Enterprise Europe YorkshireHazel is an author, independent futurist, worldwide syndicated columnist, advocate for and consultant on equitable ecologically sustainable human development and socially responsible business and investment. She is a futurist and an economic iconoclast. In recent years she has worked in television, and she is the author of several books including Building A Win-Win World, Beyond Globalization, Planetary Citizenship (with Daisaku IKeda), and Ethical Markets: Growing the Green Economy.

Can you envision major wild cards (positive or negative) that may occur in the next 20 years and are particularly relevant to the EU research and/or may dramatically affect the ERA vision?
 
What is your overall view about wild cards and weak signals?
 
With ethical markets we are trying to connect the people who have genuine foresight and knowledge. That seems to be the same kind of thing that the iKnow project is doing. It is a very good idea. I have done a lot of work with the European Commission. We have done work on Beyond GDP.1 My company financed a survey in ten countries, including many EU countries, Brazil, Australia, Russia and Kenay. We asked the public in those countries whether they thought that GDP, a money-denominated measure, was adequate. The first question was: did they believe that GDP was the best way to measure the progress of society? The second question was whether GDP should be examined to include indicators of health, education and poverty gaps etc., which GDP leaves out. In all the countries we surveyed, at least 70% of respondents thought that GDP needed to be expanded to cover other indicators which are as important to people’s lives as money. We are doing a re-run of that survey later on 2010 and adding China and the USA. I have a different viewpoint on the idea of wild cards and weak signals and would like to challenge those two definitions. From the perspective of my work in foresight over the last 30 years, I like to think of myself as a global acupuncturist. I like to scan all these nested global systems within the planetary ecology: countries, economies, technology, culture and so on. I have an intellectual boutique for redesigning cultural DNA. There are many malfunctioning strands of DNA, like GDP, that need to be teased out and redesigned, because right now it is replicating unsustainability. For example, the functioning of the financial system is based on faulty economics and keeps replicating social and cultural destruction, as well as ecological destruction. I question the category of wild cards. I believe there is no such thing as wild cards, because all our problems in the world, whether we view them as wild cards or weak signals, are of our own narrow human perception. As we expand our perception and knowledge, we find that these so-called wild cards are simply to do with our blindness. 1 www.beyond-gdp.org I have been having this debate with the author of The Black Swan, Nassim Nicholas Taleb. He is a Wall Street trader and made this a fashionable term.His idea is that there are wild cards, which he called Black Swans, that we do not expand. This is the same idea as weak signals: we expect that swans will be white, so we are very upset when we find a black one. He pointed out that a function of human behaviour is to designate through our paradigms what we pay attention to and then what we don’t pay attention to, because we have put on intellectual blinders. We then think it is a surprise, i.e. a wild card. But if we had an expanded model of the way the world works, we would expect these phenomena, or these wild cards, as they would be in the model. My life’s work has been about expanding models of human knowledge and how it needs to be reintegrated. The Cartesian reductionist approach to knowledge which powered the industrial revolution is an amazingly powerful kind of knowledge. It enabled us to change the circumstances of our societies to produce this huge cornucopia of goods and services. It is by paying attention to these small separate phenomena that we created the world today. The problem now is how to reintegrate that knowledge, which is now in all these separate silos, not only in our academic institutions, but throughout our society. Governments have Departments of Energy, Departments of Justice, etc. In Washington DC and around the world, there is a now new sort of metaphor. Policy makers are talking about the silos and how they prevent systemic and integrated policy. Everybody wants to know how to connect the dots. That conversation is going on in academic institutions and everywhere in the world. In the 1970s, I was with the US Office of Technology Assessment (OTA). We knew about global warming and the loading of the atmosphere with carbon. We were aware that the first visible symptom, that people would think was a wild card, was crazy weather (climate change). As I went around the world lecturing I would do a little informal survey and ask people whether they had had any unusual weather. Increasingly over the last two decades the answers would come back: yes, we had the largest snowstorm or the worst drought. At the OTA we knew these were the early symptoms of climate change, but it took 30 years for that to get on the political agenda. This happens mostly because of willful blindness, both in academia but also in incumbent industries e.g. fossil fuel industries. They now have all the lobbying power and they give money to government and politicians, and they prevent the emergence of the next economy, which is the green economy.So I am more interested in willful human blindness: among individuals, academia, the business community, the political system, even NGOs, which are a kind of early warning system. Over the past 30 years, groups of people eventually come to feel the impact of this inadequate analysis or blindness. They find that their air or water supply is too polluted and so they form voluntary groups. This gives an early warning signal to the politicians, who, along with academics and the business community, resist seeing what is obvious. This is why I am so eager for your project to discuss the categorisation of wild cards, rather than the cause of the wild cards. Wild cards are caused by willful human narrowing of perceptions based on special interests, sometimes based on ignorance but often not. The best example is the willful ignorance in the economics profession, which considers effects like pollution, climate change, and poverty as externalities. Designating something as an externality is like designating it as a wild card or something you can ignore. You push it outside of the system until it reaches some kind of crisis.
 
