Title: A Republican Victory: a US that looks after itself
Approx. Reading Time: 11 minutes
Author: Mathew Burrows
Biden came to office vowing to reverse everything that Trump had done or stood for. Mat Burrows argues that while the partisan divide has deepened on domestic issues, there is something close to a new consensus on foreign policy, centred around a hardline against China and scepticism of free trade. There are still differences in emphasis and for most allies and partners, a second Biden Administration would be the easier partner. However, US-China tensions will grow whichever party holds the presidency, threatening a more fractured world just at a time when there is an urgent need for greater global cooperation.
Read EssayTitle: Climate Risks are National Security Risks
Approx. Reading Time: 10 minutes
Author: Laurie Laybourn
National security risk assessments identify major threats to stability and wellbeing, but do not include climate risks. Yet the best available scientific knowledge shows that the collapse of key ocean circulations would have a catastrophic impact on food and water supplies and, hence, security. This could occur within decades, if not years. In keeping with Oracle’s guiding principles, Laurie Laybourn argues that governments have to focus on worst-case scenarios, as they do with other threats, and not the wide probabilities of climate change models. As the climate and nature emergency escalates, it is essential that risk assessments include plausible, high-impact scenarios.
Read EssayPolitical, media and technological landscapes are dominated by contests about the future—a defining feature not only of culture, but of power. Political, corporate and Big Tech leaders battle over their own visions of ‘technologies of the future’ to create hope and aspiration, and to set agendas. For populist leaders like President Putin, Prime Minister Modi, former-President Trump and many more, the contests are fought not on the battlefields of imagined futures, but also in the re-imagined past—a world of history, myth and false memory.
While the likelihood of an asteroid wiping out life on Earth has been much exaggerated in fiction, scientists have begun to take the prospect of a catastrophic impact seriously. NASA has been investigating the viability of deflecting the path and momentum of smaller space rocks, but as yet there is no solution to the bigger one. Indeed, in 2018, Stephen Hawking wrote that he considered an asteroid collision to be the biggest threat to the planet.
The delay to decisive and urgent climate policy action means that the necessary transformation will now be more disruptive than it needed to be and, hence, more politically challenging. Climate policy can either become another wedge issue, feeding culture wars and exacerbating the politics of distraction, or an existential one that societies can unite around. For a host of reasons, our politics are poorly placed to deliver the latter.
If central banks continue to raise interest rates, they will soon be adjusting them down again in the face of rapidly weakening demand and, hence, inflation pressures. However, going forward the world faces 4D inflation pressures, driven by de-carbonisation, decoupling, defence and demographics. Maintaining inflation at 2 percent in this context could be economically and politically costly. Pressure will mount to raise inflation targets or to move to the targeting of nominal GDP growth.
Title: Travels in Hyperreality Revisited
Approx. Reading Time: 12 minutes
Author: Peter Kingsley
In 1975, Umberto Eco toured America exploring the world of fakes and make-believe that sought to replicate the real world, places and events. Almost five decades later, we are immersed in hyperreality—of fakes posing as reality—from the dark worlds of cyberwar, propaganda and total surveillance, to machine-driven mind control and political fantasies. Peter Kingsley explores these existential risks. Even as artificial intelligence and science promise to reveal the deepest secrets of everything from biological life to earth systems, we are sleepwalking towards catastrophe. The best of times, the worst of times.
Read EssayTitle: Decoupling: disengagement by any other name
Approx. Reading Time: 12 minutes
Author: George Magnus
Evidence of decoupling is still partial because it is a process and not a binary phenomenon. China wants to de-Americanise its supply chains and dependencies, but its economic stability depends on selling into the US and European markets. The United States wants to decouple where it must and preserve interdependence where it can. Europe seems to want to follow the American example, but with less ‘must’ and more ‘can’. Such limited or soft decoupling is unlikely to be the end state. George Magnus argues that geopolitics and national security, centred around the US-China relationship, will increasingly frame business and financial relationships, and the movement of both investment and portfolio capital.
Read EssayTitle: The Geopolitics of Artificial Intelligence
Approx. Reading Time: 16 minutes
Author: Peter Kingsley
Emerging AI services such as OpenAI’s ChatGPT represent a new chapter in the crisis of governance that began with the rise of social media and inter-state cyberwar. Peter Kingsley explores how policymakers failed to anticipate the strategic, inter-systemic, networked and cascading risks, driven by machine-driven misinformation and deepfakes. We now risk being governed by algorithms that create an illusion of reality, yet are the product of an alien world. In worst-case scenarios, AIs will impose their own de facto alternate realities that even their designers cannot understand, shaping political and cultural systems, and threatening everything from social stability to military security.
Read EssayTitle: Inter-Systemic Risk: resilience and the grand challenge
Approx. Reading Time: 15 minutes
Author: Peter Kingsley
Tipping points, cascading events, runaway climate change: just some of the language that attempts to grasp the realities of a chaotic, radically uncertain future. Peter Kingsley explores how catastrophic inter-systemic events will dominate the landscape, and why cultural transformation and breakthrough invention will be key to countering them. The grand challenge is how to navigate a path when no assumptions are safe and historical models are irrelevant. Time for predictive modelling that reflects the real world.
