Tuesday, October 25, 2011

Burning Issues: Economy / Stock Market / Poverty

See also Club of Amsterdam Journal, November 2011, Issue 143, Special Edition

Hardy F. Schloer, President and Managing Director, Schloer Consulting Group

Hardy is a strong team builder, entrepreneur, accomplished scientist and visionary theoretical thinker with extensive people and public relation skills.

Club of Amsterdam: Does the 2008-2009 crisis, by its consequences, need to be considered as the main economic challenge we now face; or was this crisis a painful highlight of the economic and financial defaults of our globalized economy?

Hardy F. Schloer
: The short answer is: Both. Nevertheless, a longer and more careful view at this subject, looking perhaps into the next 2 decades, reveals a much more complex picture. The current global economic and geopolitical situation, as it will develop between 2010 and 2030, expectations are not comforting, including the prognosis of conflict and deeper economic adversity. Nevertheless, an informed understanding of these current and future trends could contribute to innovative solutions to manage these events, at least on a case-to-case basis.

The world continues in a fast transforming and unstable global framework of complex problems and multi-dimensional influences. A cluster of different types of crisis has now matured into a "perfect storm" that will transform the entire planet very extensively. These crises are systemic problems, and are therefore very difficult to manage.

The crisis of 2008-2009 was not the real and pivotal global crisis, though it felt so to many; it was simply a mild and early marker of what is yet to come on a much larger, more sustained scale and of what will have greater consequence. Over the past decades, Western societies have committed serious errors in their economic planning and fiscal policies. The results are dependency on accelerated deficit spending and an enormous accumulation of external debt.

The conflicts of the future will be conflicts of social unrest. We are seeing this not just across the Arab world, in Syria, Libya, Egypt, but also across England and Israel during August 2011. We believe that this wave of social unrest will continue to spread throughout the world in the years to come. This social unrest comes exactly as I predicted in 2010 and even before. The world is not just economically but moreover socially in a state of redefinition that will bring in a period of extensive chaos and be accompanied by global anxiety.

Trends in the United States

The United States government is bankrupt; its finances are beyond the point of no return. The reoccurring debate over the debt ceiling only serves to obscure this painful fact. The downgrade earlier in 2011 of American debt by Standard & Poor's to AA+ is the first sign of this fact seeping into general consciousness, the facts about an intractable budgetary predicament. The only plausible future scenario is default by the U.S. government, or significant devaluation of the dollar - which is basically the same thing in monetary terms; this will happen regardless of further modifications to the debt ceiling.

In the midst of the debt crisis, the U.S. will undergo the greatest strain to its cohesion as a single country since the civil war, more then 130 years ago. It will not only lose its global status and leadership in governance and lifestyle, it will internationally become more and more economically and politically ignored. Social tensions will again test the breaking point of the American Union. Although this may be speculative from today's perspective, the trends are clear and the likely outcomes of these social tensions have a number of possible consequences that include international isolationism similar to the pre-World War I era, and a potential break up into 3 or 4 separate geographical and cultural units.

We project China will overtake the U.S. economy in 2016 or latest 2017. A good share of the U.S. economy has become devoted to a high level of military spending and maintaining the country's government debt. In contrast, China has relatively little debt, relatively low military spending in comparison (2.2% of GDP versus 4.7% in the USA) and is investing in the country's prosperity. This disparity will accelerate the eventual passing of power between these two countries.

Unlike Europe, the U.S. will be faced with the added transition of an ethnic and consequently cultural shift towards a Hispanic society. Hispanics traditionally tend to prefer working in smaller companies and groups, as opposed to big corporations, and prefer working in small manufacturing and trade as opposed to finance and banking. The dominance of the U.S. in international banking was largely due to the dominance of certain European groups, British and German for example, in the U.S. mainstream after 1900. In the future, the U.S. will start acting like a Hispanic society, and will have stronger ties with Latin America than with the East or West. America's new friends are increasingly found in the south - not overseas.

Trends in Europe

The end of the Western financial model extends from New York to Frankfurt. Europe also suffers from U.S. fractional reserve-style banking and insurmountably high debt levels in nearly all states, with Greece, Spain, Ireland, Italy and France being some of the most prominent examples In the U.S., national bankruptcy is being driven by the debt and refusal to deal with the debt. In the Euro zone, it is driven by the discrepancy between currency management and the political integration that has been a hallmark of the European project in the last few decades. The French and German answer to the currency problems is that all Europeans should become like Germans, but other nations strongly resist this. Although there is a single currency for this geographical area, debt is issued by governments, not by the European Union. Without any politically effective means to resolve these tensions, the crisis will continue to spiral downward. Europe further suffers from the costs of a demographic transition towards a substantially higher average age, and a fast diminishing population in several key countries.

The repercussions of this crisis will create a substantial power shift from a Western and Caucasian dominated world to an Eastern and Asian dominated world, with South America gaining influence on its northern neighbours. The West will begin a very long economic and social decline well into 2025 to 2030 while concurrently losing influence in the world.

The waves of social unrest that will continue to sweep the world in waves of climactic events will also affect China to some degree, but in a way that is a bit disconnected from their economic process. The currently more police-controlled state will very slowly give away to a much milder form of governance, as we have seen happen in Shanghai, and bring a more balanced form of existence to Chinese citizens all across the nation. The government is extremely active in staying on top and is well engaged in political and social developments in the world. But in order not lose their migration to a position of global power; Chinese leaders must focus on maintaining stability and relative peacefulness in the country. The Chinese government will however not hesitate in the future to make a point of power, if deemed necessary.

China's internal political weakness is exacerbated by fast shifts to a male dominated society (males outnumber females in increasing numbers due to frequent abortions of female fetuses). This partially results from forced family planning, and partially from the traditional preference for male children. But, in an era when more boy children survive than previously, it also means more internal conflict amount young males. This fact may move China into a more conflict willing society and may cause external conflicts in the 2020s or 2030s and beyond. A corrective measure here would seem to be a priority.

From 2025-2030 onwards, the world in general will be sobered by deep crisis, and ready for a renaissance. Just as Europe built out of the ashes of the world wars a period of unprecedented peace, so Asia and the rest of the world will be ready to experience a new age of enlightenment. The meaning of globalization will have gone from being, what can everyone steal from himself throughout this planet, to discovering how we can live together, on a global scale.

How can the westernized countries best manage their downfall in power facing the rise of the new superpowers such as China, India or Brazil?

Hardy F. Schloer: They cannot. However, the West must do two things to soften the landing and to position for a better future later.

Firstly, the West must seek economic investment from the East. An increasingly self sufficient China that migrates from a export society to a self consumption society is less interested in such investments in the future, therefore such investments must be thought after now, not later. Secondly, the West must focus on producing products that are increasingly important to the East. The gold of the future is agricultural commodities and clean drinking water. Especially Eastern Europe has here a very large and unused capacity that could bring very advantages trends to a region that has been economically challenged for a long time. Thirdly, Europe must change its immigration policies in the nearest term to attract young people from abroad to relocate into Europe and to make up for the loss of a young working population in that region due to a fast accelerating demographic shift. Developed Western countries are aging dramatically; the average age is over fifty, compared to for example Turkey, Malaysia or the Middle East where average ages are between 19 and 23 years of age.

The majority of experts, professionals and the public opinion now all agree governments provided wrong answers and policies to various economic challenges in the last decades: what should be the measures taken for the future? Do politics still have a strong role to play in an ever more globalised economy?

Hardy F. Schloer
: First of all, governments do not run the world. Goldman Sachs, Citibank or global multinational corporations with interconnected networks run the world; not in a way of conspiracy, but simple in the way they seek through maximization of profits also maximum leverage of their global influences. Today, governments can be bought, and they are bought through political donations, lawyers, lobbyists, and economic threats by powerful economic interests. When a government is bought, it becomes irrelevant.

Secondly, no one can deny that the benefits of globalization are manifold. A global financial perspective has facilitated the standardization of products, as well as the rapid movement of goods, people, capital, technologies, and information around the world. The rapid adoption of information and communications technology makes it easier to fragment the production of goods and services, and to outsource certain tasks to other countries. This has extended the reach of globalization to domestic activities where workers were previously sheltered from direct international competition. And yet, despite some of the advantageous aspects of the trend towards global knowledge and product sharing, the current global economic crisis shows us that the financial system governing this interaction is obsolete and inadequate.

What is needed here is a vision that is radically different from the economic and financial model of today - a model, that I, and many others have argued, is inherently unstable, unfair and repressive. The current model gives monetary speculation and financial derivatives a central role in defining the character and dynamics of not only the way in which people accumulate wealth, but also the way in which some people impoverish others. Quite simply, the current instruments used in the financial industry have made much of the world poorer. Following the statistics of the World Bank and the IMF demonstrate most clearly, that the existence of these institutions did not prevent poverty, but make it worse over the last 50 years by substantial margins.

