Friday, 16 June 2017

TOWARDS DEMOCRATIC SUSTAINABILITY

by Dirk Helbing [1]

1. City Olympics Proposition

Competitions for the best kinds of technologies, solutions for resource shortages, and a quick implementation of new solutions can be achieved through Global City Olympics.

Comments: Cities and social communities can be important agents of global change. A combination of competition and collaboration among cities can advance us in our efforts to solve the challenges of the 21st century. Thus, I follow Elinor Ostrom and suggest a "polycentric" approach to solving global problems [1]. The idea of "City Olympics" [2] may become a powerful tool. City Olympics would have a sportive spirit. Cities all over the world would engage in friendly competitions to achieve the best scientific and technological progress, as well as mobilize collective action to counter climate change. They would reach the highest possible degree of citizen engagement. After the competitive phase of each Climate Olympics, there would be a cooperative phase, where the best ideas, technologies and urban governance concepts would be exchanged among the participating cities. 

For a more detailed explanation of this idea click this link

2. Digital Upgrade of Democracy Proposition 


Digital technology allows to design a new form of democracy with transparent, uncensored, fair and moderated discourses, in which AI is used to support the constructive exchange of ideas and the identification of different perspectives that need to be integrated. Responsible behavior and high-quality contributions would be promoted.

Comments: More and more people claim that digital democracy is the evil that makes our world ungovernable [3]. Modern mass media and social media tend to create ‘filter bubbles’, which are reinforcing opinions, while reducing the ability to handle different points of view. Digital information becomes increasingly personalized, manipulative, and deceptive.

But instead of trying to revive governance principles of the past, which have failed to embrace the complexity and diversity of modern societies, we should engage in digitally upgrading democracy through the use of Massive Open Online Deliberation Platforms (MOODs) [4]. Letting people decide about “yes” or “no” is not enough. Citizens should be able to continuously engage in online deliberation processes, where they can feed in their ideas and voice their preferences on different aspects of a topic. A refined, more inclusive process would enable people to learn about and to unfold the different aspects of a complex political topic.


For a more detailed explanation of this idea click this link



3. Finance 4.0+ Proposition 

In order to solve the challenges of the 21st century, the financial system has to be altered into a multi-currency system representing different positive and negative externalities and incentivizing behavior that is aligned with our societal goals and values.

Comments: Computer simulations about the world’s future predict severe resource shortages –and linked to this – an economic collapse. This is known at least since “The Limits to Growth” study commissioned by the Club of Rome, and the “Global 2000” study issued by the US government. The UN Sustainability Agenda 2030 is giving the world less than 15 years of time to solve this problem.


It is necessary to create a multi-dimensional incentive and reward system beyond money. We call this system finance 4.0+. This can now be built by combining the Internet of Things, blockchain technology and complexity science. To boost a circular economy, we need a system that can measure, value and trade positive and negative externalities – external effects of interactions between people, companies and the environment. Desired values can be agreed on in a participatory, subsidiary way, as suggested in proposition 2.


For a more detailed explanation of this idea click this link 

4. Democratic Capitalism Proposition [2]

The digital technology has the potential to reinvent the money system such that it empowers people to be innovative and to engage in social and environmental projects. Moving beyond venture capitalism towards crowd funding for all would enable participatory budgeting and democratic capitalism. 

Comments: One cannot put the interests of a few hundred people over the well-being of society as a whole. As long as the mechanisms of the monetary and financial system don’t benefit everyone, the world will not be stable and sustainable on the long run. Fortunately, there are alternatives. The failed approach of pumping trillions into the economy from the top by means of “quantitative easing” could be replaced by a new approach, where the money is created from the bottom. The idea is [5] that everyone would regularly get an “investment premium”, which would have to be distributed to people, companies or institutions with good ideas, or those who are engaged in social or environmental projects. Then money and resources would flow into the activities we find most important. This would boost innovation in a pluralistic manner. Such an approach would combine our two most successful organizing principles – democracy and capitalism – in a new way, and replace today’s market-driven democracy, where capitalism threatens to destroy democracy.

For a more detailed explanation of this idea click this link


References:

[1] Ostrom, E., A polycentric approach for coping with climate change. Ann. Econ. Finance, 2014. 15(1): p. 71-108.

