Economy of the future to make the world unrecognizable

Economy of the future to make the world unrecognizable. 44568.jpegAustralian engineer and philosopher Dr. Moody presented his model of the development of the economy of the future. Moody believes that the economy of the future will not look like the economy of present times. According to the scientist, production and business will have to adapt to the growing shortage of natural resources on the planet. To put it in a nutshell, the world will have to learn to develop in a different way.

James Moody made a very interesting report during Vivid Creative Sydney forum. Moody acts as the executive director of Commonwealth Scientific and Industrial Research Organization. He is also the chief designer of FedSat Australian satellite system. He is a co-author of The Sixth Wave - a book on how to succeed in a resource-limited world. This man surely knows a lot about modern macroeconomic processes. Moreover, his knowledge is based on practical experience, not just a number of books.

According to Moody, the economic crisis of 2008 triggered the sixth Kondratiev wave. Such waves, named after Russian economist Nikolai Kondratiev, are sinusoidal-like cycles in the modern capitalist world economy. A Kondratiev wave, or K-wave, lasts from 40 to 60 years and comprise two phases. During the first phase, as Kondratiev calculated, the technological progress pushes the development of production, and creates the economic growth.

However, such transformations inevitably take the society towards changes. The ability of the society to change lags behind the requirements of the economy. The development thus enters another phase - a phase of decline. Crisis and depression make the world reform economic and other relations, which creates conditions for a new wave of technological progress and starts another stage of the economic growth.

Unlike other models, the Marxist model, for example, Kondratiev's cycles do not depend on the social structure, the policies of ruling regimes and national peculiarities of states. The whole world needs to reach a certain point in its development, when technological achievements begin to show influence on the production process, commerce and economy. The first cycle, as Kondratiev believed, began in 1803 - the time, when those conditions were reached in the countries of Western Europe, America and in the European part of Russia.

The world has experienced six K-waves since that time. The fifth cycle, which ended by 2008 (it started in 1981) resulted in an especially fast development of electronics, robotic technologies, laser and telecommunication technologies. One may say that it was a cycle of information and communication technologies. The economic development of the world was based on the development of those technologies, whereas all other economic spheres were tuning up to them.

However, according to Moody, the cycle of information and communication technologies has ended. Now it is time for a new cycle to begin, and the goals of the new cycle will be absolutely different. The new priorities will include the creation of production to effectively consume energy and other resources. To describe the new cycle briefly, one may resort to an old motto of late-Soviet times: "Economy must be economical." Dr. Moody believes that mankind has already reached the point when the shortage of any resources, energy resources in the first place, is obvious.

James Moody believes that people need to learn how to use their own garbage. He referred to Storm Brewing, a Canadian company, which grows shiitake mushrooms on brewing wastes. The mushrooms turn the wastes into animal fodder.

In addition, Moody believes that the world economy under the conditions of limited resources will be oriented at selling services rather than products. There are companies in the world that have started practicing that already. In Britain, for instance, there is a company called Streetcar. This is not actually a company, but a community, which unites the people who do not need to own personal cars. The members of the community do not want to buy cars for themselves, because they do not need to use cars every day. They only pay for what they use. The company has it own car fleet, and members can find cars on thousands of streets in the UK whenever they need to use a car.

Dr. Moody also thinks that there will be no gigantic corporations in the new world. Millions of people work for those corporations, but the basic profit comes only to a small group of people. The companies of the future will be organized similarly to Streetcar or its Australian analogue - GoGet. In the product-selling world, customers buy, let's say, a washing machine and wants the machine to work as long as possible. Customers' wishes contradict to the interests of manufacturers, because if their washing machines last for many years, they will not be able to sell many of those machines. In the service-selling world, people do their laundry outside their homes. The seller will be interested in making long-lasting products because no one will be buying their services otherwise.

Moody also believes that in the sixth cycle companies will be coming to remote regions to purchase information, rather than raw materials and goods as it happens now. Today we have the following. An industrially developed country buys crude from a poorly developed state located somewhere far far away. In the future, a poorly developed state will purchase a technology from a post-industrial country. The technology will give the poor country an opportunity to exploit its resources effectively.

During the sixth cycle, there will be no local economic crises, which frequently occurred during the previous cycles. The new cycle will be balanced out, Moody said. A global crisis will most likely occur at the end of the crisis, but it will only mark the end of the sixth and the beginning of the seventh cycle.

Anton Yevseyev


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Author`s name Dmitry Sudakov