According to various distinguished sources including the Bank for International Settlements (BIS) in Switzerland, the amount of outstanding derivatives worldwide, as of 2008 reached USD 1.144 Quadrillion, (i.e. USD 1,144 Trillion), a number that equates to a shocking 190,000 USD per person on the planet. The term "quadrillion" is a number usually reserved for use in complex super computing processes or astronomical measurements, not for economists and bankers.

Certainly, the human mind boggles when contemplating these enormous amounts of "paper promises" holding no intrinsic value, created by the current system's need for an ever expanding economic value that is not based on actual goods and services. Yet, these so called financial instruments have been used to negotiate products and services of true value in every day's business, in spite of such instruments' total lack of value. In other words, such empty paper promises being used to negotiate "true value." Nevertheless, this near fraudulent transaction is called in modern business school language "maximizing profits" or simply good or innovative business.

What is more, under the complex guise of financial exactitude and an evolving spiral of inter instrument dependency, financial derivatives have instrumentalized risk in a way that forces ownership and property to take a new form. History shows us that the limited liability and "absentee ownership" in the second half of the nineteenth century marked the beginning of a transformational shift in the way the human collective responded to trading goods for services. With this transformation towards unchecked liability, true ownership was less tangible, and less based on any underlining reality. It was, in fact, a relationship between a complex, underlying, loose process, and the powers that be.

The event of derivatives only added another layer of obstruction to the system and loosened the ties to reality even further, as they act as financial instruments with absolutely no direct tie to any particular commodity or asset. It is also important to mention that from the perspective of personal responsibility and stewardship, derivatives are based on the "disengagement and financialization proceeds via the construction of indifference to the exigencies of 'real' economic competition." (Wigan, Duncan, 2009).

In the context of the current financial and economic crisis, some economists argue that the current speculative system cannot go on, unchecked, forever. A collective, financial "reality check" will soon be needed. What humanity must do soon, East or West, is to evaluate some of the most basic systems. We must ask tough questions, such as: do we need money at all to manage a functional and creative global society? Or if we chose to use money or a money like system, would one single currency, that serves the whole planet, be a good step towards an economic more equal world?

Burning Issues: Waste / Pollution

See also Club of Amsterdam Journal, November 2011, Issue 143, Special Edition

Douglas Mulhall and Diana den Held for the Academic Chair 'Cradle to Cradle for Innovation and Quality' - Rotterdam School of Management, Erasmus University

Club of Amsterdam: Industrialized countries generate more than 90 per cent of the world's annual total of some 325-375 million tons of toxic and hazardous waste. Urban outdoor air pollution is estimated to cause 1.3 million deaths worldwide per year (source: WHO). Can you describe the key achievements in environmentally-intelligent design since launched in the Cradle to Cradle movement in 2002?

Douglas Mulhall
and Diana den Held: The key achievement has been that hundreds of products and thousands of components have been redesigned so their materials are safe for life processes and can be recovered at the same level of quality for reuse.

Diana den Held: To be able to get there, one of the first steps Prof. Dr. Braungart initiated was to go and talk with the big players in the chemical industry, to go to the very core of intelligent design. That process actually already started in the late 80s, way before the term "Cradle to Cradle" was introduced.

It is at these companies where important innovations have been and still are taking place. Important, since their products are the basic tools to work with. You cannot go and ask a furniture company to look at the materials they are using, if healthy materials won't be there for them to use, companies need to work together on this.

Still, a lot of work needs to be done. But at this point of time, hundreds of products and thousands of components have been redesigned. Which means: these materials and products will not become 'waste' in the old meaning of that word any more.

Please do get me right: Prof. Dr. Braungart is not asking people to take only these types of materials as a starting point in their concept phase. What is not available now will be there in a few years, especially if people ask for it. But it is a given fact that people can work with healthy materials if they want to.

In the Netherlands you can point out > 100 organisations that are working on C2C inspired projects or sell C2C products that are designed to go into the biosphere, or are designed for disassembly. It is amazing to see what has happened since the very first broadcast, in 2006, of the Tegenlicht documentaire 'Afval is voedsel' ('Waste Equals Food') by Rob van Hattum. It's only 5 years later, and we see companies as well as governments and educational institutes applying the Cradle to Cradle principles. Together they change the way (raw) materials are (re)used. And it isn't that difficult to calculate how to profit from that.

What are the current issues when dealing with waste and pollution? Is there a difference between developing and developed countries?

Douglas Mulhall: The main issue is that more than half of our topsoil for agricultural production globally has been lost. The current trends to replace fossil fuels by burning biomass and attempting to replace lost humus with poorly designed fertilizers is one of the most urgent topics to address. If nutrients are incinerated along with mixed waste, the nutrients cannot be used to replenish the soil.

Instead, mined phosphate fertilizer is used to replace some of the nutrients. This fertilizer not only fails to replace humus but also contains high levels of uranium and other heavy metals that contaminate (top)soil and water.

Topsoil is generally defined as the top metre of soil, and is central to human civilization because agriculture depends on it. Topsoil is one of the most important materials for maintaining a balance of climate change gases, because two thirds of the carbon on land and in the atmosphere globally is held as nutrients in topsoil.

Most nations, especially but not limited to those with highly developed economies, are losing their topsoil at an alarming rate, accelerating CO2 release and ultimately leading to non renewability of biological resources. However, there are opportunities to restore soil and capture CO2 by combining energy delivery with nutrient recycling. This requires assuring that the biological nutrient metabolisms that products are designed for are free of harmful contaminants.

Biodegradable fabrics, polymers, and paper for example can be designed to be compatible with biological systems so they can contribute to restore topsoil.

In Europe, each of us produces an average of 500kg domestic waste per year. What are the contributions everybody can do? Is it possible to reach zero domestic waste?

Douglas Mulhall and Diana den Held: When looking at a question like this from a Cradle to Cradle perspective, we need to start by stating that 'zero' is the wrong goal. As Prof. Dr. Michael Braungarts always phrases it: 'Who wants to be zero? People want to be beneficial, they don't want to be known as nothing'.

Diana den Held: So, let's face it: customers are currently paying tax to get rid of products that they don't want anymore (and in many cases, of which they never wanted to be the owner). That can be done differently: if the manufacturer designs their products so that they can easily be taken apart, they can have the material picked up again from the customer. As a customer, you then go from 'paying to get rid of something' to 'being paid to supply materials'.

You really don't need to be stuck with something as a user. For example, you can buy a number of hours of television viewing. And if you need something else, trade in your device. As Prof. Dr. Braungart always puts it: 'Why should you be stuck with an old television set if you just want to watch television?'

I'm not trying to say that everything should end up in a lease construction. I wouldn't want huge monthly payments because all my products are paid per month. I'd find that quite oppressive. But I can imagine manufacturers letting users choose either monthly payments or buying with a deposit, or something similar. It could be useful for offices if they could lease their office chairs on a monthly basis, for individual users it would be much better to be paid back after use for example, having your carpet picked up.

Today customers are able to have their Desso carpet picked up because it is suitable for disassembly, but not a carpet of another brand. The one is happy with what you recycle and will reward you for it, while the other you have to take care yourself and indirectly pay to get rid of it. Users are eventually not going to put up with that anymore.

However, not only buyers need clarity from manufacturers; material collectors do as well. If a disassembly company knows where a certain material can be found in a product, they can effectively ensure that the material be put back into the cycle.

The government will also have a role to play in this part of the cycle. A tax on waste needs a totally different model since discarded material is still very valuable to the end user recycling it, the collector, the material collector and the manufacturer who sees significant savings when it comes to buying it. This will be even more so the case every year, since the consumption of raw materials is still on the rise.

And then individual customers will wake up. They will realise all of a sudden that every product they throw in the rubbish bin is basically shaking their wallet above the same bin. I think that we will see some momentum when customers will demand their place in the cycle and ask companies to change the situation.

Burning Issues: Climate Change / Sustainability (2)

See also Club of Amsterdam Journal, November 2011, Issue 143, Special Edition

Chandran Nair, founder and CEO, GIFT - Global Institute For Tomorrow

His new book is entitled “Consumptionomics: Asia’s role in Reshaping Capitalism and Saving the Planet.”

How to Accommodate 9 Billion and Save the Environment
World’s largest population centers, centered in Asia, cannot aspire to live like Americans

Published by
YaleGlobal / Yale Center for the Study of Globalization

HONG KONG: At the height of the financial crisis in 2008 Asians were urged by Western politicians and economists to consume more to help rebalance the global economy. At the same time, during the run-up to the climate talks in Copenhagen, Asians, especially the Chinese, were scolded that they had to be responsible global citizens and reduce carbon emissions.
Few global leaders and commentators dared connect the dots and openly acknowledge that asking Asians to reduce emissions while asking them to consume more simply did not add up.
Now try imagining a world with three Americas. Difficult? But that’s where economists say we’re heading.

Within two decades at most, China will overtake the US and become the world’s biggest economy. Within another 20 years, by 2050, India will be as big.

