The End of Economics

Economics is the study of scarcity. By 2050, in many parts of the world, scarcity may well be transcended. At that point, economics will be history.

In an agricultural economy, there is a very real question of starvation. Subsistence living was reality for the vast majority of the world's population only 1,000 years ago. In Europe, it was not unusual for groups driven mad by starvation in the months leading into harvest to form suicide pacts.

In an industrial economy, food production is less precarious and scarcity typically shifts from food that might feed one to the products that do things like clothe, house, entertain, transport, or inform one. In agricultural economies, the rich are fat and the poor are thin; in developed nations, the poor are fat and the rich are thin. Food scarcity is a product of will power rather than crop failure.

In an information economy, even a scarcity of goods becomes history as landfills, garages, and closets become increasingly packed and cluttered. What is scarce is the economic freedom that allows one to pursue avenues of engagement, contribution, and meaning that seem pushed to the periphery of life for many focused on making mortgage payments, college loan payments, 401(k) contributions and insurance payments.

Already, G-8 countries are building something new atop the information economy, just as they did with the industrial economy around 1900. An entrepreneurial economy is emerging, an economy in which the roles that are typically ascribed to entrepreneurs are made more popular, more common. The wealth that will be generated in this economy, wealth driven by and driving further advances in resource availability and use (problems of the agricultural economy), manufacturing and distribution (problems of the industrial economy), and problem-solving and design (problems of the information economy), will create abundance inconceivable by most of the current generation.

Humanity will still face problems. The problem of being human, the problems of finding happiness, meaning, engagement, and healthy relationships will all still be with us. But these dramas will be played out free from the fear, or overhang of scarcity. Measures like GDP growth will become as nonessential to the measure of progress as caloric intake has become to the developed nations. We will have moved beyond that.

Before about 1000 - 1300 AD, tradition rather than economics defined society and its changes. Since that time, the West has been transformed by economic forces. By the middle of this century, those of you who are still alive will get to witness the end of economics. Historians will look back to the period before 2050 as a time when humanity was so consumed by fear, scarcity, and competition for goods that our humanity was largely subsumed to Freudian impulses. Once economics has ended, we'll live in a true renaissance, a time when a majority of humanity can properly focus on what it means to be human.

The end of economics. It's just decades away.

Soft Technology Invention

Most attempts by business to understand the future rather seem to miss the point. They come across as technology plays, predictions about which breakthroughs are likely to come to fruition and how they'll parlay these into products. This is fine if you are head of a research lab, but has less obvious application if you are tasked with other management positions. If your job is to head up a business or function, you're likely looking - if indeed you are looking at all - at the wrong kind of technology.

Some should focus on the evolution and change in hard technology - changes in cars, computers, drugs, and telephones. Most managers should be focused instead on soft technology - changes in culture, behavior, roles, beliefs, and organization. It's true that in practice these two, the hard and soft technologies, play together. It's also true that any one individual is likely to focus on one dimension. Thanks to roughly a century in the evolution of the formal role of scientists and engineers, we have clearly defined the tasks associated with the development of hard technology. By contrast, roles for developing soft technology are less clearly defined. Indeed, what plays catalyst for the shift in public opinion or new practice often seems unpredictable and random. Of course, so is the development of hard technology, but that doesn't stop societies from investing hundreds of billions into its development.

Most management types should be looking at the future of organizations, work, and society. It is not that they should remain willfully ignorant of the hard technology, but often there is little that a CEO or VP of, say, Human Relations can do about furthering the next generation of web development software. They can help to develop the organization.

There is so much that can be written about this, but I will for now limit myself to this. There are a variety of questions that anyone in management - from small business owner to CEO - can ask, questions that intelligent and imaginative people scattered throughout the organization can answer more creatively than me. Managers should be regularly asking these questions.

1. How do we more fully engage our people in work? What work place designs, chunking of tasks, and communication protocols should we use to encourage focus?

2. How do we clarify consequences? What can we do to more clearly link the work of the individual to the value created by the organization?

3. How do we more clearly tie together individual effort, longer term consequences, and organizational performance? Are there lessons we can draw from market economies?

4. Are we prepared for the devolution of power and decision making as accords with self-adapting complexity and market dynamics that might follow from designing a system that allows individual initiative in place of central controls? What are the consequences of creating such a system? How would we make this operational? What are the practical obstacles to moving in this direction today?

5. Are our people motivated by a vision of their future? Do they see this organization as a place of possibility or are they even interested in realizing their own potential? Why or why not? What would we have to change about our organization to allow a critical mass of our employees to realize their potential?

6. Who in the organization is tasked with coaching our people towards the realization of their potential? What is the lost revenue resulting from our lack of interest in this?

I would argue that seriously pursuing questions such as this could be the catalyst for developing new organizations, for creating the next generation soft technology. If your business is hard technology, you are likely focusing an enormous amount of energy on creating the next generation of your products. If you expect to remain competitive as a senior executive, you should be just as focused on creating the next generation of soft technology.