Globalisation is to blame for two reasons. Firstly it encourages centralisation. Secondly it encourages imports which makes it harder for anyone to anticipate or plan for the problem and cuts domestic production even further. It makes central planning (which does not have a great track record) even harder.

The reason we have this system is supposedly the pursuit of efficiency, and it is possible that prices of ammonia (of which CO₂ is a by-product) and CO₂ are lower as a result. I have some doubts (there are other motives for scaling up, and there is plenty of evidence that agency conflicts and the advantage to managers is the real motive), but we can leave that aside for now.

A clearer problem is that the costs of the shortage are widely spread out across the economy, rather than falling on those who operate the plants. In other words, the risk and reality of shortages are externalities.

Combine externalities with the market fundamentalist ideology of the “invisible hand” and the, again ideological, taking of homo economicus not just a useful simplification in economic models but as a guide to reasonable, even moral, behaviour, and we have all the ingredients for the problem. It is not the manufacturers duty to even warn of the problem, let alone try to ameliorate it. If people are expected to have a selfish motivation, what duty is expected to customers, let alone wider society?

So, in summary, if we had lots of small firms, instead of a few big ones, we would avoid this sort of problem. If we had a bit less free trade, it would help as well. Finally, if we had different ideologies and attitudes, we could plan for it. However, these are not three separate issues: they are all products of the market fundamentalist/neo-liberal/pro-business (call it what you will) ideology.

Here is the original, but its all quoted below.

I write this to explain why I’ll be holding back my album, 1989, from the new streaming service, Apple Music. I feel this deserves an explanation because Apple has been and will continue to be one of my best partners in selling music and creating ways for me to connect with my fans.

I make lots of money from iTunes, and this could be profitable too, so I had better do enough grovelling first to let me change my mind if I have to.

I respect the company and the truly ingenious minds that have created a legacy based on innovation and pushing the right boundaries.

They are really good at marketing, just like me.

I’m sure you are aware that Apple Music will be offering a free 3 month trial to anyone who signs up for the service. I’m not sure you know that Apple Music will not be paying writers, producers, or artists for those three months.

It is shocking that anything new in the music industry does not make even more money out of fans.

I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company.

Apple is really good at extracting money from consumers, so we want a slice.

This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows.

This is entirely about me, but people are horribly unsympathetic when a super-rich 25 year old complains she is not making enough money.

This is about the new artist or band that has just released their first single and will not be paid for its success. This is about the young songwriter who just got his or her first cut and thought that the royalties from that would get them out of debt.

That is assuming that lots of people listen to them on Apple Music, and no one buys downloads or CDs or anything, and assuming unknowns people actually make lots of money from their first single. Its not like this is an industry where a few stars make all the money of something!

This is about the producer who works tirelessly to innovate and create,

A lot of my rich and successful friends and colleagues will not make enough money out of this either.

just like the innovators and creators at Apple are pioneering in their field…but will not get paid for a quarter of a year’s worth of plays on his or her songs.

I think a bit more sucking up here will make me sound better.

These are not the complaints of a spoiled, petulant child. These are the echoed sentiments of every artist, writer and producer in my social circles who are afraid to speak up publicly because we admire and respect Apple so much

These are the complaints of a spoiled, petulant bunch of rich people who want more money, but are scared of upsetting Apple too much.

We simply do not respect this particular call.

We will respect a call that makes us more money.

I realize that Apple is working towards a goal of paid streaming. I think that is beautiful progress.

It would be really great if people paid to listen to streaming services, and then paid again to buy downloads. No physical product, gross margin of almost 100%. That is what I call beautiful.

We know how astronomically successful Apple has been and we know that this incredible company has the money to pay artists, writers and producers for the 3 month trial period… even if it is free for the fans trying it out.

Apple needs this to work badly enough that my friends and I can squeeze some money out of them, even if they are not making any money out of it.

Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing.

I want the money now.

I say this with love, reverence, and admiration for everything else Apple has done. I hope that soon I can join them in the progression towards a streaming model that seems fair to those who create this music. I think this could be the platform that gets it right.

Pay me from the start, then I’ll be happy.

But I say to Apple with all due respect, it’s not too late to change this policy and change the minds of those in the music industry who will be deeply and gravely affected by this.

We can squeeze pretty hard if we want to.

We don’t ask you for free iPhones. Please don’t ask us to provide you with our music for no compensation.

