The accelerating rate of change in many fields of technology all manifest themselves in terms of human development, some of which can be accurately tracked within economic data.  Contrary to what the media may peddle and despite periodic setbacks, average human prosperity is rising at a rate faster than any other time in human history.  I have described this in great detail in prior articles, and I continue to be amazed at how little attention is devoted to the important subject of accelerating economic growth, even by other futurists.

The time has thus come for making specific predictions about the details of future economic advancement.  I hereby present a speculative future timeline of economic events and milestones, which is a sibling article to Economic Growth is Exponential and Accelerating, v2.0. 

2008-09 : A severe US recession and global slowdown still results in global PPP economic growth staying positive in calendar 2008 and 2009.  Negative growth for world GDP, which has not happened since 1973, is not a serious possibility, even though the US and Europe experience GDP contraction in this period.  The world GDP growth rate trendline resides at growth of 4.5% a year.

2010 : World GDP growth rebounds strongly to 5% a year.  More than 3 billion people now live in emerging economies growing at over 6% a year.  More than 80 countries, including China, have achieved a Human Development Index of 0.800 or higher, classifying them as developed countries. 

2011 : Over 2 billion people have access to unlimited broadband Internet service at speeds greater than 1 mbps, a majority of them receiving it through their wireless phone/handheld device. 

2013 : Many single-family homes in the US, particularly in California, are still priced below the levels they reached at the peak in 2006, as predicted in early 2006 on The Futurist.  If one adjusts for cost of capital over this period, many California homes have corrected their valuations by as much as 50%. 

2014 : The positive deflationary economic forces introduced by the Impact of Computing are now large and pervasive enough to generate mainstream attention.  The semiconductor and storage industries combined exceed $800 Billion in size, up from $450 Billion in 2008.  The typical US household is now spending $2500 a year on semiconductors, storage, and other items with rapidly deflating prices per fixed performance.  Of course, the items puchased for $2500 in 2014 can be purchased for $1600 in 2015, $1000 in 2016, $600 in 2017, etc. 

2015 : As predicted in early 2006 on The Futurist, a 4-door sedan with a 240 hp engine, yet costing only 5 cents/mile to operate (the equivalent of 60 mpg of gasoline), is widely available for $35,000 (which is within the middle-class price band by 2015). This is the result of combined advances in energy, lighter nanomaterials, and computerized systems.

2016 : Medical Tourism introduces $200B/year of net deflationary benefit to healthcare costs in the US economy.  Healthcare inflation is halted, except for the most advanced technologies for life extension. 

2018 : Among new cars sold, gasoline-only vehicles are now a minority.  Millions of vehicles are electrically charged through solar panels on a daily basis, relieving those consumers of a fuel expenditure that was as high as $3000 a year in 2008.  Some electrical vehicles cost as little as 1 cent/mile to operate. 

2019 : The Dow Jones Industrial Average surpasses 25,000.  The Nasdaq exceeds 5000, finally surpassing the record set 19 years prior in early 2000. 

2020 : World GDP per capita surpasses $15,000 in 2008 dollars (up from $8000 in 2008).  Over 100 of the world's nations have achieved a Human Development Index of 0.800 or higher, with the only major concentrations of poverty being in Africa and South Asia.  The basic necessities of food, clothing, literacy, electricity, and shelter are available to over 90% of the human race. 

Trade between India and the US touches $400 Billion a year, up from only $32 Billion in 2006. 

2022 : Several millon people worldwide are each earning over $50,000 a year through web-based activities.  These activities include blogging, barter trading, video production, web-based retail ventures, and economic activites within virtual worlds.  Some of these people are under the age of 16.  Headlines will be made when a child known to be perpetually glued to his video game one day surprises his parents by disclosing that he has accumulated a legitimate fortune of more than $1 million. 

2024 : The typical US household is now spending over $5000 a year on products and services that are affected by the Impact of Computing, where value received per dollar spent rises dramatically each year.  These include electronic, biotechnology, software, and nanotechnology products.  Even cars are sometimes 'upgraded' in a PC-like manner in order to receive better technology, long before they experience mechanical failure.  Of course, the products and services purchased for this $5000 in 2024 can be obtained for $3200 in 2025, $2000 in 2026, $1300 in 2027, etc. 

2025 : The printing of solid objects through 3-D printers is inexpensive enough for such printers to be common in upper-middle-class homes.  This disrupts the economics of manufacturing, and revamps most manufacturing business models. 

2027 : 90% of humans are now living in nations with a UN Human Development Index greater than 0.800 (the 2008 definition of a 'developed country', approximately that of the US in 1960).  Many Asian nations have achieved per capita income parity with Europe.  Only Africa contains a major concentration of poverty. 

2030 : The United States still has the largest nominal GDP among the world's nations, in excess of $50 Trillion in 2030 dollars.  China's economy is a close second to the US in size.  No other country surpasses even half the size of either of the two twin giants. 

The world GDP growth rate trendline has now surpassed 5% a year.  As the per capita gap has reduced from what it was in 2000, the US now grows at 4% a year, while China grows at 6% a year. 

10,000 billionaires now exist worldwide, causing the term to lose some exclusivity. 

2032 : At least 2 TeraWatts of photovoltaic capacity is in operation worldwide, generating 8% of all energy consumed by society.  Vast solar farms covering several square miles are in operation in North Africa, the Middle East, India, and Australia.  These farms are visible from space. 

2034 : The typical US household is now spending over $10,000 a year on products and services that are affected by the Impact of Computing.  These include electronic, biotech, software, and nanotechnology products.  Of course, the products and services purchased for this $10,000 in 2034 can be obtained for $6400 in 2035, $4000 in 2036, $2500 in 2037, etc. 

2040 : Rapidly accelerating GDP growth is creating astonishing abundance that was unimaginable at the start of the 21st century.  Inequality continues to be high, but this is balanced by the fact that many individual fortunes are created in extremely short times.  The basic tools to produce wealth are available to at least 80% of all humans. 

Greatly increased lifespans are distorting economics, mostly for the better, as active careers last well past the age of 80. 

Tourism into space is affordable for upper middle class people, and is widely undertaken. 

________________________________________________________

I believe that this timeline represents a median forecast for economic growth from many major sources, and will be perceived as too optimistic or too pessimistic by an equal number of readers.  Let's see how closely reality tracks this timeline.

On 3/21/08, I wrote an article about the economic and technological implications of medical tourism.  True to our long tradition here at The Futurist, this article made predictions months before a major publication arrived at the same expectations.  The Economist has an article this week that predicts everything that by original article does, from a rapid increase in Americans going abroad, to the loss in revenue to the US healthcare system triggering overdue reforms.  I particularly like the following sentences from the article :

"Jagdish Bhagwati, an economist at Columbia University, thinks that the offshoring of, for instance, customer service and claims-processing could save America alone $70 billion-75 billion a year."

"By Deloitte’s reckoning, medical travel will represent $162 billion in lost spending on health care in America by 2012. "

"A bit of rivalry from top foreign facilities may introduce transparency and price competition into an inefficient system riddled with oligopolies and perverse incentives. "

If some people thought the outsourcing of technical support and software development was significant, then medical tourism promises to be several times larger by the middle of the next decade.  The Economist article provides a chart projecting the number of US patients expected to partake in medical tourism.  The number is expected to grow from under 1 million today to over 15 million by 2017.  By then, this could carve $250 Billion/year out of US healthcare spending, and pump $50 Billion/year into the destination countries, introducing $200 Billion/year of net deflationary benefit into the US economy.  Everyone will know someone who went abroad for a medical procedure, with many customers comparing their experiences in India vs. Thailand vs. Jamaica.   

To repeat the sequence of predicted events from the first article, they are :

1) Americans with no insurance are forced to make a life or death decision to get their surguries abroad, where the service meets or exceeds their expections.   

2) More insurance companies offer medical tourism with liability guarantees and cash/vacation incentives to American patients.  Only a small fraction of patients are adventurous enough to do this, but all insurance companies are compelled to offer these options.

3) Major centers for medical tourism, after a track record of about a decade, develop solid brands that can attract American patients. 