[2] Helbing, D., City Olympics, 2017 

Link: https://www.youtube.com/watch?v=di_Qf1nR_XA
Uploaded on May 20, 2017

[3] Jaishankar, D., Brexit: The First Major Casualty Of Digital Democracy. June. 27, 2016.  
Link: http://www.huffingtonpost.in/dhruva-jaishankar/brexit-the-first-major-ca_b_10695964.html

[4] Helbing, D. and S. Klauser, How to make democracy work in the digital age. 2016, ETH Zurich.  
Link:  https://www.researchgate.net/publication/305571691_How_to_make_democracy_work_in_the_digital_age.

[5] Helbing, D., Digitization 2.0: A New Game Begins. June 2017
Link:
https://www.researchgate.net/publication/317279118_Digitization_20_A_New_Game_Begins













[1] Affiliation: ETH Zürich, Department of Humanities, Social and Political Sciences, Computational Social Science, Clausiusstrasse 50, 8092 Zürich, Switzerland. mailto: dirk.helbing@gess.ethz.ch

[2] An extensive explanation of these propositions can be found in [1].

Thursday, 15 June 2017

City Olympics to Improve the World

By Dirk Helbing

Abstract:
We could organize City Olympics, i.e. competitions for the best kinds of technologies, solutions, and city-wide implementations, driven by ambition, competition, engagement and fun. Global City Olympics to progress energy, sustainability and resilience solutions would be a promising new way to make progress towards global goals in a bottom-up way. Competitions could take place every two years, while every other year, cities would learn the best solutions from each other. That is, competition and cooperation would alternate.

Going a step further, in full agreement with Nobel prize winner Elinor Ostrom's "polycentric" approach to solving global problems,[i] I believe that cities and social communities can be important agents of global change. A suitable combination of competition and collaboration among cities can advance us in our efforts to solve the challenges of the 21st century. If we manage to find ways to make our cities smarter, this will make our planet smarter.[ii] In this way, acting locally will cause a global change for the better. For example, I recently proposed that we might establish something like a "City Olympics" to address global problems such as climate change.[iii]

As we know, calls to combat climate change are often met with skepticism by companies and citizens, who see it as a threat to their preferred ways of business and life, and that's why these attempts receive so little support. However, doing something for our climate could be rewarding and even fun, if we ran a climate-oriented City Olympics every few years. These events would have a sporting spirit, whereby cities all over the world would engage in friendly competition to develop the best science, technology, and architecture to counter climate change. They would also compete to achieve the highest degree of citizen engagement (in terms of environmental-friendly mobility, investments in renewable energy technology, better thermal insulation, and more). These events could be presented by the public media in pretty exciting ways. Furthermore, after each Climate Olympics, there would be a cooperative phase, where the best ideas, technologies and urban governance concepts would be exchanged among the participating cities, thereby allowing them to make faster progress. Which city or country can reach its climate goals first? Let's be ambitious! While we may dislike regulations that tell us what to do, we love competitions, and we love winners!

We could address other global challenges in a similar way. This would simply mean a change of the disciplines in which cities compete. It also seems natural that cities would form global networks with other cities that struggle with similar problems. Exchanging knowledge, ideas, technology and experts, or supporting each other when disaster strikes would give such global networks of cities an advantage. Why shouldn't we have an alliance of cities that takes a lead in supporting better, climate-friendly technologies? Just suppose that cities next to rising oceans, such as New York City, Singapore, London, Hamburg, Sydney, and a few others would start this together. Wouldn't that create a first-mover advantage, which others would soon seek to copy?

The "glocality" principle "think global, act local" can be implemented in various ways. For example, it might also be beneficial to establish governance structures based on representatives of regions. Global negotiations between nation states have often failed, because nations have acted selfishly and sometimes wielded veto powers. But what if we built institutions that could make decisions from the bottom-up in parallel to the top-down institutions we already have today? An institution such as a council of regions, for example, might help to reach agreements that are better adjusted to local needs and would provide more space for local cultures and diversity. We might even have institutions working towards the same goals in parallel from the top-down and the bottom-up. The first agreement reached through either approach would then be implemented (and it might be further improved over time). Wouldn't such a competition between two institutional settings be good?

To have a strong degree of legitimacy, regional representatives should be directly elected. In order to avoid political casts, all adult citizens should be eligible to be a candidate, regardless of whether they belong to a political party or not. Moreover, it would promote integration if every adult resident of a region would have the right to vote. Remember that lack of participation is one of the most important factors causing crime, extremism and conflict.

To solve problems that have trans-regional relevance, the corresponding regional parliaments could send representatives for a limited time into trans-regional and global councils, which would be established to address specific problems. After all, these representatives would know best how to serve the needs of the people they are representing. To ensure flexibility and avoid accumulation of power and corruption, the global representatives of the regional parliaments should rotate every few months, or have a mandate which is restricted to certain subjects, or both.


