No problem can be solved from the same level of consciousness that created it.
~Albert Einstein~

We hear a lot about consciousness these days. This attention to a new level of awareness has increasing numbers of people checking their egos, performing acts of kindness and attempting to inject a greater level of civility into our daily discourse. All of which is welcome indeed, but it is less clear how the expansion of consciousness will have any impact on the very serious issues we all face in the world of politics, business and the economy. Einstein’s quotation gives us a hint.

Regardless of whether we protested or agreed, we have all lived in a political and social context over the recent years that operated on two fundamental principals: We could have war without cost and profit without value. On their face, these principals make no sense. We all knew they made no sense. Now we are beginning to experience the reality that they make no sense and the potential consequences from an economic perspective look worse every day. Just when the latest mortgage backed securities write-offs by UBS were supposed to mark the end of that crisis, we discover that the financial turmoil has seriously impacted GE, a stalwart performer whose stock price dropped nearly 15 percent last week. So much for the theory that the credit crisis would only affect the financial services sector of the economy.

The cost of the war, at $3 billion a day, also has finally come into our awareness. We can do the math in our heads to know that the amount spent in Iraq could have a significant impact on education, health care and the state of our infrastructure. Since we haven’t taxed ourselves to pay for the war, we have borrowed the money and grown the debt to astronomical proportions. There is a new context – an understanding of what we have done and the choices that we have made – even though those choices were in many ways a decision to let someone else decide.

Now that we are at the beginning of this awareness, many are clamoring for a “solution” to the many problems that face us. More regulation, say some. Less regulation, let the market sort itself out, say others. Withdraw immediately, say some. Remain for the foreseeable future, say others. These are all reactions in the same “consciousness” that created the problems. Reactive change is never resilient change and despite some transient upward ticks in the stock market, any of these actions are unlikely to have a prolonged effect.

To move to the next level of awareness it is becoming clear that we will need to experience a more detailed understanding of what we got ourselves into. The unraveling of the financial system will happen in due course. This is far beyond the supposedly normal process of a business cycle. The issues we need to deal with have to do with the corrosive effects of debt and the worthless nature of many “structured financial products." Those who cheer at the collapse of companies and financial institutions are foolish indeed; there has been and will continue to be much suffering.

But we can also see the beginnings of the new consciousness that Einstein suggests impacting both the economic and the political realities. Energy generation from what we now call “alternate” sources is beginning to come on stream in a significant way around the world. We will likely see these energy technologies develop both at a local level with individuals and municipalities deploying them and at a macro level as companies like Shell and BP continue to invest in them. The fundamental difference here is that the source of the energy (wind, solar, ocean currents, etc.) is essentially free. The economics will revolve around acquiring the devices to harness the free energy, and we will likely see significant changes in the economic structure of the current liquid fuel industry. This is not futuristic babble – the technologies exist today. It is well within the realm of the probable that our children will see the fossil fuel economy the same way we saw communism – seemingly impregnable and immovable and then a dusty memory. In any event, who with any sense and a blank piece of paper would choose to base an economy on an energy source that was limited, increasingly hard to find, dirty and located in some of the most unstable regions of the world?

Managing risk in this new environment or consciousness will be a challenge but it will be a welcome change from the defensive posture of the last several decades. We have been operating in the economics of scarcity and we are now entering the economics of abundance. Instead of looking at the world from the perspective of a country that constitutes 5 percent of the global population and consumes 30 percent of the world’s resources, we can conceive of a reality where, from an energy standpoint, an unlimited supply is achievable. Creating economic models that allow for the construction and deployment of the machines necessary to harness these energies has already begun.

So we are in the process of a tremendous change, one that seems unachievable and one that will cause a good deal of suffering even in the best scenarios. Einstein’s quotation provides us with a signpost of the direction that we need to move toward. We need to take the risk.