We need a new economic vision in order to cope with the problems of the 21st century, according to economist Jeremy Rifkin's new book, The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World. "If we are to put people back to work, curtail climate change, and save civilization from ruin, we will need a compelling new economic vision for the world and a pragmatic game plan to implement it," Rifkin declares in the book. The book, released the end of last month, lays out that "pragmatic game plan," or the five pillars of the third industrial revolution (TIR).
The five pillars of the TIR consist of:
In order to make the TIR a reality, there will need to be a "wholesale reconfiguration of the transport, construction, and electricity sectors, creating new goods and services, spawning new businesses, and providing millions of new job," as Rifkin declared in an article posted on the website of the organization where Rifkin serves as president: the Foundation On Economic Trends. In other words, there will need to be an overhaul of the entire economy.
Germany is the model for the TIR transition
The type of overhaul that is needed is the one that European countries like Germany are undertaking, as Rifkin chronicles in his book. Germany is a country that Rifkin has advised about transitioning to a TIR economy. It is very fitting that Rifkin works with Germany because it is the country responsible for the second industrial revolution, as the book mentions.
A few weeks ago, before the release of the book, Rifkin met with Germany's Chancellor Angela Merkel to advise on how to implement the TIR in the midst of the euro crisis. The euro crisis, according to Rifkin, is part of a larger crisis, the end of the second industrial age.
"We're at an end-game for the industrial age based on fossil fuels," Rifkin said.
Germany is leading the way when it comes to the TIR. "Germany is the model," Rifkin said. It is the "economic engine and the most powerful single player" in the EU.
The chance for the U.S. to become a TIR leader
Rifkin doesn't paint such a rosy picture for the U.S. in his book but bluntly states that the "upshot of eighteen years of living off extended credit is that the United States is now a failed economy." However, he includes a section in the book about the consultation work he has done for San Antonio, a Texas city with the goal of a 20 percent reduction in greenhouse gas emissions and a 20 percent increase in renewable energy generation by 2030. If San Antonio invests the "equivalent of one year of its economic development money over the next twenty years, a total of $16 billion spread out over 20 years, it could become the nation's first low-carbon Third Industrial Revolution city," Rifkin states in the book.
Rifkin states in the section about San Antonio that American companies "are currently flush with reserves, holding a record $1.6 trillion in profit made over the past few years, despite the Great Recession." If every major city in the U.S. created a similar plan to San Antonio's and developed investment partnerships with the companies flush with profits, the U.S. could also become a leader in the TIR, as it was in the first two industrial revolutions.