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  • Writer's pictureDoug Weiss

Crystal Ball

Last week I wrote about an empirical study originally done in 1972 and recently updated which forecast a possible global collapse by 2040. Predictions about the future as they relate to almost any subject tend to be heavily contested, especially if they project a dire or unpopular outcome. As much as we humans are endlessly trying to peer around the corner, we have a dismal track record recognizing the portents of change, except in hindsight. Perhaps the single greatest reason for this is our belief that meaningful change is always preceded by significant, and often cataclysmic events.

Retrospective analyses of economic, political, and social change paint a very different picture, however. They trace the origins of change to incremental, often innocuous actions or failures that in time lead to insurmountable shifts in the affairs of people, governments, and civilizations. This is precisely the scenario the overwhelming majority of scientists are telling us is happening in the present with respect to climate change. But before you conclude that this post is yet another rant on the very real threats of global warming, let me say that while the situation is in fact dire, it is not the only man made challenge we face.

As the MIT/KPMG studies suggest the end times –or at least the radical and potentially devastating failures that lie ahead will not occur with a bang, they have in fact already begun. The great conflicts that marked the prior century, world wars, global hunger and privation to say nothing of disease on a scale many times more deadly than our current pandemic, global depression, and the assassination of popular political leaders are recognizable even familiar hallmarks of a tumultuous stage in our world’s evolution. Less commonplace are the portents we see today. Let's consider three developments of our modern age that have created unintended consequences: the frictionless supply chain; consolidation and globalization; and complexity.

Consider the current issue of supply chain disruption that is causing gaps in inventory world-wide, fueling scarcity at the grocery store and everywhere else and driving an inflationary spiral. Analysts correctly identify the pandemic as the exacerbating factor but miss the real culprit. In our attempts to fashion a highly efficient, frictionless supply chain, one that has traded the seemingly wasteful practices of warehousing inventories for just in time collaboration, we have also removed the cushions that once helped add resilience to our manufacturing industries. So delicate is the balance that even seemingly minor delays have a rippling impact that persists for months or even years into the future.

But supply chain issues are not the only culprit, farming has become more consolidated and more focused on growing crops destined for processing rather than direct to the consumer sales. Rising costs for fertilizer, seeds, and farm equipment have made it nearly impossible for small farmers to achieve economic scale with the result that small farms are vanishing. Those that have managed to survive have done so by concentrating on specialty items that command higher prices albeit with lower yield. We have become used to eating what we want when we want it with the result that groceries are more expensive and more dependent on global rather than local supplies. Any significant disruption drives higher prices as we are seeing today, and the lack of local farming makes food supply more precarious.

Auto dealers have nearly empty lots and used car prices are rising at a furious pace all due to a world-wide shortage in the chip-sets that are needed to allow sophisticated systems to function and manufacturers to offer new features, many of which are simply unnecessary. Beyond the inflationary impact, the complexity of today’s vehicles is such that repairs have become very costly, more frequent, and even slight damage often results in totaling a vehicle. This has lead to increasing insurance costs, decreased reliability and as we now are experiencing, manufacturing delay. Few of us are able to do even minor service on our own cars any more. Increased complexity has driven cost increases, and service centers cannot staff sufficient mechanics to keep up with demand.

Changes such as these made over the past 50 years impact every sector of our economy with questionable benefit in the short term but long term consequences that we may not be able to forestall much less unravel. No one of these is likely to cause collapse by itself, but together with other precipitating factors they have set in motion an avalanche. These are just a few of signs we are on accelerating track toward collapse:

- Increased poverty in first world countries

- Viral distrust of media and news sources

- Nearly universal mistrust of the political process

- Health care systems unable to respond to large scale public health issues

- Wide spread rejection of credible science and proven fact

- A widening performance gap between markets and economies

- Disillusion with the traditional work ethic

As it further aggravates existing tensions, we can begin to appreciate the impact of a significant and durable climate change setting into motion a sustained disruption that will lead to global breakdown. As economies stall and prices escalate beyond inflationary excess, the ingredients for famine, social unrest, and political extremism are abundant. As we have seen, government provided safety nets are easily over-taxed, exacerbated by political stalemate and heightened geo-political tensions.

I am reminded of an old joke, that we are all born with a crystal ball, the only problem is that the instructions were left out. Perhaps you do not see as bleak an outcome, or perhaps your crystal ball is clearer than mine. If nothing else I hope this post offers both alarm and hope. We have squandered decades debating what to do about the changes we can observe unfolding around us. We can no longer afford to wait. The time is overdue for nations to accept that the bang we are arming ourselves against is not how the end will arrive. We do not need prophets or crystal balls to see what is coming, the signs are all around us.

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