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Looking Back from 2010
Peter Zandan*
It is a pleasure to have the opportunity to talk with you this morning about the future of technology and our society. What will Texas look like in 2010? Let me start with any reasonable technology forecaster's warning: It is very easy to overestimate how quickly things will change in regards to technology. Our technology industry often gets very excited about the promise of our inventions and advances and has a tendency to think that the rest of society has the same level of enthusiasm and a willingness to adopt new technology into our work, lives, and entertainment. of today's emerging technology trends will be very clear to most of us. The direction that we are heading: technological intelligence will surpass human intelligence. This has incredible ramifications for many of the social, political and economic issues this forum is addressing. The ultimate power of the human species to be the primary influence on Earth is coming to an end. Sometime within the next 30 to 50 years, humans will no longer rule this planet; the microprocessor will.
Clearly, computers are already taking over many of the decisions that traditionally are made by humans. On my drive to this conference this morning, I was listening to NPR and the commentator complained that he had just heard the latest college football ranking based on a computer analysis evaluating which two colleges should play for the national title. What frustrated him was that he did not know whom to call to vent his anger with the analysis. He explained that when people voted, if he disagreed, he could rant and rave directly at them about their decision. However, with a computer doing the analysis, he did not know how to direct his opinion. He felt that he had lost his power to object.
A recent example of our growing dependency on computers and technology is the disruption we are concerned that Y2K will bring. The issue has certainly received enormous attention from our media and has created a great deal of fear about our society's infrastructure shutting down as we hit the year 2000. No matter what happens, I believe the true legacy for the "Y2K issue" is that for the first time our society realized that if computers shut down, our modern society would shut down. We are already extremely dependent on computers to run our infrastructure. By 2010, we will have another critical realization similar to Y2K. That realization will be that our society will be more dependent on the computer's intelligence than on human intelligence.
An example of this growing "computing intelligence" occurred a couple of years ago when, for the first time, a computer beat the world chess champion. We took one of our brightest humans and a computer beat him. Computers can make serious evolutionary jumps in a matter of months, while humans take hundreds of years to genetically change. Our species will not be able to keep up with the pace of technological change. For humans, "generational differences" usually refers to tastes and interests rather than well-defined improvements in brainpower and abilities. A new generation for computers usually means greater ability to process and analyze information. Gordon Moore, an inventor of the integrated circuit, came up with the insightful observation that every 24 months, you could pack twice as many transistors on an integrated circuit. This doubles both the number of components on a chip as well as its processing speed. Therefore a significant evolutionary progress occurs in the technology world in a matter of a couple of years.
There is an interesting test developed by Allen Turing in the 1950s. The test involves a human judge trying to tell the difference between a computer's and a human's response. The judge asks questions to a human and a computer and then the judge decides who responded. Computers have continued to improve on the test and it is estimated that by the year 2020, it will be extremely difficult to tell the difference between respondents. So when you contrast the intense speed of computer evolution and the slow pace of our evolution, it becomes clear that eventually computers will surpass our species as the most advanced "beings" on Earth.
Let me present one more example. I recently started a company called Zilliant. Zilliant is part of the Internet investment wave that allows start-ups to raise millions of dollars to launch a business to take advantage of the power of the Internet. One of the software tools that Zilliant uses is "intelligent agents." These intelligent agents are programmed to go out on the Internet and look for specific items. They do the work of hundreds of employees. They work 24 hours per day, seven days a week, to do a given task. What is amazing about the technology is that these intelligence agents, or "bots," can discriminate between types of information and get smarter the more they operate. Therefore, they do the intelligent work of humans but in a much more efficient and cost effective manner.
So how do we relate this technological innovation to Texas mythology? In order to take a refresher course in Texas mythology, I reread Edna Ferber's Giant, which presented every Texas stereotype in its full glory. There was land, oil, power and money and all the drama and intrigue. What struck me while rereading and examining the story with today's business climate is the book's portrayal of entrepreneurship. Entrepreneurship served as the catalyst for change in West Texas. This same type of entrepreneurship and the mythology exists today in our "new economy" of Texas. Michael Dell symbolizes the new Texas entrepreneur. Michael is the Jett Rink played by James Dean in the Giant movie. This new generation of maverick entrepreneurship is thriving in Texas's new economy and bodes well for Texas and the next generation of Texas mythology.