…because the cost of producing an iPhone is near zero just like the cost of producing a copy of music. I may use free software to run my website, but I need more money than a geek! Its not like anyone ever produced art or music without being assured of royalties first.

Smarterer is being used for recruitment, and its business model relies on that. The tests are free to take, but employers pay for access to job applicants scores. Smarterer scores can play a large part in who gets hired.

Smarterer uses an 800 point scale, not unlike GMAT. Scores close to 800 are supposed to be very impressive (I recall impressing people more with my 780 GMAT score than I did with any real life achievement) and get an appropriate “master” description. One assumes that “expert” means someone is pretty good at something, and even “proficient” must surely indicate that someone would be a competent employee in a job that relied on that skill. What else could these as an assessment of a potential employee?

My Smarterer scores right now (not all are shown on my public profile):

SEO (Master – 796)
C (Master – 796)
Corporate Finance (Master – 791)
Financial Analysis (Master – 791)
Management Accounting (Master – 785)
HTML (Master – 782)
Statistics & Probability (Expert – 775)
CSS (Expert – 767)
MySQL (Expert – 764)
Python (Expert – 746)
Linux (Expert – 733)
SQL (Expert – 717)
Apache (Expert – 713)
Financial Accounting (Proficient – 653)
Python Workshop (Proficient – 650)
Financial Markets & Securities (Proficient – 639)
PHP (Proficient – 594)
Web Design (Proficient – 561)
Investment Banking Fundamentals (Proficient – 487)
Django (Proficient – 483)
PostgreSQL (Proficient – 461)
Microeconomics (Familiar – 434)
HTML5 (Familiar – 338)
Trading Options (Beginner – 274)

My Management Accounting score is far higher than my Financial Accounting score. I have studied the two subjects to about the same level. My overall training in finance gives me a feel for the concepts behind management accounting, but I have a lot more experience of financial accounts, albeit interpreting and analysing them rather than preparing them. I would have expected to do much better in Financial Accounting, but Smarterer thinks quite the opposite. I am inclined to put this down to a mixture of luck and, possibly, a flaw in Smarterer’s adaptive system for picking questions.

There are many other inconsistencies in my scores. Different scores in two different tests on Python, one little better than my score in the PHP one. I have used PHP only to write some simple WordPress and WolfCMS plugins, and similar light use, whereas I have used Python a lot over the last few years. My Django score is actually lower than my PHP score. I write Django all the time but rarely write PHP.

My scores in Statistics, SQL, and a number of other tests may be accurate if you interpret them in the correct context. I am no statistician or DBA, but I am far ahead of the average accountant or MBA graduate in my understanding of statistics. You cannot really interpret the results of these tests without spending time evaluating the level of the test.

For a number of tests, it is not clear what the objective is. What job does the skill relate to? Trading Options and Investment Banking Fundamentals are not tough enough to be useful to the employers to whom they may be relevant, and are too specialist to be of interest outside the speciality.

Now for the outrageously wrong tests. Sadly, this means I have to repudiate my two best scores.

There is no way I am a master SEO. I wish I was. I know the basics, but I also know my limits. My feeling is that the score reflects the general low level of competence in an industry full of snake oil, guess work, and fearful clients.

Even better is my equally high score in C. My total experience of C programming consists of an unsuccessful attempt to write a game for the Atari ST as a schoolboy and reverse engineering a few hundred lines of C (essentially working out the exact financial calculations being done by undocumented code) nearly 10 years ago. I also read about half the K & R book (the classic book on the language) about six months ago. This makes me a master?

The truth is that the C test is better described as an IQ test that assumes a knowledge of C. It tests got basic knowledge of the language, while the harder questions are essentially puzzles written in C. There is nothing that tests the skills that would be needed to write software in C.

Part of the problem is that it is hard to devise multiple choice questions for most subjects. I have seen meaningful multiple choice questions all the way up to postgraduate level, but they are very hard to set. It requires both deep subject knowledge and the very specific skill of devising good questions.

Part of the problem is that expertise is, by its nature, hard to crowd source. It may work is Smarterer gains massive scale, but I doubt it, and it is certainly not working now. Even where there are multiple tests on a subject, there is no useful way of quantifying quality.

Smarterer is great fun and I enjoy it. Use it as a subject specific trivia game. Relying on it in its current state would be mistake.

