ECONOMY

By Michael Peters
School of Business Law/Taxation

Our existing legal and political structures have evolved in much simpler times, with fewer people and less pressure on resources.

So what type of world should we expect as we exceed the 7 billion mark?

The great demand on resources, health, education and opportunities will need to be carefully planned and regulated. Otherwise the few may dominate and the majority will be frustrated and alienated.

The rule of law will become an even more critical part of human culture.

The law will become more complex, perhaps less accessible, but it will remain the single most important tool of social cohesion to guarantee access to political, economic and social empowerment.

It will be the only way we can guarantee every person has the right to access health, education, transport, water, shelter and the opportunity to live a fulfilled life.

We see glimpses of the future in the present and in the past.

The ancient cities gave us many of the legal principles and procedures we have today. It was their way of dealing with their population explosion.

Whether it’s the law of obligations, the concept of the duty of care, criminal law, fiduciary duties and the rights attached to property, all originated from a need to manage resources and people concentrated in one place.

Multiply that on a global scale and chances are there will be more laws, regulations and many more new legal principles.

More people mean more demand for shelter, which will increase the cost of living, and drive people to earn more. In turn, people will tend to protect what they have aggressively. The result? More regulation, more disputes and perhaps more litigation.

People will value their rights and enforce them with vigour, while at the same time suppliers will use sophisticated marketing to attract buyers and manage the consumer. This will inevitably lead to more regulation of marketing, and of competition generally.

We have seen this trend in areas of mobile phones and consumer credit law reform in Australia and globally.

Competition law will become a central theme of political and economic policy. The great human energy to invent and endeavour will explode but it will be met by forces seeking to monopolise the new opportunities.

We know that each time there is a technological breakthrough or opportunity such as the internet, a rush of new suppliers enters the market, then one large supplier emerges as the gatekeeper.

As accessible as new technology may appear, a few always seem to dominate.

Competition law will become critical to guarantee access to the new technology and opportunities.

The phenomena of the few controlling markets, politics, and access to health, wealth, information and education will be an ongoing theme.

We see glimpses of this in 2011 at the Occupy Wall Street protests in New York, USA, and on the streets of cities throughout the Middle East and Europe. Populations in these cities have seen their access to resources and to opportunities diminished.

Whether it’s a failure of regulation on Wall Street, or an abuse of power elsewhere, the prognosis is very similar. As populations grow, equity and access to resources and opportunity will be critical to maintain a civil society.

We see this with the new competition, banking and finance laws and new range of regulations in Australia, the USA and Europe.

People will see that they have a stake in the environment, how resources are managed, how business behaves. They will ask why some schools, businesses, institutions or even classes of people are treated differently from the majority. They may begin to ask why so few command influence over the economy, politics, and policy and perhaps the law. People have a stake, a say well beyond where they live and work. Stakeholder interest will emerge as a legal right, eroding property rights over time. It will be a sign that 7 billion people on one small planet means give and take, careful management of resources and the environment.

Otherwise many of our 7 billion people will be destined to live in poverty, in refugee camps, stateless, and millions will never use a telephone, never have access to clean water, medicine, let alone education or access to the internet.

The rule of law on a global scale is perhaps the greatest moral challenge of our time.

ECONOMY

Business Law expert Michael Peters explores the critical role that law will play in ensuring fair access to services and property in a more populous world.

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"Perhaps the greatest moral challenge of our time."