So do you think that by calling something a wild card we are giving it a label so that we don’t have to think about it yet?
 
It is one way of calling attention to these phenomena, but calling it a wild card is a misnomer – it is the willful blindness of the people doing the perceiving. This is the debate I have with Nassim Nicholas Taleb, the author of The Black Swan. In the financial system, almost everyone who is testifying about the financial crisis says it was the black swan, the wild card, the perfect storm, we could not have anticipated it. This is the way of avoiding responsibility for this narrow view. In the case of the financial system, I and many others had been writing about systemic risks in the financial systems in derivates since the early 1990s. So to call it a perfect storm or a wild card or an unanticipated event is not only untrue, but irresponsible.
 
What do you think are the best methods of scanning for these to avoid this blindness?
 
I think we do need very much to scan for the crisis that we are creating, because we are creating all of these crises. The other avoidance of responsibility that humans use is: ‘oh it was an act of God’, the invisible hand in the economics model. All my work shows that the invisible hand is our own. We create the crises and the quicker we collectively take responsibility for them and speak about them honestly, rather than treating them as wild cards, the better our analysis will be. For example, what is emerging in the field of nano technology could create a lot of wild cards. There are 1,600 consumer products that have nano particles in them, in clothing, paint etc., and there has been hardly any research as to what nano particles do in the human body. We know that when humans inhale very small particles that get lodged in the lungs this causes diseases, such as mesothelioma from asbestos particles. That problem is potentially much worse if nano particles enter the human body. An enormous industry has developed, with numerous companies and university research departments pushing nano technology, while almost no money is spent on studying the effect all of this may be having on human biology and the environment. This is a familiar pattern, that we saw it all the time at the OTA. The OTA was set up in 1974 with an annual budget of $15 million. Our remit was to look at the social and environmental impacts of these technologies pouring out of the research. Nobody had done that before – they preferred to wait until the impact happened and say ‘that was a wild card’ or ‘we did not expect that’. The development of nuclear energy is a good example. We were told it was too cheap and how wonderful it would be; only later did we realise that it had the long-term problem of waste disposal, radioactive emissions and was the most expensive and inefficient way that humans had ever invented to boil water. So why did we end up building these nuclear power plants? Because lots of intellectual or vested interests were going to make a lot of money out of it. Also, since the atomic bomb had been developed, there was a desire on the part of politicians – particularly President Eisenhower – to do something with this incredibly dangerous technology that had been released. So they had the atoms for peace programme and that compounded the error. These are the kind of examples that I know of from my service on the OTA advisory council. The people who served with me were Nobel Prize winners: the president of MIT, the Secretary of Defense, the Head of the General Accounting Office, all these incredible people. We did the best foresight studies ever conducted in a national government, and the OTA model was copied in about 40 countries to provide foresight before technologies were released to the public, in order to gain an idea of their social and environmental consequences. Yet when the Republican party – basically the party of business and finance – took over in 1996, they did what humans so often do. They killed the messenger and shut down OTA, so that we could go on being comfortably blind and when these effects hit us we could say it is a wild card. I began calling these acts, such as the nuclear accident at Three Mile Island, not an accident but an ‘inevitability’. I am thrilled the EU is funding this project. There are many incredibly good policy people in the European Commission, and I am trying to help them and point this out. It gives them political cover and a better opportunity to recommend that we recognise these issues ahead of time and exercise real foresight, rather than waiting until they hit and call them real wild cards.
 
So would you rather call them inevitabilities than wild cards?
 