This maverick entreprenuership is thriving right here in Austin at the end of this century. We have had two major "oil strikes" by technology companies called Vignette and Crossroads. These companies have multibillion dollar stock market valuations. Miraculously, these technology companies that did not even exist five years ago have generated unbelievable wealth and influence for hundreds of central Texans. Based on technological innovation and entrepreneurship, I would like to present a different view from Dr. Silber's discussion of the end of the frontier that we have in the U.S and specifically in Texas.
The technology world offers our state a whole new frontier to explore. The boundaries, rules and future for this industry are still unclear. At the same time, entrepreneurs are trying to create and invent new opportunities that might offer many of the features of our mythologized western frontier. Today's technological triumphs and failures will be the myths for future generations. I believe that the 1990s will be considered the glory days of the technology frontier. Today's technological triumphs and failures will be the foundation for new myths for future generations. It is a special period of time that we might look back upon and appreciate the entrepreneurs who are building the next generation of the Texas story that will add to the older cowboy and oil mythologies that help define our state today.
Environment and Texas in the
Twenty-First Century
Jim Blackburn*
Albert Einstein has stated:
The world we have created today as a result of our thinking thus far has problems which cannot be solved by thinking the way we thought when we created them.
This is a perfect description of the environmental and economic development situation in Texas today. We Texans will evolve a different way of thinking about these issues in the future. Here are seven aspects of a different way of thinking about environment and development in Texas in the future.
1. Empty Texas vs. Full Texas. Part of the Texas mythology is that it is big and empty, just waiting to be settled. However, many parts of Texas are no longer empty, and we will continue to fill up with more humans and human impacts well into the twenty-first century.
The economist Herman Daly has observed that there is a great difference in empty-world thinking and full-world thinking. His thesis is that today the world is filling up and that we humans now have the ability to transform the natural system with our economic systems, our chemicals, our weapons, and our sheer numbers, yet we still live by values, doctrines, and philosophies that were developed at a time when humans were at the mercy of the natural system rather than vice versa.
Full-world thinking is different from empty-world thinking. Full-world thinking recognizes that ecological limits to economic growth exist and that we can destroy our natural systems if its capacity to assimilate impacts is exceeded. Full-world thinking changes humans from the party affected by the environment to the party with responsibility for the envi- ronment.
Texas must solve water supply crises associated with existing and projected population growth without dewatering our rivers and destroying coastal productivity. We must act to reduce Houston's ozone air pollution that is now the worst in the United States and prevent Dallas, San Antonio, and Austin air quality from worsening. And how many ranchettes can the Hill Country handle? By 2010, we will have stepped out of the empty Texas mindset and will be experimenting with full-world thinking.
2. Don't Mess with the Creation. A quiet revolution has been occurring within organized religion in the last third of the twentieth century. This change has centered around creation theology which asserts that God created the Earth and ". . . saw everything that he had made and indeed, it was good." (Genesis 1:31, The New Revised Standard Version). Presbyterians now write about Earth keeping, Episcopalians about the environmental metaphor, and Methodists join many other denominations in a commitment to stewardship of the creation. Perhaps most interesting are the statements of the Baptists:
Divine ownership means that the Creator holds property rights to the entire creation. . . . We never own the land. We are simply trustees of it. The failure to take care of the earth is tied to human sinfulness and issues forth in catastrophe.
Divine ownership of the earth requires that we recognize who holds the property rights, acknowledge that our mission is earth keeping, and get busy tending to our habitat. (The Earth is the Lord's, a publication of the Christian Life Commission of the Southern Baptist Convention, Nashville, Tennessee). Creation theology linked to earth keeping has not arrived at the grass roots level in Texas yet. It will arrive before 2010 and the church house on the prairie will never be the same, nor, for that matter, will the Texas legislature.
