an interesting narrative – when it is read – will most probably influence the ease with which people can imagine, by themselves, future instances of similar events. We could also wonder if becoming aware of the scenario narrative would affect, though memories, perception of occurrence of such events.

Heuer (p.149), indeed, underlines that the participation to scenario-building exercises impacts estimations of probabilities for participants. Here we suggest that people reading scenarios – or more broadly being exposed to products derived from those scenarios such as films, theatre pieces, games, etc. would similarly be affected.

Using our weakness in assessing probabilities

As judgments concerning the probability of a scenario are influenced by amount and nature of detail in the scenario in a way that is unrelated to the actual likelihood of the scenario (Heuer pp. 156-157), then narrating a scenario or part of it with details will impact the ability of the customer to believe in its plausibility. This should prove extremely useful in convincing recipients to pay attention to potentially least possible futures, in struggling against prejudice and more generally against all organizational and belief-based biases.

Fictionalized narratives are thus a very useful type of products for the delivery of foresight, that we should permanently keep in mind, be it to deliver the result of more or less long scenarios-building processes, as with The Millenium Project 2020 Global Energy Scenarios, or the Global Trends 2030 of the NIC, or in the case of short exercises as shown above for potential algorithms-related threats. Could it also be used for other methodologies, such as  Forecasting?

Comments, ideas and suggestions are welcome!

*The label used signals various assumptions, methodologies, processes, aims and groups of practitioners.

** Even doing nothing is an action.

*** Scenarios are one of the end products of the process known as scenario-building as, for example, presented by Glenn and The Futures Groups and as used here to assess the future of the nation-state. A practical way to write them has been presented with the post “Constructing a foresight scenario’s narrative with Ego Networks.”

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Glenn, Jerome C. and The Futures Group International, “Scenarios,” The Millennium Project: Futures Research Methodology, Version 3.0, Ed. Jerome C. Glenn and Theodore J. 2009, Ch 19.

Heuer, Richards J. Jr., Psychology of Intelligence Analysis, Center for the Study of Intelligence, Central Intelligence Agency, 1999.

Ulfelder, Jay, Forecasting Round-Up No. 3, Dart-Throwing Chimp, 6 Dec 2012.

Kahn, Herman, and Weiner, Anthony J. The Year 2000: A Framework for Speculation on the Next Thirty-Three Years. New York, NY: The Macmillan Co., 1967.

Tversky, Amos and Daniel Kahneman, “Availability: A Heuristic for Judging Frequency and Probability,” Cognitive Psychology, 5 (1973), pp. 207-232.

Durance, Philippe and Michel Godet, “Scenario building: Uses and abuses“, Technological Forecasting and Social Change », Volume 77, Issue 9, November 2010, Pages 1488–1492, doi:10.1016/j.techfore.2010.06.007

2013 – 2018 EVT – Learning from Water Privatization? (Panglossy)

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This post, as many others in the Chronicles of Everstate, can be read both as part of the scenarios on the future of the nation-state, as explained below, or as part of the section on Global Water Security. This shows how all issues are intertwined, and that the multiple existing feedbacks should not be ignored.

Previously: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which begins the second scenario, Panglossy. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. The first years fail to bring back growth; the power of the lenders’ nexus and induced appropriation of public power continue unabated as the regulation of the international financial system does not progress. The initial efforts to fund  Green Growth through infrastructure investments show minimal and disappointing impacts. Worse still, the initial implementation of air commodification under the ISSIGE flagship project by the consortium Novair triggers a nationwide wave of outrage because the beliefs of Everstatans are denied at all levels, while the elite is surprised.   

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading)

The Everstatan elite, surprised by the new Air Revolt, continues applying to the situation a superficial analogy with water to estimate the severity of the outrage in the country and its potential evolution. Yet, analogy is not comparison and is often insufficient to inform proper understanding and thus decisions.

Margaret Thatcher with Ronald Reagan at Camp David

Margaret Thatcher with Ronald Reagan at Camp David (Photo credit: Wikipedia)

First, the commodification of water, in its second wave, is still a very recent phenomenon. It started at the end of the 20th century with the privatization of water utilities in the United Kingdom of Margaret Thatcher, and is far from being completed, assuming it is meant to follow an ineluctable path towards completion, which has still to be proven. Everstatan elite cannot thus easily draw any clear conclusion.

Second, some voices exist, even if they are not so numerous and have so far not mobilised masses, that underline the ethical problems linked to the privatization of water (e.g. 2008 Symposium) or criticise the whole commodification endeavour.

Third, the current and future various issues and problems surrounding global water security will most probably keep the matter of water services privatization and water commodification on the agenda, seen in an even larger perspective, where security questions and geopolitics will be underlined.* This is likely to lead to stronger stance taken by all actors, and open the door to any strategy including manipulation and irredentism. As a result, a complete and smooth commodification of water that would not generate rebellions cannot be taken for granted.

Sbocco della Cloaca Massima in Rome, sewer system started in 735 B.C by Ettore Roesler Franz, 1880 via Wikimedia Commons

Fourth, in countries such as Everstate, when water was privatized at the end of the twentieth century, it was done in a way that is very different from the way Novstate-Air intends to monetize air. Then, a public service dealing with water-related issues was handed over or sold from the state to private companies. This was only one episode in the millennia-long struggle of human societies to manage wastewater, sewage and obtain clean water (Jungclaus, 1998). Everstatans never went from free clean water, or free apparently clean water, free sewage, etc. to becoming suddenly aware of the extent and danger of polluted water and having to pay for being able to drink and eat safely.

