OPINION:Our grandchildren will face a complexity in decision-making that we can only imagine, writes Dr Stephen Kinsella.
IN 1930, the economist JM Keynes wrote Economic Possibilities for our Grandchildren. Keynes described his hopes for economic opportunities for his grandchildren's generation. Some of it he got wrong - he predicted that people wouldn't be able to enjoy the increased leisure their wealth and modern technology afforded them, and that the accumulation of wealth wouldn't be as high a priority any more.
But he also suggested that standards of living would rise dramatically, and that there would be a dramatic change in the moral codes of "decent" society.
I am 30 years old and I have two children under two. I have a middle-class job, and a middle-class lifestyle, and can reasonably assume I'll live to be 80, all going well. My sons can expect to live to be 90 or so, according to the Central Statistics office. If they have children when they are about 30 as well, my grandchildren will be born in or around the year 2040, when I'm in my 60s, and my grandchildren will live between 90 and 100 years. My grandchildren will see the 22nd century.
Here is my question: what will life be like for an educated, middle-class family in the mid-21st century in Ireland? What trends can be reasonably relied upon to hold their magnitudes and directions this far forward into the future?
Well, first, they won't have an oil problem the way we have one. By 2040, there is general agreement we won't have enough oil to power the world's needs. Something else will have taken its place, most likely a combination of nuclear power and cleaner, greener energy sources.
In fact, I would place a bet that the world economy will still be largely in a transition from oil-dependent energy generation technologies by the time of my first grandchild's birth.
The general cost of things may be well above our current level for that reason, because prices shocked out of their trends by a costly technological change would tend to be higher. Economic output in Ireland may suffer as a result, but this will be temporary. It might feel like a long time for my grandchildren, though.
The grandchildren won't have to worry about climate change the way I do: for them it will be an ever escalating reality. While we debate the severity of the oncoming environmental damage the post-industrial generations have inflicted upon the planet, they will know it first-hand. I wonder will they thank us for our actions today.
Ireland will be a smaller place, in terms of square miles, thanks to climate change, and erosion, but also because of a larger population. Irish people have enjoyed relatively low population densities (that is, numbers of people in an area divided by the size of the area) relative to other rich western countries, but this will change.
All population growth rates for Ireland are projected above 2 per cent, much higher than international averages, thanks in part to the recent economic boom and inward migration. What this means is that through compounding, our population will double by 2040, and we will see more than eight million people living on this island.
My grandchildren will have access to more information than all previous generations of mankind combined. In previous generations, mere volume of information was a strong predictor of success in warfare, industry or any other sphere of life. Now the quantity of information will not be a problem.
The quality of that information, my grandchildren's ability to see patterns in this information, and the basic rules they have for dealing with flows of information, will be a hallmark of their generation. They will face problems of choice, and a complexity in decision-making, that we can only imagine. Their education will have to include skills, training and techniques to cope with the onslaught of information from such an early age.
My toddler already has a youtube.com favourites list. What will his children be watching at age two?
Irish society will, I suspect, be largely the same as our generation: the traditions and customs which matter will persevere. I am writing about just two generations forward, remember. What is certain is that my grandchildren will not be as influenced by religious culture as I was through my childhood, as the influence of the Catholic Church wanes further.
Concomitant with this secular trend, the rise of a more isolated, fractured society will result in more failed marriages and divorce, and less formal living arrangements for the raising of children.
The Irish economy subsisted as an agricultural economy for thousands of years and, up until 1970, a larger proportion of Irish adults were employed in agriculture than any other sector. These days agriculture is on the decline, but with soaring oil prices leading to increased costs of moving goods from abroad to Ireland, we will see a shift toward smaller, more efficient farms, run part-time by farmers working at other jobs to pay their way.
The manufacturing sector will see a sharp decline over the next 20 years, as more and more basic assembly-type jobs succumb to the forces of globalisation and move to lower-waged countries. Wealth generation therefore, year to year, must come from services. This is a very hard area in which to predict growth or decay. There is very little good data on service level productivity in Ireland, so we're not quite sure how good we are relative to our neighbours and competitors internationally.
Service sectors tend to experience technological progress much faster than other sectors, so a large-scale disruptive technology, which no one could foresee, might affect this sector in highly unexpected ways. Who expected to be buying groceries online 20 years ago?
What policies can the Government enact to make sure the economic possibilities my grandchildren face are as favourable as possible?
Well, first, they need to help me save. The more the middle class saves, long term, the more their children and their children's children will benefit. Second, they need to make sure my children survive, by providing a health service which will make the chances of this more likely. Third, the Government must ensure the natural environment my grandchildren inhabit is as conducive to their happiness as possible, while allowing service sectoral growth and general economic development to maximise the economic possibilities for my grandchildren.
Dr Stephen Kinsella lectures in the department of economics, Kemmy business school, University of Limerick