Back to the future

Nearly all mediations involve juggling different timeframes. Exploring different perspectives to better understand what is rooted in the past, developing options for moving forward - trying to transform present circumstances into a more positive future.

In many respects the time and effort that goes into the mediation process from all concerned can be seen as an investment in the future, however, the process itself also needs to involve sufficient due diligence to be effective and ensure the outcome is sustainable. A critical element is the reality resting of options - to what extent are possible future outcomes achievable or are they just empty promises or wishful thinking?

In his recent book ‘The Alibi of Capital - How We Broke the Earth to Steal the Future on the Promise of a Better Tomorrow’, historian and political theorist Timothy Mitchell argues that the conventional framing of investment as the deployment of savings in the form of consumption foregone in the present to stimulate future growth and development may be far from the full picture. He argues that much of what we consider as investment is made using credit to generate rights to future payments or goods. These rights, can then be traded and speculated upon at a discount in the present. As such wealth for those that can generate, trade and speculate on these rights today can be seen a claim on the efforts of future generations.

As Mitchell puts it: “We live in a world organised to place the future in debt, with the income discounted to the creditor and later repaid in full by those encumbered or indebted.” These claims on future generations might be even greater than they first appear from a financial perspective when the externalities of current activity (such as carbon emissions) are taken into account.

Some of the implications of debt financed investment on everyday life are graphically illustrated in the leveraged buyouts of private equity funds. In a book published this month (summarised here) journalist Hettie O’Brien explores a financial web than now impinges on many aspects of our lives. In this growing part of the financial system bought out businesses (on whom the debt incurred by the acquiring ‘equity’ investors is loaded via ‘debt pushdown’) pay off the debt (which could be up to 80% of the purchase price), while their customers ultimately foot the bill through increased prices and poorer services. As she puts it:

This suggests the need for some serious due diligence in what we’re investing in and how we are financing it, not least in how sustainable it is, both in terms of social justice and environmental impact.

A key part of this will involve to what extent and by how much we should discount the future. Is a bird in the hand worth two in the bush? The choice of discount rates is a key part of any cost-benefit analysis. It will determine how much value is given to future benefits and costs to be set against current costs of making the investment.

In his book ‘What we owe the future’ philosopher William MacAskill argues we should value future outcomes much more highly than we currently do. Morality he says “is about putting ourselves in others’ shoes and treating our interests as we do our own.” A sentiment that won’t be lost on mediators. The ‘others’ we should be putting ourselves in the shoes of, will be the many millions to follow us in future decades and centuries. What we do today is likely to have a significant impact on their wellbeing. If we are still in the foothills of human history, as hopefully we are, he argues we need to act wisely and not like an imprudent teenager.

Technological advances in so many fields, such as AI and weapons development, along with the resource use and the waste product implications of what we do today, make the future impact of the decisions and actions we take today ever more significant. We owe it to ourselves, the next generation and many future generations to be as robust as we can be in reality testing the sustainability of the options open to us.