1865 – New York City Sanitary Commission, via Wikimedia Commons

Furthermore, throughout the millennia old struggle for safe water, they have, at least dimly, become conscious of direct links between living beings concentrations and water pollution, thus of their own responsibility. This long process and history does not exist in the case of air. With water, there was thus no effect of shock, no sudden awareness triggering a feeling of injustice and moral outrage, when there is with air. This implies that the absence of initial reaction in the case of water cannot be used to deduce that Everstate’s air revolt is unimportant and will be short-lived.

Finally, timing matters, twice. The privatisation of water utilities itself is not always done nationally but according to the administrative organisation underlying the public service, most of the time municipalities. This implies that changes happen according to the timing of each town. This stops the creation of any nationwide reaction. The impossibility of such large reaction is strengthened by the diverse situations existing for each administrative division. However, here, had separatists feelings and right conditions existed, water privatization in Everstate would then have strengthened those sentiments (see the last posts of the Mamominarch scenario for an example of such dynamics). Those underlying processes could and should have been considered by Novstate-Air and the Everstatan government, as those lessons were applicable to air. Considering the current conditions in Everstate, Novstate-Air had thus the “choice” between triggering a nationwide protest and sowing the seeds for separatism.

Then, water privatisation has mainly been done before the crisis, before the rise of inequalities and decline of purchasing power became obvious, before the rise of tension, before the legitimacy of governments and actors and of the whole socio-political model started being questioned.

Walker, DEFRA, 2009

In the past, if water prices increased with privatization (Barlow, 2001), the share of the water bill in a household expenses (e.g. averaged to 335$ a year in the U.S. in 2012 by the American Water Works Association, CNN February 28, 2012, 339£ a year in England and Wales in 2009 according to DEFRA, with many local and individual variations) and the added cost were not such that a collective feeling of relative deprivation could be born. The unequal weight of water bills according to household income inequalities must however be noted (Smets, 2002). Then, water privatization has been done while respecting, to a point, and with (large) variations according to countries and actors, the human right not to die of thirst or because of polluted water. For example, the existence of public fountains, access to clean public utilities, etc. has been maintained, while in many OECD countries one scheme or another used to exist or was created to help the poorest face their water bills. There was thus little that could have triggered a nationwide outrage and related escalation.

The commodification of air is happening in completely different circumstances and with no such safeguards as those that were implemented for water. Actually, Everstate’s Air revolt should suggest to the government and concerned actors that they should actively revisit water related policies, be they public, private, or mixed, as circumstances have changed. True enough, the privatization of water has been done and thus it cannot be a trigger for a new rebellion. If matters continue to be handled carefully by all actors involved, if the impacts of the various global and local evolutions are properly foreseen, while adapted and timely preventive measures are implemented, then the risk to see water riots added to the air revolt will be minimized. On the contrary, lack of foresight and of caution, which, considering the overall level of tension and ideological polarization becomes everyday more plausible in Everstate, will most probably mean that water issues will soon be added to the escalating number of grievances.

Alas, neither Novstate-Air nor the Everstatan governing bodies even attempt to move beyond the analogy with a water privatization of the past. They thus decide that the air revolt is nothing more than the passing fit of a population that does not truly understand problems, and that an emphasis on communication and advertisement while local meetings with the population are organised by Novstate-Air and the local authorities will be enough to defuse the anger. Meanwhile Novstate-Air does not change the schedule according to which Air contributions will be collected.

To be continued…. after the Summer.

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References

* For more references, see, notably U.S. Intelligence Community Assessment, Global Water Security, 2 February 2012, and two previous posts as well as their bibliography: Water security: a strategic foresight and warning issue for national security? (1 February 2012) and Building upon the 2012 “Global Water Security” IC Assessment (27 March 2012).

American Water Works Association

Barlow, Maude, “The Water Privateers,” Blue Gold: The global water crisis and the commodification of the world’s water supply (International Forum on Globalization (IFG), 2001).

Ellis, Blake, “Water bills expected to triple in some parts of U.S.,” CNNMoney, February 28, 2012.

Jungclaus, Joyce Everhart, “1998 Congress Recap” published in the APWA Reporter, excerpt republished as “History of sewage management” on Bloomington Minnesota Cityweb.

Smets, Henri, Le Droit à l’Eau, Conseil européen du droit de l’environnement., 2002.

Symposium Proceedings: Common Grounds, Common Waters: Toward a Water Ethic, Panel I: Water Ethics and Commodification of Freshwater Resources, Diamond, Stephen (Moderator), 6 Santa Clara J. Int’l Law 15 (2008).

U.S. Intelligence Community Assessment, Global Water Security, 2 February 2012.

Walker, Anna, CB, Independent Review of Charging for Household Water and Sewerage Services, DEFRA, Department for Environment, Food and Rural Affairs (UK), December 2009.

Wikipedia, Criticisms of the commodification of water.

Wikipedia, History of Water Privatization.