And what will drive this? Human aspiration apparently – aided by free markets, technology and finance. As the cheerleader of globalization, Thomas Friedman has written: “World population is projected to rise from 6.7 billion to 9 billion between now and 2050, and more and more of those people will want to live like Americans.”

This is unthinkable. If the United States is joined by two more economic masses as big – or bigger, as on current trends the American economy will also have trebled in size by mid-century – all aspiring to live like Americans, our planet’s resources will be stressed beyond imagination.

Wherever we look – be it carbon emissions, oil and gas, food shortages, water, rare earths, fisheries or forests – there just isn’t enough for the world to soak up another two consumption-driven Americas.

To stop heading down this road, Asian governments must immediately recognize that a bleak future lies ahead if Asians attempt to live out an aspiration to consume like Americans. The current debt crisis in the US, ultimately fueled by over-consumption, has even led China’s media to lecture the Americans that it’s “time to revisit the time-tested commonsense that one should live within one’s means.”

Above all, Asia must reject the blinkered views of those who urge Asians to consume relentlessly – be they Western economists and leaders who want the region to become a “motor of growth” or Asian governments convinced that ever-expanding economies are what their populations need.

Instead the world – and Asia first of all – must find alternative ways of promoting human development. Asian governments must shape expectations critically around the issue of rights with the clear focus on the following basic needs: food as well as security and safety, water and sanitation, low-cost housing, education and primary health care. It must be made clear, for example, that car ownership is not a right. Growing demand for non-essential goods and services must reflect true costs.

Asian governments should look at the Arab spring and understand that what the people on the street want is not some utopian democratic state but a state that even with imperfections focuses on the key areas of human development and progress. Governments should wake up to the reality that in the region, the majority of people – more than 2 billion in total – still do not have equal access to the basic necessities of clean water/sanitation, housing or adequate nutrition.

Asian nations will need frameworks of fiscal measures, land-use practices and new approaches to social organization that can create sustainable national economies. This requires shaping expectations through public education that aspiring to live like Americans is a bad idea for the creation of more equitable societies in a crowded world and unattainable.

Resource management must be at the center of all policymaking, and putting a proper price on greenhouse gas emissions and the resources we use via taxes, licenses and other charges.

Measures constraining resource usage must be extended to every area of life – at play and work. They must become an inherent part of all economic and social policy.

Countries in the region must structure incentives to reward “more is less” activities. It’s not that people must be poor, rather consumption should be funneled in ways that do not increase the demands on our already-stressed resource base, deplete or degrade our environment, and put at risk the livelihood and health of hundreds of millions.

A key step: fiscal and labor policies aimed at strengthening local economies that both reduce poverty and prevent mass migration to cities.

Curbs on the resource-intensive practices of industrialized agriculture would further aid development. Where basic living needs are met, employment policies can explore other directions that reduce wasteful consumption, such as shorter working weeks or more training. People must be encouraged to regard quality-of-life issues as extending beyond the size of their disposable incomes.

Energy networks using renewable sources in conjunction with pricing to penalize excessive use would be another likely target of state funding. But technologies, particularly government-supported ones, should be aimed at spreading well-being rather than only maximizing economic returns. It’s better to forestall environmental problems than expensively treat them.

Another area to be challenged is how consumption-driven capitalism has developed techniques to displace traditional outlooks, and whether these can be countered. One example is today’s preference for owning over yesterday’s for doing. Previously children played games, now they have PlayStations.

We should also revisit the possibilities offered by traditional cultural attitudes, such as the preference many Indians have for a vegetarian diet and an age-old way of life that is increasingly under threat as Indians seek to ape Western lifestyles.

In education, ideas about constraints, the way we use and manage resources must be placed at the center of learning, especially in economics and business courses – not brainwashing, but aggressively countering the promotion of unfettered consumption that lies at the heart of modern commerce and advertising.

For too long, schools and universities have been regarded as the training ground for economic growth, be it preparing people for the disciplines of company life or learning “marketable” skills. Instead, education should be redirected towards giving people an understanding of limits, the human impact on the world and the consequences.

We should return to stressing the public interest rather than individual rights. This is in stark contrast to the arguments of consumption-driven capitalism with its claims that allowing everyone to pursue individual self-interest eventually leads to benefits for all.

Governments must also back policies with constant reminders that being well-off involves balancing a range of factors, among them ensuring social equity and an environment fit to be handed on to future generations.

This won’t be easy in Asia, especially in societies which for the last few decades have been repeatedly told that all limits can be overcome and prosperity can only come from conventional forms of consumption-driven economic growth. Required is a strong, confident state, one with an understanding that its legitimacy depends on changing direction and better serving the needs of the disenfranchised majority.

If the governments of the region rise to this challenge, the decision-makers in Beijing, Delhi and Jakarta will determine whether our world has a future – not the capitals of Europe and America.

Burning Issues: Climate Change / Sustainability (1)

See also Club of Amsterdam Journal, November 2011, Issue 143, Special Edition

Douglas Mulhall and Diana den Held for the Academic Chair 'Cradle to Cradle for Innovation and Quality' - Rotterdam School of Management, Erasmus University

Club of Amsterdam: Sustainable area development needs to tackle the core environmental issues related to - amongst others - mobility, housing, consumption, connectivity. Reuben Abraham from the Center for Emerging Markets Solutions in India states that by 2050, it is expected that the world will be 80 percent urban. Both India and China are witnessing the greatest migrations in human history as hundreds of millions leave the countryside for urban areas. What are your thoughts on this? Is a global collaboration needed and also realistic?

Douglas Mulhall and Diana den Held: First of all, if we really want to make this, we need to design buildings and area's that contribute positively to their environment, not just be 'less bad'.

Sustainability as defined by current regulations and laws, is more part of the problem than the solution.

Eco-efficiency that treats people as 'human resources' will not solve area development questions; it will only make them worse. That's why C2C goes beyond sustainability.

Diana den Held: It has now been shown that it is possible to make buildings that can clean the air, contribute to the biosphere and supply energy and clean water, but further steps are necessary, especially for area development. We really have to help each other speed up. That's why I feel it is so important to work on and communicate about Cradle to Cradle case studies, as we are doing here at the C2C Chair at the Rotterdam School of Management.

My favourite example of international cooperation is the Cradle to Cradle Islands project, led by the province of Friesland. No other project in the world has so many different cultures working together simultaneously on C2C.

It's silly when you think about it, but in present days, most islands depend on the mainland for their raw materials. Which makes islands perfect small scale pilots for resource management. And I'm not just talking about materials when I say that. Think of fresh water as well: the demand for water on the islands keeps increasing, mainly due to an increase in tourists and it's always the highest when the offer is lowest: in summer. Most islands are connected to the mainland by large waterpipes, to ensure there is enough drinking water available.

Recently the Minister of Environmental Protection Administration of Taiwan, Mr. Shu-hung Shen has, after been invited to do so by Prof. Dr. Braungart, announced Taiwan to become a honorary member of the Cradle to Cradle® Island community. Isn't it fantastic to see how such a project now can grow from small pilot islands like Ameland and Texel, to an island this size and use the first results of the C2C Islands project directly in Taiwan strategies?

Taiwan can take the next step, and together these islands can show others what they have experienced and learned. I think this is a beautiful example of international collaboration on Cradle to Cradle implementation, a.o. in area development. It's not just possible. It's being done. Right now.

Sunday, October 23, 2011

Burning Issues: Health

See also Club of Amsterdam Journal, November 2011, Issue 143, Special Edition

Philip Gagner, Chief Scientist and Vice President, Schloer Consulting Group

Schloer Consulting Group is presently developing large scale interoperable electronic health records (EHR) systems specifically designed to assist in the delivery of patient-oriented, biometrically secure healthcare on municipal, regional, and national levels.

Philip has more than 30 years of experience in the computer and technology fields, including robotics, digital hardware design, software development, data communications, finance, and law. He earned a Juris Doctorate from Georgetown University, and has litigated some of the lead cases in software and technology law. In addition, his technical experience includes work as a researcher at the M.I.T. Artificial Intelligence Laboratory, hardware and software engineering as Senior Software Engineer at Digital Equipment Corporation, several years as a senior researcher at the Federal Judicial Center in Washington, D.C., and founder of Legal Data Systems, a software solutions company.

Club of Amsterdam: With technology now present in all aspects of our daily lives it is not surprising that healthcare systems in high-income countries are depending more and more on technological and computer assisted devices for their functioning and services. The 2011 American healthcare system reform illustrates perfectly the computerization of a number of Medicare activities. Are the current security measures and regulation rules enough to guarantee the functioning of the system concerned with such an important issue as health?

Philip Gagner: Let me, somewhat artificially, divide healthcare technologies into two parts: First are those that actually deliver healthcare (such as EEG machines and which I will label "medical devices") and second are those that keep patient histories and perform billing and financial systems (which are generally called Electronic Healthcare Records systems). I think that, given current technologies, these must be viewed separately, although some devices such as sleep apnea PAP machines, some dialysis machines, and some insulin dispensers are both therapeutic and keepers of records.