3. Principles, Taxpayers, and the Role of Government. My father loves the Louis L'Amour paperbacks about the "real west," where men and women fought and died over principles. What principles are we willing to fight for today? How about the principle that we want as little government as possible? One of the greatest myths is that Texas businessmen and women, particularly developers, dislike government and want to be rid of it. In fact, nothing could be further from the truth. Private sector access to governmental powers and bond money is a Texas business tradition. While stating their disdain of government as a matter of principle, developers and industry line up at the public trough like thirsty range cattle seeking highway funds to induce more development and MUD and PUD bonds for water, sewer, and drainage. Our cities, counties, and school districts establish tax increment finance districts to redo shopping centers and vote for tax abatements for corporations whose net worth is larger than many nations'.
Taxpayers and environmentalists acting together will discover that they have a common interest in reforming this Texas tradition. Together, they will lessen our public debt while spending public money in a manner targeted to cause less harm to the creation, all in accordance with the articulated Texas principle of less government. 4. Free Enterprise and Full Cost Pricing. Full-world thinking will require the fusion of economic and environmental thinking. Free enterprise will be the centerpiece of twenty-first century economic thinking as long as prices reflect ecological costs. Ernst von Weizsacker has stated:
Bureaucratic socialism collapsed because it did not allow prices to tell the economic truth. The market economy may ruin the environment and ultimately itself if prices are not allowed to tell the ecological truth. Here, the key is to get the price right. The costs of goods such as gasoline and plastics must include the health costs associated with air pollution, estimated in Houston to be at least $3 billion per year, not including effects on children. These products must also bear the costs of the greenhouse gas and CFC emissions to the atmosphere. The free market system of the future, if it is to survive, must generate proper prices, sending realistic signals.
Similarly, governmental projects in the full world will tell the truth about the ecological consequences of their actions through pricing. The cost of water from a reservoir project must include the harm resulting to coastal fisheries from reduced freshwater, nutrient, and sediment inflows. By setting the price in this manner, alternatives that have minimal ecological costs but high development costs are more fairly evaluated by computing the "full cost." Ecological destruction in the future will not be subsidized by allowing its cost to be neglected.
5. Environment as Strategic. Brad Allenby, a vice president with AT&T, has written and talked about the transition in environmental thinking within corporations from end-of-the-pipe to strategic. Here, he is exploring the change whereby corporations are bringing environmental thinking into product decision-making and sales rather than simply considering the environmental department as an add-on, as overhead, at the end of production.
Assume with me that a company can produce product A or product B at more or less the same cost and that these products are interchangeable. Assume further that to produce product A causes the emission of much more carbon dioxide, nitrogen oxide, and air toxins than to produce B. As a corporate manager deciding to build a new plant, do you choose A or B?
Currently, most corporations do not maintain this information in an easily accessible format, and the algorithms for assessing product environmental performance-the so-called metrics of sustainability-are only now being developed. However, computer models should be widely available within the next few years and the practice will be to use this information to prioritize new product development such as B above.
Given the availability of these models, what about the use of these metrics by consumers? Assume that a believer in creation theology wished to buy in an ecologically sound manner and further assume that such information was easily available at the grocery store when they were choosing among competing products. What product would they select? Such purchasing patterns are already evident in Western Europe, a relatively full place, and it will happen in Texas as well.
6. Cooperation Rather Than Domination. The gunfight of the Old West is alive and well in our legal system today, if nowhere else. However, cooperation rather than domination will be the full-world ethic.
Imagine a corporation asking a Texas community if they want a new chemical plant, offering both jobs and air pollution? Imagine further that they ask the community to help select the consultants to conduct environmental evaluations and that they offer to open their other corporate facilities to compliance and performance audits conducted jointly by the company and the local community. Imagine further that they ask a member of the community to become a part of the decision-making process regarding the environmental design of the facility.
Far-fetched? Not in a full Texas. In fact, certain aspects of this scenario have already occurred at Formosa Plastics in Point Comfort in the middle Texas coast. While not a perfect solution by any means, a series of agreements between Formosa and their adversaries have paved the way for cooperative solutions in the future, solutions that take us away from the legal gunfight mentality that represents an empty world's version of conflict resolution. 7. Texas as a Place. The greatest mythic strength of Texas is its self-image. Texas clearly exists as a place. Interestingly, one of the most important topics in environmental literature is sense of place, the linkage of person and environment. And while one might argue that the sense of place that we have in Texas is different from that described in books such as Refuge and A Sand County Almanac, we Texans at least have a strong concept of place upon which to graft ecological aspects. Granted, our ecological literacy is low. Most people living in Houston do not realize that they live adjacent to seven uniquely different ecological systems that link Houston with Canada and the Arctic Circle, the tropical forests of Mexico, Central and South America, and the Caribbean and Atlantic waters.