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2013 – 2018 EVT – Unforeseen Outrage: Privatising the Commons (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which begins the second scenario, Panglossy. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. The first years, however, fail to bring back growth; the power of the lenders’ nexus and induced appropriation of public power continue unabated as the regulation of the international financial system does not progress. The initial efforts to fund growth through infrastructure investments show minimal and disappointing impacts. Worse still, the implementation of the ISSIGE flagship project on air quality by the consortium Novair triggers a nationwide wave of outrage as the struggle against air pollution is monetized.

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading – Research/methodological note at the bottom of the post – see credits for the images in the references)

The monetization of the struggle against air pollution is perceived by Everstatans as nothing else than the privatization of air.  It generates such a strong reaction and mobilization because it creates a feeling of injustice, actually moral outrage, as it impacts and upsets all layers of beliefs of Everstate’s population (see Ideological Stakes in an Outdated Worldview).

by Tim Evanson

Most fundamentally, monetizing air is at once an appropriation of an essential element that has so far belonged by right to each living being by the simple fact of it being alive, and a desecration, both going against the deepest human beliefs as shown by symbolism, as air is an image often found in many cosmological, religious and philosophical myths, books and systems. Air is one of the four (or five if we include aether) elements of classical thought. It can be found in Hinduism, Buddhism, Bon (Tibetan philosophy), in the Japanese traditions, and more recently in medieval Western alchemy. If it is not present per se in the Chinese elements, breathing, notably in Qi Gong, is seen as fundamental. In the Bible, the “breath of life” is God’s power to create and give life to man (Genesis 2:7). Air and breath go thus beyond one religion to reach something that can be seen as archetypal, following Jung. It is the very relation to the Mystery of life (Mystery meaning “a religious truth that one can know only by revelation and cannot fully understand”), life’s origin, beauty, and continuation or termination, that is being upset by Novstate-Air.

At the normative level, more superficial although also crucial, the monetization of air is one more attempt at privatizing the commons, at transforming the public good into public goods that can then be transferred to the private, sold and bought in the name of any ideology, as recently denounced again, among others by Reich. This process is also known as commodification, for example the commodification of water or the commodification of nature. Indeed, in the real world, the latest failure of the 2012 Rio+20 summit (Montbiot, June 2012) is not lost on the private sector and, among other impacts, open the door even more widely to an all-out commodification, as underlined by a recent article in MarketWatch:

“So while it is a sad time for the planet from a policy perspective, the private sector has just been handed a golden opportunity.” Kostigen, 29 June 2012

The privatisation of the commons started in England, as early as the 12th and 13th century, then accelerated with the rise of capitalism – and modernization – through the centuries-long struggle over the right to use common land to graze livestock, which ended up with generalised enclosure and the disappearance of the commons. History shows that privatization leads to protests and revolts (e.g. Hardin 1968, Moore, 1966).

“In the case of the enclosure of the common lands, which was going on from about 1600 to 1850, the land-grabbers did not even have the excuse of being foreign conquerors; they were quite frankly taking the heritage of their own countrymen, upon no sort of pretext except that they had the power to do so.” Orwell, 1944

If, as underlined by Hardin, we must also be conscious of “The Tragedy of the Commons,” with air pollution as a perfect example, and one that he singles out, commodification and monetization of the air, paid only by consumers, may not be the best solution, even if this solution has worked beforehand for other commons. Indeed, the ideological battle that is actually taking place questions now this approach, and could very well emphasize that as, modernity, it is part of an outdated order.

One could also argue that Everstatans felt directly threatened too, as air, actually oxygen, is one of the most basic, fundamental elements for living beings on earth since the Great Oxidation Event, because cellular respiration depends on it. Being deprived of air means death within a few minutes for the strongest. However, historical facts and research, including the direst political phenomenon that is genocide, have shown that direct threat to life alone does not lead to rebellion or even to escalation, whilst feeling of injustice and moral outrage, in specific conditions, do.*

The Everstatan government and elite are surprised by the moral outrage that spreads because of their position within the ideological battle that is taking place. Moreover, during the last decades of economic, materialistic, technocratic, politician supremacy, they have forgotten the most fundamental political dynamics, or, if they know and understand, they do not care because they believe that those who will have to deal with the most violent side of political processes are not them but future generations. The analogy they used to create Novstate-Air and the monetization of air, the commodification of water, also plays into their inability to foresee Everstatans’ reaction. Privatizing water has so far not created such a moral outrage. Thus why should air be any different? Does the acquiescence to water’s monetization show that the air revolt will be short-lived and soon forgotten if Novstate-Air, backed up by the government, remains firm?

To be continued…

Research and methodological note

This post (and the next one) and the way the scenario narrative unfolds suggest that what the elite does, more precisely the way public power is appropriated matters. Here, however detailed our model (see Creating the model part 1 & 2) may appear, especially when it is described in number of variables used (compare with the 2 to 8/10 variables that are most often suggested as ideal for foresight), the means and processes of appropriation are not detailed.

The question is: should we translate those processes in terms of our model and add them to it, to the price of complicating the model even further, or should we, as I have done here, add further understanding only through the narrative, keeping the model as guidance?