So what is the real purpose? It varies, but the key in most cases is to control consumers. Consider the the Amazon Kindle and the DRM Amazon applies to books. Again, the content is available without DRM through the Kindle Cloud Reader: although, as far as I have been able to find out it is in any case fairly simple to remove the DRM from Kindle ebooks, so no one bothers the more awkward process of intercepting the DRM free content in Cloud Reader.

The real purpose of Kindle DRM is to make it expensive to switch to to another device. A consumer who has a collection of books and wants to switch to another ebook reader must purchase new copies of every single book they want to keep. This ties consumers down, maintaining market share against existing competitors and making it very difficult for a new entrant into the market to gain share at all. The tech savvy minority will strip the DRM, but for the majority of customers switching will simply not be an option.

Of course many services have exceptions to DRM: much of the music Apple sells is now DRM free, and Amazon Kindle software can be used to read Kindle books on an Android tablet (and the Cloud Reader to read on any platform), but the remainder is still a very high barrier to switching. Furthermore, none of these are guaranteed to remain available: they may turn out to be a  way of leading customers into lock-in, and may be withdrawn once their purpose has been sufficiently served. In Apples case its customers are locked in in multiple ways, not just DRM, so selling some content without DRM does not loosen the lock very much.

The bottom line is that DRM is a way of limiting competition; a way of routing around free market competition.

For those unfamiliar with financial markets what they are claiming is that using information on their website (the “disclosure table”) to produce a list like this:

1. Acme plc is subject to a bid by None plc. Offer made 12th December 2012. Bidder name disclosed 5th January 2013.
2. Another plc is subject to a bid by an undisclosed bidder. Started 10th January 2013/

for about a dozen lines is a breach of copyright.

This seems entirely wrong to me for several reasons:

1. The information should be as widely circulated as possible, and impeding its distribution makes markets less efficient. This is the opposite of what the Takeover Panel should be doing.
2. It impedes people’s ability to comment on the table, and therefore to comment on the market. This, again, is the opposite of what the Panel should want to achieve.
3. The information is not created by the Takeover Panel, it is reported to them by the companies concerned.
4. A regulator of markets should not be a manager of copyright works. Unlike a commercial publisher it has a monopoly and it should not seem to exploit this in any way.
5. It is a collection of facts, not a creative work. I only want the information not the layout or arrangement. It is also doubtful whether it falls under database right (which they are not claiming anyway) given the table itself required no real effort to compile.
6. It is news, and it was never an (admitted?) intention of copyright law to impede the distribution of news.

As an aside for those more interested in copyright than financial markets, this is yet another counter example to the argument that copyright provides an incentive to create works. The Takeover Panel would have no choice but to produce the table whether or not copyright existed, but given copyright they choose to exercise it.

The more I looked at it the less I liked it. The low returns are not just a problem in themselves, but they are slowly declining, making management claims that the pubs being sold are lower quality. If what was being retained were the better businesses, then we should see a rise in returns, but ROCE fell from 6.9% in 2009 to 6.3% in 2012, with similar declines in returns calculated in other ways (using EBITDA, using slightly different asset numbers, etc.).

It is not entirely clear from the accounts, but it looks to me as though:

1. Pubs intended for sale are revalued, almost always downwards. In fact are much of the revaluation (227m of 691m in the last four years) are of “non-current assets held for sale” — i.e. pubs that are up for sale.
2. They are then sold at a little more than the revalued price, generating a small “profit on sale of property, plant, and equipment”.

With £675m of disposals from “non current assets held for sale” over the last four years,  it looks very much as though revaluations are roughly equal to the actual market value of pubs being sold: project that forward (and the trend in returns supports doing that) and that promising 0.5 price/book looks about right.

The calculations above are somewhat “back of an envelope” and the comments on revaluations (the last para above) may well be wrong, but I think it cannot really be improved much of the information available. The market is working nicely and has value Enterprise Inns fairly.

In the long run, the growth that matters is economic growth. Without economic growth organic growth would be a zero-sum game, and negligible at the market level. There would be winners and losers, but the gains would be entirely offset by the losses, so the average investor would gain nothing from this growth.

The question is what drives economic growth? In the long term economic growth comes from improvements in technology. The economy cannot grow past the productive capacity of the economy, and technology enables this. This has not always been what we regard as high technology: the invention  of the horse collar had a tremendous impact on economic growth.

