2012 is a year which comes up in a range of mythology as a period of great change. It seems everyone from the Mayans to the Mesoamericans and even Vishnu herself allude to a period of transition and renewal.
Given my comments on black swans in the 2010 Christmas edition of this bulletin, I figured I’d better make a prophecy of my own about 2012 before it arrives. So here it is.
I hereby pronounce 2012 as the death of the industrial age.
Lets face it, it’s time to recognise that the industrial age was the greatest ponzi scheme of all time.
It was an age where resources and growth were abundant and limitless. It was an age powered by fossil fuels, which helped us tap into the earth’s natural capital.
It was an amazing era, where average human beings could do things which the gods themselves would have been amazed by. We could eat strawberries in winter. We could control the climates of our homes. We could heal the sick and travel from Sydney to Melbourne in just over an hour.
We could do this all by digging up old dinosaur remains and converting them into fuel. These are all nifty tricks. The gods, magicians and alchemists would have all been impressed.
Of course, all good things come to an end, and we are now hitting natural limits.
In the early industrial days the planet could heal itself quicker than we could damage it, and damage was localised rather than systemic.
This is no longer the case.
In 2012, the world’s population will be seven billion and climbing.
Peak oil will have arrived.
Ocean, ecosystem and atmospheric governance are fractured and ineffective. By a series of measures, we currently need 1.4 planets to sustain us all. And that’s before economic growth or the industrialisation of developing countries is factored in.
All good ponzi schemes pay great dividends to those who get in early. It’s a pea and thimble trick which distributes future capital within that system and pretends it is income.
And this is what the industrial age was. Economic growth was driven by consumption of the planet’s resources and our reserves of natural capital, consuming capital faster than it could be replenished. Clearly, this can’t go on and the myriad of emerging risks is enormous.
Converting risk into opportunity
Having said that, I never met a risk that wasn’t someone else’s opportunity. The trick will be getting in early enough to make those opportunities yours.
There are many weak and strong signals on what the post-industrial era will look like, and there’s still time to get on the ground floor.
I like the idea of renewal. It sounds so much better than change or Armageddon. I look forward to joining you for a bit of renewal in 2012.
This article first appeared in the December 2011 edition of Risk Management Today.