They are really inevitabilities, because they are based on willful blindness and lack of perception. Knowledge of these consequences existed; it is the political fights around this new knowledge that is the issue, and how vested interests accumulate around these incumbent technologies and prevent the knowledge we have from getting into the system. Making knowledge more available and integrating it is absolutely vital. I am raising a philosophical question about a paradigm. The point has been made about whether they are wild cards or simply links in a very long chain that were going to happen because they all derive from somewhere and they are all going to go somewhere. The whole issue is to deepen our knowledge in order to trace these things back to their sources. We are all dealing with sources; the cause is always inadequate human perception, rather than knowledge.We have the knowledge . the issue is the willful blindness caused by politically interested groups and intellectual investments. We had a conference here on transforming finance. We looked at all the knowledge about how finance became so bloated and how it began to become cancerous on the real society and real economy, as in the classic case of Iceland. So you have to go back and examine what were the causes that led finance itself to become a bubble that was far too big and became a cancer on society as a whole. There is a very good book from the London School of Economics, called the Future of Finance. They examined the causes, incentives and all the inadequate economic models, which externalised all the social costs they were creating, and the various theorems and hypotheses about markets and rational actors. Economic textbooks which have not been updated for 15 years underlay the computer risk models, so all the assumptions were wrong from the start. Then there were the incentives in the system to make more and more money. All the best students, instead of going into engineering and law, want to get into finance to make a quick buck. Then they put it all on steroids with these computers, so that 70% of all trading on Wall Street is done by computers, with thousands of trades every second. I have been writing articles about this for 15 years and saying this is such a dysfunctional system that of course it generates crisis. And then they say the crises are perfect storms or black swans. This book is wonderful and they have started an excellent new centre at LSE . the Centre for the Study of Dysfunctional Finance. The iKNOW project has the opportunity to point out where dysfunctional information drives systems into these kind of bad social and environmental effects. That is why I set out to create a new kind of indicator beyond GDP, which is what the Calvert-Henderson Quality of Life2 is indicating. Looking forward, I think what we are going to be rebalancing in all societies; in the market sector and the commons and governance. Over the past 20 years there has been a terrific expansion of markets. Markets are useful ways of allocating resources, as long as you have good information and everybody has the same information and power. If this is not the case, then markets become dysfunctional, as they are now. There will always be an equivalent sized domain of the global commons, but all must have access to air, water, and biodiversity. So the next big wave to emerge strongly is research about the best way to manage our common resources. I wrote a book titled Building a Win-Win World and Paradigms in Progress, which discusses the rise of this parallel commons sector. It is now moving very quickly; there are conferences on how to manage the commons and the first Bank of Sweden prize in economics was recently awarded to Elinor Ostrom, who has been researching the commons/shared resources. Until recently, economists dominated the entire field with the message that we must extend markets all over the world, and that the only way to manage common resources is to turn them into markets. Dr. Elinor Ostromfs research pointed out that was not true. Every human society has been able to manage common resources with cooperation, and has found very good ways of getting together and managing these. That requires a re-emphasis on cooperation and sharing, rather than competition. So we have to rebalance the global system. There is nothing wrong with competition, but the system must always tend towards the cooperative framework within which competition takes place. 2 . http://www.calvert-henderson.com/ Markets are being transformed and my company is covering the great transition from the age of fossil fuels, based on those reductionist methods of knowledge, to what I call the solar age. This is based on much more knowledge about the way the planet actually works and the way human beings actually behave. On our website the green transition scoreboard tracks this transition to the solar age. People can consult the scoreboard every day and see how much private investment is pouring into solar, wind, sustainable forests, agriculture and all the new technologies of the solar age. All of that is now moving more into the information age. This is the new emerging economy. Because of the old paradigms, the mass media and many in academia cannot see how huge this transition is. According to our first calculation, $1.2 trillion of private investment is already in the pipeline. In the first half of 2010 several more billion were added, even when the finances were going down. The knowledgeable people are investing in solar and wind and energy efficiency and the new economy.
 
Can you see any inevitabilities that people are not focusing on, or trying to ignore?
 
I think the emergence of the new economy, the new green transition, is still being largely ignored by mass media. The other is the fragility in the design of the internet and the World Wide Web and the energy inefficiency of these electronic technologies. We have all been lulled into the idea that they are much more efficient.Yet Google is so energy inefficient, it now wants to site its server farms in Iceland. It is a great opportunity for Iceland to have these things in the coldest climate they can find, but it would be much better to redesign the system that is gulping electricity. One estimate says the whole IT internet system will be using half of all the electricity generated on the planet by about 2012. So that has to be a priority. Another, minor example, on a much smaller scale, is cell phones. People are finally beginning to realise there is evidence that cell phone use causes brain cancer. In the USA they are trying to sell cell phones to children, as if they were toys. I hope that the knowledge spreading that this project could achieve can help to catch this kind of irreponsibility before it becomes too serious.
 