The answer depends upon the degree of automation of the system and of the composition of the foresight team. The more automated the foresight system (let’s imagine it is computer run and can generate automated foresight scenarios through text-generation) , the more important to continuously expand the model, when some processes appear to have been underdeveloped as here. This begs the question of detecting such underdevelopments. The more diverse, knowledgeable and well-educated the team of foresight analysts, the more the model can be kept as such, being used as guidance.

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References

* Among others, Sambanis, Nicholas, “Using Case Studies to Expand the Theory of Civil War,” (World Bank, CPR Working Papers, Social Development Department Environmentally and Socially Sustainable Development Network, Paper No. 5, May 2003); James C. Scott and Benedict J. Tria Kerkviliet, Everyday Forms of Peasant Resistance in South-East Asia, ed.  (London: Frank Cass & Co.; 1986); Scott, James C., Domination and the Arts of Resistance: Hidden Transcripts, (New haven: Yale University Press, 1990) and Weapons of the Weak: Everyday Forms of Peasant Resistance, (New Haven: Yale University Press, 1985); Moore, Barrington, Injustice: Social bases of Obedience and Revolt, (London: Macmillan, 1978); Jeff Goodwin, James M. Jasper, Francesca Polletta, Passionate Politics: Emotions and Social Movements, (Chicago: University of Chicago Press, 2001).

Hardin, Garrett, “The Tragedy of the Commons,” Science 13 December 1968: Vol. 162 no. 3859 pp. 1243-1248 DOI: 10.1126/science.162.3859.124.

Kostigen, Thomas, “Rio+20 was a win for social investors,” MarketWatch, June 29, 2012.

Merriam-Webster Dictionary, Mystery.

Monbiot, George, “After Rio, we know. Governments have given up on the planet: The post-summit pledge was an admission of defeat against consumer capitalism. But we can still salvage the natural world,” Guardian.co.uk, Monday 25 June 2012.

Moore, Barrington, Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World, (Beacon Press, 1993, 1966).

Orwell, George, “As I Please” column, Tribune, 18 August 1944. in Alex Peak blog.

Reich, Robert, “The Decline of Public Good,” 4, January 2012.

Images

Clerestory window – North Nave – National Cathedral – DC by Tim Evanson [CC-BY-SA-2.0 via Wikimedia Commons: The center pane depicts God (upper portion) breathing the breath of life into man (bottom portion). It is the breath of God which leads to creative inspiration (center portion).
A group of dissenters in Norfolk during Robert Kett’s rebellion of 1549 in Samuel Wale engraving of Robert Kett beneath the oak of reformation – 1785, via Wikimedia Commons.

2013 – 2018 EVT – Novstate-Air: Fighting Air Pollution for Profit (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which begins the second scenario, Panglossy. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. Its first measure, to raise the minimum wage, fails to boost growth through consumption. As the new international meeting group for the resilience of the financial system IRESFIS does not show any progress, the ISSIGE, the international fund to promote green growth through infrastructure investment contributes to reinforce the power of the lenders’ nexus and appropriation of public power. Moreover, its results are disappointing: selected projects are insufficient to catch up on late investments, and their impact is too small to bring back growth, to show a change towards sustainability, and to alleviate unemployment. Remains one hope, now vested in the ISSIGE flagship project on air quality.

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading.)

Global but unequal fight against air pollution

Air quality is crucial in terms of health and related costs, and a complex challenge as its pollution involves many chemical elements.

Despite efforts, notably within many OECD countries, to struggle against air pollution, air quality remains a severe global problem, all the more so that pollutants travel. Furthermore, much still needs to be done to fully understand the problem and to devise solutions, as detailed by the EPA for black carbon in its chapter on research needs. For example, synthesised global data are still difficult to gather. The array of means used to improve the collection of information, from sensors to satellite image, as exemplified on the US Air Quality: The Smog Blog, and to provide citizens with adequate daily measures and warning on all types of pollutants, as shown for example by the Daily Air Quality Index in the UK, exists, most of the time, only in OECD countries.

In Everstate, as in its neighbouring countries, the fight for air quality must continue and even be reinforced if more and better results are to be observed, especially as pollution does not diminish in other parts of the world, notably in Asia. This is the overall framework for the ISSIGE flagship programme.

The creation of Novstate-Air

Novstate creates a special structure to answer the proposal, called Novstate-Air. It gathers in a friends network covering Everstate and its neighbours, various industries, universities, research laboratories and health institutions, which are all involved at one stage or another in air pollution and air quality, either because their activity and products are potential sources of emissions, because they participate in the design, implementation or monitoring of sensors and models, or because their research or practice is linked to air pollution or to its impact on health.

In early 2014 EVT, Novstate-Air is awarded the ISSIGE contract and the funds. Besides the breadth of the answer, allowed by the variety and number of stakeholders, which thus fits perfectly well the framework programme, the originality of the financial proposal is what determines the ISSIGE to grant the contract to Novstate through Novstate-Air.

Financial boldness rewarded

Novstate-Air underlines first that what stops companies’ efforts towards air quality are the added costs to their products that changes and investments would create, when benefits would not only be delayed but also spread throughout a population that may or may not belong to their clients. Then, it stresses that if the overall effort were to be supported by the state, then the public deficit would increase in the short-term, while benefits, notably in terms of heightened health security and diminished related visible and hidden costs, would only appear in the longer term. Furthermore, it would be difficult to establish a direct link between investments and benefits, which may be unfavourable in terms of promotion and communication.