One thing investors forget is that technology often has an impact well beyond the the industry it occurs in. The agricultural revolution made available the pool of labour that enabled in the industrial revolution (not that it would have looked like a good thing to those in the pool!). Computers have allowed the automation of banking (manual processing of cheques is a lot of work) and made logistics more efficient (for example, fewer empty lorries because computers can match loads to journeys better than is practical manually).

I have been arguing for sometime that the last few decades have seen little new invention. I have recently noticed that the message seems to be getting through to the mainstream media (a recent article in The Economist, for example).

We have had economic growth driven by incremental improvements to existing technology. Computers may have ultimately similar designs to those available in 1970, and made using similar processes, but they would not have had the same economic impact if they were still the same size and cost!

The problem with this is that there are limits to incremental improvements. Once we reach the limits of, for example, reducing the size of integrated circuits (that the limits exist is a matter of the laws of physics), advances in computers and electronics will no longer be rapid.

There are also diminishing returns to incremental improvements. It is fairly clear that most of the productivity gains enabled by the automation of clerical work and financial transactions have already occurred, and the impact on productivity of making computers still smaller and cheaper will not be as big.

In the past by the time the impact of the big breakthroughs of one period were running down, the next lot of big breakthroughs were beginning to have an impact. With no big breakthroughs in the last 40 years, once the incremental improvements run out, growth is done.

Of course there are many exceptions to this. The largest lies in emerging markets where existing technology is not anything like fully utilised. The problem is that this is not a replacement growth driver, it is just one driver that is not disappearing with the slowdown in innovation.

Population growth may also help boost demand, at least in some countries, but it will also put pressure on limited resources, particular food and natural resources: slowing technology means that our ability to make more from the same inputs will not grow at the same pace as in the past.

There will also be some growth industries: I am not arguing that all advance will stop, just that it will be a lot slower. There will also be opportunities to consolidate and create economies of scale, and these may be easier to exploit when a lack of disruptive technology makes things more predictable.

None of this is enough to change things very much. Growth in one business will matched by a corresponding decline in another, as low economic growth means aggregate demand will grow slowly. If growth is lower, then returns need to be more immediate. The market as a whole should return far more in the short term: dividend yields need to be much higher than has been typical in the past. IN practice we also need to take into account other ways of returning profits to shareholders such as buybacks.

Although this may seem to be a triumph for value investing, I am not sure this is entirely true. Even growth that comes from wining a zero-sum game is growth nonetheless, and growth stock picking will continue: perhaps with gradual shifts in emphasis.

I am not a believer in strong form market efficiency. Neither am I a free market fundamentalist who believes nothing should be regulated. Insider trading allows insiders to profit at the expense of other investors, destroys faith in markets, and is fundamentally unfair.

Insider trading laws have been failure. While there is occasionally a successful high profile prosecution in the US, they are rare. I cannot even remember the last big case before Rajaratnam. Successful prosecutions are even rarer in the rest of the world, and very few big fish have ever been convicted in the UK.

Insider trading remains pervasive. Every study shows consistent patterns of price movements prior to news releases: proving that insider trading happens. The fact of further price movements after news is released disproves strong form efficiency: the price clearly did not reflect the undisclosed information until it was disclosed.

At the moment insider trading is not supposed to happen, but it does. The pretence that it does not gives investors false confidence. It is better to have no faith, than false faith, so I say destroy investors faith in the markets: it is better to tell the truth. The law is hard to enforce (because of the paucity of evidence) even when it is broken, and the difficulty

What would the consequences be? I must admit that in the past my opinion was that they would be disastrous: markets would seize up leaving most investors with very few options for saving. Companies would not be able to raise money for expansion from the markets. The economy would be owned by plutocrats due to the inability of small companies to expand, and the inability of the public to invest though the markets with confidence.

I changed my mind because a range of other possibilities occurred to me. Looking at possible scenarios, the end result is likely to be better than the sham we now have.

The worst case scenario is that investors will discount valuations for the risk that there is price sensitive information that has not been disclosed. This happens in poorly regulated emerging markets. In those countries lack of faith in markets due to insider trading does often inhibit the development of capital markets, and does hold back economies through all the consequences I used to fear. In a developed market where shares (and other securities) are widely held, and most money is managed by investment professionals, I think the different path will be followed.