What fields of research and knowledge should be pulled in to help the development of these emerging economies?  Is it just economics?
 
Economics will be irrelevant. The current model of economics is discredited. It is an entirely inadequate way of measuring the efficiencies of solar age technologies, because economics does not understand thermo dynamic efficiencies. In order to look at these technologies you have to understand the laws of thermo dynamics. We are trying to reduce energy and materials throughput to the absolute minimum, whereas economists have the absolute opposite view . they want to increase consumption. We want to dematerialise our economies and bring consumption down and share it better, so that people have enough but not too much, so that we grow mentally and spiritually, rather than just growing fat. It is the same with society. I have a new paper on my website, eOutside Insights Qualitative Growthf,3 which I wrote with the physicist Fritjof Capra. It was published by the Society for Chartered Accountants of England and Wales and released in the House of 3 http://www.icaew.com/index.cfm/route/168855/icaew_ga/Technical_ and_Business_Topics/Topics/Corporate_responsibility/Qualitative_ Growth_by_Capra_and_Henderson__Corporate_Responsibility__ Sustainable_Business__ICAEW/pdf Lords in November 2010. I also presented it to the Oxford University Finance Lab and the European Parliament. The reason they like the paper is that they can talk about growth again. The Green Members of the European Parliament call it qualitative growth. We make the point that the environmental movement, which has talked about no growth or low growth or negative growth, is politically untenable. Politicians cannot possibly handle that. Our paper points out that growth is natural, it is part of nature, and the question we have to ask our policy makers and academics is always what is growing, what is dying and what needs to be maintained. We know the green solar age is growing very fast and the fossil fuel economy is dying; in the meantime we need to maintain our infrastructure, like levies and public transport. The politicians in the House of Lords and European Parliament loved it, because now they can talk about growth again. It is the growth of what we want and some things have to die, otherwise we have a budget deficit. At the same time, we must stop subsidising nuclear power in order to invest in the growing part of the economy and to maintain our infrastructure. The whole idea of the green transitions scoreboard is to give people hope. You can drill into the scoreboard and see where the money is going and this can create the new career paths and new jobs in the future.
 
Of these inevitabilities . the emergence of the new economy; the fragility in the design of the internet; and the energy inefficiency of these electronic technologies . which one would you prioritise in research?  Which is the most urgent?
 
We need clusters of priorities that sit together. For example, we must prioritize cutting the weapons budgets, but at the same time we must also have the priority of not subsidising wasteful energy. If we are going to invest in the green future, at the same time we must stop wasting money on things that are obsolete. It is less a matter of priorities than a systems view of policies that sit together and are synergistic, so that each policy will fit with each other. The priorities approach is part of the reason why we got into the mess. We need to make people realise that their priorities can be aligned with each other. I will give you one crazy example from the USA. We have more and more homeless people in the USA, who have been thrown out of their houses. At the same time, the empty houses are being vandalized. It would be so much better to let the homeless people . with help and supervision . be in the empty houses. They are run by two different departments: the US Dept of Housing and Urban Development and then the US Dept of Health Education and Welfare. One deals with house builders and the other deals with homeless people and they donft talk to each other. This is why we need a systems view now that takes the whole thing to the next level. It is rather like imagining we were extra-terrestrials visiting this planet and looking at what humans are doing, as I did in my first book, having that view that we all live on the same planet and the conditions of our happiness and quality of life are similar in every part of the world. We all need loving families and stable communities and to be able to use resources to create good livelihoods; we all need to educate ourselves and grow, and we all need healthcare. A lot of this stuff is now moving to the United Nations level, because these are all cross-cutting organizations. It is the reconceptulising of the system at the next level and every human being has this mental skill. As in a camera, each one of us has the skill to have a zoom lens; we can zoom down into more and more detail and we also have the same skill to pull back and take a wide shot and look at the whole system and remember where we zoomed in before. We can go back and forth between the zoom and wide lens whenever we want. We just have to teach that to children. It is about critical thinking.