Long Now

The Long Now Foundation "was established in 01996 to creatively foster long-term thinking and responsibility in the framework of the next 10,000 years." It has three main projects - "to construct a timepiece that will operate with minimum human intervention for 10,000 years... to preserve all languages that have a high likelihood of extinction over the period from 2000 to 2100... and to propose and keep track of bets on long-term events and stimulate discussion about the future."

The foundation also conducts "Seminars About Long-term Thinking". In fact, there's a Long Now "Meet-up" in London tonight, and Chris Skinner of the Financial Services Club recently compiled a great collection of blog posts, SIBOS discussions and comments in a document called "Introducing Long Finance".

It's quite liberating to think in terms of a 10,000 year framework, though one could get bogged down in the best way to go about it. I'm not sure it matters whether one thinks about how the world will be in the year 10,000 or 12,010 and what we might do today to ensure there actually is one, or whether you roll forward 10,000 years only to look back at what might then be considered to have been the big problems of today. In any case, it's at least a very different perspective on human existence to the one I was taught.

Of course, we already tend to this sort of analysis when we talk about landing our grandchildren with financial and environmental problems, but that's not very far in the future, and most of our institutions seem pressured for one reason or another to focus on the very short term.

For what they're worth, my own thoughts - partly reflected in earlier posts and partly in response to "Introducing Long Finance" (ILF) - are these:

1. It is critical to bear in mind that almost all significant events in history are Black Swans - surprise events that have a huge impact and which we rationalise by hindsight. As a result we should maximise our exposure to the upside of such events, and minimise our exposure to the downside (see The Black Swan).
2. We should focus on the total cost of our activities, rather than merely their immediate market 'price' - i.e. not only the retail price of petrol at the pump or the spread between savings and lending rates, but the cost of subsidies and cross-subsidies paid to each of participants in the supply chain.
3. It doesn't seem worthwhile to get too caught up in debating the rate at which certain energy sources are 'running out', when it seems likely that it will come as a surprise that they have, in fact, run out or at least become unaffordable (see above). Given the implications of running out of energy on a mass scale, any degree of scarcity is reason enough to create viable, sustainable alternative energy sources now. Otherwise we are exposing ourselves to the massive downside associated with a surprise event. This is the sort of thinking that led the Dutch government to spend €450 million building the Maeslant barrier, for example (page 6, ILF).
4. Education and health are more critical to our survival - and therefore of greater social importance - than the accumulation of wealth. But we have a tendency to let the accumulation of wealth dominate our activities from time to time. And then we get burned, either by military conflict or economic hardship (read in The Ascent of Money). We should therefore incentivise the pursuit of knowledge and good health above the accumulation of wealth. The process of accumulation of wealth should also be harnessed in favour of education and public health.
5. Migration will remain a very significant source of conflict, since population imbalances - whether caused by social policies like China's one-child policy or declining population - must result in significant relocation of people, whether peacefully or by conquest.
6. I agree that "commodities, capabilities, processes and capital" are key drivers of international tension (page 20, "Introducing Long Finance"). But I don't believe the long term issue is one of which nation will be the next global superpower. In fact, the trend may be towards the devolution of national power into regional and local power (see comment on page 26, ILF), Scotland and Wales being examples close to home, and commodities etc are not evenly distributed within most countries. So the economic challenge becomes one of matching regional/local strengths, weaknesses, opportunities and threats in terms of commodities, capabilities, processes and capital (labour included). Hans Rosling's analysis of regional human development, the rise of the "Cheetah Generation" in sub-Saharan Africa and the aid-investment dichotomy illustrated by China's involvement in that region are illustrative of this trend. Issues of fairness, inequality (page 32, ILF) and the total cost of our activities (#2 above) arise to be resolved in this context. The ideas of Bernard Lietaer and the Japanese currency of ‘fureai kippu’, that enables families to exchange time and duties in support of each others' parents and grandparents (pp 37-40, ILF) are also attractive here.
7. A focus on the eradication of "poverty" (see page 30, ILF) seems a futile as an end in itself. It should be a bi-product of prioritising education and public health over the accumulation of wealth, as well as meeting the challenges arising out of regional/local economics and migration, as discussed above.
8. Industries naturally concentrate and fragment, while customer dissatisfaction and the competitive activities of players normally considered to be in other markets play a role. This dynamic has played out in the past decade via the Web 2.0 or 'social media' phenomenon in the retail, travel and entertainment industries, for example. I've covered this in the consumer finance context already. And there are signs the markets for audit services and credit risk ratings will be next. So I disagree with Chris's contention that banks have a future as "safe keepers of information", in the way that "Apple’s iTunes, Amazon’s Superstore (it’s no longer books) and Google are all data businesses who use the rich analysis of data as their key resource" (page 46, ILF). I disagree partly because that would buck the social media trend generally, and partly for the very reason that those social media based businesses developed their rich data capability first, and are implicitly more competent in this respect than retail banks (who actually have little such readily accessible data or relevant skills and resources). Instead, the functions associated with retail and commercial 'banking' today are likely to be subsumed and concentrated into other types of businesses more closely aligned with end-to-end retail and commercial processes. Those businesses are in turn likely to fragment to create new types of service provider aligned with the regional/local economic developments, new currency models, shifts in population and so on, discussed above.