4) When we finally get to the point that 10% of Americans are traveling abroad for a wide array of procedures, the US will be forced to begin to take measures to reduce costs throughout the healthcare system.  Losing 10% of the market is all that it will take to force some positive changes.  This could begin to happen by 2020. 

This confluence of market forces, globalization, and biotechnology is about to bring overdue reform to one of the biggest and worst sectors of the US and global economies.  There are tremendous investment opportunities here, which I will write about in the near future. 

 

I feel compelled to dispel ten myths that I see as pervasively present in American society. These are beliefs that are repeated so often, and with so little opposition, that they are taken as fact. However, they fail to stand up to mathematical analysis, logical reasoning, or both.  These combined myths have cost the US economy trillions of dollars in direct and indirect losses.  In no particular order, let me evoke John Stossel and proceed to puncture these oft-unchallenged myths.

1) School Teachers are Underpaid in America : In any free-market setting, no major profession will be perpetually underpaid, relative to output produced, or the profession simply will not attract any new entrants.  Another clue is that private school teachers actually earn less than public school teachers.  As a private school is a business that has to pay market wages to teachers, something is seriously amiss with public school teacher salaries.

An average public school teacher earns about $54,000 a year, but this is for 9 months of work.  Thus, they earn about $6000 per month.  Most teachers have a BA degree in education, and some have an MA degree.  A wage of $6000/month compares favorably to what people with similar education will earn in a corporate job.  Furthermore, a public school teacher is shielded from economic conditions, and thus has higher job security than, say, engineers have during recessions.

So no, teachers are not underpaid, on a monthly or hourly basis, relative to professions that require a similar level of education.  To compare teacher salaries to the wages of doctors and lawyers is false, as the educational qualifications, hours worked, and stress levels are entirely different. 

2) Women Earn Less than Men in America : It is true that women, on average, earn less per year than men do.  It is also true that 22-year-olds earn less, on average, than 40-year-olds.  Why is the latter not an example of age discrimination, while the former is seized upon as an example of gender discrimination?  Because men are too afraid to challenge the false statement. 

If women truly did earn 20% less for doing exactly the same job as a man, any non-sexist CEO could thrash his competition by hiring only women, thus saving 20% on employee salaries relative to his competitors.  Are we to believe that every major CEO and Board of Directors is so sexist as to forego billions of dollars of profit?  Women entrepreneurs could hire other women and out-compete any male-dominated business, but we don't see this happening.  Individual cases of discrimination may exist, but it cannot possibly be a universal norm in a profit-driven economy.  Market forces would correct such mispricings, if they actually existed. 

This myth is closely tied to Myth #1, with the same people propagating both.  It is sad that the feminists reciting this myth are devaluing one of the most important roles in any society, that of a mother with the responsibility of cultivating the next generation of citizens, who chooses to work part-time.  The backlash of this will punish feminists greatly, as immigrants from countries quite unsympathetic to feminist notions move to the US and reproduce prolifically. 

3) Whites Prevent 'Minorities' from Achieving Economic Parity : Many of the points from Myth # 2 also can apply here.  But let me also add that the leftists who spread this myth go to great lengths to avoid revealing that Asians actually earn more than Whites in America today.  This inconvenient reality will become harder to conceal as Asians grow in number and visibility.

Furthermore, if Whites are the reason that Blacks still earn less than Whites in 2008, is it not fair to point out that Whites created a system where immigrants from poor countries like India, China, and VietNam can come to America and do so well that they surpass their White hosts, economically?  Fair is fair.  If Black poverty is due to Whites, then Asian success is also due to Whites.  If this is not acceptable, then the only other explanation is that each group's outcome is primarily due to their own actions, rather than the invisible hand of the white majority. 

Lastly, people have always migrated away from places where they are discriminated against, and into places that are relatively better for them.  We see Mexicans coming to the US by the millions, even at great personal risk.  Blacks from the West Indies, Africa, etc. also immigrate into the US in large numbers.  At the same time, we never see African Americans voting with their feet by going to some country where they might be able to earn more.  Where is the evidence of an African American exodus to Canada, Sweden, Britain, Jamaica, South Africa, etc.?  In fact, Liberia was a country created specifically for this purpose, but Liberia clearly is not able to entice any African Americans to relocate or even vacation there. 

Reverend Jeremiah Wright has become wealthy by pretending to be a man from a race he does not belong to, who is oppressed by people from the race he does belong to.  Amazing.  I am both infuriated and envious at the same time. 

4) Healthy Foods are Expensive, and Unhealthy Foods are Cheap : While I think America is the best country in the world in most ways, in dietary terms, America is sadly one of the worst.  What North Korea and Zimbabwe are to economics, America is to dietary health.  Most Americans are so alien to the concept of regularly consuming fresh fruits and vegetables, that I wonder if they even know what people ate before the 20th century.  That the 'poor' people in America have much greater rates of obesity than higher-income people is shocking to most of the world, and also leads Americans to assume that fast food is the cheapest available choice. 

On the contrary, if one goes to any no-frills grocery store, several bags of fruits and vegetables can be purchased for under $20.  Tomatoes, potatoes, bananas, carrots, cauliflower, onions, cabbage, green beans, apples, broccoli, zucchini, garlic, celery, beets, kidney beans, lentils, and dozens of other plant foods all cost less than $2/pound, and sometimes under $1/pound.  If all one eats are fruits, vegetables, and whole grains (which in fact is normal in many cultures), one can easily eat their fill for under $4/person/day.  Compare that to $15/day for someone who eats all three meals at McDonald's.  The tens of thousands of dollars of lifetime healthcare costs that a person can save with a fruit/vegetable diet are additional. 

The best kept secret in America is that the cheapest food is actually the healthiest food.  The barrier to eating healthy meals is not cost, but rather knowledge, habit, and culinary skills.  Do you dispute the $4/person/day figure?  Then you haven't actually seen how many pounds of tomatoes, bananas, carrots, apples, cabbage, etc. can be bought with $4 from a modest store.  Try this for 30 days, and the rate at which you fatten your bank account will be surpassed only by the rate at which you shed bodily tonnage.     

5) America's Foreign Policy is the Reason for the 9/11 Attacks : This clearly does not explain why the same group conducted attacks in Bali (twice), London, Madrid, Bombay, Jordan, Turkey, Morocco, and dozens of attacks in Iraq and Israel.  They also have massacred schoolchildren in Russia, Indonesia, and Thailand.  How are each of these attacks against unrelated victims due to America, rather than the logical conclusion that this group seems to have a problem with anyone who does not subscribe to their ideology?  Whatever America's flaws, America does not make a terrorist behead his hostages.  It is odd when an anti-American worldview itself is tainted by the US-Centric thought that anti-Americans love to condemn. 

6) Leftists are 'Liberal' and 'Progressive' :  You will notice that on The Futurist, I never refer to leftists as 'liberals'.  Those who were truly liberal at one time became the 'neoconservatives' of today, while the fascists of yesteryear became the leftists of today.  They are illiberal, intolerant, opposed to free speech, and incapable of defending their claimed beliefs in the face of incisive questions.  In the modern era, the Left can best be described as a vehicle through which people can fancy themselves as intelligent without having to put in the effort previously required to become intelligent, simply by believing a set of agreed-upon dogma.  The cost-benefit analysis of this approach is attractive, but this strategy falls apart spectacularly when a leftist is confronted by an informed non-leftist in a debate, hence the efforts to silence informed non-leftists through extremely illiberal means.  Ace of Spades has a superb article about what attracts people to Leftism. 

7) Republicans are Less Intelligent than Democrats :  This is the natural extension of Myth # 5, reinforced by George W. Bush's subpar oratory skills.  I simply have to point you to the voting trends by income bracket as reported by the CNN website.  Let me repost the table here :

Income certainly does not corelate exactly to intelligence, work ethic, and determination, as someone in college may have all of these things but still not yet be earning a high income.  But to believe the 'leftist' view that Bush supporters are stupid is to believe that intelligence is inversely corelated to an ability to earn a high income.  This is vastly more difficult to logically accept. 

