Dramatic shifts in global power and wealth are under way.
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The crash of 2008 exposed deep failures at the core of macroeconomic policy-making and thinking. The rapid spread of the crisis from its epicentre on Wall Street to nearly the entire world underscored the interconnectedness of the global economy.
Purveyors of the ancien régime hope that a few superficial fixes will get us back on track. This is not to be.
Sustained and widespread future prosperity will require changes in global macroeconomic governance and science, and a new way of thinking. This new thinking will need to focus on two things: first, on 'human ecology' - humanity in the context of the physical environment, rather than a single-minded focus on markets; and second, on finding global solutions for global structural problems.
A return to sustained prosperity will also require the reassertion of core values in economic life: integrity, fairness, justice for the weak and sustainability for the future.
We find ourselves at a watershed in history, with multiple dramas unfolding at once across the planet. Four key global changes in particular pose major challenges.
First, dramatic shifts in global power and wealth are under way. With the rise of Asia, Western economic dominance is coming to an end, after more than two centuries, due to the global diffusion of technology, literacy and political sovereignty since the end of colonial rule.
We are heading towards a multi-polar world, both politically and economically. Society has never been very good at changes in power. They can give rise to new tensions, destabilising political competition and even (in the most dire cases) to war.
Second, we are witnessing the unprecedented global-scale impact of human society and production on the physical environment, and the economic disasters that come with this.
Today's 6.8 billion people average around US$10,000 (A$12,000) production per person (measured at purchasing-power adjusted prices), which amounts to about US$70 trillion (A$76 trillion) of global production per year. The scale of the world economy has risen roughly 100- to 1,000-fold during the past two centuries, since the start of the industrial era.
The ecological consequences are staggering. Around 30 billion tonnes of carbon dioxide each year are now emitted into the atmosphere by burning fossil fuels. Around 60,000 major dams, rapidly depleting groundwater and human-induced climate change are dramatically altering the world's hydrological cycle, leading to severe water crises in many regions.
We have no reliable systems for coping with the profound consequences of human impacts on water, climate, biodiversity, patterns of disease, invasive species and other environmental changes wrought by global society and the global economy.