However, there is strength in the self-image. It is difficult to picture Texas, the mythical place, without large open spaces, flowing rivers, and a productive coast. That the stars at night are big and bright implies that they can be seen through the air pollution. Texas in 2010 will be interesting. A coalition of taxpayers, conservationists, organized religion, environmentalists, and business people will emerge to fuse economics, ecology, and spirituality. As a result, the moneylenders will be thrown from the Texas temple, protecting the creation and ourselves, as a matter of principle.
Karl Rove*
I have to start by correcting our president who said I held degrees from-then listed off a very impressive list of universities. I attended all those universities but have no degree. And being the only undegreed member of the panel, I've been assigned to government work.
After this impressive pair of presentations, I don't want to sound like I'm whining, but I will for just a minute. These guys get to talk about the interesting stuff that has a future and bright possibilities. I have to try to depict what Texas state government will look like in the year 2010. I'm given the ugly topic to begin with, and how one could figure out where anything as eccentric and as personality-driven as Texas government will be in ten years is beyond me. But I will offer up five key points to help describe where our government might be in 2010, depending on the resolution of these five conflicts. But I'll do so in as oblique a way as possible, so if you corner me on January 1, 2011, I can claim you're wrong and I was right.
There is this great myth of Texas government that it's limited in size and scope, that we're a state of low taxes. Until recently we were a one-party state in which all the major issues were settled by internecine warfare in Democratic primaries between two factions. Obviously, that last one has changed. I would suggest some of the other parts of that great myth have changed as well.
But we face in the coming years five important battles that will decide how Texas state government looks not only in the year 2010 but in many years after that.
The first one will take place shortly after the real Y2K, the real turn of the millennium, in January of 2001, and that will be the battle over redistricting. We are a rapidly growing state and will receive two or three additional members of the United States House of Representatives, and as required by our own constitution, the lines for our State Senate and State House will have to be redrawn. Redistricting is the ugliest, most important battle of Texas politics, and thank God we relegate it to one session every ten years so we only waste 20 percent of the time that our legislature is in session every decade.
How this will come out, God only knows, but I do think that it is most likely to come out with something that we've never seen before. Before, redistricting has always been-in the 1971, 1981, and 1991 sessions, and the 1961 session-has been fair and impartial. It's been designed to fairly and impartially represent Democrats in every possible position. Because we face 2001 with Republicans dominating statewide offices and in control of the Senate, we're likely to see the same degree of fairness and impartiality observed on the part of the Republicans toward their Democratic colleagues as was visited on the Republicans in the past, particularly since the Republicans now hold every seat on a board described in our constitution and generally ignored called the Redistricting Board.
The lieutenant governor, speaker, attorney general, comptroller, and land commissioner constitute a board that writes the lines if the legislature is unable to come to a conclusion about the lines for the legislature. And this will have ramifications throughout the decade, because who will dominate the legislature will have an effect on the kinds of policies that our legislature enacts.
The second system-the second big battle that could emerge in the coming decade that will impact how Texas state government exists in the year 2010 has to do with our tax system. There are two possible outcomes to this. We could have a battle and a new tax system could be written. Or we could avoid this tax-reform battle and let the existing tax system stay in place. Either instance will have huge ramifications for Texas in the year 2010 because we have a tax system that was written for the 1930s and 1940s that we're trying to apply to an entirely different economy, an entirely different set of circumstances. The myth is that our tax system is regressive because it's based on property taxes, a sales tax, and a corporate franchise tax. In reality, we have one of the less zregressive systems of taxation in America because we don't tax incomes and we don't tax the essentials of life. We don't tax your utility bill. We don't tax your doctor's bill. We don't tax your grocery bill. But we do have a system that taxes capital intensive enterprise.
