How Will Humans Survive?

There's a Yahoo Answers question up by Steven Hawking asking how humans will survive the next hundred years.

Below is the post I wrote answering it. It's been edited and expanded a bit for clarity.

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How Will Humans Survive the Next Hundred Years?


I can tell you exactly how humans will survive--I've been studying it
for the last ten years. We will not only survive but thrive like we
have never even imagined.

Before 1900, when Newtonian (or classical) physics dominated the
world, our economic, social and political structures were extremely
inefficient. During this time our economy grew about .3% a year (based
on world GDP) and our social, political and religious structures grew
just as slowly.

Because systems were so inefficient, waste and pain were commonplace.
Literally--raw sewage and physical pain were daily features for just
about everyone. Illness was seen as a natural, omnipresent, part of life.

Even the most efficient systems of this age (like the internal
combustion engine) generated 85% waste.

The science of this age was dominated by tangible concerns--it dealt
primarily with matter.

With the introduction of quantum physics and related know-how around
1900, systems became vastly more efficient almost overnight. This science dealt primarily with energy and was dominated by intangible concerns.

After thousands of years of .3% growth, the world GDP experienced a
ten-fold jump with the introduction of this paradigm--to an average of 3% a year. (Where it has remained for the last hundred years.)

Political and social systems became much more efficient during this
quantum age as well--slavery was all but eradicated, our populated
environments became much cleaner, and billions of us gained political
authority, education, economic independence and the right to vote.

But quantum, or intangible, systems are still somewhat inefficient.
Nuclear power plants generate much more power per pound of waste than
coal plants ever did, but they still generate significant and
troubling waste.

Similarly, the economy affords us much more physical comfort and
well-being, but still generates significant quantities of anguish and
fear. We're not loosing fingers, arms, or lives at anywhere near the
1850 rate but we still have plenty of emotional worries, fears and
hungers.

Another way to put this is that the introduction of intangible systems
solved most of our tangible problems, but also generated new
intangible ones.

These new intangibles concerns, of course, can only be remedied by the
efficiencies offered by untangible systems. Just as our tangible
problems could only be remedied by the efficiencies gained by the
introduction of intangible systems.

In science the shift to an untangible paradigm is reflected in the
discovery of dark energy, which is entirely untangible. Just as
Einstein figured that intangible energy was more fundamental than
tangible matter, scientists now know for certain that untangible dark
energy is much more fundamental than both matter and energy.

In the practical economy, the shift from a tangible paradigm to an
intangible one, around 1900, was achieved when reason began to prove
its value in the marketplace via technology. Before this religion and
most political and communal authorities suppressed reason, science,
education and critical thinking. Once reason began to yield concrete
results such as electricity, trains, sewers, clean water and the like,
the intangible age was born and any markets that suppressed reason
found themselves more and more poor and irrelevant.

There was a huge, essential, global demand that only reason could
satisfy. These days, the most profitable and efficient corporations
are intangible ones like Google, Berkshire-Hathaway, and Microsoft.
And the richest and most sought-after workers are those who have
mastered intangibles.

The current market is awash in technology but cannot satisfy demand
for culture or meaning--there is a huge global demand that only emotion can satisfy. We have lots of high quality intangibles--lots of productive thoughts--but much fewer high quality untangibles--or enjoyable feelings (such as relaxation, faith, enjoyment and peace).

As untangibles enter the economy primarily through art and culture (music, movies, books and the like) the question is what's preventing creative leaders from satisfying our demands for a meaningful culture--one that allays our fears, gives us hope and delivers significant quantities of inspiration?

Most assume that the answer is abstract or philosophical, but rather
it's arcane and structural. The reason that the market can't supply
quantities of high quality creative content is fixed prices.

All movies, songs, books and other mass market creative products--all
pure untangibles--have arbitrarily fixed price points. (Songs $.99,
movies $10, DVDs $24, books $14, etc.)

This is less overt (and less tangible) than religion's suppression of
science, but the end result is the same--untangibles grow much, much
more slowly and much less efficiently than those sectors of the
economy where the market is allowed to function. We have a dearth of
untangibles because they don't pay and must be subsidized--just like
science in the 1700s. (Though it's much harder to get locked up for
making art, thankfully.)