The most likely to withdraw completely are are individual investors. What I expect is that fund managers will take great care they have to ensure that they do have all the information before investing: financial markets will work rather more like private equity does, with extensive due diligence. Individual investors will invest through fund managers, as that would be the best alternative left to small investors who ruled out running their own investments. This would make markets a lot less liquid, but far from ineffective at fulfilling their primary purposes in the economy, of allowing companies to raise capital, and individuals to get better returns.

The best case scenario is that markets would be forced to respond by raising standards. The better a company was at disclosing publicly what insiders know anyway, the less its securities would be discounted for the risk. This would create an incentive for transparency. Once a reputation for honesty with investors becomes important it would create a culture that values honesty, whereas tight regulation tends to create a culture that rewards the ability to push restrictions and find loopholes.

There are precedents for a culture of integrity and enlightened self interest making financial institutions work without the threat of punishments. Trading on the London Stock Exchange once relied on floor brokers keeping their word, which is why it adopted the motto “dictum meum pactum” (my word is my bond). The great mistake of modern law and regulation (and incentive schemes), and not just in financial markets, is to rely purely to selfish incentives, and ignore the far greater importance of prevalent values and attitudes.

Once obvious response to all this, is to suggest that the law be enforced more vigorously, or strengthened and enforced more rigorously. I do not believe that this possible. It is difficult to define inside information, and there are too many sources of extra information that lie outside the definition (information from sales channels, information that is not directly price sensitive, etc.) but can be significant: especially in aggregate, or because of inferences that can be made from it. It is too hard to prove what people knew and when and why they made decisions. If a CEO said that a lunch with a big investor was purely private and all they discussed were their kids and hobbies, how to you prove otherwise?

There is also a real lack of will in committing resources to going after lots of rich and influential people (the more money people have or control, the more damage their insider dealing does) committing a non-violent crime with very little likelihood of leaving enough evidence to be convicted.

The most practical solution is to give up on prohibition, and hope something better will evolve.

What I have in mind most of all is good short term performance of shares in companies that have long term problems or risks, which do not seem to be reflected in the price. A good example is French Connection which always had potential problems which were likely to manifest themselves sooner or later: most importantly a main brand (FCUK) that relied on shock value which would wear off sooner or later,

However, even though the long term weaknesses were visible in more than a decade ago, the price actually peaked in 2004, when it being evident that the brand was weakening. Anyone taking my advice to sell in 2001 would have missed an opportunity to nearly triple their money.

Why did the market not foresee that the brand would weaken? Were investors too stupid to see what would happen, or too deluded to believe the warnings that it would? I do not think so. As long as there was a good prospect that earnings would continue to grow for a little longer, there was a chance to gain a little more and sell before things went visibly wrong. A greater fool expectation.

Investors also look for catalysts for re-ratings. This is reasonable: you may think a company is on too high or low a valuation multiple, but something needs to happen to persuade the rest of the market of this. If you cannot find such a catalyst then you assume the company will continue to be valued in the same way, so you hold, or avoid buying, until you can see a potential catalyst in the near future.

There is also, of course, an element of herd instinct in this as well: its a bit frightening to sell something that the rest of the market still thinks is worth a high valuation and with good prospects for growing earnings. This is part of what makes it possible to find a greater fool (right up until things fall apart) so it is too closely entwined with the greater fool effect to be regarded as entirely separate.

Investors deviate from investing on fundamentals because of their expectations of what other investors will do, so this itself becomes a key source of market inefficiencies.

The pace of innovation is slowing (hard though it may be to believe). I have looked at this from a social and political point of view already. I now want to look at the implications a bit more, and also why it seems unbelievable at first. The reality is that we are living on past innovation, and it looks as though we are losing the key driver of economic growth and potential solutions to our most pressing problems.

The idea that the innovation is slowing is hard to accept because it contradicts both the received wisdom of an ever accelerating pace of change, and the experience we have of lives transformed by technology. However if we look at this more carefully, the explanation becomes apparent.

First, to sum up my previous argument: there have been very few big new inventions in the last forty years. The previous forty years saw radar, electronic computers, transistors, lasers, nuclear reactors and many more huge breakthroughs, the peak of a rate of innovation that had been increasing since the start of the industrial revolution. That is probably an understatement as the pace of progress (with some setbacks when civilisations fell) has tended to increase throughout human history, and the the upward trend was continuous in Western Europe (where modern technology as born) since the fall of the Western Roman Empire (and, from what I understand of history, even that setback is now regarded as popularly overstated).