Novstate-Air thus suggests, to overcome this conundrum, to ask citizens, who are the final beneficiaries, to become directly involved in the effort by paying regularly a small contribution towards air quality. Looking for an analogy, Novstate-Air decides to mimic the way water is delivered and sold to citizens, but adapted to the specificity of air. The alternative was the creation of an indirect air tax, as indirect taxes are a perfect way to collect taxes without creating resentment. The air contribution is chosen over the tax because it allows for the monetization of the service as well as for profits, thus to the involvement of the private sector, which should contribute to growth and economic sustainability, two specific requirements of the ISSIGE.

Monetizing air quality

by William Adams, How Much Air Do We Breathe?

Novstate-Air, working hand in hand with local administrations will make sure the contribution is calculated fairly, while the data gathered to establish the amount owed by each citizen can be used for research purpose. To mimic at best the water system, Novstate-Air decides to estimate the amount of air breathed by each citizens, according to a specific survey of their activities. This quantity will be revised every trimester. Further research in this field will be conducted to confirm previous findings according to age and gender. Finally, the air contribution will be calculated according to the liters of air used by each family during one trimester. The contributions will be used to finance research, update sensors and all monitoring activities and to help private companies improve their emissions. In the name of transparency, activities and achievements will be given to each family, emphasising notably the improvement of air quality in their environment and the impact on their health.

Thou shalt be surprised…

By 2015, Novstate-Air is able to provide citizens with a preliminary factsheet on the status of their air quality, to start gathering data and, thanks to the use of internet-based facilities, to almost immediately collect contributions nationwide.

Novstate-Air and its network of associated bodies, the ISSIGE and Everstate’s government expect a strong positive reaction. They are thus extremely surprised when, on the contrary, a wave of outrage sweeps over the country, supported by Occupy Everstate, Anonymous, and various unions.

To be continued…

References

Adams, William C., Research Note 94-11: Topic = How Much Air Do We Breathe? California Environmental Protection Agency, 1994.

Dupré, Franck, “Pollution : le diesel, un danger mortel ?” Autonews.fr, 29 Mars 2012.

Durden, Tyler, The Benefits Of A College Education, Zerohedge, 05/21/2012, from Jed Graham, New Normal: Majority Of Unemployed Attended College, IBD, 05/17/2012.

EPA, Black Carbon Report to Congress, March 2012.

European Environment Agency, Chapter 4. Nitrogen emissions and threats to biodiversity, Environmental indicator report 2012 – Ecosystem resilience and resource efficiency in a green economy in Europe, Part 2. 2012.

Janssen, Nicole AH, Miriam E Gerlofs-Nijland, Timo Lanki, Raimo O Salonen, Flemming Cassee, Gerard Hoek, Paul Fischer, Bert Brunekreef, Michal Krzyzanowski, Health effects of black carbon, WHO, 2012.

Lehner, Peter, of the NRDC, Diesel Exhaust Does Cause Cancer, CleanTechnica.com, June 12, 2012.

The Guardian, Global air pollution: what is the most polluted country and city in the world? (WHO data), 26 Septembre 2011.

US Air Quality: The Smog Blog.

WHO, Air quality and health, Fact sheet N°313, Updated September 2011.

2013 – 2018 EVT – Green Growth in Action (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which begins the second scenario, Panglossy. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. Its first measure, to raise the minimum wage, fails to boost growth through consumption. The first high level conference of the ISSIGE, the international fund to promote green growth through infrastructure investment, is hailed as a success. However, as the new international meeting group for the resilience of the financial system IRESFIS does not show any progress, the ISSIGE, in such conditions, also contributes to reinforce the power of the lenders’ nexus and appropriation of public power.

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading.)

The Everstatan delegates and members of the ISSIGE are conscious that its success is crucial. The highly unstable situation demands it. They thus start immediately working on the various framework projects’ proposals and their selection. Three more months, which is considered as a very short time-frame in a multinational governmental setting, are needed before the selected projects are publicised to allow companies to bid for them. The project themselves are due to start at the beginning of 2014 EVT, latest.

Meanwhile, the overall situation of Everstatans continue to degrade slowly. Every month now, one or the other area of Everstate is marred by some unusual climatic event. Those, however, are very localised and damages are relatively small. The overall world growth is minimal while energy and resources prices remain very volatile, contributing to a mood in see-saw. As a result, food prices continue to soar. Everstate’s public deficit remains as high as previously, and even rises as interests grow and as more borrowing is needed. The lenders’ nexus profits skyrocket. Many small companies that constitute the productive fabric of Everstate suffer from this environment and either stagnate or are forced to close down. On the contrary, a few well-connected companies, such as Novstate and its friends businesses, continue to be highly profitable, even though they complain that their rate of growth starts to be slow compared with the past. It is very high time that the overall boost expected from the ISSIGE takes place.