This, more than anything else, explains why the Democrats have failed to get 50% of the vote in the last seven Presidential elections since 1976, while the GOP has achieved this feat 4 times (1980, 84, 88, 2004).  The median-income voter does not like being told that he/she is stupid. 

8) Democrats Have a Better Record on Racism than Republicans : It is an utter failure of the GOP's branding efforts that this myth has gained traction, despite :

• Abraham Lincoln being a Republican

• FDR's interning of Japanese Americans

• George Wallace running for President as a Democrat as recently as 1976

• Robert Byrd, a former leader in the KKK, still acting as the seniormost Democrat in the Senate, even to this day.

• Strom Thurmond running for President on a segregationist platform as a Democrat, becoming a Republican only 16 years later. 

• The first two black Secretaries of State being appointed by George W. Bush

Clearly, a foreign visitor with no prior exposure would not possibly conclude that the Republican Party is somehow more racist than the Democrats.  That the GOP has gotten stuck with this label despite the facts above, is remarkable.  The GOP also has some unfortunate racial incidents in the recent past, but they certainly have not done more than Democrats have.  I guess that Democrats say this partly because the GOP lets them. 

9) Houses Always Rise in Value : Here on The Futurist, we identified the Real Estate bubble back in April of 2006, when it was heresy to suggest that home prices could not detach from incomes.  Real estate is an investment class, just like stocks, bonds, art, wine, gold, and Internet domains are.  Yet, you never see people nagging you about how you 'must own stocks', or 'must invest in art'.  Residential real estate is the only investment category where emotion dominates quantitative analysis.  Remarkably, such a belief does not exist for commercial property, but somehow the existence of a kitchen and shower bestows a structure with magical immunity to price declines.  Emotions about residential real estate reveal the following two major errors that many proponents consistently make :

a) The failure to distinguish between high prices and rising prices :  A good school district or California weather can certainly justify high prices, but as these factors are the same from one year to the next, there is no reason for them to result in home prices rising faster than the salaries of workers in that area.  Is the school getting dramatically better each year?  Is California weather improving each year?

b) The failure to account for cost of capital when calculating a home price gain :  Otherwise intelligent people who fully grasp the concept of inflation still manage to think that if their home price is flat for 5 years, that they 'at least didn't lose money'.  If one's cost of capital (a mortgage rate can suffice) is 6%, then 5 years of flat prices are effectively (1.06)^5, or a 34% real loss.  On a $1 million home, 5 years of flat valuation is a $340,000 effective loss to one's net worth. 

It will take a decade for home owners to fully accept that homes are not guaranteed to rise in price any more than stocks, art, wine, or antiques are. 

10) High Oil Prices Will Create Permanent Long-Term Poverty : This belief is thoroughly debunked here.  One must have very little faith in market-driven technological change or human adaptability to believe that the world of 2020, 2030, or 2040 will be so poor that car ownership will be rare. 

Notice a common theme in these 10 myths.  Myths 1, 2, 3, 9, and 10 betray an ignorance of free-market economics or even an active attempt to suppress evidence of it.  Myths 1, 2, 3, 4, 5, 6, 7, 8 are propagated by the same ideology, indicating a total inability of that ideology to actually generate compelling ideas.  Myths 1, 2, 3, and 9 are derived from a sense of entitlement and unwillingness to accept personal responsibility.  Believing myths 2, 3, 4, and 5 require having never ventured outside of the hotel in any non-Western country.   

Clearly, a couple of unsavory philosophies have managed to disguise themselves and dupe a majority of mainstream Americans (and the foreigners who watch our television news) into believing things that are simply illogical.  As citizens, we must fight to overturn these myths, lest they give rise to even more absurdities that cost trillions of additional dollars. 

One of the most popular dinner party conversation topics is the possibility that the United States will be joined or even surpassed as a superpower by another nation, such as China.  Let us assess the what makes a superpower, and what it would take for China to match the US on each pillar of superpowerdom.  Two years ago, in May 2006, I wrote the first version of this article, and it became the most heavily viewed article ever written on The Futurist.  The comments section brought a wide spectrum of critiques of various points in the article, which led me to do further research, which in turn strengthened the case in some areas while weakening it others.  Thus, it is time for a tune-up on the article. 

A genuine superpower does not merely have military and political influence, but also must be at the top of the economic, scientific, and cultural pyramids.  Thus, the Soviet Union was only a partial superpower, and the most recent genuine superpower before the United States was the British Empire.  Many Europeans like to point out that the EU has a larger economy than the US, but the EU is a collection of 27 countries that does not share a common leader, a common military, a uniform foreign policy, or even a common currency.  The EU simply is not a country, any more than the US + Canada comprise a single country. 

The only realistic candidate for joining the US in superpower status by 2030 is China.  China has a population over 4 times the size of the US, has the fastest growing economy of any large country, and is mastering sophisticated technologies.  But to match the US by 2030, China would have to : 

1) Have an economy that matches the US economy in size.  If the US grows by 3% a year for the next 22 years, it will be $30 trillion in 2008 dollars by then.  Note that this is a modest assumption for the US, given the accelerating nature of economic growth, but also note that world GDP presently grows at a trend of 4.5% a year, and this might at most be 6% a year by 2030.  China, with an economy of $3.2 trillion in nominal (not PPP) terms, would have to grow at 11% a year for the next 22 years straight to achieve the same size, which is already faster than its current 9-10% rate, if even that can be sustained for so long (no country, let alone a large one, has grown at more than 8% over such a long period).  In other words, the progress that the US economy would make from 1945 to 2030 (85 years) would have to be achieved by China in just the 22 years from 2008 to 2030.  Even then, this is just the total GDP, not per capita GDP, which would still be merely a fourth of America's. 

The subject of PPP GDP arises in such discussions, where China's economy is measured to a larger number.  However, this metric is inaccurate, as international trade is conducted in nominal, not PPP terms.  PPP is useful for measuring per capita prosperity, where bag of rice in China costs less than in the US.  But it tells us nothing of the size of the total economy, which could be more accurately measured in commodities like oil or gold.  Nonetheless, in per capita GDP, the US surpasses any other country that has more than 10 million people (and is thus too large to rely solely on being a tax haven or tourist destination for GDP generation).  From the GDP per capita chart, we can see that many countries catch up to the US, but none really can equal, let alone surpass, the US.  An EU study recently estimated that the EU is 22 years behind the US in economic development.  The European Chamber of Commerce estimated that the gap between the EU and US was widening further, and that it would take 75 years for the EU to catch up to the US.  Again, these are official EU studies, and are thus not 'rigged by America'.         

The weak dollar leads some who suddenly fancy themselves as currency experts to believe/hope that the US will lose economic dominance.  However, we see from this chart that the US dollar comprises a dominant 65% of global currency reserves (an even greater share than it commanded in 1995), while the second highest share is that of the Euro (itself the combined currency of 21 separate countries) at just 25%.  Furthermore, the Euro is not rising as a percentage of total reserves, despite the EU and Eurozone adding many new member nations after 2001.  Which currency has any chance of overtaking the US, particularly a currency that is associated with a single sovereign nation?  The Chinese Yuan represents under 2% of world reserves, and China itself stockpiles US dollars.  Clearly, US dominance in this metric is enormous, and is not dwindling in the forseeable future. 

2) Have a military capable of waging wars anywhere in the globe (even if it does not actually wage any).  Part of the opposition that anti-Americans have to the US wars in Afghanistan and Iraq is the envy arising from the US being the only country with the means to invade multiple medium-sized countries in other continents and still sustain very few casualties.  No other country currently is even near having the ability to project military power with such force and range, despite military spending being only 3% of US GDP - a lower proportion than many other countries.  Mere nuclear weapons are no substitute for this.  The inability of the rest of the world to do anything to halt genocide in Darfur or other atrocities in Burma or Zimbabwe is evidence of how such problems can only get addressed if and when America addresses them.

3) Create original consumer brands that are household names everywhere in the world (including in America), such as Coca-Cola, Nike, McDonalds, Citigroup, Xerox, Microsoft, or Google.  Europe and Japan have created a few brands in a few select industries, but China currently has almost none.  Observing how many American brand logos have populated billboards and sporting events in developing nations over just the last 15 years, one might argue that US cultural and economic dominance has even increased by this measure.