With regard to medical devices, the current security situation is appalling. At a recent Black Hat conference, a security researcher demonstrated how easily he could hack medical devices such as an insulin pump. The researcher, Jerome Radcliffe, was interested in the security of his own insulin pump and he discovered that there was essentially no security at all in the device: He could remotely control it with a simple radio transceiver, assisted by a java applet provided by the device manufacturer.(1)

More and more medical devices are being networked, and those networks are connected to the Internet. This is true both for home monitoring and for use in physicians' offices and hospitals. The convenience of remote access (as well as remote control) makes such connections inevitable.(2) The increasing use of wearable monitoring devices (often connected to smartphones) presents other security issues, both privacy issues and even the continued good health of their users.

Connecting a device to a smart phone is easy. However, smart phones are notoriously easy to hack, and any system that uses them is vulnerable to denial of service, eavesdropping, man in the middle, and insertion of dangerously false data or commands. These devices are generally connected wirelessly, and the protocols that they use (CGM and serial Bluetooth, for example) are also fatally insecure. In addition to wearable sensors, hospital equipment is increasingly connected to networks, and the security used is generally non-existent or easy to compromise.

If the possibility of remote commands to mis-delivery insulin is not sufficiently alarming, consider the group of researchers who were able to gain wireless access to a commercially available heart defibrillator and pacemaker. They were able to do so in an undetectable manner, and claimed that they could easily have set the device to kill the user, had the device been in a human body.(3)

Many millions of such devices are implanted or worn today, and tens of thousands more are prescribed or implanted each day. For existing devices, correcting even the most blatant security flaws is an intractable problem. As Gollakota et al. point out, such devices, have limited memory and limited possibility of upgrade. Replacing them would often require major surgery with high risks. In addition, using cryptographically secure techniques might actually endanger the patients, for example if doctors at a different hospital required emergency access to the device.

For future devices, security can, and must, be built into the devices. Existing medical standards are inadequate, and all software (including crypto software) for medical devices has special requirements of reliability and proper fail-safe modes. All software is notoriously prone to unanticipated bugs, and the more complex the device, the more prone to bugs it becomes. Security for medical devices must be simple, and at the same time highly resistant to passive (e.g. unauthorized monitoring) and active attacks. Active attacks here mean attacks that issue unauthorized commands to the medical devices.

Adopting rigorous medical device communication standards and thorough device testing can reduce the above problems for future devices. Today, there are no universally accepted standards, and there is little if any penetrability testing. Even so simple a method as wearing a removable metal shield over the implanted device can significantly reduce radio remote control hacking (see footnote 3), but these are not generally known to, or even thought about, by doctors.

The difficulties of allowing access to authorized medical providers while denying it to unauthorized ones, ties the problems of device security to problems in electronic healthcare records (HER). The healthcare records industry is fragmented not only along national borders, but also within nations. In many countries there are multiple competing systems of EHR, with the United States being the worst example. Simply obtaining a patient's electronic healthcare records can be such a bureaucratic and technical nightmare that doctors often merely fax them. This is even more true for records might be stored on incompatible systems, or systems with incompatible authorization protocols

When healthcare records are stored electronically, there are no universally accepted security standards. There are various laws in various countries regarding patient privacy, but from a technical standpoint, these are meaningless. If my doctor has my records on an office computer, and a worker in the doctor's office, on the same network, downloads a pirated electronic game containing computer viruses and Trojan horses, then all the policies and laws in the world have no effect. A famous case of public disclosure involved cancer records of the actress Farrah Fawcett and other celebrities. In 2008, an unauthorized employee with an administrative password was easily able to access them and sold them to the press.(4)

Security of EHR, like security of medical devices, is both a technological problem and a medical problem. As medical devices and medical records systems become more and more integrated, issues of security and privacy become issues of medical ethics and of sound medical practice. Just as doctors should not use equipment on which they has not been trained, neither should they use computer systems that they don't understand. But, every day, in every country, they do.

Social and legal systems must be changed to address these issues. First, we can no longer tolerate fragmentation of EHR standards. To be minimally medically acceptable, an EHR system must be able to forward records to at least the likely set of medical providers My company, Schloer Consulting, has designed a system that provides for electronic translation and interchange of EHR between all major standards, and uses biometric security and encrypted channels as integral components. This is not a perfect solution, but it is far superior to most systems.

Devising secure technical solutions for EHR within one group - a nation, for example - is not that difficult, but it is expensive. It requires cooperation and enforced standards between providers, and between providers and payers.(5) In the United States, such cooperation has been mandated by recently passed legislation, what Republicans there term "ObamaCare". We do not think that this legislation goes far enough and it certainly does not solve, or even address, the problems globally.

Medical device and EHR cyber security standards both must be rigorous, and both ought to require thorough penetration testing. The first murder by cyber attack probably has not occurred - although we would not know if it had - but in today's world, it is a very real possibility. The first major releases of EHR have, indeed, occurred. Present security technologies for medical devices and records are totally inadequate. We can correct this with a combination of legal, ethical, and technological changes, but resources must be made available to do this. I do not see this happening to nearly the extent that is required.

The Personalized Healthcare Initiative, a recently launched project in the USA, has set itself the goal of using clinical and genomic information to improve the effectiveness, safety and quality of treatment for patients by adapting treatments to each individual's medical identity. Would this kind of project be possible on an international scale or are the established healthcare systems, such as the French one characterized by universal coverage, the most efficient system we can hope for at this scale?

Philip Gagner
: The US healthcare system is a disaster. People in the USA pay four times as much as most of the civilized world for healthcare, without significantly better outcomes (and in many cases, such as infant mortality, much worse outcomes). Despite the deplorable state of both its public and its private healthcare, the US remains a leader in medical technology research. One of the most ambitious and controversial high-tech programs is the Personalized Healthcare Initiative (PHCI).

In the words of the US Department of Health and Human Services official documents:
"The Personalized Health Care Initiative will improve the safety, quality and effectiveness of healthcare for every patient in the US. By using "genomics", or the identification of genes and how they relate to drug treatment, personalized health care will enable medicine to be tailored to each person's needs."(6)

The PHC has two guiding principles and four goals:
Principle 1: Provide federal leadership supporting research addressing individual aspects of disease and disease prevention with the ultimate goal of shaping preventive and diagnostic care to match each person's unique genetic characteristics.
Principle 2: Create a "network of networks" to aggregate anonymous health care data to help researchers establish patterns and identify genetic "definitions" to existing diseases.

The four goals are generally to [1] link clinical with genetic information; [2] protect individuals from unauthorized or discriminatory use of genetic information; [3] ensure the accuracy and clinical validity of genetic testing; and [4] develop common policies for access to genomic databases. It is notable that neither of the two guiding principles explicitly includes either ethical or privacy concerns. The second goal (and to a limited extent the fourth) addresses individual privacy concerns but, as I read the descriptions of them, fail to recognize that privacy is, in fact, in conflict with the other goals and principles.

PHCI builds on prior U.S. law, primarily the Genetic Information Nondiscrimination Act (GINA) that prohibits most uses of genetic information by employers and by health insurers. This law, according to the NIH National Human Genome Research Institute, is required to ensure that individual healthcare can flourish without patients worrying that test results may adversely affect their work or insurance situation.

It is worth focusing on GINA because it is both an inspiration for, and intimately connected with, the implementation of PHCI and because the concern about whether patients will risk bad non-medical consequences from a medical test is a valid one. Employers are rationally less likely to hire and train an employee who carries a genetic marker for early death. Similarly, private insurance companies are less likely to provide health insurance to somebody who is more likely than average to develop a severe condition requiring expensive medical care, if they have the option.

Employers are relatively easy to regulate. Their actions are, to the employees, quite public, and measures in the US such as work hours, minimum wage, and even anti-discrimination laws have been widely successful. Because this is another anti-discrimination statute, it also is likely to be widely observed and honored.

Insurance companies are another matter. American insurance law does not protect people with non-genetic indicators of future bad health, such as cancer polyps or a negative X-ray diagnosis. In fact, GINA actually leaves them worse off, because, deprived of clearly relevant predictive data, insurers must rely on less reliable indicators or on secondary sources, such as treatments given. This means, at best, attempts to indirectly circumvent the prohibition, as well as the use of an inconsistent set of predictors. It means increased randomness as to outcomes, which in turn means that the overall variance in cost of insurance premiums will rise for the population. Because negative diagnosis can be inferred from treatment (and the use of this data is not prohibited), it means that patients will be less willing to undergo preventative care methodologies if they perceive them as likely to raise their premiums.(7)

Second, patients who receive bad news about their genetic testing will, rationally, opt-in for higher medical insurance coverage, and patients who receive good news will, rationally, opt for less. The outcome is an overall smaller population with more healthcare risks, and the GINA goal of spreading the risk through the population cannot possibly be satisfied.