Considering the number of countries that are part of the ISSIGE and the relatively small amount of the overall bonds issued to fund them, the infrastructure investments that will take place on Everstate’s territory are few and far between. The very caution used, as this first year of funding must be considered as a test-case, tends to be self-defeating because of the considerable needs faced. The selected projects are not only insufficient in terms of catching up on late investments, but also their impact is too small to bring back growth, as well as to alleviate unemployment.*

WPA road project, Franklin D. Roosevelt Presidential Library and Museum, via Wikimedia CommonsCompared with the past, infrastructure projects are not anymore labour intensive. They are, however, knowledge intensive. Thus, considering the deficit of proper and fair treatment to the Everstatan educated population (see inequality statistics; Zerohedge, 05/21/2012 using Graham, IBD, 2012), the idea of promoting green growth investment, if set and re-imagined within a new socio-political model, might well be a way forward. Here, unfortunately, Everstate tries getting past-style results, when those cannot anymore be delivered.

Nevertheless, one of the infrastructure projects selected for Everstate is elected as ISSIGE flagship infrastructure programme for its deeply innovative character, the breadth of its environmental scope and its crucial character: Air Quality. Could this, at least, herald something really new and forward looking that could continue fostering hope among Everstatans, if overall general results are insufficient?

Starting most probably with the industrial revolution, air quality has degraded globally, notably in cities, but not only. Since its first report warning about those risks in 1987, the World Health Organisation has published its Air quality guidelines – global update 2005. In 2011, it underlines that

“Air pollution is a major environmental risk to health. By reducing air pollution levels, we can help countries reduce the global burden of disease from respiratory infections, heart disease, and lung cancer… Urban outdoor air pollution is estimated to cause 1.3 million deaths worldwide per year. Those living in middle-income countries disproportionately experience this burden…. The mortality in cities with high levels of pollution exceeds that observed in relatively cleaner cities by 15–20%. Even in the EU, average life expectancy is 8.6 months lower due to exposure to PM2.5 produced by human activities. ” (WHO, Air quality and health, Fact sheet N°313).

Among the pollutants singled out by the WHO, one finds notably: particulate matter (PM), ozone (O3), nitrogen dioxide (NO2) and sulfur dioxide (SO2). PM, includes PM2.5, also known as black carbon, which comes, among others, from diesel engines and vehicles, and contributes to both diseases – including cancer for diesel – and climate change (Janssen, et al. 2012, EPA, 2012). NOx contributes to various diseases and acid rain, which impacts negatively freshwater, forests and crops, and, more generally, biodiversity (EEA, 2012). The screenshot below of the excellent interactive and explanatory display done for the French ADEME (Agence de l’Environnement et de la Maîtrise de l’Energie)  summarizes the complexity of the challenge Everstate as all countries face (click on the image to access the interactive application – in French but the visual part can be understood in any language – PM are included in “aerosols“):

To be continued…

* Read on investment and more generally on growth in current conditions the excellent article by Michael Spence, Nobel laureate in economics, “Why Do Economies Stop Growing?” Project Syndicate, May 23, 2012.

—–

References

Dupré, Franck,  “Pollution : le diesel, un danger mortel ?” Autonews.fr, 29 Mars 2012.

Durden, Tyler, The Benefits Of A College Education, Zerohedge, 05/21/2012, from Jed Graham, New Normal: Majority Of Unemployed Attended College, IBD, 05/17/2012.

EPA, Black Carbon Report to Congress, March 2012.

European Environment Agency, Chapter 4. Nitrogen emissions and threats to biodiversity, Environmental indicator report 2012 – Ecosystem resilience and resource efficiency in a green economy in Europe, Part 2. 2012.

Janssen, Nicole AH, Miriam E Gerlofs-Nijland, Timo Lanki, Raimo O Salonen, Flemming Cassee, Gerard Hoek, Paul Fischer, Bert Brunekreef, Michal Krzyzanowski, Health effects of black carbon, WHO, 2012.

Lehner, Peter,  of the NRDC, Diesel Exhaust Does Cause Cancer, CleanTechnica.com, June 12, 2012.

The Guardian, Global air pollution: what is the most polluted country and city in the world? (WHO data), 26 Septembre 2011.

WHO, Air quality and health, Fact sheet N°313, Updated September 2011.

Images

WPA road project, Franklin D. Roosevelt Presidential Library and Museum, via Wikimedia Commons.

CNES-CNRS/INSU-MEN, Les polluants de l’air extérieur, Agence de l’Environnement et de la Maîtrise de l’Energie, 2009.

2013 – 2018 EVT – Investing for Green Growth without Liquidity (2) (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which starts the second scenario, Panglossy. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. Its first measure, to raise the minimum wage, fails to boost growth through consumption. The second, longer term, policy, which promotes green growth through infrastructure investment, starts with the preparation of the first high level conference of ISSIGE. Notably, funding through the emission of bonds, which should promote a lever effect by involvement of the private sector, is decided. The new international meeting group for the resilience of the financial system IRESFIS also convenes, but with no progress as the lenders’ nexus is as strong as ever.

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading.)

Actually, the lenders’ nexus has even seen its position reinforced. The ISSIGE, by deciding to issue bonds, which go through the private banking system, and by hoping for leverage, has reinforced the dependency of the nation-states and its governing bodies upon the lenders’ nexus as well as upon any private actor with liquidity. The political weight that is put on the ISSIGE success, notably because it has been framed in terms of growth, which is crucial according to the past worldview, on the one hand, and, on the other, because of the global increasingly urgent need for investment, further strengthens the immediate power of the lenders’ nexus.