[i] E. Ostrom, Beyond Markets and States: Polycentric Governance of Complex Economic Systems, The American Economic Review 100(3), 641-672 (2010)

[ii] B.R. Barber, If Mayors Ruled the World: Dysfunctional Nations, Rising Cities (Yale, 2014).


Democratic Capitalism



By Dirk Helbing

One cannot put the interests of a few hundred people over those of mankind. As long as the mechanism of money-making does not benefit everyone equally, the fate of the world will hardly change for the better. But there are alternatives! The failed approach of pumping trillions into the economy from the top could be replaced by a new approach, where the money is fed in from the bottom, i.e., via the bank accounts of the citizens. Note that I am not talking here about unconditional basic income, because it might eliminate healthy competition as well as creative and performance incentives.

At least a part of this money should be paid out as an investment premium. Everyone should invest it into projects, i.e. distribute it to people with good ideas, and to people who engage for social or environmental matters. Then the money would flow where the best ideas and engagement are. I think it would be the logical next step to go from venture capitalism, to crowdfunding, to participatory budgeting, and finally to crowd funding for all. Such an approach would marry together our two most successful systems – democracy and capitalism – and replace today’s "market-conform democracy", where capitalism threatens to destroy democracy, by "democratic capitalism". According to the constitution, "all men are equal before the law." It is time to demand true equality of opportunity, also when it comes to money creation!

In this new democratic capitalism we would continue to earn an individual salary, depending on what we do for business, society, or the environment. But we could focus on what we consider to be important and right. Combined with "open innovation", the rate of inventions, innovations and investments would be accelerated in all areas of life, from the improvement of neighborhoods to the investment in new technologies. 

Isn’t this what we need in order to allow society to master its challenges in a successful and timely manner? Couldn’t we now reach the next level of our economic, social, and cultural evolution?


Further information:

D. Helbing, Link: Digitization 2.0: A New Game Begins, on Researchgate

D. Helbing, Link: Reinventing Society in the Digital Age, on YouTube




Monday, 5 June 2017

Global Reset: A Socio-Ecological Finance System to Boost Sustainability



by Dirk Helbing (ETH Zurich/TU Delft)


Previous chapter:CLICK Chapter 1
Previous chapter:CLICK Chapter 2

Previous chapter:CLICK Chapter 3   


Lack of sustainability is our biggest existential threat.
Humanity is largely overusing the Earth’s resources. We are consuming more than what is renewable. Currently, we would need at least 1.5 planets to maintain our lifestyle. Would everyone have the standard of living of European countries, we would even need to have 3.5 Earths at our disposal. The USA even consumes 4.5 times as much as what the Earth can sustainably maintain. That is why they engage in a race to Mars. Getting hold of Mars’ resources, if we can accomplish this, would be the next stage of globalization. But it may come too late…

The current over-consumption of industrialized countries leads to a scarcity of resources elsewhere. This is probably the reason of many conflicts and wars today, of revolutions, mass migration, terrorism. While those problems could be kept at bay in the past, mass migration and terrorism show that the problems caused by us come ever closer.

Let’s face it: if we don’t get the lack of sustainability fixed, the world will end in disaster. If we go on as before, at least one third of the world’s population will die in the coming decades. That would be more than 2.5 billion people – more than the US, European, Russian and Chinese people taken together! That is why the danger of a World War III is popping up on the news so often. A global nuclear war, however, could make the entire Northern hemisphere uninhabitable.

In fact, predictions for the Earth don’t look good. All computer simulations of the world’s future predict an impeding economic and population collapse. This is known at least since “The Limits to Growth” study commissioned by the Club of Rome, and the “Global 2000” study issued by the former president Bill Clinton. The UN Sustainability Agenda 2030 is giving the world less than 15 years of time to solve this problem. That is, lack of sustainability has become a matter of life and death for all of us.

Is there a solution at all, beside depopulating the planet? Yes, indeed! Today, an average consumer in an industrialized country produces more than 600 kilograms of waste per year – about 50 tons in a lifetime. And this does not even include the waste produced by companies. In a lifetime, most of us throw away several cars, boards, sofas, TV sets, computers, smart phones and many more things. This would be enough for several people! So, we neither have an overpopulation problem nor a shortage of resources. We just have an organisational problem, but a serious one.

Our economy is not using and distributing available resources well. We need a circular economy rather than linear supply chains, where fresh resources are used to produce consumer goods, which are finally thrown away. Currently, some people die of obesity, others of hunger. This does not make any sense. While the world’s food production is enough for everyone – 30-40% food is thrown away. Nevertheless, millions of people die of starvation every year, and the situation is expected to deteriorate.