With fixed prices, the only untangible producers that are even
remotely efficient are the ones that produce low-quality offerings.
Offerings that are easily understood by the greatest number of
consumers. Those interested in higher quality or more sophisticated
offerings are frustrated both as consumers (because nothing's
available) and as producers (because they can't work at what they
enjoy). As more and more of the population grows interested in high
quality content, frustration with existing systems grow as well.

If science had to operate this way--if Einstein's Theories of
Relativity, for instance, had to be understood by a large segment of
the 18-34 demographic before he could get recognition or
compensation--we'd still be in the dark ages. But all he had to
convince were the smartest few folks to get published, get tenure and be set for life.

If a musician, writer or filmmaker appeals to such a small population--no matter how great the demand for or value of the actual work, he or she is an abject failure. Even more importantly, as there is a sea of low-quality, fixed price and free content with
which he or she must compete, it is unlikely that such an offering would be seen by any significant audience. Price may be valuable for its ability to ensure the success of the best producers, but it is invaluable for the speed and efficiency with which it communicates complex information about quality to consumers.

An rational idea can be monetized in the form of a patent and make the thinker rich overnight. A creative idea--which may inspire many such valuable rational ideas--will likely be so specialized that it will be given away or ignored. These are the ideas not of popular bands, movies and books, but the more obscure bands, movies and books that inform popular offerings--The Pixies obscurity vs. Nirvana's overnight success. As these artists serve niche markets, their produce is worthless at a fixed price points. As such, they struggle and starve and eventually give up. Also, though this content is more valuable than more commercial content, fewer people are interested in making it due to the level of financial sacrifice necessary to participate.

Quite literally, we make our best artists pay to do what benefits us all immensely. Think what you want of this ethically but it's an incredibly inefficient and backward way to run both our culture and our economy. We all pay dearly in terms of lower quality culture, less creativity at work, and, perhaps the largest cost, we think that doing what you really want is hard, impoverished and lonely. We think that being real, or authentic, is incompatible with making a living. It is, but that's only because we've set it up that way. It doesn't have to be. We crave the authentic more than anything. All we have to do to make it commonplace is pay market rates for it--it's no different than anything else.

An easy analogy is food--we have a fast food culture but without
allowing demand to raise the price per "meal", there's no way any
significant producers or distributors can offer healthier, more
enjoyable, organic or less processed fare. No one considers fixed
prices a more efficient way to deliver food, housing, transportation
or prosperity, but we still insist upon it for our untangibles.

Consequently, the untangible sector looks like a throwback to the
Soviet era--government subsidies, poorly stocked shelves, uninspired
offerings, and enormous demand/long lines for the few quality goods
that do make it through. If high quality content could be horded, it surely would be.

As with all fixed price markets, the content market is
failing--despite growing demand. In the music industry, where the
transition to digital is essentially complete, the entire system is
falling apart. With film, television and books about to go digital,
it's likely that without floating prices we'll have a recorded culture
almost entirely created by amateurs, hobbyists and part-timers within
ten years.

(As most bands profit only from touring, endorsements and merchandise;
recording and songwriting for even the most successful artists is a
sideline endeavor. Recorded songs are a loss-leader--essentially advertising for live shows and t-shirts. Consequently, the more "successful" a band is, the less time and energy is spent on creating new high quality music. By way of example, if engines made no money and auto paint did, the market would be increasingly filled with dazzling durable paint and shoddy, underpowered and disposable engines. This is a little different with culture because so many are willing to subsidize its creation, but the overall result relative to other economic sectors is the same--socialized products are derivative, stale and carelessly built while profitable products are well crafted, novel, and exciting. In our current system we get better t-shirts and more spectacular tours while recorded music--the songs being sung--gets less and less appealing.)

Eventually demand will set content prices as it does all other prices,
but until then, our intangible problems such as environmental
devastation, depression and violence will continue to threaten us and quality untangibles such as relaxation, fun and even love will be absent from our public lives.

Very simply, they are systematic inefficiencies in the intangible
paradigm we currently employ. Our markets structures insist that
reason is more valuable than emotion and as a consequence, it dominates how we feel. No amount of technological or intellectual growth can produce the happiness we crave because happiness itself is seen as worthless in the market.