However, a large part of the investment deficit has been and is created by companies and lenders that have been seeing more (short-term) profit in not investing than in investing for years. This perception of the profits private companies and lenders could get – the return on investment – affects the perception of risks. It thus, most probably, contributes to lead private actors to ask the public (i.e. the nation-state) to bear the cost of all risks attached to green growth investment, from “where returns cannot be monetized or appropriated by the investor” to “risks that are more perceived than real, e.g. demonstration of a proven technology” (Global Green Growth Forum, March 2012, p.2). Actually, considering the overall investment deficit, it seems that it is not only green growth investments that are concerned.

Furthermore, all actors evolve within a paradigm that enounces that the private sector is best and knows best how to run everything and to provide for any goods and services. This favours the idea (even if it is never couched in such crude terms) that, if the private sector must contribute to invest, then it can do so only by obtaining the same high profit rates it could get by placing its cash surplus – the liquidity – elsewhere, i.e. notably in the bubbles of the financial market. It is thus up to nation-states to pay for the difference. Again, this leads to a blatant appropriation of public wealth and power.

Considering the existing public deficit, the private ownership of the related debts, the prevalent worldview and the various ideological and material stakes to keep it, there is, however, no other solution. To find another way would demand that at least one of the prevalent conditions change, so as to rebalance the negotiating power of actors (see, for a detailed explanation, “The powerful Everstatan elite under threat?” in Everstate, setting the stage (2) and 2012 EVT: Public Resources and Lenders).

Once the ISSIGE funding process is set up, the ISSIGE summit may take place. In a nutshell, the criteria the framework projects’ proposals will have to meet are as follows:

Arbutus menziesii immature fruit by Jina Lee GFDL or CC-BY-SA-3.0, via Wikimedia Commons

  • transboundary projects involving at least two countries,
  • fostering economic growth,
  • innovative,
  • green projects that are environmentally and economically sustainable,
  • improving or creating infrastructures that provide a service and/or allow overcoming identified and felt environmental threats.

Once the framework projects are selected, then a usual legal bid system to compete for and be awarded public markets will be used. Legally, the system of the countries where the project will be implemented can be used indifferently. The delegates, once the summit ends, have six months to define framework projects proposals. Some of those proposals will then be chosen by the network of delegates and become the ISSIGE framework projects for the year. The network will make sure that each member country receives the same value in terms of funding of projects.

The summit is considered a success by the various member states. The very identification and presence of the delegates, on the one hand, having been able to agree upon and set up the process, on the other, are seen as the very first achievement of ISSIGE. A strong communication campaign is organised around this theme.

Yet, in terms of everyday life, for Everstate citizens, there is no improvement whatsoever, besides the efforts of the various administrations they witness. On the contrary, the situation appears to grow worse, slowly and inexorably. The administrative time, notably when it involves the coordination linked to multinational governance, seems to be increasingly disconnected from and ill-suited to a real world where problems follow their own dynamics.

Because of the transparency surrounding the process that allows for proper information, because citizens know that green investments are crucial, while being aware of the complexity of the task and finally because Everstatans hope for a direct improvement in their lives once the projects start, as has been promised, they bear with their rising hardship and fear.

To be continued…

———-

References

For real life discussions on green growth investment & financing, as well as on investment deficit:

3GF, Global Green Growth Forum, FINANCING Preparatory Strategy Meeting, 26-27 March 2012.

Caranci, Beata  & Chris Jones, “Milking America’s Cash Cow: The Case For Stronger Investment Growth,”  Special Report, TD Economics, May 25, 2012.

Climate Policy Initiative and the World Bank Group in collaboration with China Light & Power and the Organization for Economic Co-operation and Development, Inaugural Meeting of the San Giorgio Group: Expanding Green, Low-Emissions Finance, October 2011.

Euractiv.com, “‘Project bonds’ launched as an experiment,” 23 May 2012.

European Commission, Europe 2020 Project Bond Initiative, Investment needs, last updated 19/10/2011.

Hutton, Will  Companies must stop hoarding cash and start investing instead, The Observer The Guardian, 19 February 2012.

Klein, Ezra, America’s capital investment deficit, Washington Post, December 31, 2010.

Pan European Networks, “‘Project bond’ plan approved by diplomats,” 22 May 2012.

World Economic Forum, Financing Green Growth in a Resource-constrained World Partnerships for Triggering Private Finance at Scale, 2012.

Zarroli, Jim,  Companies Sit On Cash; Reluctant To Invest, Hire, August 17, 2011, NPR.

Zenghelis, Dimitri, “Restoring growth and confidence through green innovation,” E!Sharp, June 2012.

2013 – 2018 EVT – Investing for Green Growth without Liquidity (I) (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which starts the second scenario, Panglossy. Dependent upon programmes created to face efficiently past challenges, prisoners of entrenched political groupings, the major parties campaign to come back to the order ante. Meanwhile, the polarisation and rise of a new opposition that took place during the election is temporarily frozen by the last hope thus created. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. Its first measure, to raise the minimum wage, fails to bring back the expected result, to boost growth through consumption and thus to restart the engine.

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading.)