4) Have major universities that are household names, that many of the worlds top students aspire to attend.  17 of the world's top 20 universities are in the US.  Until top students in Europe, India, and even the US are filling out an application for a Chinese university alongside those of Harvard, Stanford, MIT, or Cambridge, China is not going to match the US in the knowledge economy.  This also represents the obstacles China has to overcome to successfully conduct impactful scientific research. 

5) Become the center of gravity for all types of scientific research.  The US conducted 32% of all research expenditures in 2007, which was twice as much as China, and more than the 27 combined countries of the EU.  But it is not just in the laboratory where the US is dominant, but in the process to deliver innovations from the laboratory to the global marketplace.  To displace the US, China would have to become the nation that produces the new inventions and corporations that are adopted by the mass market into their daily lives.  From the telephone and airplane over a century ago, America has been the engine of almost all technological progress.  Despite the fears of innovation going overseas, the big new technologies and influential applications continue to emerge from companies headquartered in the United States.  Just in the last four years, Google emerged as the next super-lucrative company (before eBay and Yahoo slightly earlier), and the American-dominated 'blogosphere' emerged as a powerful force of information and media.  Even after Google, a new batch of technology companies, this time in alternative energy, have rapidly accumulated tens of billions of dollars in market value.  It is this dominance across the whole process of university excellence to scientific research to creating new companies to bring technologies to market that makes the US innovation engine virtually impossible for any country to surpass. 

6) Attract the best and brightest to immigrate into China, where they can expect to live a good life in Chinese society.  The US effectively receives a 'education import' estimated to be above $200 billion a year, as people educated at the expense of another nation immigrate here and promptly participate in the workforce.  As smart as people within China are, unless they can attract non-Chinese talent that is otherwise migrating to the US, and even talented Americans, they will not have the same intellectual and psychological cross-pollination, and hence miss out on those economic benefits.  The small matter of people not wanting to move into a country that is not a democracy also has to be resolved.  The true measure of a country is the net difference between how many people seek to enter, and how many people seek to leave.  The US has a net inflow of immigrants (constrained by quotas and thus a small fraction of the unconstrained number of people who would like to enter), while China has a net outflow of native-born Chinese.  Click on the map to enlarge it, and see the immigration rate to America from the world (which itself is constrained by quotas in the US and forcible restrictions on fleeing the country in places like Cuba and North Korea). 

7) Be the leader in entertainment and culture, which is the true driver of societal psychology.  China's film industry greatly lags India's, let alone America's.  We hear about piracy of American music and films in China, which tells us exactly what the world order is.  When American teenagers are actively pirating music and movies made in China, only then will the US have been surpassed in this area.  Take a moment to think how distant this scenario is from current reality.  Which country can claim the title of #2 in entertainment and cultural influence?  That such a question cannot easily be answered itself shows how total US dominance in this dimension really is. 

8) Be the nation that engineers many of the greatest moments of human accomplishment.  The USSR was ahead of the US in the space race at first, until President Kennedy decided in 1961 to put a man on the moon by 1969.  While this mission initially seemed to be unnecessary and expensive, the optimism and pride brought to anti-Communist people worldwide was so inspirational that it accelerated many other forms of technological progress and brought economic growth to free-market countries.  This eventually led to a global exodus from socialism altogether, as the pessimism necessary for socialism to exist became harder to enforce.  People from many nations still feel pride from humanity having set foot on the Moon, something which America made possible.

China currently has plans to put a man on the moon by 2024.  While being only the second country to achieve this would certainly be prestigious, it would still be 55 years after the United States achieved the same thing.  That is not quite the trajectory it would take to approach the superpowerdom of the US by 2030.  If China puts a man on Mars or has permanent Moon bases before the US, I may change my opinion on this point, but the odds of that happening are not high. 

9) Be the nation expected to thanklessly use its own resources to solve many of the world's problems.  It is certainly not a requirement for a superpower to be benevolent, but it does make the path to superpower ascension easier, as a malevolent superpower will receive even more opposition from the world than a benevolent one, which itself is already substantial.  If the US donates $15 billion in aid to Africa, the first reaction from critics is that the US did not donate enough.  On the other hand, few even consider asking China to donate aid to Africa.  After the 2004 Indian Ocean tsunami and the 2008 cyclone in Burma, the fashionable question was why the US did not donate even more and sooner, rather than why China did not donate more, despite being geographically much closer.  Ask yourself this - if an asteroid were on a collision course with the Earth, which country's technology and money would the world depend on to detect it, and then destroy or divert it?  Until China is relied upon to an equal degree in such situations, China is not in the same league. 

10) Adapt to the underappreciated burden of superpowerdom - the huge double standards that a benign superpower must withstand in that role.  America is still condemned for slavery that ended 140 years ago, even by nations that have done far worse things more recently than that.  America's success in bringing democracy to Afghanistan and Iraq, and defending local populations from terrorists, is condemned more than the UN's inaction in preventing genocide and slavery.  Is China prepared to apologize for Tianenmen Square, the genocide in Tibet, the 30 million who perished during the Great Leap Forward, and the suppression of news about SARS, every day for the next century?  Is China remotely prepared for being blamed for inaction towards genocide in Darfur while simultaneously being condemned for non-deadly prison abuse in a time of war against opponents who follow no rules of engagement?  The upcoming 2008 Olympics will be an event where political demonstrations are going to grab headlines perhaps to a greater degree than the sports themselves, and the Chinese leadership will be tested on how they deal with simmering domestic discontent under the scrutiny of the world media.  The amount of unfairness China would have to withstand to truly achieve political parity with America might be prohibitive given China's history over the last 60 years. 

Economically, is China prepared to withstand the pressures that the US presently bears?  How long before the environmental movement (at least the fraction of it that is actually concerned about the environment) recognizes that China is a bigger polluter of the atmosphere than the US is, and that the road to pollution reduction leads straight to China?  How long before China is pressured to donate aid to Africa in the manner that the US does?  What happens when poorer nations benefit from Chinese R&D expenditures, particularly if those are neighboring countries that China is not friendly with? 

Furthermore, China being held to the superpower standard would simultaneously reduce the burden that the US currently bears alone, allowing the US to operate with less opposition and more equitable treatment than it experiences today.  Is China prepared to take on the heat?  Arguably, there is evidence that the Chinese public has not even begun to think that far. 

Of the ten points above, Britain, France, Germany, and Japan have tried for decades, and have only achieved parity with the US on maybe two of these dimensions at most.  China will surpass European countries and Japan by 2030 by achieving perhaps two or possibly even three out of these ten points, but attaining all ten is something I am willing to confidently bet against.  The dream of anti-Americans who relish the prospect of any nation, even a non-democratic one, surpassing the US is still a very distant one. 

A point that many bring up is that empires have always risen and fallen throughout history.  This is partly true, but note that the Roman Empire lasted for over 1000 years after its peak.  Also note that the British Empire never actually collapsed since Britain is still one of the most successful countries in the world today, and the English language is the most widely spoken in the world.  Britain was merely surpassed by its descendant, with whom it shares a symbiotic relationship.  The US can expect the same sort of very long tail if it is finally surpassed, at some point much later than 2030 and probably not before the Technological Singularity, estimated for around 2050, which would make the debate moot.   

That writing this article is even worthwhile is a tribute to how far China has come and how much it might achieve.  I would not bother to write such an article about, say, India or Germany (the largest of the 27 EU countries).  Nonetheless, there is no other country that will be a superpower on par with the US by 2030.  This is one of the safest predictions The Futurist can make. 

More on American Exceptionalism by Tunku Varadarajan at Forbes. 

Related :

The Winds of War, the Sands of Time

Who Hates America?

Who Does America View Favorably?

The Age of Democracy

The Culture of Success

This is a supplement to my article from Demember 2006 titled The Culture of Success.  In that article, I make a detailed case on how certain cultures are far more likely to produce economic prosperity than others.  A recent chart from The Economist, however, adds another dimension to this thesis.  Economic prosperity is not always a guarantee of happiness.  So which cultures generate greater happiness?