The distinction between genomic information and other medical information is, in my view, arbitrary and without any valid basis in science. If you consider a future where genetic testing technologies are low cost and commonplace, and where better genomic knowledge predicts more and more about human physiology (including disease processes), then such testing becomes just another medical tool, like a biopsy. The entire idea behind GINA, the distinction between genomic disease probabilities and observable current medical conditions is a false distinction, and the underlying policy problem is that insurers are permitted (in the United States) to discriminate by risk pool manipulation based on any medical test.

In a society, such as the French medical system, where essentially 100% of the population is in the same risk pool, there is no discrimination by excluding those with genetic markers perceived as negative. Many of the features of PHCI and of GINA are based on policies to prevent such exclusion, but they do not solve the problem in a way likely to succeed, nor are such features necessary or desirable in other nations.

Whether or not prohibiting discrimination by employers is another matter. To me, it seems probable that such a prohibition would be both necessary on moral and social grounds, and effective, and similar prohibits are found in French and other European nation laws.

Other provisions of PHCI remain valid, and appear to hold great promise both for clinical treatment and public health. Genomics testing is still expensive, but far less so than it was a decade ago - by as much as 500%. This cost will continue to decrease, and equipment to sequence DNA and DNA fragments will be available at any large hospital in developed countries. With present technologies, much of the analysis required to perform genetic tests is done by highly trained people, but nearly all of this can, very likely, be automated. One researcher at George Washington University Hospital is developing large molecule detection devices that cost less than ten dollars and are disposable. These particular devices test for certain antibodies, but similar technologies are feasible for DNA marker testing.

The medical risks of genomic testing - as distinguished from risks of genomic diagnosis - are almost non-existent for adults, and minor for infants and fetuses. Assuming that current cost reduction trends continue, and that an increasing number of disease processes are linked to genetic markers, demand by physicians and patients will increase. Pharmacogenetics, allowing the targeted prescription of drugs based on DNA and large molecule markers, has entered medical practice and has been successful.(8)

Low cost and large-scale genetic testing provides two very different benefits: First, it has clinical utility, that is, it can alert healthcare providers to increased probabilities of certain outcomes for an individual patient. Second, it can provide a database for medical research. These two benefits have two sets of parallel risks. In the clinical practice case, the risks include the psychological burden of knowing that one is at higher risk for a certain condition (which may lead to behavioral changes that are harmful to the individuals overall health, such as fad diets, wasting money on charlatan healers, or even taking unnecessary medications), and can include false complacency based on negative test results).(9)

By way of example, consider a newborn screened for genetic markers for cystic fibrosis. Early diagnosis of that condition is believed to significantly improve clinical outcomes by allowing prompt administration of pancreatic enzymes and treatment of infections.(10) There are, of course, corresponding risks, and one can easily identify the risk of incorrect test results among them. Nevertheless, as a matter of clinical utility, one must determine whether the evidence-based benefits outweigh the evidence-based risks.

From the public health viewpoint (which is the viewpoint in which the database referred to above is useful), there is a significant benefit to large scale genetic testing. But, since the public at large will carry the cost burden, the public health benefits and risks must also be measured. As a matter of basic research, the type of database envisioned by PHCI will be valuable, and a simple example is correlating gene markers on one DNA segment with those on another and comparing them with other observed health information. Such database mining has already found correlations, and has found areas for further (non genomic) research into specific disease processes. The problem here is that, to achieve the benefits, individual data including environmental data must be stored in the database. The more data that are stored, and the greater the degree of public access, the more difficult it becomes to protect (or obscure) the identity and privacy of the tested individuals.

An example might be helpful here. Consider a database that contained the following information: A male individual, (name and exact address obscured in the database) mixed Caucasian-Asian ancestry brown hair, dark brown eyes (all easily determinable from DNA markers), born July 2009, early medical history includes persistent cough, stomach swelling, lives in a farming community near Nice, France, within 5 km of a fertilizer storage and processing facility, and has some genetic markers for cystic fibrosis. Given this information, it very likely would be possible, even easy, to identify the particular individual. At present, testing infants at birth for cystic fibrosis (particularly if there is a family history) is commonplace. But the results of that testing are not stored in a large and generally accessible database, and so are not available to neighbors, potential employers of other family members, the press, or charlatans hoping to peddle quackery to distressed parents.

A large public database with highly personal and traditionally private information is, by its very nature, inconsistent with individual privacy. The more one limits access to such data, the less likely the data are to be used for useful research. The more access one provides, the fewer realistic assurance of privacy one can give. This problem cannot be solved by legislation or by technology - it is simply that two different but worthwhile goals are inconsistent. One must decide how important the privacy issues are, and how valuable the research results will be, and then adjust the database content and access to achieve the balance.

In conclusion, he United States, first with GINA and later with PHCI, has determined to create a highly regulated national database of individual genomic information. The designers of the system are correctly concerned with the individual privacy issues and with public health risk issues, including those described here. The Obama administration has determined that the probable public benefits outweigh the public and individual risks, and this is likely the correct decision. But, it is in my view, a decision in an area fatally marred by the US healthcare payment and insurance coverage system. An insurance company that, in partial or complete defiance of the law, uses genomic information to reduce its payment risk will make greater profits than one that does not. Since the purpose of corporations is to maximize profits, this pressure to gain information will be intense. And although the US law prohibits using individual data, it does not, as I read it, prohibit using genomic information to create risk pools by statistically analyzing the data after removing individual identification. The smaller (the more specific) the risk pool, the more this becomes like discrimination against individuals. There is a large grey area of vagueness here, and insurance companies will undoubtedly exploit it.

By contrast, in a system where healthcare coverage is universal, the calculus becomes much easier. Assuming that reasonable measures are taken to maximize privacy and minimize security and penetration risks, the benefit to the public of such a database seem to quite clearly outweigh the risks. Genomic markers generally indicate a probability, not a certainty, of medical conditions, and genes generally work in combination to produce physiological effects. Understanding probabilistic evidence in favor or against clinical therapeutic measures only comes with large populations(11), and such a database is likely to reduce the number of expensive clinical trials. In addition, knowing what genetic predispositions exist in the population as a whole is valuable to public health officials.

Genomic information, in databases or otherwise, is not different in kind from other medical information, it is just newer. The same measures that are necessary to protect people from disclosure of private matters are necessary for genomic information, not more and not less. Those features of PIHC that do not relate specifically to the US healthcare insurance industry can, and should, be adopted in other countries and, to the extent politically possible, the PIHC database should be extended to an international genomic database of the human race.

1) Hacking Medical Devices for Fun and Insulin: Breaking the Human SCADA System, Jerome Radcliffe, http://www.blackhat.com/html/bh-us-11/bh-us-11-briefings.html (retrieved October 19, 2011).
2) Wearable Wireless Sensors, ABI Research, 3Q 2009
3) They Can Hear Your Heartbeats: Non-Invasive Security for Implantable Medical Devices. Gollakota, Hassanieh, Ransford, Katabi, Fu, In Proceedings of ACM SIGCOMM. August 2011.
4) Los Angeles Times, May 09, 2009. (retrieved October 14, 2011)
5) In the data processing world, it is often said, jokingly, that the best things about standards are that (1) there are so many to choose from and (2) if you don't like the existing ones, wait a month because they change so frequently. This is certainly true in healthcare records management, and the only feasible solution is to mandate, by government regulation, that systems must be compatible with (that is, capable of interchanging data with a certain standard of choice). Yet, this very requirement adds complexity and new security vulnerabilities.
http://www.hhs.gov/myhealthcare/ (October 18, 2011).
7) This analysis of insurance company reactions to GINA was first and cogently argued by Professor Russell Korokin, J.D., UCLA Center for Society and Genetics and UCLA Law School, and Dr. Rahul Rajkumar, M.D. J.D. of Brigham and Women's Hospital, Boston, MA, USA. The conclusions from the argument, however, are mine, and not to be attributed to them.
8) Genetic Testing in Clinical Practice, Lamberts and Uitterlinden, Annu. Rev. Med 2009, 60:431-42.
9) What is the clinical utility of genetic testing? Scott D. Gross, M.D. and Muin J. Khoury, M.D. Ph.D., Genetics in Medicine, Vol. 8 No. 7 (July 2006).
10) Ibid at 449.
11) Genetic Testing in Clinical Practice, Annual Review of Medicine, Vol. 60: 431-442 (Volume publication date February 2009).

Burning Issues: Resources: Water, Energy, Air, Food

See also Club of Amsterdam Journal, November 2011, Issue 143, Special Edition

Michael Akerib, independent higher education professional

Part academic, part consultant, of multicultural background, fascinated by Russia, the Arctic, Brazil, natural resources, demography, new spaces, Biotechnology, post-humanity and many many more issues.

A Halloween Story

'You are confusing two concepts: answering the questions and formulating them correctly. Only the latter is required of an author.' - Chekhov

A message for Halloween: let us not listen to the witches that tell us to walk into an age of scarcity and perhaps even into the next dying out by destroying the strategic natural resources our earth has been endowed with: air, food, water and energy sources which are intricately woven to form our environment from which we derive our basic needs.