What I did not discuss properly before, was why we perceive the pace of change to be accelerating. If asked for examples of new technologies have had a significant impact in the last forty years, most people will suggest computers, the internet and mobile phones. All these were invented more than forty years ago (even computers with mice and graphical user interfaces). What has happened in the last forty years is that we have made them smaller and cheaper. However this rests on improvements (not breakthroughs) in a very narrow area.

We may now be able too combine a computer and a mobile phone into a pocket sized unit and sell it at a price that makes it affordable to consumers. However this, and most of the other advances of the last forty years are the result not just of progress in a single industry, but are the result of improvements to a single manufacturing process.

The rapid progress has been made in the manufacture of semiconductors, which has continued to follow Moore’s Law. Most of what has been changed is simply the result of being able to fit 30 times as many transistors on a silicon chip at the end of each decade as we could at the beginning. As smaller transistors are faster this meant a thousand fold increase in performance every twenty years, and a million fold increase in the last thirty years.

There are three aspects to the limits of this:

1. The physical limits of what a computer can do,
2. the limits of the underlying technology, including problems lithography and heat dissipation problems,
3. diminishing economic returns from further improvements.

The first is not much of a problem. We are centuries from hitting the ultimate physical limits. To get there we need the invention of whole new technologies — which is exactly what has has not happened.

The limits of further improvements to the processes we have been polishing for the last forty years are likely to be much more immediate. We could see a significant slow down this decade. We are already seeing some changes even in consumer devices that reflect these limits: multi-core processors have become standard (all new computers, and even high end phones) because of the amount of heat produced by ever faster single core processors. We are very close to hitting this.

The diminishing economic returns are also something that is evident, at least in part. The utility of further increases in processing power, and the effect of further increases to increase productivity are becoming limited. We saw huge increases in productivity from early automation: banks once employed vast numbers of clerks just to process cheques. This process was first automated (making it much cheaper) and has now largely been replaced by purely electronic transactions making the margin cost of actually processing a transaction near zero). Those of us who heavily use online information were one of the the last large groups to make large productivity gains, and there are still large cost savings to come in areas such as replacing physical media distribution with electronic. What then?

It is also worth considering what has not happened. We have still not got fusion power (green, and virtually limitless), real breakthroughs in artificial intelligence elude us (much needed given the shortage of the natural kind), and almost every form of transport uses the same underlying technology (jet aircraft, petrol and diesel piston engined cars, electric and diesel powered trains). It would not be hard to extend this list with a many more optimistic expectations of the seventies.

So without innovation, what do we have? Much slower economic growth. If the improvements in semi-conductors, out magic of the last few decades, slows, everything else that has depended on it will stagnate, and that means the whole global economy. It is technological progress that drives productivity, and it is productivity that drives growth. Does anyone question that?

There is room to for global growth by rolling out even more slowly developing technology to developing countries, but this will lead to resource shortages: we need new forms of energy and new materials to make that scale of development possible. I am not even considering the problems of food production and water supply.

The implications just for investors are staggering. It will mean much lower returns on equity investments. This in turn means that the the era of equities hugely out performing bonds may be over. Alternatively, it may lead to lower bond yields as well, as the need for investment capital to roll out new technology diminishes. There may be opportunities in emerging markets, natural resources, and food, but the market growth cannot be expected to continue at past levels for more than another decade or two. This is long term by most standards, but not if you are saving for your retirement.

Opportunities in technology sectors will be very limited. With a slower rate of progress they will become mature industries. There may be some gains for consumers as the focus moves from innovation to quality and reliability or price — as has happened in other mature industries, but this will mean lower margins and limited expansion into new product categories, which means lower returns.

My previous post looked at some of the possible social and economic consequences, such as increasing income inequality. There are also wider consequences. Ultimately, this megatrend affects all the others. Fusion power (or cheap solar power, or any of many other possibilities) would solve out most pressing environmental problems — and the alternative solutions will restrict, or even reverse, growth. We face food shortages that would be relieved by the reduction in the birth rate that accompanies affluence, and affluence spreads to the poor more slowly without technology to drive growth. The developed countries need medical innovation to cope with ageing populations. The unacknowledged megatrend is the biggest of them all. It is perhaps, better called a gigatrend.