If you are in a capital-intensive business like a refinery or manufacturing, good luck to you. If you're a software company, law firm, service industry, or something that depends on getting a highly skilled, highly paid labor force that has very little in the way of capital in plant or facilities, the system benefits you. And if you're smart enough to have a smart tax attorney, you can really jerry-rig this system.
I have a personal amount of bitterness about this. I ran a small business with eleven people, and I paid more in corporate franchise taxes than the Austin-American Statesman and that's because the Austin-American Statesman, one of the most profitable parts of the Cox newspaper chain, is not a corporate entity. It is a partnership in which the only real partner is the corporate entity existing in Atlanta, Georgia, and the newspaper thereby escapes any corporate franchise taxation.
So I, employing eleven people, paid more franchise tax than a giant printing plant sitting on South Congress Avenue. And if you think that is the rarity, you're kidding yourself. There is a guy in Texas who goes around and tells every newspaper how to turn itself into a partnership.
I was out in California last summer, and a guy said, "Geez, I bought this wonderful company in Texas. It makes ta-da-da-da and ta-da-da-da. It's fabulous. What a wonderful company." He said, "Not only that, but when we bought the company we turned it from a corporation into a limited partnership, and I pay no state corporate tax. Isn't that great?" Our tax system is increasingly out of touch and out of sync with the reality of modern Texas. It's great if you're a software company because you may pay a little bit in franchise taxes, but you don't have a personal income tax that hits your employees, and we're in a relatively low-cost state compared with other high-tech states. But if you run a big petrochemical facility, you're worried about your franchise taxes. Increasingly, our system taxes those who are the departing portion of our economy as opposed to the rising part of our economy. How this will play out, I have no idea, and whether it will be played out at all is a big question. I suspect it will not be. But how it's played out affects the revenue stream and the fiscal health of our state in the long term.
The third battle that may take place that will have a big impact on how Texas state government looks in the year 2010 and how Texas looks for decades after that has to do with our educational system. We are beginning, after a fifteen-year battle, to reap the benefits of educational reform in Texas. Now, when exactly educational reform started is a question itself. I think it started in 1982 when Bill Clements took the first step toward educational reform by literally doing away with the part of the Texas state law that apportioned how much time in each school day had to be spent teaching what subjects in what grades. In 1982, we had a law that existed in Texas for thirty-some-odd years that spelled out exactly how every minute of the classroom day was to be spent-that you had to spend fifteen minutes in each day teaching health, for example. The law had been changed continually so it had gotten wonderfully complicated throughout the years. But we had clearly made the reforms in 1984 on class sizes and classroom discipline and first started the accountability system.
The pace of reform picked up in 1995 when Senate Bill 1 strengthened the accountability system, with tougher, higher standards, removing ways that people gamed the accountability system. We had a new reading initiative that used important diagnostic tools to identify kids at risk of not learning to read by the third grade and giving them extra help to catch up.
We had a great new curriculum that's winning awards all around the country for being the best. It's focused not on how do we teach but what is it that we expect the child to know. And we had a pretty dramatic effort in 1999 with the ending of social promotion. Think about this. In 1992, there were 42,000 kids who failed the third-grade reading test. Now, this is not the reading test that requires a perfect score to pass. Forty-two thousand kids could not read at the minimum acceptable level of reading in the third grade.
Do you know what happened to them? Thirty-eight thousand of them went to the fourth grade. Now, do that over decades and years, and there's a gigantic pipeline full of functionally illiterate Texans who cannot learn to read and never catch up. And we've taken steps to end this kind of bigotry of soft expectations.
The changes are pretty dramatic. You talk to people in other states who observe these things around the country, and they're amazed at the progress we're making in Texas. Our improvement in African-American and Hispanic reading and math scores leads the country because of our tough accountability system.
Thirty-seven percent of the schools that are deemed to be failing-do you know what happens to them? Within one year the principal is gone because the local community demands change, because we've empowered teachers and parents and communities to know whether their schools are succeeding or not. Yet this educational reform, as hard fought and as long fought as it has been, is very fragile, and it faces opposition from the right and the left. The right has been attacking it over the question of standardized tests, the heart of the accountability system. Some people on the right don't want tests. Do you know why? Because there are some who want the public school system to fail. They know instinctively that the accountability system makes it more likely that public schools will perform, and they don't like the public schools. And I admit that as somebody from the hard right. There are those on the left who attack the accountability system with equal vengeance and equal vituperativeness, and it's because they don't like standardized tests for the same reason-testing shines a spotlight on failure.