Once we correct this anomaly, start to deploy untangible systems, and reward the creation of high quality untangibles, much of the economic and political strife that has dominated the last century will disappear. Creative pursuits will pay handsomely and the economy will be much, much larger and more efficient. Much of our fear about shortages,
which relates directly to the fixed quantities of energy and matter in
the world, will evaporate as we realize that that which is truly
primary and valuable--dark energy/untangibles/emotion--is unlimited and constantly growing.

(In science this discovery is presaged by the discovery, in 1998, that
the universe was growing at an ever accelerating rate. It had
previously been thought that the rate of growth was slowing and that
it would eventually contract. In contrast to matter and energy, dark energy grows along with the universe--that is, there appears to be no "Conservation of Dark Energy" law as there are conservation of matter and conservation of energy laws.)

Once the bulk of our economy is based on "stuff" with an unlimited supply, many of the skirmishes over resources will be relaxed or disappear. Growth will require fewer and fewer resources as we employ highly efficient untangible systems. Growth will also be much easier and rapid. Ball bearings must be shipped, energy must be wired for each house, but with content you can just post it on the internet and set up a Paypal account. There is no effort to distribution.

Relaxation, happiness, peace and joy are all untangibles, they will be
much more plentiful once their creation and consumption is valued in
the economy. Just as reason, education and intellectual stimulation
(intangibles) became much more plentiful after reason was allowed to
be valued by the market, high quality emotions will become much more
plentiful after they are valued by the market.

(This is also a way of saying that this will happen because it's what the market wants--people want a million dollars, or to be smart, sure, but without the feelings of wealth or the feelings of intelligence, neither money nor smarts holds much value. Feelings are more primary than thoughts or energy which are more primary than health or material.)

These efficiencies will also make us much, much richer. If the tangible age produced a few millionaires and the intangible age produced many billionaires (and made more than half the world self-sustaining), then it's likely that the untangible age will produce trillionaires and make almost all the world what we currently think of as middle class or above. If this seems unlikely--remember that our current prosperity and leisure seemed absolutely impossible to the most educated observers at the end of the tangible age.

This financial and emotional prosperity will also come quite quickly. It's important to note that as the cycle period seems to decrease by a factor of ten with the introduction of each new paradigm (the tangible age was thousands of years, the intangible age was around 100), that all this could happen in as little as ten years.

For the prosperity of the intangible age to arrive things had to be built, entire countries wired and systems developed. For the untangible age to arrive, all we need to do is tell stories and sing songs over existing wires. It can and most likely will happen overnight.

All of this means that we will likely have an world GDP growing at an annual average rate of around 30% in as little as ten years while actually decreasing our consumption of energy and natural resources. Large portions of the population engaging in very profitable, enjoyable, and extremely low impact untangible activities for most of their productive lives will allow this hyper-efficient growth.

Untangibles

You may not have heard much about untangibles, but you will.

Untangibles are to intangibles as intangibles are to tangibles. Times ten.

Basically, when viewed scientifically, the universe is made up of three distinct components: matter, energy and dark energy.

Matter is tangible--and relates to a corporation's products and material assets--buildings, trucks, computers, desks.

Energy is intangible--and refers to a corporation's know-how, ability to reason, design acumen, and part of what is termed "goodwill".

Dark energy, discovered by science only recently (1998), is entirely untangible. That means they can't find a single mote or flicker of it. Despite it's elusive nature, scientists know conclusively that it's running the entire universe. They estimate dark energy comprises 96% of the universe--with matter and energy making up the remaining 4%.

You can imagine, then, how crucial untangibles are for any business' future.

Before 1900, the economy was almost entirely tangible--and the world GDP grew at an average rate of less than .3% a year.

From 1900 to 2000 the economy was both tangible and intangible. Running on two cylinders instead of one, the world GDP grew exponentially more quickly--averaging a robust 3% per year.

But while the intangible age has provided for many of us materially and intellectually, it hasn't done much emotionally or culturally.

Just like the tangible age failed to deliver reason (high quality intangibles), the intangible age has failed to create meaning, happiness or relaxation--or any other high quality untangibles.

In the market, untangibles are essentially creative content--songs, movies, television, fiction, etc. This sector of the economy is most clearly defined by its low, fixed prices.