Therefore, what we really need to do is to change our economic system such that supply chains are closed and a circular and sharing economy results. Then, the world’s resources would be enough for everyone. The question is, how to build this circular and sharing economy? In some countries, politicians have tried hard to promote recycling by laws and regulations, but things did not get very far.

Today, millions of responsible citizens recycle glass, sort waste, bring back old batteries etc. However, even in the most advanced countries, we don’t have anything that comes even close to a circular economy. Developments look more promising for the sharing economy, but so far it is dominated by a few companies such as Uber and AirBnB. We are still far from an open and participatory information, innovation, service and product ecosystem, in which everyone can contribute with their own products, services and ideas.

Therefore, to boost the emergence of a full-fledged circular and sharing economy, we need to create new market forces. This brings us to a new socio-ecological financial system, which I sometimes call “finance 4.0” (the number does not really matter). What I have in mind is an exchange platform that combines the Internet of Things with Blockchain Technology and Complexity Science. Let me explain this in in more detail.

The Internet of Things comprises a large number of measurement sensors that are connected to the Internet. Such sensors can now be used to measure features of their environment cheaply. One could say, these sensors make it possible to give ordinary things senses and allow them to “perceive” their environment. Combined with Artificial Intelligence and actuators (i.e. active elements), one can even build things that respond to such “perceptions” in a “smart” way. This gives them something like an own, artificial “life”. At least we can give things autonomy now. For example, self-driving cars are using radar sensors, video cameras and other sensor systems to get a picture of their environment. In response, they drive the car autonomously, as decided by machine intelligence.

In particular, with Internet of Things sensors, we can now easily measure negative externalities such as noise, light, temperature, acceleration, rotation, location, and many other undesirable things. So, let us assume we would use such sensors to measure carbon dioxide (CO2), stress, all sorts of emissions, and waste of various kinds. Further assume that we would measure positive externalities such as social cooperation, health, education, or the reuse of different kinds of waste.

Then, we could build a multi-dimensional incentive system on top of these measurements that gives each negative externality a price and each positive externality a value. For the sake of illustration, imagine we would use black, red, blue, green, yellow and all sorts of differently colored eCoins to price the different kinds of externalities. These different eCoins could be implemented by means of Blockchain technology.

With this multi-dimensional incentive system, we could then implement real-time feedbacks and reward desirable externalities, while discouraging undesirable ones. This differentiated reward system would be much more suitable to manage complex systems such as our economy or society than the one-dimensional money system we have today.

Our current money system is based on a utilitarian approach which ranks the entire world on a one-dimensional scale. It is clear that such a one-dimensional approach is oversimplifying world affairs and needs. It creates a hierarchy and a power structure, which makes the world go ‘round, i.e. governs by force. However, it is not suited as a coordination system for today’s complex world.

To illustrate the issue, let us imagine the production process of a complicated chemical or medical drug. Here, it will certainly not be enough to control a single variable such as the temperature. Instead, it will be necessary to control the temperature, pressure, and concentrations of all sorts of ingredients, and perhaps even arrange for several different subsequent processes.

Similarly, our human body cannot thrive by varying just one variable such as the amount of water we drink. We rather need a variety of substances such as water, proteins, carbohydrates, vitamins, and minerals. Normally, these cannot be substituted for each other. If one of the necessary substances is lacking, our body will not perform well or even fall ill. So, why should it be possible to run our economy or society with one-dimensional money?

It is clear that a more differentiated, multi-dimensional approach promises better results, and this has a reason. Many complex systems are made up of so many autonomously (re-)acting parts that it is difficult to make them do what you want them to do. Often, strong interactions within a complex systems lead to unexpected side effects, feedback effects or cascading effects, which cannot be simply controlled in a top-down way. However, there is a way to make these systems well-behaved. Complex systems tend to self-organize, i.e. to come up with their own characteristic kinds of structures, properties, and functions. By changing the interactions, one can change the outcomes. It’s a focus of Complexity Science to study, what kinds of interactions produce particular outcomes. “Mechanism design” is the discipline that studies, how to choose, specify or change interaction mechanisms in such a way that the desired outcomes would result. The Nervousnet project my team is working on, is aiming to produce a platform that would eventually allow to create context-dependent incentives and interactions such that desirable outcomes would occur by self-organization. Boosting a circular economy is one of the goals. However, it would require a much larger-scale approach to get there by 2030. It’s possible, but governments would urgently have to take action.