I recently contributed to an interesting white paper on the future of resource scarcity and commodity prices at GBN. Check it out here; it’s called, “Winners and Losers in the New Commodity Price Regime” (PDF).
Part of what I found so interesting about this exercise was that the project began as a heated debate over whether or not “technology would save us”. Everyone agreed that demand was outstripping supply and that, for a variety of reasons, supply would’t be able to catch up in the next 5 to 7 years. The result? Increasing commodity prices across a range of categories are likely to cause a range of political, social and economic consequences. The paper explores those and suggest strategies for businesses trying to understand how to get ahead of this curve.
The paper is good, but the debate behind it warrants more attention. Will technology save us? Easily 70% of the effort involved in this paper revolved around coming to terms on what we meant when we say “scarce”. The natural response is that high prices will drive innovation and everything will just work out fine. It always has, hasn’t it? The Club of Rome was wrong and we should all just calm down. I call these the techno-optomists.
The pessimist-realists represent the other camp. Technology won’t save us. Limits to Growth was right and we’re about to see how right they were.
I don’t want to start that argument here. The point is that there is so much uncertainty around these questions, the debate becomes a matter of faith pretty quickly. “I think this is the way the world works, therefore I’m going to interpret the data in this way.”
This all reminds me of Fred Pollack’s classic work on “The Image of the Future“.
“There are two chief routes to victory over an unknown future. The religious route and the secular route. One is eschatological and the other utopian…” “The pendulum of history is constantly swinging back and forth,” he writes. “Awareness of the future makes possible a conscious, voluntary and responsible choice between alternatives.”
The combination of eschatological (i.e., pre-ordained, predetermined) or utopian world-views (i.e., future in the hands of humankind), and optimistic or pessimistic attitudes describes the essential outlines of our ability to think about the future. This can be seen in the grid below.
When thinking about issues as central (and potentially terrifying) as resource price shifts, these four attitudes permeate everything we contemplate; even amongst brilliant, worldly and educated people.
The point of this post, then, is to highlight the necessity to position ourselves on this grid and acknowledge our biases and perspectives before trying to debate about anything. Our team would have saved a lot of time if we just acknowledged our positions upfront, then sought data that we could all agree on and data that also refuted our positions. Such an approach, often called “joint fact finding“, is an essential step in conflictual, consensus-building exercises.
After going through a similar, albeit organic, process ourselves, I have to say that the actual work of conducting the analysis and writing the paper was a breeze. The hard work is reaching a point of agreement about where your values (and hence data and interpretations) overlap, and what to do about where they don’t.