Instead, let us resuscitate the voices of the fairies that were left drifting while we were only concerned with prices and that are telling us we need to avoid an impending disaster. They are telling us there is a problem and that a solution needs to be found as quickly as possible. So does the United Nations Environment Program which states in a recent report that if the right systems are implemented as of today, agriculture could feed 9 billion people AND become largely carbon neutral.

The alternative would satisfy the witches: the inability to produce sufficient food would lead to mass migrations, famines of an unprecedented scale and global social movements as prices skyrocket to unprecedented levels and the poor suffer even more.

The agro-industrial model, built over the last half-century, which sees the environment as a machine from which products must be extracted from unlimited resources with the help of technology; and the market as a global free-for-all arena, driven by price rather than quality - so as to reduce the percentage dedicated to food from our disposable income - is unable to sustainably feed a growing human population. We now consume more food than we produce, thus depleting stocks.

We need to rethink not only agricultural production but also the policies of retailers - who have driven the prices down to levels at which farmers can no longer concentrate on quality - and the expectations of consumers.

The very first step in any decision making process is becoming conscious of the problem and therefore of the need of a solution and this seems to have finally happened.

For a humanist, the alternative model to 'us or the planet' is one that sees humans as a component of a broad biological system - a complex dynamic model that links man and the earth's resources.

Concrete steps to apply this model include stopping deforestation, in particular in tropical areas, as these prime biotopes are essential cogwheels in the water cycle and in reducing atmospheric carbon. Fertilizer addition to the soil needs to be reduced as it contaminates water tables and rivers. Methane release from animal manure, cattle in particular, also requires a substantial reduction.

Land usage (including not only pasture but also land devoted to grain farming) to produce beef is colossal. Convincing consumers to eat other types of meat or, on a more technological vein, producing meat in the lab, would contribute to preserving our environment.

Investments in agroecology would represent a big step forard in solving the food issue as well as allowing a satisfactory management of the three other resources. These investments can only be made by governments as major food companies are not interested in systems that offer a lower productivity per hectare. Investments must include storage facilities to enable farmers to store product rather than selling at harvest when prices are lowest. Investments must also be made in educating farmers to use these techniques and laws must also allow small farmers ownership of the land.

Indeed, agroecology, by relying less on external outputs, offers the advantage of breaking the reliance of agriculture on energy which is required for fertilizers, pesticides and to drive agricultural machinery. Pests are controlled by a variety of methods, such as insect repellent plants or animals such as fish in the case of paddy rice.

Prioritizing local production, as against global supply chains, also reduces the energy required to process food and transport it over long distances. This will not reduce the need for infrastructure to avoid produce spoilage which is a major source of waste in developing countries.

Introducing such methods would cease making the small farmer 'the global epicenter of extreme poverty' as he is described in the Millennium Project.

The reduction of food wastage should also become a matter of interest to retailers and consumers - statistics show that up to 30 to 50% of food products are thrown away. A pick up and recycling system in France, in particular to use this wastage as an energy source, has been shown to be profitable.

Water scarcity, already a fact in many countries, and variability in rainfall (and let us not forget that 80% of crop-land uses rainfall as its water source) becomes less of a problem with new forms of agriculture, which includes better rain water harvesting, particularly if new varietals are developed which require less water. Small infrastructure building is essential to enable access of water for the poor living in arid areas.

Yields, and therefore farmer income is increased.

New desalination technology, using substantially lower amounts of energy, will enable countries to regulate water availability in periods of low rainfall.

Our planet has a unique atmosphere that allows life and regulates the climate. An increase in the content of CO2, as is forecast from developing countries, would induce major changes in the earth's ecological and geological system. Power generation is a major contributor to this state of affairs.

We discussed above the importance of tropical forests as carbon sinks. On the supply side, agriculture is a major contributor of climate change as manure releases substantial quantities of methane.

Coal usage in OECD countries should be gradually replaced by natural gas as CO2 emissions are heavily taxed. This is unlikely be the case in the rest of the world, and in China in particular.

Transport also has a major impact as it consumes sizable quantities of energy essentially in the form of gasoline. While the number of vehicles is expected to increase sharply, particularly in Asia, more efficient engines and alternative energy sources, particularly in cars developed and sold in America, Europe and Japan, should contribute to slow the expansion of oil consumption. 'Smart' vehicles and roads could reduce consumption by up to 40%.

As the world's energy consumption increases, alternatives to oil will inevitably have to be used particularly as reduced availability of 'black gold' will drive prices upwards - whether peak oil is due to dwindling reserves or to the enormous amounts of capital required to locate and develop new deposits, oil production is set to fall. Reduced energy consumption would contribute to cleaner air by reducing the amount of pollutants released.

Technology will be a major factor determining the choice of the substitute, whether it is by cleaning coal, developing advanced materials for solar energy or inventing groundbreaking technologies. Developing countries may well have considerable difficulties to access these new sources and remain contributors to atmospheric pollution and global warming.

Greenhouse gas emissions could also be reduced if meat was grown in the laboratory as experiments under way appear to make it a clear possibility.

For such programs to become reality, retailers must lend a hand by accepting products with a greater variability. Standardization is difficult, if not impossible, to achieve with sustainable agriculture.

Higher prices of oil would undoubtedly assist in making this change in the agricultural paradigm. Such price increases could be a result of conflicts in producing countries - such as has recently been the case in Libya - or of the ability of China and the US to each secure captive production sources leading other buyers to pay premium prices.

Major price increases in oil would lead once more to the transfer of wealth from consumers to producers, with the poorer countries, particularly in Africa, suffering most. Turbulence in the currency market, particularly a weak US dollar, has negative long-term repercussions on oil availability and therefore leads to higher prices. A concerted action by Central Bankers would help stabilize currencies - perhaps with the introduction of a new global currency or the return to an indexation on gold.

The doorbell has just rung - children from the neighborhood were treat or tricking me. Having run out of sweets I offered them a ten dollar greenback which they turned down. Just like they turned down a 10 Euro bill. They asked for a gold coin, or a barrel of oil, but I did not have one. I am lucky to live in Switzerland and was able to give them a 10 franc note. They took it - no trick for me.

I hope the same applies to all those of us who live on this planet. Seven billion at the latest count.

Burning Issues: Education

See also Club of Amsterdam Journal, November 2011, Issue 143, Special Edition

Peter van Gorsel, Educational Business Developer, University of Amsterdam

Peter spent many years in publishing before becoming Director of the Institute for Media and Information Management at the Hogeschool van Amsterdam. Since October 2010 he started his current assignment.

Club of Amsterdam: Are the current educational standards and policies accurate to prepare future generations to this ever more globalized world? Which countries over the world seem best prepared?

Peter van Gorsel
: There is no perfect way to educate people because local, national and international culture plays a big part and young people are not cattle. So there is no global answer to what education should be and what policies will work and what policies not. The difference between countries are enormous and there seem to be no countries that are the best in everything. Each country has institutions that are very good in some area's but those same countries are doing very bad in others. Nobody is really prepared for the uncertain future and unsure job market that will come out of this crisis. Education certainly can't be everything to everybody. Education in a broad sense is preparing people for a fulfilling life and a rewarding job that matches their talent and capacities. Most educational thinking is still very much rooted in the 19th century and revolves around the transfer of static knowledge that the teachers grew up with and is strongly divided along lines that are blurring: academic, vocational, artistic etc. It also takes the position that teaching is something completely different form the outside world. Hence the walls between education, business and arts. Politicians often see education as a means to enhance economic development or a way to promote their view or policy. Funding is in such cases used as a lever to bring about changes that they want to see in educational systems. Top positions in education are therefore often a political more than a professional nomination. The world maybe globalized but education isn't.

Do we now face more challenges concerning education in a globalized world then the ones we already had such as illiteracy, the necessity to prepare generations for the future or women's uprising through education?

Peter van Gorsel: Future generations will have to deal with the effects of globalization and their careers will be much more erratic and unsure. Intensified competition for top jobs will be a feature of the future as well as strong division between high earners and the mass of workers below them bridging about stronger class divisions and erosion of educational systems as state support falls away. Students in western parts of the world seem to be especially unaware of this while they are the first ones that will have to face these harsher circumstances. The role of women will be more important than in the past both in education and inn the workplace. They, however, work and learn, differently from boys. Education should reflect that without bending too much in one direction.

What role should technology play in our educational system in the context of a globalized and evermore technologically advanced world? Should we set limits to the use of technology in education and if so to what extent?

Peter van Gorsel: Technology can never take the place of good and committed teachers. It can, however help teachers to work in a more interesting way and assist students with complicated projects and give them access to knowledge now beyond their reach and means. Technology is vital when we look at the education and training or those people already out there. Lifelong Learning is certainly one of the most important aspects of the future of education. Through blended learning, on line coaching and monitoring workers can stay up to date and abreast of the latest in their field. There are no limits to use of technology in education; there is however the fine balance between the time spent with technology and the time spent with teachers.