All songs are $.99, all movies $10, all DVDs $24--regardless of production cost, demand, or quality.

Your company has all three attributes whether it knows it or not--products, reasons/technology, and stories. The stories are what's most important and where most of the value is, but because they're essentially irrational, they scare the pants off of most managers and executives.

Forests are murky and ambiguous, trees are concrete and clearly defined. Forests are also where the money is, even though many businesses get by for years going fearfully from tree to tree.

The current economy doesn't properly value untangibles just as the economy in 1800 didn't properly value intangibles. And it suffers from just as significant inefficiencies because of this oversight.

This will change as the market corrects pricing structures for untangibles. CEOs, CFOs and COOs will be largely outsourced just like white collar is now. Most of what we think of now as commercial activity will be little more than a back office for enormous content engines.

Untangibles are 96% of the economic landscape. Right now they're largely hidden, just as reason and technology was hidden a hundred years ago, but they will have their day.

Put it this way: after iPhones, designer shoes and blazing internet connections are universal, disposable cheap and omnipresent, the only thing that anyone will care about is content--meaning--and they'll gladly pay a premium for quality just like they pay a premium for organics, good design and selvage jeans--high quality tangibles and intangibles.

Put another way, after all the "what" and "where" (tangible) questions are answered and all the "how" and "when" (intangible) questions are answered, the only game in town will be the beautifully untangible "why".

As this new untangible age blossoms, the world GDP is likely to increase by as much as 10 times--to an incredible 30% a year. The economy will not only be more efficient but will also be more relaxed and have a much smaller negative impact--thanks to new ultra-efficient untangible systems that produce nowhere near the environmental impact of current intangible and tangible systems (both of which are relatively inefficient and produce lots of waste).

The Googles and Microsofts of tomorrow will be making films, writing songs and books, producing high quality television and creating new content. They will play the internet like Jimi.

And they'll mint billionaire artist/producers like MSFT mints millionaire managers/engineers.

And the owners--the pioneers and original shareholders--cold easily be trillionaires.

It sounds fantastic, but it's important to remember that it sounds exactly as fantastic as billionaires did the the most reasonable experts just a hundred years ago. The tangible age created millioniares, the intangible age created billionaires--you do the math.

Oh--and by means of comparisons--as the paradigm-shift cycle time seems to decrease each cycle by a factor of at least ten (tangible age--thousands of years, intangibe age--one hundred), we should expect to see these trillionaires in as little as ten years.

Sound impossible?

Imagine a corporation better at relating than Oprah, better at rocking than the Stones and with better taste than Prada. Now make it global and mass-market like hip=hop.

The best band in the world selling $14 songs.

They don't have to tour to make money, nor do they care about albums, so they release 10-20 singles--hits--a year.

At $14 a song, $140 an album, a corresponding $12 reality tv show (two and a half episodes a week), a licensing deal with Gucci for an affiliated clothing line, an 8 Mile-like movie telling the backstory ($24 a ticket, $14 a rental, $140 for the DVD).

Since they're the first and clearest of vision, they sign the best new talent to their roster like Dr. Dre signed both Eminem and 50. (Who both signed other platinum-sellers, started clothing lines, etc.) They might even have ghostwriters writing books like Jeff Koons has other people doing his paintings.

At that point, Hollywood looks like the backwater it is and have lawyers watching accountants watching computers loading up bank accounts. As no artists really want to run the back office, if you can do it right and preserve quality, you'll be sitting on top of the largest licensing and production deal in the history of the world. Managing the best artists/designers/creatives in the world.

And inspiring others to shine--you make trillions by making the best artists billions. As every artists has a virtual monopoly, there's little of the competition for market share that we see in the tangible/intangible economy.

And a rabid audience of wealthy, brilliant sell-outs and starved, creative counter-culture refuseniks--both desperate to connect creativity and cold hard cash in their own lives. Thankful that it's been done and interested in as many particulars and as much inspiration as possible.

It's aspirational, inspirational, high, low, Wall Street and gutter all at the same time.

It will be untouchable and it is the future.

We have everything else--the only significant demand left is for a meaningful way to live. A way to be happy and feel the luxury that surrounds us.

And the market always gets what it wants.