How the education fight plays out in the years ahead is going to be really critical to the nature of Texas state government in the year 2010 and to the nature of Texas itself. If we have a society that's divided into two classes of people-those who we gave up on at an early age and passed on through and those who succeeded-where are we going to be as a society in 2010? A large group of people will enjoy affluence and the American dream, and a significant underclass will be doomed forever to look at but not taste that dream. The fourth battle is similarly important in the long term, and it has both practical and practical-tactical considerations to somebody like me who's a political hack, and it also has importance to Texas as a whole, and that is the racial diversity of our political parties.
We face the possibility of creating a new myth here, and it's unfortunately a bad myth. Modern American political parties in the South could be divided between a party for whites and a party for minorities. And in Texas, we avoided this by having everything fought out within the Democratic Party, and then papered it over for the last 20 years as the Republican Party emerged. But we do face the possibility that in the year 2010 we can find most whites in the Republican Party and the Democratic Party dominated by an even greater degree than it is today by blacks and browns. And I would suggest that this is unhealthy and unacceptable, both to our society as a whole and to the party that I care about, the Republican Party.
If Republicans fail to broaden their appeal by the year 2010, then some time shortly after that, they will drop into permanent minority status because sometime in the year 2015, 2020, or 2025, our state becomes not a state where the population is majority minority-it will be that before then-but a state where the voters will be a majority minority. The hopeful news here is that we have qualified and capable people like Tony Garza and Michael Williams who are Hispanic and African-American and serve as Republicans in statewide elected offices, and there will be something hopeful for the Texas to come if the influence of those two and others like them continues to grow.
The final interesting question is, Will government grow or not grow? Now, government in Texas is going to grow because we're a rapidly growing state. We add 70,000 schoolchildren to our school system every two years. You've got to spend more money for that. But the question is, How will it grow in proportion to population, inflation, and personal income? Because if you're like me, you might believe that growing government faster than those measures is a sign of something that will impede economic growth. We have had this myth of limited government and low taxes in Texas, but it is not a myth borne out by the facts. For example, in the six years between 1989 and 1995, adjusted for population and inflation, real state spending grew at 31 percent, which meant that state government was taking a 20 percent larger share of personal income in Texas in 1995 than it had been in 1989.
Yet between 1995 and the year 2001, our state budget will grow in adjusted terms, adjusted for population and inflation, 2.7 percent, all while the budget has been reoriented toward education and justice system and roads. We had, in the late 1980s and early 1990s, the highest percentage or per capita of full-time equivalent state employees of any of the ten megastates. We had more state government employees per capita than New York and California and Illinois and Pennsylvania and Michigan, states which are traditionally thought of as having much bigger government.
But whether or not we'll continue on the current path of limited growth of government and reorientation of priorities within the money that government spends, again, will be a big battle that will be fought out over the coming ten years. Where do I think these things will end up? Well, I've said where I think redistricting will end up. It will be as fairly and impartially done by the Republicans as it was done unto them over the past fifty years.
I don't believe the tax system will be changed, and as a result, it will grow more decrepit and more out of touch and more distorting in its impact. There will come a fiscal crisis in Texas sometime, maybe in the coming decade in which the train will hit the wall and something will happen. Whether it will be good or bad depends on the quality of leadership that Texas will enjoy at that moment. I'm hopeful, probably too hopeful, about the ability of our state's leadership to withstand challenges to the wonderful, bright, optimistic, and hopeful educational vision that we have created in Texas in which our schools are being redirected to really serve the needs of our children, and I'm hopeful about racial diversity in our political parties and about the ability to keep government limited.
But whether or not we will achieve these things will be one of the great dramas of Texas for the next ten years, played out, unfortunately, by a less colorful group of characters than have populated our politics in the past, but with consequences as great as those for which any group has ever been responsible.
Thank you.
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