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Thinking in miracles

I saw this cartoon (right) in a comment on a post about optimistic oil supply projections at the oil analysis site The Oil Drum – which is must-visit if you are interested in the future of oil, a rich cluster of technical experts clustered around a single blog. It was relevant to the post – broadly, the projections being critiqued needed good fortune pretty much everywhere, and not a single instance of bad luck – but it also made me think of the role of miracles in futures analysis.

The famous example is in the presentation by Pierre Wack and Ted Newland of the Shell ‘Rapids’ scenarios in 1973. There were six scenarios in the full set, which these days is usually regarded as too many to be useful, but effectively they were ‘pathway’ scenarios which fell into two groups of three.

As Art Kleiner tells it in his fine alternative business history The Age of Heretics, having interviewed several of the participants, one of the scenarios chimed particularly with the mindset of the Shell CMD at the time. This was ‘High Supply’, in which oil supplies were maintained without price increases, because “through the heroic efforts of oil companies the West would develop enough new oil to keep on top of the world’s demand”.

“”But let us see”, Wack said drily, “what would have to come to pass.” This future would need not just one, but three simultaneous miraculous events. First, oil companies would have find and retrieve new reserves incredibly quickly … Second, the OPEC countries would have to undergo a change of heart and become willing to sell as much oil as they could produce … And finally, there would have to be no extra strain on oil production capabilities- no wars, extra-cold winters or sudden demand for off-road vehicles, and no natural disasters.”

When The Futures Company did some ‘future of government’ scenarios for the UK at the end of 2010, using a version of a morphological scenarios model, we found that the ‘present trends extended’ scenario similarly needed three miracles if it wasn’t to mutate into one of the.other four scenarios well before the decade was out. The miracles were (or are):

  • that the private sector would quickly create enough jobs, at high enough salary levels, to replace those lost through public sector cutbacks;
  • that the effects of this ‘re-balancing’ would not fall too unevenly across the different regions of the UK; and
  • that the cuts would fall evenly across different sectors of the population (such as women, young people), thereby ensuring that there was not a political backlash from particular groups.

I think we know already how this has turned out. The private sector – still de-leveraging its debt – won’t create enough jobs without some evidence of demand creation, which needs some investment by the government; any analysis of the impact of public sector cuts shows how differentially they fall across the regions; and we know that they are already having a hugely disproportionate effect on women. And the Conservatives’ reputation for economic competence has been plummeting as a result.

In practice, quite a lot of widely held views about the future are based on assumptions which are broadly speaking, miraculous. One of my favourites at the moment is that technological innovation will reduce energy consumption. Of course, it might. But so far, the rebound effects of more cost-effective energy have always outweighed the efficiency gains. We have been living with this ‘paradox’, the Jevons Paradox, for almost 150 years now. Another is the notion that we’ll get to an 80% carbon emissions reduction by 2050 without a significant, and early, investment in clean and renewable generating technologies.

What’s your favourite ‘futures miracle’?

If you know who drew the cartoon at the top of the post, please get in touch. I’d love to give the cartoonist proper credit.

What do you think? Leave a comment below.

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