Burning Issues: Globalization

See also Club of Amsterdam Journal, November 2011, Issue 143, Special Edition

Madanmohan Rao, Research Advisor, Asian Media Information and Communication Centre, Singapore

Madan is a consultant and author from Bangalore. He is the editor of the five book series: “The Asia Pacific Internet Handbook”, “The Knowledge Management Chronicles,” “AfricaDotEdu,” “World of Proverbs,” and “The Global Citizen.” He is the research director of Mobile Monday, a global network of mobile and wireless communication professionals, and co-founder of the Bangalore K-Community, a network of knowledge management professionals. Madan is the founder of the Indian Proverbs Project, Asia editor for M2M Insights, and world music & jazz editor at Jazzuality and World Music Central.

Club of Amsterdam: Globalization accelerated through liberalisation of trade and finance, changed production and service processes, a revolution in transport and especially also in communications. The above video illustrates the rapid change in the media landscape and consumer behaviour. Has media irreversibly turned into a global platform? What can we expect in the future in relation to local versus global culture? Is there a danger of loosing cultural roots and values?

Madanmohan Rao
: We are seeing two major trends in media changes. In broadcast TV, BBC and CNN used to be major agenda-setters in news, and Hollywood set the pace for movies. Now strong players have emerged from the Middle East (Al Jazeera), India (Bollywood), South Korea (movies), Nigeria (Nollywood) and Mexico (telenovelas).

In digital media, social media have emerged as the new environment of choice. They are global in nature (especially Facebook, Twitter) - but here also there are regional variations (largely in China, with its own home-grown social media platforms). But whichever platform they choose (US or Chinese), social media have ushered in person-to-person communication on an unprecedented scale.

I have charted some of these changes in my book series, The Asia-Pacific Internet Handbook. What emerges is that new media are technologies of power. They are not inherently good or bad, but the outcome depends on those who have the passion and skills to use them. In the realm of politics, social media can empower people but can also be used by authoritarians to track dissenters and spread rumours. In the realm of business, social media emerge as stronger tools for consumers. In educational activities they enable peer-reinforced learning, but also pose challenges as sources of distraction during immersive book-oriented learning.

Social media are terrific ways to preserve and promote local cultures (eg. I tweet Indian proverbs daily from @IndianProverbs drawn my recent book). But in the area of language they are also reducing grammatical competence.

The Internet is now an integrated part of doing business. This can be both local and international. Virtual companies or services outsource their production to firms around the world. The global supply chain or IT services are managed through the Internet. Who will be the winners? What role or chance will developing countries have? How will this change the global business landscape? What will be the role of Mega countries like China and India versus small countries?

Madanmohan Rao
: The Internet has been a godsend for countries with diaspora populations, especially China (an estimated 50 million people of Chinese origin living outside China) and India (20 million diaspora population). The Internet has become the glue for them to stay connected to the news, culture and business of their homelands. It has also opened up new ways for emerging economies to plug into global workflows, eg. for offshoring activities.

Countries like India and China play along all four dimensions of globalization: sources of production, markets for consumption, service centres and innovation hubs. The Internet plays a key role as a platform for knowledge flows in all these areas. And in the domain of workplace learning, social media are powerful enablers for organisational knowledge management, as described in my book series on knowledge management. Indian companies regularly feature in global and regional top rankings of the Most Admired Knowledge Enterprises (MAKE Awards), thanks to knowledge cultures reinforced by social media.

In the context of the recent 'Arab revolution' the use of mobile phones, smart phones, live streaming of videos by users has been widely discussed. Facebook, Google etc have unprecedented access to personal information. What are the long-term chances that the democratisation of media will continue? Tim Berners-Lee - one of the "inventors of the Internet" - advocates the idea that net neutrality is a kind of human network right. What needs to happen to secure this in the future?

Madanmohan Rao: Social media along with mobile access have definitely amplified the Arab Spring thanks to grassroots communication and 'smart swarming.' Democratisation of social media will accelerate thanks to ever-cheaper smartphones and a proliferation of open-source apps. But the use of smartphones by rioters in the UK has also shown the proverbial 'dark side' of new media, and there will be demands by governments to restrict access and open up user records. Many social media companies have therefore set up explicit policy practices for interaction with the government authority community.

This just goes to reinforce, however, the point I made earlier about social media being technologies of power which can be used for and by good and bad (with a lot of 'grey' areas in between!). Social media have five key properties - free, interactive, global, immediate and archived - thus making them powerful tools for interaction between global and local movements.

Thursday, October 20, 2011

The ultimate freedom: beyond time

By Luc Sala

Dear friends

Once more I will try to summarize my insights, acquired or given to me over the years, about the structure of the universe, the nature of time, our psyche and our soul. All this together amounts to a quantum jump in consciousness and for most people this will be total weirdness, but what choice do I have, but to share.

To start with time, I believe old Plato hinted not only at the structure and task of our mind in Phaedrus, with his two horses (one obedient and one wild) but also knew they refer to the two dimensions of time. One is the logical, causal, rational, deterministic time of the clock, not necessarily unidirectional, the other is the magical, creative, free will dimension, the Bergson inner time. Both are real, but the free will is limited by our self imposed worldview, it’s like the flow in the river bed of beliefs.

The clock time stretches or bends (cyclical) in both directions, meaning any event is a function of past, present and future (and of the consciousness of the inner or outer (observer) resonances). So the outcome of any event/experiment is dependent on its future tail, this explains why changing paradigms is such a hard task. Predicting this deterministic future is therefore not only knowing the past (the Laplace approach), but also figuring in the future, a teleological feedforward approach, far beyond the feedback approach now so prevalent in society and science. When Plato spoke about Phusis, now commonly translated as nature, he didn’t mean the static image of the measured and determined now, but nature as a process, not only including the past but also the future, a far more dynamic image. His fascination with prophets and augurs wasn’t superstitious, I feel, he realized the bidirectional nature of time.

The free will dimension complicates matters, but is essential as everything would become static and would eventually petrify without this dimension of change, creation, freedom. It is in this dimension that life manifests, it is life itself and we only limit it by sticking to the beliefs that include our human laws of nature. Any true sorcerer or believer will tell you about the miracles that arise when we let go of our beliefs (or create new ones).

We think that the mind (or imagination) is the great tool to change our beliefs and situation, but what reaches our cognitive levels is just a filtered and twisted representation of what our primary sensor/actuators pick up. Our “primes” are the real interface with energy, time, truth, love, danger, procreation, spirit, the fundamental categories or dimensions that matter beyond matter.

Archetypal, bodily, emotional and cognitive filtering and mixing mechanism, both on the in and out influence the real message or actions. Only rarely do we contact those primal capabilities, where true creation and magical power resides and go beyond the prison we created. Personality, body, emotions, beliefs, the world around us (tat svam asi) all are part of this prison.

The main antenna for time in living beings (on this planet) is DNA, that tells the seed to what plant it will grow, evolution is remembering the future. DNA again has an existence in both time dimensions, this is really what epigenetics means, we can escape the deterministic part by venturing into the free will dimension.

Going beyond what we call life, every existence has the two time dimensions, the drop of rain over a watershed can make the quantum-decision to go either way, that’s why watersheds are so holy. Some elements or forms offer a better bridge between the time dimensions like crystals and especially gold (in fact an isotope of gold) has special qualities there. Crowns, gold clothes, jewelry, they are functional devices for thought wave protection or manipulation.

The super-dimension (this might even be the free will time one) that holds us and everything together can be called love, chi, nature, God, but I like to call it information. “A bit is only information if it bytes” is my keyphrase here, and can be read as “there is only existence if the quantum probability functions resonate (collapse)”. Resonance is the basic mechanism of creation (which in turn is the union of love and truth, reality is the shadow of God’s love is a great image here). Resonance, correspondence, we would call it links in cyberspace terms, the old vedic core message “Ya evam veda” makes the connection between power and wisdom, he who knows has the power, but (and here the rational West missed a major part) also he who has been given the power (initiation/crowning) will have the wisdom/knowledge. If we accept that thought (ideas) are part of this information dimension (and alas beyond the tangible except when it is transformed in our cells and becomes electrons and chemicals) we live in a universe full of information waves/streams and are nothing but a cocreator in a cosmos that exists but is framed as illusory.
Information is really the main issue in philosophy and maybe even theology, it goes beyond (cyber)-space and time, and infotheism or information philosophy should be the main focus of science. Until we understand or grasp how information (and consciousness is a part of information and therefore of existence) underlies everything we are just like in Plato’s cave.