As the first measure fails to boost growth, then the income of Everstate remains in the pitiful state into which it was before the elections. It even continues degrading as pressures and related costs do not relent. Meanwhile, as the need for liquidity does not stop, power remains in the hand of the lenders’ nexus.  Yet, the failure of the government is only about the first measure. Two longer term policies are meant to address those very problems that have contributed to derail the whole system: the pressures related to the increasing complexity of resources, including looming scarcity, relative and absolute, through ISSIGE, and the problem of liquidity through the new international meeting group for the resilience of the financial system (IRESFIS).

Those two policies show that, even if they are included under a label, “restoring economic growth,” that is still part of the outmoded worldview, some awareness of the real problems besetting Everstate has started to take place.

ISSIGE will convene its first high level meeting in Everstate’s capital, six months after the elections, to allow for the organisation, for the presentation of first recommendations and to make sure that it will be able to announce the amount of the overall fund. It is imperative that firm and consensually accepted recommendations follow from this conference, considering the urgency of the situation. Heads of governments of the various member-states will be present to show the high level commitment given to the project. Several hundreds delegates of all the countries involved will be present. They will constitute the ISSIGE network, backbone of the effort.

Each delegation prepares a draft determining the criteria for the framework projects they will have to propose in the years to come, the process according to which those framework projects will be selected and, finally, how those projects will be implemented, by whom, with which supervision, etc. Those drafts are, of course, widely shared, read, and amended among delegates over the six months preceding the conference. In this way, no surprise and no intractable dispute will occur during the conference. Considering the administrative work load those exchanges require, and considering the high level profile of the delegates, substantial emoluments are paid to those delegates who are not civil servants, while those civil servants who are now working full-time for ISSIGE within their mother administration are promoted to the rank of Director with corresponding salary increase.

In a wish to promote transparency and show Everstatan citizens the real and genuine efforts and progress of the new government, drafts, exchanges and discussions are precisely documented and uploaded on a dedicated ISSIGE website. Furthermore, a special platform opened to citizens is created, where Everstatans can give their input. This effort is quickly followed by other countries.

More difficult, ISSIGE must also find a way to fund the projects themselves, and decide upon a global amount. Considering the public deficit existing in most countries, the ISSIGE network, the governments and administrations behind them decide that the various members and the Regional Union will issue bonds to fund the projects, which should also, hopefully, promote private investment. The overall amount for the first year is set at EVC (Everstate Currency) 250 millions. ISSIGE hopes that a lever effect will apply and that the overall value of the projects thus funded will be much higher.*

This is a very small amount considering the global current needs existing in terms of investments. According to the Global Green Growth Forum using 2010 IEA estimates, “by 2050 US$ 1.2 billion additional annual investments just in energy supply and use are needed to avoid a temperature increase beyond 2°C.” Meanwhile, the economy needs in terms of investments “for transport, energy and information and communication technologies (ICT) infrastructure projects in Europe are estimated at €1.5 trillion for 2010-2020″ (Euractiv.com, 23 May 2012). According to the European Commission, “infrastructure investment needs” “are estimated to be of EUR 1.5 trillion to EUR 2 trillion to meet the policy goals of the Europe 2020 Strategy for smart, sustainable and inclusive growth.” However, this first ISSIGE funding is a start.

Meanwhile, the IRESFIS meets a couple of times, but each player camps on its position, and no progress is made. Those, which include Everstate’s government, who want more regulation, are immediately countered by most financial actors, who oppose it, as well as by some governments, who believe that more regulations will hamper financial transactions and thus diminish the power of their countries as financial centres.

As the income of the nation-state continues to be insufficient, the bargaining position of the lenders’ nexus is as strong as ever. It is even stronger because of the ISSIGE needs… to be continued.

———-

References

For real life discussions on green growth investment & financing, as well as on investment deficit:

3GF, Global Green Growth Forum, FINANCING Preparatory Strategy Meeting, 26-27 March 2012;

Caranci, Beata  & Chris Jones, “Milking America’s Cash Cow: The Case For Stronger Investment Growth,”  Special Report, TD Economics, May 25, 2012.

Climate Policy Initiative and the World Bank Group in collaboration with China Light & Power and the Organization for Economic Co-operation and Development, Inaugural Meeting of the San Giorgio Group: Expanding Green, Low-Emissions Finance, October 2011.

Euractiv.com, “‘Project bonds’ launched as an experiment,” 23 May 2012,

European Commission, Europe 2020 Project Bond Initiative, Investment needs, last updated 19/10/2011.

Hutton, Will  Companies must stop hoarding cash and start investing instead, The Observer The Guardian, 19 February 2012.

Klein, Ezra, America’s capital investment deficit, Washington Post, December 31, 2010.

OECD, Infrastructure to 2030, Vol.2, 2007.

Pan European Networks, “‘Project bond’ plan approved by diplomats,” 22 May 2012;

World Economic Forum, Financing Green Growth in a Resource-constrained World Partnerships for Triggering Private Finance at Scale, 2012;

Zarroli, Jim,  Companies Sit On Cash; Reluctant To Invest, Hire, August 17, 2011, NPR.

Zenghelis, Dimitri, “Restoring growth and confidence through green innovation,” E!Sharp, June 2012.