Read EssayInter-systemic failure is fast becoming the primary source of catastrophic, potentially existential, risk. Fragile political systems, economies and urban infrastructures face a short-term reckoning. Cascading failures are exposing the pervasive lack of foresight and strategic resilience across all geographies, states, cities, industry sectors and political systems.
Most of the time change seems to happen imperceptibly or not at all. As a result, it is easy to fall into the trap of thinking that things always remain the same. However, sudden change does happen, as history clearly shows. Given accelerating climate change and huge geopolitical, cultural and technological shifts underway, far-reaching change is more likely than continuity.
Climate change-linked ocean heatwaves are breaking records. They underlie the connectedness of risk in a rapidly warming world and will have profound consequences. Ocean heatwaves pull apart the delicate web of life of marine ecosystems, raise sea levels, melt ice sheets, and threaten changes to the ocean circulations that send nutrients around the world and mediate the climate. They are a sign of the new, ever-shifting normal of the planetary-scale climate and nature emergency.
Two years ago, in The Big Adjustment, we wrote that the world did not have 30 years to reach zero-carbon and that the process would therefore be more disruptive than assumed. We were too optimistic. Despite the rapidly worsening climate crisis, the pace of transition continues to disappoint, further squeezing the time available to stop emissions. There is a growing risk of a shift from prevarication to panic, leading to something akin to a war-time economy. This is the original piece.
Climate change could trigger unprecedented migration. Despite coming from regions that have contributed least to the crisis, migrants are unlikely to be met with solidarity. Green fascism, an ideology that blames overpopulation and immigration for environmental destruction, is likely to gain ground: dehumanising migrants will make it easier to treat the issue as ‘us or them’. There are already precedents.
Almost two years ago we published a short essay on ‘speed and time’, exploring how seemingly ‘long-term’ threats became clear, present and extreme dangers. Since then, the governance failures surrounding the geostrategic world order, climate change and artificial intelligence suggest that little has changed. Unless and until state, corporate and financial leaders reinvent how they think about the future, escape endemic short-termism and find some imagination, the world faces cascading, runaway crises.
The US is highly unlikely to default. Even if the Republicans and Democrats fail to reach a deal, the latter can find a way around the country’s self-imposed debt limit without reneging on debt or slashing spending. However, recourse to any of these ‘workarounds’ promises to exacerbate the country’s deeply polarised politics and increase the chances of a second Trump presidency. This, in turn, would further aggravate environmental and geopolitical stress.
Europe’s climate is changing rapidly, with 2023 shaping up to be the hottest year on record. This will worsen an already protracted drought, and the cascading effects could be far-reaching: food shortages and power outages may disrupt industrial production, pushing up inflation and making it harder for central banks to cut interest rates. This, in turn, could start to focus investor attention on the sustainability of various sectors, and even the future of vulnerable population centres.
Policymakers are finally moving away from a simplistic cost-benefit approach to tackling the climate and ecological crisis, but even with decarbonisation and nature restoration, rapid change is now unavoidable and will have far-reaching consequences. Societies must become more robust. Adaptation and resilience should be seen as an enabler of sustainability.
While people in the past may have subscribed to individual conspiracy theories, such as believing the moon landings were faked or that 9/11 was “an inside job”, many now seem to hold a clear and specific worldview that that can accommodate multiple and highly varied conspiracy theories. This ideology can move and adapt to whatever new grievance piques its interest. It’s highly likely that the years leading up to 2030 will provide plenty of material.
A slight fall in its share of official global reserves, combined with moves by big emerging economies to do more trade in their own currencies, has renewed speculation over a challenge to the US dollar. While the current dominance is ultimately unsustainable, this is less because of the risk others will lose confidence in the US currency than the constraints it places on the US’s attempts to rebalance its own economy.
The conflict between financial stability and inflation, and the failure to account for the link between excessive corporate profits and inflation, both highlight the risks of over-dependence on monetary policy to steer the economy. Interest rates cannot achieve this when governments fail to prevent special interests, such as commercial banks, from gaming the system to socialise losses, or firms from being able to inflate margins.
War between the US and China appears increasingly inevitable. Russia’s invasion of Ukraine has increased the standing of hawks in Washington who frame the debate as a contest between authoritarians and democracy, while Taiwan is pushing for full independence. China increasingly feels backed into a corner. A conflict would have devastating military and economic consequences.
ChatGPT exhibits no creative capability or conception of invention—it is unable to make novel associations, so can’t come up with unique ideas. However, were it programmed to widen its search rather than simply searching “probabilistically” for a close match, it could be genuinely creative. Whether or not it could then become an inventor will undoubtedly be subject to fierce debate and in all likelihood end up before the Supreme Court.
It is now clear that climate tipping points—abrupt, potentially catastrophic changes in natural systems—could be triggered at just 1.5C of global heating. Immediate action is needed to improve resilience to potential tipping point events, protecting populations as well as ensuring emissions reductions and nature restoration can be sustained through the chaotic consequences.
If the headlines are to be believed, rising US protectionism threatens the international trading system. This highlights how muddled our understanding of what constitutes protectionism has become. The structural mercantilism of Germany and China, among others, poses a far bigger threat to open and efficient trade than US industrial policy does. Restricting capital flows might ultimately be the only way to combat it.