This brings me to the question who we are. That most of us have an inner child or self and an outer layer of ego/personality that we think is our “I” is no news, that understanding runs through all the traditions. Letting go of that “I” as in detachment, meditation, bhakti-yoga, devotion, is necessary to get in touch with the deeper layers, connecting with the self. Not an easy process, as we have many defense layers and clicking back into ego is the natural defense we have developed. For a while I believed that getting to know and living the inner child was the ultimate way to reach Samadhi or whatever we call the higher states, but that image has changed. We have chosen this life, this body, these parents and this DNA, so our persona or mask is also a choice we made, and as I believe in guidance and direction beyond the dimensions, we better accept our mask as part of the great lesson. Without the mask we wouldn’t create these circumstances, would not face the true lessons, we would all be like God’s children, living in paradise. So hail the mask, even as the glimpses of the inner or supersoul we perceive in mystical moments, with the help of psychedelics, sacred encounters, meditation or misery, are so enormous and overwhelming. Integration is what is called for, understanding and respecting the necessity and mutual fertilization of our mask and inner child.

The structure of our psyche, reflected in our body down to the tiniest limb, organ and cell, is of course a mirror of the universe, the old hermetic understanding. If we just take the seven correspondence (but any number would do), there are seven major celestial bodies, seven layers of existence, seven temples including the one we build in our mind, seven chakra’s and each of them giving rise to unique experiences. Religions are usually mirroring our energy chakra’s, the Hinduistic focus on truth and power relates to the 3 th, the Christian blood/love focus to the 4th, Islamic and Jewish rules and regulations to the 5 th, Buddhist visualization to the 6 th .

We, as humans, usually have a specific focus, translated and carried by our body posture and most of all our breath patterns. Typologies like the enneagram are basically models of the way we move the chi/breath energy in our bodies. That is different for our mask (or masks) and our inner child, we share the hardware but the software differs, there are thus different modes we can recognize, although others are sometimes more aware of what mode we are in, this is the blind spot(s) phenomenon. The more interesting events in our lives, like falling in love, healing, transformation, are rooted in our inner child mode. I actually believe that ignoring the messages from the inner child will lead to malfunctioning, diseases and eventually death, it’s the misunderstood and wounded inner child that kills us. Understanding the development of the inner child and the mask by the way illuminates the old nature/nurture question quite well.

We develop our awareness/consciousness in each of the energy nodes (and in the different modes to complicate the whole deal), but in our rational worldview we value most the cognitive awareness, intelligence. Spiritual awareness comes next and can even be measured, we sense the holiness, especially if it centers in the inner child. The most common mystical experience (at least in the West) is the unity feeling of the heart, when all is love and one. Mystical experiences in other chakra’s, like the lucidity and all-knowing experienced when the mind exalts, the tantric orgastic or the magical power experience are less known. There are awareness levels in each mode and node, together a rather complex image of one’s being and potential, and definitely not used as criteria for getting a job in big business. These levels can be measured, maybe with some projection variations, but this has not been the subject of any scientific research as far as I know (excuses to Bovis, Tomatis and the few who tried). My analysis in this respect shows me time and time again, that we are all equally endowed with talent, but these differ in how and where they manifest. The Down syndrome child may lack a suitable persona or mask, but offers to us an insight and access to our own inner child and is therefore as valuable and gifted as anyone.

Our place in the universe, or where we are as a race, who cares? Whether we are just the epitome of life or a mere but grandioso experiment in consciousness with the sun as our energy source, the planets as our protection against cosmic distortions (hail astrology) and solar heating as a way to protect us from incoming cosmic debris, who cares but the fearful. We live here and as we don’t even understand the basic tenets of what happiness is, why bother with the celestial questions. Who let the sun in (Sam’s koan) is also about everyday life!

The above is just a tiny bit of what came to me, from the universe, the future or my inner soul, I really don’t know.

Do you want to know more, please email me or look at www.lucsala.nl

Wednesday, October 05, 2011

Limits to Knowing

By Patrick Crehan, Director, Club of Amsterdam, CEO and Founder, Crehan, Kusano & Associates

The way we think about the future has immense influence and impact on both our professional and personal lives. This is especially true for those who work in positions of responsibility for organizations and the people in them. They are the ones who decide on a regular if not continuous basis what time and money, human and material resources should be allocated to which activities so as to ensure optimal outcomes for themselves and their families, for their organizations and society as a whole.

The tools we employ to think about the future are constantly evolving. Our ability to gather store and process information about the past and the present state of the world is expanding at an extraordinary rate. Several pas Club of Amsterdam events have looked at the extraordinary pace of progress in sensing, connecting and computing. These have helped our members explore the consequences of how our ability to sense the present, combine it with knowledge of the past and simulate the future, has expanded at an extraordinary rate.

But it is worth while taking a look at the limits of our knowing about the future to see if we really understand how to use these powerful tools and ask if we really are on the right track, if we really are mastering the tools required to help us design and build the better worlds we want to create.

Swept up in the euphoria of technological progress, there is a risk of “irrational exuberance”, that we might overlook small issues of great consequence. For this reason it is useful occasionally to go back to basics and take stock of where we are and try to filter what is real from what is mere illusion.

The first reality check concerns the nature of our ability to model the world, simulate it and make predictions. Despite the extraordinary progress we have already made, and the very reasonable expectation that by the end of this decade we will have succeeded in feats as complex as simulating the workings of an entire human brain, there are real limits to what we can simulate and what we can predict. So far I am aware of at least 3 hard barriers to success in modeling and simulation, and there may be many more.

The first is a demonstration by the philosopher Carl Popper, about the impossibility of predicting the future. His argument is very elegant and relies on special relativity. Effectively he provides a proof that if the world is governed by the principles of relativity, then even if we have perfect theories, and infinitely fast computing capabilities, we will still never have enough information available to always make accurate predictions even arbitrarily small times into the future. Of course we will get away with ‘good enough’ most of the time, but he explains that there is a hard barrier between that and being able to guarantee getting it right every-time.

The second barrier has to do with the discovery of quantum mechanics and has to do with the ‘knowability’ of nature. The initial insights came from the work of Heisenberg and have been debated ever since. The general consensus is that it is impossible to simultaneously possess knowledge of arbitrary accuracy about the state of the physical world. In physical terms it means that we may know the position of a particle with arbitrary accuracy at a given time, but only by sacrificing accuracy in our knowledge of its state of motion. This is a hard limit on what we can know about the world and seems to be no way around it. Once again we can get by pretty well for most intents and purposes but bear in mind that many modern engineered products rely on relativity and quantum physics for their operation. Both relativity and quantum physics have left the realm of science and entered the realm of engineering many years ago. So these limits we refer to are real, impact our work and are faced by engineers every day.

The third major barrier is one which only really emerged or became clear in the 1970s with the discovery of what is called ‘deterministic chaos’. This has to do with a form of ‘unknowability’ that afflicts even old fashioned Newtonian systems. It does not rely on artifacts of relativity of quantum mechanics. It would exist even if quantum mechanics or relativity were not true. This insight into the limits of ‘knowability’ go back to the discovery of dynamical systems that can be modeled perfectly, for which solutions can be shown to always exist, but which can never be calculated by any algorithm with any degree of accuracy. These systems often appear random or chaotic, when they are absolutely deterministic. Even though we know everything about what drives these systems, we also know that we cannot simulate them in any reliable way. In practice what happens is that arbitrarily small errors in the measurement of the parameters of the system lead to arbitrarily large errors in the results of a simulation.

These are three hard barriers to what we can know from measuring modeling and simulating the world. There are others. Despite these limits we do pretty well and simulation can be a very useful tool when used in the right way. The spectacular collapse of Long Term Capital Management (LTCM) run by Nobel Prize wining economists is the text-book case of what can happen when the models are applied outside of their domain of applicability. We could move on from discussion about errors in simulations based on models to the impact of errors in the model itself, but that is a subject for another day.

Instead it is interesting to look at issues relating not so much to our ability to predict the future, but to our ability to control it. The future is highly subjective. No one creates it alone. Chance requires the cooperation or complicity of a great number of actors. It is an iron rule of change and it is true whether we are talking about change on the level of the global economy, a business unit or our personal circle of family and friends.

To affect change it is not enough for one person to know about the future, they need to bring along everyone else by forming change-coalitions for want of a better word. The starting point is creating and sharing relevant knowledge. This touches upon the philosophy and mission of the Club of Amsterdam, and there are many techniques for doing this. But even this is not enough. Given all the knowledge and understanding in the world, people may then need to act. This is the real barrier to making change happen, especially when we are looking at long-terms issues that do require an immediate solution. Such issues tend to get put off until it is too late. Making change happen requires not so much progress in simulation but progress in understanding factors such as motivation, confidence, courage, the will to act in ones own interest.

This was why it took about 50 years before clear and overwhelming evidence linking smoking to lung cancer became generally accepted. It is why even today people do things like smoking that they know will shorten their lives and limit the time they have to enjoy the good things of this life. Arguable it is also one of the reasons why progress is so difficult on issues such as climate change.

Despite the incredible progress we have made in out ability to collect and analyze data, model and simulate the world, make predictions about the future, we are still very poor I moving from knowledge to action.

The future of the future needs to include initiatives that more explicitly not only the barriers to knowing but the barriers to acting when the knowing battle has been won.