Alvin Toffler:  We never use the word 'predict'.  We think anybody who says they can predict the future is probably a member of the society of quacks, because human events are filled with surprises and chance, and conflict and reversals and upsets.  And therefore it's not possible to predict change in society or business, or economics, with exactitude.  You can, however, I think, model changes.  There's a way of thinking about change that gives insight into the very broad movements.  I can't tell you that Joe Doakes is going to do X, Y, Z, but I can say that the society appears to be moving in a certain direction, or not moving in a certain direction.

Norman Swan:  Of course, just to pursue this for a little while, extrapolation is a problem in that history doesn't seem to move in that way, where you can extrapolate from existing trends.  It's discontinuities in history.

Alvin Toffler:  Exactly.  In fact, we think that people who talk about trend analysis and trend projection are really peddling a very, very poor way of thinking about the future.  Trends usually are interpreted to mean straight-line development so that if something grew by 2% last year and 2% the year before, it will continue to grow at 2% this year and next year.  That's childish, especially when you live in times like ours which are extremely turbulent, in which we have fundamental changes taking place at high speed -- powerful, sometimes global changes.  And so we reject trend extrapolation as a method.  Trends never tell you why things happen.  They seldom tell you what counter-trends there may be.  There are many, many things wrong with trend projection.

You can't have large-scale changes on the planet without conflict.  Conflict is a part of change, and conflict can be good.  It can be constructive, creative.  But you can't have a massive change on the scale that we're now going through without massive conflict as well. The Industrial Revolution, what you had in England for 50 years, you had a conflict between Disraeli, representing the landed interests, and Gladstone.  In Japan you had the major revolution, two sides:  the traditionalists hanging on to the land, and the modernisers symbolised at that time by the Emperor.  And in the United States the conflict actually took violent form, where you had an industrialising North in a civil war with a backward agrarian South, and it was the worst war in human history up till that time.

Norman Swan:  So what would third-wave economics look like?

Alvin Toffler:  The central change that the economists have not yet been able to get their arms around is the change in the role of knowledge in the broadest sense of information and ideas and data, the relationship of that to making wealth in an economy.

Norman Swan:  Dealing with the Microsoft phenomenon, dealing with the Intel phenomenon, the large telecommunications companies.

Alvin Toffler:  Yes, but also it's not just that kind of knowledge that's important in the new economy.  It's people who know how to organise.  In 'The Third Wave' we wrote about the so-called commanding heights of industry, and that was the slogan of the Labor Party in Britain at the end of the war.  'We must capture the commanding heights.'  Well, the commanding heights they captured are no longer the commanding heights of industry.  They were yesterday's commanding heights.  The new commanding heights are knowledge-based, and that's why you see companies like Microsoft suddenly emerge out of nowhere and become huge, and the people who understand this better than the economists are on the one hand the people who are building these new high-tech systems, and also investors.  And that's why investors will value some of the information-based companies, without much in the way of fiscal assets, at very high multiples.  So investors and technological pioneers and the scientific pioneers actually understand this better than the economists do.

Norman Swan:   Not everybody can live easily in a world of rapid change where they have to be endlessly flexible, even though their level of education is extremely high.  They actually need an environment where there is some personal security and humanity.  Do you agree?  And if you do agree, how do you put that back into the system?

Alvin Toffler:  I think that it's a lot easier to deal with all of that if you know who you are and if you have a fair fix on what your values are.

Norman Swan:  As an individual, or as a corporation? 

Alvin Toffler:  Well, probably both, but I'm talking about individuals now.  I know in my family, because there is a health problem, I know that that is our primary issue, and I know that our family life is more important than anything else, other than saving life.  So I have, and others have, different problems and different value systems, and that's fine.  But in order to be able to make decisions at high speed and in great complexity (and we all face more and more of those decisions), you need to know what your criteria are.  You need to know what you value more than anything else.  So I would argue that anything that helps you clarify your values, so that you have a good fix on what they are, is going to help you adapt personally.  Obviously, in another sense, getting an education, getting appropriate skills is very important to finding a part in this new economy.  But I also don't believe that everybody has to be a rocket scientist.  Society needs people who take care of the elderly and who know how to be compassionate and honest.  Society needs people who work in hospitals.  Society needs all kinds of skills that are not just cognitive; they're emotional, they're affectional.  You can't run the society on data and computer screens alone.