It appears that happiness corelates moderately, but not exactly, with economic prosperity, as Japan and South Korea are less happy than Brazil.  However, happiness certainly does corelate with Western values.  The oldest Democracies, such as the US, Britain, Denmark, etc. are also the happiest countries. 

India warrants special mention.  While India is a genuine democracy, human development indicators reveal India to be one of the least successful societies in terms of wealth creation, even as it was once the world's wealthiest society for over two thousand years.  However, we additionally see from the above chart that India is one of the unhappiest societies in the world.  Suffice it to say that Indian culture, with thousands of years of accumulated baggage calcifying into a rocklike rigidity, has mutated into the most efficient machine imaginable for stripping away human happiness.  One could scarcely invent a more sophisticated infrastructure for extinguishing the basic joys of life if they tried.  The typical American, Australian, or Dane cannot even begin to imagine the sheer variety of obstacles to the pursuit of happiness that can be constructed around the human soul. 

Much more will be written on this subject in the future.

Related :

The Culture of Success

Computing, once seamlessly synonymous with technological progress, has not grabbed headlines in recent memory. We have not had a 'killer ap' in computing in the last few years.  Maybe you can count Wi-fi access to laptops in 2002-03 as the most recent one, but if that is not a sufficiently important innovation, we then have to go all the way back to the graphical World Wide Web browser in 1995.  Before that, the killer ap was Microsoft Office for Windows in 1990.  Clearly, such shifts appear to occur at intervals of 5-8 years. 

I can, without hesitation, nominate surface computing as the next great generational augmentation in the computing experience.  This is because surface computing entirely transforms the human-computer interaction in a matter that is more suitable for the human body than the mouse/keyboard model is. In accordance with the Impact of Computing, rapid drops in the costs of both high-definition displays and tactile sensors are set to bring this experience to consumers by the end of this decade.

BusinessWeek has a slideshow featuring several different products for surface computing. Over ten major electronics companies have surface computing products available. The most visible is the Microsoft Surface, which sells for about $10,000, but will probably drop to $3000 or less within 3-4 years, enabling household adoption.

As far as early applications of surface computing, a fertile imagination can yield many prospects. For example, a restaurant table may feature a surface that displays the menu, enabling patrons to order simply by touching the picture of the item they choose.  The information is sent to the kitchen, and this saves time and reduces the number of waiters needed by the restaurant (as waiters would only be needed to deliver the completed orders).  Applications for classroom and video game settings also readily present themselves. 

Watch for demonstrations of various surface computers at your local electronics store, and keep an eye on the price drops.  After seeing a demonstration, do share at what pricepoint you might purchase one.  The next generation of computing beckons. 

Related :

The Impact of Computing

(Crossposted on TechSector)

I have long been optimistic about Solar Energy (whether photovoltaic or thermal) becoming our largest energy source within a few decades.  Earlier articles on the subject include :

A Future Timeline for Energy

Solar Energy Cost Curve

Several recent events and developments have led me to reinforce this view.  First of all, consider this article from Scientific American, detailing a Solar timeline to 2050. The article is not even Singularity-aware, yet details many steps that will enable Solar energy to expand by orders of magnitude above the level that it is today.  Secondly, two of the most uniquely brilliant people alive today, Ray Kurzweil and Elon Musk (who I recently chatted with), have both provided compelling cases on why Solar will be our largest energy source by 2030.  Both Kurzweil and Musk reside in significantly different spheres, yet have arrived at the same prediction.

However, the third point is the one that I find to be the most compelling. There are a number of publicly traded companies selling solar energy products, many of which had IPOs in just the last three years.  Some of these companies, and their market capitalizations, are :

Now consider that the companies on this list alone amount to about $50 Billion in capitalization.  There are, additionally, many smaller companies not included on this list, many companies like Applied Materials (AMAT) and Cypress Semiconductor (CY) for which solar products comprise only a portion of their business, and large private companies like NanoSolar (which I have heavily profiled here) and SolFocus that may have valuations in the billions.  Thus, the market cap of the 'solar sector' is already between $60B and $100B, depending on what you include within the total.  This immense valuation has accumulated at a pace that has taken many casual observers by surprise.  A 2-year chart of some of the stocks listed above tells the story. 

While FirstSolar (FSLR) has been the brightest star, all the others have trounced the S&P500 to a degree that would put even Google or Apple to shame over this period.  Clearly, a dramatic ramp in Solar energy is about to make mainstream headlines very soon, even if the present valuations are too high. 

Is this a dot-com-like bubble?  Yes, in the near-term, it is.  However, after a sharp correction, the long term growth will resume for the companies that emerge as leaders.  I won't recommend a specific stock among this cluster just yet, as there are a wave of private companies with new technologies that could render any of these incumbents obsolete.  Specific company profiles will follow soon, but in the meantime, for more detail on the long-term trends in favor of Solar, refer to these additional articles of mine :

Why I Want Oil to Hit $120 per Barrel

Terrorism, Oil, Globalization, and the Impact of Computing

(crossposted on TechSector)

Energy and Financials are both large sectoral components of the S&P500.  Yet the two have diverged immensely over the last 2 years.  Not since the technology bust at the start of the decade have any two sectors diverged so much from each other, and from the composite S&P500 index. 

XLE is an exchanged-traded fund for the Energy sector, while XLF is the equivalent for the Financial sector.  First, let us view a two-year chart : 

Energy has outperformed the S&P500 by an equal margin that Financials have lagged the S&P500 by.  Next, we can view a five-year chart :

While Financials only began to fall away in 2007, Energy has gone so high above the composite market that it reminds one of the technology bubble of the late 1990s. 

It seems quite obvious here that while it is impossible to identify the exact top of the Energy run, or the exact bottom of the Financials correction, it would be very prudent to sell any existing holdings in Energy (or even short Energy if you have the appetite) and rotate the proceeds into Financials.  The gap could widen in the short term, but rarely do two sectors reach such extreme disparities that make a profitable trade so obvious. 

(crossposted on TechSector).

The Pew Research Center has presented a simple linear chart that places the ideology of the three Presidential contenders and the current President on a left-right scale, along with the median ideology of the voting public. A two-axis chart would be more informative, but this one-dimensional distribution reveals a great deal :

1) The center of gravity of the US public is significantly right of the center, no matter what leftists may say/wish.  McCain, thus, is far closer to the center of gravity than Bush, who in turn is closer than Obama or Clinton. The GOP is far less dependent on centrists to win elections than Democrats are.

2) The notion that McCain is 'not conservative enough' does not stand up to statistical evidence. Those who whine about McCain's support for amnesty of illegals or compromises on judicial appointments forget that even Ronald Reagan did three things that were not purely conservative.

a) Reagan granted amnesty to illegals in 1986

b) Reagan appointed two moderate Supreme Court Justices, Kennedy and O'Connor, and only one conservative, Scalia.

c) Reagan did increase income taxes, after first lowering them

No President will be purely conservative, nor should he/she be.  So I reject the initial conservative hostility to McCain (which seems to have somewhat abated). The job of a political party is to win elections, and the fact that Republicans span a wider ideological spectrum than Democrats should be a source of pride, which brings us to observation #3.

3) The Democratic Party has been enslaved by fringe leftists.  Obama and Clinton are nearly identical in ideology, yet very far to the left of the center of gravity.  The purple oval I have inserted, along with the question mark, represents a vacuum in the moderate left.  A large number of voters clearly reside there, but the Democratic party of today will not nominate someone who resides in the purple zone, leaving these voters as ideological orphans.  Thus, Clinton and Obama have to lie (assisted by a complicit leftist media) to appear more moderate than they are, and hope that the public doesn't figure that out.

Joseph Lieberman, the VP candidate against Bush/Cheney just seven years ago, was run out of the Democratic Party simply for not being opposed to bringing democracy to Iraq.  Bill Clinton's actions of supporting free trade agreements like NAFTA, sending troops to fight proto-Al-Qaeda terrorists in Somalia in 1993, reforming welfare, cutting taxes on capital gains in 1997, attacking Saddam Hussein to remove his WMD programs in 1998, etc. are all actions that the modern Democratic party would not take.

