Friday, December 28, 2018

Herman Kahn’s Great Transition: 42 Years Later It’s Coming True, Quaternary Economy and All

In 1976, the Hudson Institute, now a multicity conservative think tank, released The Next 200 Years, a look at major trends in population, work activities, and general prosperity around the world.  Often described as intended to refute Malthusian projections such as Paul Ehrlich’s Population Bomb and The Club of Rome’s Limits to Growth, it took the opposite view that physical resources, such as mineral wealth and food-producing ability, would greatly increase, and that the number of people in the world, then extrapolated to reach 25 billion or more within two centuries, was in fact having an anomalous surge that would fully return to long-term historical levels by 2176.  Per Institute founder and primary author Herman Kahn, the spiking number of people in 1976 was only part of “The Great Transition,” which would also include a per-capita Gross World Product, similar to GDP, rising from $1,300 to $20,000.

Although we are still 158 years short of that point, it is clear that Kahn’s predictions were outstandingly accurate.  We have gone from “the population explosion” being a worldwide worry to most highly developed countries actually losing people and others with vastly reduced birth rates.  The prices of commodities, from oil to copper to wheat, are either about the same in constant dollars or lower, helped by not only improved extraction processes but by discoveries of almost unimaginably large amounts of accessible minerals.  Starvation is much rarer, with the number of people living on $1.90 or less per day below half of that in 1987. 

On overall economic activities, this book has also been prescient.  Human beings have gone through a progression, starting with extraction (farming, fishing, mining, or taking other resources) and moving on to manufacturing (making other things from these resources) and then services (doing things for each other).  In total employment, extraction peaked around 1900 and manufacturing in 1943.  The number of people working in services is still growing, but may soon not be in the most developed places.

All of that leads to one question:  what will come next?  Following the nomenclature often used with services as tertiary business activity, following extraction as primary and manufacturing as secondary, the following phase would be “quaternary.”  If you look that up online now, you see a common view that it refers to research, consulting, and high-level planning.  That is reasonable, but such activities have one flaw preventing them from deserving that title – unlike the previous three, they cannot possibly provide jobs for most working people.

That brings us back to The Next 200 Years, which uses quaternary to describe unpaid things done for their own sake.  If tertiary activities are done for others, quaternary ones are done for the people doing them.  Per Kahn, they are “often constituting what we now more or less consider leisure activities” and “could include” rituals, “demanding religions,” reading, writing, painting, composing, games, “gourmet cooking and eating,” hunting, boating, discussion, “acquisition and exercise of nonvocational skills,” and, if financially unjustified, “many public works and public projects.”  As services become less and less labor-intensive, which has happened for decades now, quaternary activities will not only keep people active but will be, as paid employment has generally been, a main source of their identities.

The catch, of course, is that these quaternary activities do not provide the means for living.  Whether or not that is implicit in the recent discussion on guaranteed basic income, they go well with it.  Guaranteed income will be necessary someday, and the time people do not spend working or seeking work will be freed for quaternary activities.  How we can persuade the rank and file of Americans to choose more active pursuits than watching television and absorbing entertainment, both of which are held over from the days when work left people physically exhausted, is another problem, but the opportunity will be there.  Kahn called “the transition to a society principally engaged in quaternary activities” “the third great watershed in human history,” and expected it to be nearly complete worldwide by 2176, the same time when the higher population percentage increase will end. 

Will the practice of quaternary activities come to pass?  That is already happening.  The extent that they become people’s main occupations will depend on, among other things, where we go with guaranteed income.  That will be debated more and more over the next twenty years.  With another depression or Great Recession, we will see that jobs are permanently going away, so people, like it or not, will need to find something else to do with their lives.  That is where we are going.  We don’t know much about what life will be like for our grandchildren’s grandchildren, but it’s silly to imagine them working service jobs as if it were the 1980s.  Bet on Herman Kahn’s quaternary activities – it’s the most likely future we have. 

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