I am a political moderate, in that I care about only three issues.  These are, in order of importance to me :

a) aggresively fighting against terrorists and other enemies of democracy and women's rights,

b) the preservation of free market meritocracy, and the use of market forces to solve problems, and

c) a judicial system that punishes crime, instead of ignoring justice and proceeding to reward the criminal as a poster-child for some perverted cause.

I have a neutral/uninterested position on abortion, gay marriage, gun ownership, prayer in schools, and many other domestic issues.  Yet, I am considered 'right wing' by some extreme leftists, on account of holding the above three positions alone.  Until 2001, it did not even occur to me that only one of the two parties still advocates these three basic principles - I assumed that these were values held by any logical person.  I wish I had a true choice between two parties, but I don't.  In the words of once-Democrat Ronald Reagan, I did not move away from the Democratic Party, it moved away from me.

The moderate left died in 1968, when two of their most promising young leaders were assassinated.  Since then, Democrats have only won three of the last ten elections.  After the disaster of Jimmy Carter, Democrats never again won 50% of the popular vote in SEVEN attempts, while Republicans achieved this feat 4 times over that period (1980, 84, 88, 2004).  This is a truly shambolic performance from the Democrats of the modern era.  Jimmy Carter did more to ensure a generation of GOP dominance than Reagan, Gingrich, Limbaugh, or Rove ever could.

Furthermore, Democrats are not capable of getting a majority of voters who earn over $30,000 a year.  The middle class earning between $50,000 and $75,000 voted just 44% for Democrats.  A party that is soundly rejected by the middle class and upper class is not positioned for long-term success.

2008 is a year where more factors, from a weak economy to an unpopular incumbent, are working against Republicans than at any time since 1976.  Thus, Democrats should be in a position to win by a landslide, but even now are trailing in the polls, and have at best a 50/50 chance of winning the White House in November, with a nominee far more distant from the voting public than John McCain is.  Even if, say, Obama wins, he might repeat the Carter-esqe phenomenon of ensuring another generation of GOP dominance starting from 2012.  If 2008 is 1976, 2012 could be 1980.

Once again, the job of a political party is to attract the votes of 50% of the public, and Democrats can only hope to achieve this by fluke.  If Democrats want to become a national party again, they must move into the purple zone, period.  I sincerely want them to do this, as this will force the GOP to compete to become a better party as well, rather than stagnate into mediocrity with the knowledge that they only have to be better than the most pathetic of opponents.  

When will Democrats purge the leftists and move to the center?

Popular Mechanics has assembled one of those captivating lists of new technologies that will improve our lives, this time on healthcare technologies (via Instapundit).? Just a few years ago, these would have appeared to be works of science fiction.? Go to the article to read about the ten technologies shown below.?

Most of these will be available to average consumers within the next 7-10 years, and will extend lifespans while dramatically lowering healthcare costs (mostly through enhanced capabilities of early detection and prevention, as well as shorter recovery times for patients).? This is consistent with my expectation that bionanotechnology is quietly moving along established trendlines despite escaping the notice of most people.? These technologies will also move us closer to Actuarial Escape Velocity, where the rate of lifespan increases exceed that of real time.?

Another angle that these technologies effect is the globalization of healthcare.? We have previously noted the success of 'medical tourism' in US and European patients seeking massive discounts on expensive procedures.? These technologies, given their potential to lower costs and recovery times, are even more suitable for medical offshoring than their predecessors, and thus could further enhance the competitive position of the countries that are quicker to adopt them.? If the US is at the forefront of using the 'bloodstream bot' to unclog arteries, the US thus once again becomes more attractive than getting a traditional procedure done in India or Thailand.? But if the lower cost destinations also adopt these technologies faster than the heavily regulated US, then even more revenue migrates overseas and the US healthcare sector would suffer further deserved blows, and be under even greater pressure to conform to market forces.? As technology once again acts as the great leveler, another spark of hope for reforming the dysfunctional US healthcare sector has emerged.?

These technologies are near enough to availability that you may even consider showing this article to your doctor, or writing a letter to your HMO.? Plant the seed into their minds...

Related :

Actuarial Escape Velocity

How Far Can 'Medical Tourism' Go?

Milli, Micro, Nano, Pico

I first wrote on October 14, 2006 about a liquid that quickly self-assembles into a solid gel upon contact with blood, sealing the wound quickly.  At that time, it appeared that military use of this type of substance was 8-10 years away from 2006.  However, it appears that progress has accelerated, and we are much closer to market availability than it initially appeared.  An update on the progress is posted this week in MIT Technology Review.

The material consists of naturally occurring amino acids that have been engineered to form peptides that spontaneously cluster together to create long fibers when exposed to salty, aqueous environments, such as those found in the body. The fibers form a mesh that serves as a physical barrier to blood and other fluids.

Needless to say, this could save many lives on the battlefield, in car crashes, and during surgery.  If it becomes inexpensive enough, it could even be part of home first-aid kits.  Arch Theraputics is the company that is licensing the technology from MIT, and clinical trials are set to begin soon.

Let's hope the next hurdles are quickly cleared. 

Studying what lies beneath the surface of market forces can be fascinating.

BusinessWeek has a slideshow depicting major centers for medical tourism, as well as the cost savings of various procedures in relation to the US.  This got me thinking about several dimensions of this concept, particularly since healthcare is 15% of the US economy, yet is also the sector of the US economy, outside of government, where wastage and ineffeciencies are the greatest. 

Many procedures that cost $100,000 or more in the US can be done with equal competence for $10,000 in Thailand or India.  Normally, if something of comparable quality is available for just a tenth of the cost, demand migrates to the cheaper alternative in a huge torrent.  Even after accounting for travel costs, the gulf is immense.  Yet it appears that only a small percentage of US patients for cardiovascular surgery, joint replacements, etc. are going overseas for their operations.  Medical tourism will still only earn a miniscule $4 Billion in 2008 for India, Thailand, and Singapore combined, of which only one-third is from American patients.  Thus, only a fraction of a percent of the US, European, and Japanese healthcare sectors have been dented. 

This, of course, can be due to two reasons :

a) Fears about quality/safety, either real or perceived.

b) Net out-of-pocket cost to the patient still being lower in the US, due to insurance. 

Regarding quality, many of these surgeons are certified by US boards or even educated in US colleges, and accidents do not appear to happen at any greater rate than in the US.  At the same time, it is not possible to pursue malpractice suits against facilities in India or Thailand, which, while certainly an element of risk, itself is part of the reason for their lower price relative to the US.  It is inevitable that some mishap befalls an American patient in Asia, and the media latches onto the story for a week or more, reversing the market demand for medical tourism for years, even if the incidence of such tragedies may be no more than in US hospitals.  In fact, I am surprised it has not happened already. 

In terms of cost, that brings us to the elephant in the room, which is the revelation that it is not India or Thailand that are too cheap, but rather that US healthcare is too expensive to begin with.  I am no expert in this field, but it seems obvious that a lack of market forces in the value chain, a lack of regulation of lawsuits, the horrendous dietary habits of most Americans, and the tendency of consumers to not care about how much the insurance company pays are all contributory factors to what is arguably the greatest tragedy in US economic history.  Socializing the healthcare system will worsen it, for reasons too vast to delve into here.  It is true that many Canadians come to the US for urgent procedures that would require a 3-month wait in Canada. 

However, millions of Americans don't have health insurance at all, and while for some this is by choice, for some it is not.  For them, traveling abroad for a $10,000 heart procedure may be the only affordable option.  Even if the most experienced and well-frequented facilities are in India and Thailand, nearby options also exist in Jamaica and Costa Rica.  Over 20 other countries across Eastern Europe, Asia, and Latin America are also vying for a slice of the pie. 

As unintended consequences ripple through, herein lies the path to forcing some degree of reform of the US healthcare system.  As more Americans either choose or are forced to seek low-cost procedures abroad, even if it is only a small percentage American patients, this will compel insurance companies to include medical tourism options to patients.  The insurance company can offer their own version of malpractice insurance to the patient, cover all travel expenses for the patient and spouse, and even throw in a vacation package and cash incentive.  Even after all this, if the cost of the $10,000 procedure in India or Thailand has now risen to $30,000, it still outcompetes the $100,000 US alternative handily.  Some insurance companies are already starting this with enthusiasm, and before long, all insurance companies will effectively have to compete on this level. 

As the number of Americans combining surgeries with a tropical vacation becomes a small but significant percentage of the total patient pool, the US healthcare system will have no choice but to undertake the difficult reforms to bring costs down at a systemic level, thus benefiting even those Americans who refuse to go overseas, and even procedures that are not candidates for offshoring.  If software development can be outsourced to India where it is one fourth the cost, surgeries cannot expect to be perpetually immune to competition that is a tenth or twentieth of the cost.  Through some combination of tort reform, free-market principles, and preventative focus, US costs will gradually be brought down closer to a market rate.  Perhaps the US can comfortably sustain prices that are 3 times that of Thailand, but not 10 times.  This will be the next industry in the US that is forced to adapt. 

To review, the expected sequence of events is :

1) Americans with no insurance are forced to make a life or death decision to get their surguries abroad, where the service meets or exceeds their expectations. 

2) More insurance companies offer medical tourism with liability guarantees and cash/vacation incentives to American patients.  Only a small fraction of patients are adventurous enough to do this, but all insurance companies are compelled to offer these options.

3) Major centers for medical tourism, after a track record of about a decade, develop solid brands that can attract American patients. 

4) When we finally get to the point that 10% of Americans are traveling abroad for a wide array of procedures, the US will be forced to begin to take measures to reduce costs throughout the healthcare system.  Losing 10% of the market is all that it will take to force some positive changes.  This could begin to happen by 2020. 

Such a sequence of events, of course, will boost the US economy greatly.  Of the $2 Trillion mentioned above, as much as half of that, a whopping $1 Trillion or 7% of the US economy, is estimated to be wastage incurred due to a shortage of market forces in healthcare.  Imagine if that $1 Trillion could be redeployed elsewhere.  A person who saves $90,000 on a heart procedure can choose to use that money on emerging innovations in biotechnology that may be available in the 2020s, such as treatments to slow down or halt some aspects of aging. 

This is not going to be a trend that moves as quickly as some of the others discussed here on The Futurist.  But the economics involved are massive enough that it has certainly caught my eye.  Let's see what happens, both before and after the predicted media frenzy over a foreign medical mishap. 

Update (4/3/08) : Businessweek has an article on how technological advances in medical instrumentation are enabling some surgical procedures to be done with far tinier incisions.  Patients who previously would have to stay in the hospital for a week to recover now can leave in under a day. 

The article also mentions how hospitals are opposed to these technological advancements, as they reduce the number of days of revenue a hospital can collect while a patient recovers after surgury.  This anti-productive, entitlement mentality will hasten the downfall of the US healthcare cartel, as shorter recovery times due to smaller incisions will make a trip to a tech-friendly facility in Thailand or India even more compelling.  When the cost is a tenth and the recovery time is a fifth of what it would be in the US, how long before market forces dominate?

Every now and then, an obscure concept is so brilliantly encapsulated in a compact yet sublime term that it leaves the audience inspired enough to evangelize it. 

I have felt that way ever since I heard the words 'Actuarial Escape Velocity'.

For some background, please refer to an older article from early 2006, 'Are You Prepared to Live to 100?".  Notice the historical uptrend in human life expectancy, and the accelerating rate of increases.  For more, do also read the article "Are You Acceleration Aware?".

In analyzing the rate at which life expectancy is increasing in the wealthiest nations, we see that US life expectancy is now increasing by 0.2 years, every year.  Notably, the death rates from heart disease and cancer have been dropping by a rapid 2-4% each year, and these two leading causes of death are quickly falling off, despite rising obesity and a worsening American diet over the same period.  Just a few decades ago, the rate on increase in life expectancy was slower than 0.2 years per year.  In the 19th century, even the wealthiest societies were adding well under 0.1 years per year.  But how quickly can the rate of increase continue to rise, and does it eventually saturate as each unit of gain becomes increasingly harder to achieve?

Two of the leading thinkers in the field of life extension, Ray Kurzweil and Aubrey de Grey, believe that by the 2020s, human life expectancy will increase by more than one year every year (in 2002 Kurzweil predicted that this would happen as soon as 2013, but this is just another example of him consistently overestimating the rate of change).  This means that death will approach the average person at a slower rate than the rate of technology-driven lifespan increases.  It does not mean all death suddenly stops, but it does mean than those who are not close to death do have a possibility of indefinite lifespan after AEV is reached.  David Gobel, founder of the Methuselah Foundation, has termed this as Actuarial Escape Velocity (AEV), essentially comparing the rate of lifespan extension to the speed at which a spacecraft can surpass the gravitiational pull of the planet it launches from, breaking free of the gravitational force.  Thus, life expectancy is currently, as of 2007 data, rising at 20% of Actuarial Escape Velocity.

I remain unconvinced that such improvements will be reached as soon as Ray Kurzeil and Aubrey de Grey predict.  I will be convinced after we clearly achieve 50% of AEV in developed countries, where six months are added to life expectancy every year.  It is possible that the interval between 50% and 100% of AEV comprises less than a decade, but I'll re-evaluate my assumptions when 50% is achieved. 

Serious research efforts are underway.  The Methuselah Mouse Prize will award a large grant to researchers that can demonstrate substantial increases in the lifespan of a mouse (more from The Economist).  Once credible gains can be demonstrated, funding for the research will increase by orders of magnitude. 

The enormous market demand for lifespan extension technologies is not in dispute.  There are currently 95,000 individuals in the world with a net worth greater than $30 million, including 1125 billionaires.  Accelerating Economic Growth is already growing the ranks of the ultrawealthy at a scorching pace.  If only some percentage of these individuals are willing to pay a large portion of their wealth in order to receive a decade or two more of healthy life, particularly since money can be earned back in the new lease on life, then such treatment already has a market opportunity in the hundreds of billions of dollars.  The reduction in the economic costs of disease, funerals, etc. are an added bonus.  Market demand, however, cannot always supercede the will of nature. 

This is only the second article on life extension that I have written on The Futurist, out of 154 total articles written to date.  While I certainly think aging will be slowed down to the extent that many of us will surpass the century mark, it will take much more for me to join the ranks of those who believe aging can be truly reversed.  To track progress in this field, keep one eye on the rate of decline in cancer and heart disease deaths, and another eye on the Methuselah Mouse Prize.  That such metrics are even advancing on a yearly basis is already remarkable, but monitoring anything more than these two measures, at this time, would be premature. 

So let's find out what the group prediction is, with a poll.  Keep in mind that most people are biased towards believing this date will fall within their own lifetimes :

When will Actuarial Escape Velocity be achieved for wealthy individuals?
	2010-2020
	2020-2030
	2030-2040
	2040-2050
	2050 or later, if ever
Free polls from Pollhost.com

At The Oil Drum, a detailed article by 'Gail the Actuary' speculates on how declining production of oil combined with rising demand will cause an economic catastrophe, leading to the global economy contracting so severely, that by 2040 it is much smaller than it is today.  The author actually believes that in 2040, most people will no longer be able to afford cars, electricity will be unreliable, and goods and services will be fewer and rarer than today. 

Another article submitted by an different contributor on The Oil Drum arrives at the same pessimistic conclusion, stating that 'economic growth will end one way or another'.  Most of the commenters on both articles are in a groupthink state of agreement that can best be described as a Maoist-Malthusian cult. 

I would normally not bother to rebut something like this, except that this particular essay is so stunningly wrong and annoyingly pessimistic, despite the seemingly meticulous research the author has conducted, that I am compelled to disect how insulated groupthink can spiral into a zone where even the most extreme conclusions are accepted. 

Note that I happen to be someone who actually does believe in Peak Oil theory, but that such a condition generates long-term positives that outweigh short-term negatives. 

The assumptions that the 'Peak Oil' doomsday scenario makes are :

1) That rising oil prices do not cause a long-term downward adjustment in demand.  Oil demand may be inelastic in the short-term, but in the long term, people will buy more efficient cars, carpool, ride bicycles, reduce discretionary trips, conduct more commerce online, etc.  To assume otherwise is to ignore the most basic law of economics.  This is before even accounting for the indirect benefits of declining oil demand such as a drop in traffic fatalities (which cost $2 million apiece to the economy), less wear and tear on roads and tires, less pollution, less real estate consumed by gas stations, less competition for parking spaces, etc. 

2) That rising grain prices will not move consumption away from increasingly expensive meat towards affordable grains, fruits, and vegetables, thereby reducing grain and water demand.  This, too, is economic illiteracy.  If the price of beef triples while the price of rice and potatoes does not, consumption patterns shift.   

3) That there will be very little technological innovation in alternative energy, automobile efficiency, batteries, or information technology from this point on.  In fact, there is innovation in all of those areas, so we have multiple layers of protection against the doomsday scenario, as detailed by these articles :

A Future Timeline for Energy

A Future Timeline for Automobiles

Batteries Set to Advance, Finally

Solar Energy Cost Curve

Terrorism, Oil, Globalization, and the Impact of Computing

4) That most economic growth is now in knowledge-based industries, which consume far less energy per dollar of output.  The US economy today produces twice the financial output per unit of oil consumption as it did in 1975, with information technology rising as a portion of total economic output. 

5) That a major economic downturn, featuring skyrocketing food prices for people in poorer countries, will somehow not translate to a lower birth rate that inhibits population growth and hence curbs demand, and that population projections will somehow not change. 

6) That there will be no humans living beyond the Earth (whether in orbit or on the Moon) by 2040.  The reason this point is relevant is because a society cannot advance in space travel without simultaneous advances in energy technology.  I say that advances in photovoltaic efficiency make Lunar colonies closer to viability by that time. 

7) That we are going to have over 30 years of negative growth in World GDP, despite not having had a single year of negative growth since 1973, and despite the trendline of growth solidly registering at 4.5% a year even today.  I happen to think that by 2040, the world economy will be 4 times larger than it is today.  Even the Great Depression was only 5 years of negative growth, followed by a recovery that elevated prosperity to levels higher than they were in 1929, at a time when World GDP was only at a trendline of 2% annual growth, or less than half the level of today.  Yet Gail the Actuary thinks car ownership will no longer be affordable to most people by 2040. 

Peak oil may be on the horizon, but the US economy has already adapted to oil at sustained prices of $70 or $80/barrel (which is the biggest story that no one is noticing yet), and will soon adapt to $100/barrel.  I want oil to hit a sustained $120/barrel by 2010 to start a virtuous cycle of technological and geopolitical chain reactions that make the world a better place in the long term.  If oil hits $200/barrel, that will cause a deep recession that could last several years, but after that point, we will have adapted out of the oil burden almost entirely, and World GDP growth will resume at 5% a year. 

Could I be wrong and they be right?  Well, let us first see if oil rises substantially above $120/barrel, and if that year has negative World GDP. 

Does anyone feel like defending the doomsday prediction from The Oil Drum?

The Futurist, above all else, is devoted to bringing original ideas, observations, and analyses to the blogosphere.  The Jeremiah Wright controversy has been heavily analyzed from a mind-boggling array of angles.  Yet one noteworthy detail just has not emerged in the discussion.  Maybe, as an Indian-American, I am truly a third party, and what was utterly invisible to the two races involved in the discussion, was somehow the very first question that entered my mind. 

What immediately struck me is that Barack Obama, who is half Kenyan and half white, still has a darker skin tone than Jeremiah Wright.  Indeed, in Africa, Barack Obama himself would be considered white.  Could it be that less than half of Mr. Wright's ancestors are black? 

To be fair, one must examine additional datapoints.  Fortunately, this research exercise required no additional effort beyond what I was about to do anyway.  I proceeded to search for photographs of Halle Berry, known to have had one white parent, in order to assess her skin tone.  She, too, appears to be of a similar hue as Barack Obama, but distinctly darker than Wright.  Here is more video footage of Wright.  There just is not enough evidence to believe that even 50% of Mr. Wright's DNA originated from sub-Saharan Africa.  Clearly, more than 50% of his ancestry is white. 

Reverend Wright has built a career out of being a leader to a community from which less than 50% of his ancestry comes from, while condemning a race that apparently more than 50% of his ancestry comes from.  He could just as easily have been a pastor in a white community, where the average skin tone would be closer to his own.  White Americans have become so post-racial that it has entirely escaped their notice that the man can scarcely be considered black.  His defenders claim that his anger is a byproduct of the racism he experienced in the Jim Crow era, yet he is actively applying the one-drop rule to himself. 

It is curious that a man who refers to this country as the "U.S. of KKK-A", managed to attend the University of Chicago, and will soon reside in a 10,340 square foot mansion that his church has provided to him.  Most white people are not fortunate enough to live in homes of that size.  Indeed, most Harvard graduates don't manage to acquire such an impressive residence.  Far from shame America, he has demonstrated how generous, to the illogical extreme, this country is.  Nowhere else can someone with light skin pretend to be black, then condemn whites who are closer to his own skin color, and in the process achieve wealth from a nation while simultaneously condemning the same nation through the worst possible insults. 

It appears that Reverend Wright identified a profitable niche, positioned his career accordingly, and reaped a rich bounty.  As appalled as I am as an American, I am just as impressed as an entrepreneur. 

Only in America......

We shall close with a poll.  Choose multiple answers if desired (poll closed 4/21/08).

Sure this reproduction of Michelangelo's The Creation of Adam is a lil' bit perverted by the inclusion of a coffee cup, but look closer. The entire masterpiece was painted using only coffee

I'm amazed that I haven't seen these coffee art clones before. They're the creation of Karen Eland, a former barista, who one day decided to dip a paint brush into her coffee cup instead of nibbling on biscotti. By gradually building layers of espresso she's able to create a range of tones and what must be the tastiest smelling paintings ever.

Maybe it's my caffeine addiction talking, but this is the first time I've ever seen the Mona Lisa and wanted to give her a lick. [Coffee Art via Artsy Spot via Neatorama]

Diana Eng, who you might remember as Project Runway's premiere nerd designer, took a look at MIT's Media Lab and found some pretty cool stuff, mostly run off of Arduino microcontrollers. Check it out below.

A lot of this stuff is just playful, so some of the clothes don't need to be too polished—but I love that electronic wallpaper. Down with lightswitches, I say! [Fairytale Fashion]

Gadget Helpline, a UK tech support service, found that well over half of their male customers didn't even bother to read the manual before calling tech support. C'mon guys, is that the best we can do?

Apparently, only 24% of females don't read the manual before picking up the phone. Good on you, ladies. Apparently you're far less lazy than us when it comes to reading.

We guys are worse at figuring out the easy stuff, too. 12% of male callers needed to do something stupid to fix the problem, like plugging the item in or turning it on, versus 7% of female callers.

We're also much less pleasant to talk to. Even through the average female customer spends 33% more time on the phone than the average male, 66% of the helpline staff said they preferred talking to female callers.

Of course, I know that all of you male readers fall into the category of never reading the manual and never having needed to. But still, we could be doing better. [BBC]

This gorgeous building in France is more than just a pretty complex. The Cité du Design does one of the best jobs I've ever seen at concealing the solar panels that help power the structure.

The building is made up of 14,000 equilateral triangles. Some are solar panels, some are windows, others just fill out the structure. The net result is a building that manages to mask the black behemoths you're used to seeing.

I love how the exterior influences the interior lighting, not to mention how great it all looks when lit up. [Inhabitat]

Enough with the back and forth already, Apple. If you're going to kill Atom support then just kill it. Don't toy with us, taking and giving like some sort of merciless god.

The video above shows what happens if you try to boot the latest 10.6.2 developer build on a Hackintosh. As you can see, not much. So if you're running OS X on Atom hardware, hold off on any updates until this whole mess gets sorted out. [OS X Daily]