The 21st century will overturn many of our basic assumptions about economic life. The 20th century saw the end of European dominance of global politics and economics. The 21st century will see the end of American dominance. New powers, including China, India and Brazil, will continue to grow and will make their voices heard. Yet the changes will be even deeper than a rebalancing of economics and politics among different parts of the world.

The challenges of sustainable development - protecting the environment, stabilising the world's population, narrowing gaps between rich and poor and ending extreme poverty - will take centre stage. Global co-operation will have to come to the fore. The idea of competing nation-states that scramble for markets, power and resources will become passé. The idea that the United States can bully or attack its way to security has proved to be misguided and self-defeating. The world has become much too crowded and dangerous for more “great games” in the Middle East or anywhere else.

The defining challenge of the 21st century will be to face the reality that humanity shares a common fate on a crowded planet. That common fate will require new forms of global co-operation, a fundamental point of blinding simplicity that many world leaders have yet to understand.

For the past 200 years, technology and demography have consistently run ahead of deeper social understanding. Industrialisation and science have created a pace of change unprecedented in human history.

Philosophers, politicians, artists and economists must scramble to catch up with contemporaneous social conditions. Our social philosophies consistently lag behind present realities.

In the past 75 years most successful countries gradually came to understand that their own citizens share a common fate, requiring the active role of government to ensure that every citizen has the chance and means (through public education, public health and basic infrastructure) to participate productively within the society and to curb society's dangerous encroachments on the physical environment. This activist philosophy, which holds that the self-organising forces of a market economy should be guided by overarching principles of social justice and environmental stewardship, has not yet been extended robustly to global society.

In the 21st century, global society will flourish or perish according to our ability to find common ground across the world on a set of shared objectives and on the practical means to achieve them. The pressures of scarce energy resources, growing environmental stresses, rising global population, mass migration, shifting economic power and vast inequalities of income are too great to be left to naked market forces and untrammeled geopolitical competition. A clash of civilisations could result, and it could truly be our last and utterly devastating clash.

To find our way peacefully through these difficulties, we will have to learn, on a global scale, the same core lessons that successful societies have gradually and grudgingly learnt within their own national borders.

It has not been easy to forge co-operation even within national boundaries. In the first century of industrialisation, early industrialising countries were characterised by harsh social conditions in which individuals and families were largely left to scramble. Gradually and fitfully, the early industrialising societies began to understand that they could not leave their poor to wallow in deprivation, disease and hunger without courting crime, instability and disease for all. Gradually, social insurance and transfer schemes for the poor became tools of social peace and prosperity during the period from roughly 1880 onward.

Around half a century ago, many nations began to recognise that their air, water and land resources also had to be managed more intensively for the common good. The poorest parts of town could not be the dumping ground of toxic wastes without jeopardising the rich neighbourhoods as well.

The forging of nationwide commitments was hardest in societies like the US, which are divided by race, religion, ethnicity, class, and the native-born versus immigrants. Social-welfare systems proved to be most effective and popular in ethnically homogenous societies, such as Scandinavia, where people believed their tax payments were “helping their own.” The US, racially and ethnically the most divided of all the high-income countries, is also the only high-income country without national health insurance.

Even within national borders of divided societies, humans have a hard time believing they share responsibilities and fates with those across the income, religious and, perhaps especially, racial divide. Yet now the recognition that we share responsibilities and fates across the social divide will need to be extended internationally so that the world takes care to ensure sustainable development in all regions. No part of the world can be abandoned to extreme poverty, or used as a dumping ground for the toxic, without jeopardising and diminishing the rest. It might seem that such global co-operation will prove to be Utopian.

The prevailing unilateralism of the US will seem for many an inevitable feature of world politics in which politicians are voted in or out of office by their own populations rather than by a global electorate.

However, global co-operation in many fields has been enormously successful in the past, in large part because well-informed national electorates support global co-operation when they understand that it is in their own enlightened self-interest and vital for the wellbeing of their children.

Our challenge is not so much to invent global co-operation as it is to rejuvenate, modernise and extend it.

The world can certainly save itself, but only if we recognise the dangers that humanity confronts together. For that, we will have to pause from relentless competition in order to survey the common challenges. The world's ecological, demographic, and economic trajectory is unsustainable, meaning that if we continue with “business as usual” we will hit social and ecological crises with calamitous results. We face four causes for such potential crises:

— Human pressures, unless mitigated substantially, will cause dangerous climate change, massive species extinctions and the destruction of vital life-support functions.

— The world's population continues to rise at a dangerously rapid pace, especially in the regions least able to absorb a rising population.

— One sixth of the world remains trapped in extreme poverty unrelieved by global economic growth, and the poverty trap poses tragic hardships for the poor themselves and great risks for the rest of the world.

— We are paralysed in global problem-solving, weighed down by cynicism, defeatism and outdated institutions.

These problems will not solve themselves. Ecological conditions will be worsened, not improved, by the rapid economic growth under way in most of the world unless that growth is channelled by active public policies into resource-saving (or sustainable) technologies. The transition from high to low fertility rates, necessary for lower population growth, requires concerted public action to help to guide private and voluntary fertility choices.

Market forces alone will not overcome poverty traps. And the failures of global problem-solving mean that we are failing to adopt even straightforward and sensible solutions lying right before our eyes.

By husbanding resources sensibly we can find a path to prosperity that can spread to all regions. Global prosperity need not be limited by dwindling natural resources; the world economy need not become an us-versus-them struggle for survival. We can secure four goals in the coming decades:

— Sustainable systems of energy, land, and resource use that avert the most dangerous trends of climate change, species extinction and destruction of ecosystems.

— Stabilisation of the world population at eight billion or below by 2050 through a voluntary reduction of fertility rates.

— The end of extreme poverty by 2025 and improved economic security within the rich countries as well.

— A new approach to global problem- solving based on co-operation among nations and the dynamism and creativity of the non-governmental sector.

Attaining these goals on a global scale may seem impossible. Yet there is nothing inherent in global politics, technology or the availability of resources on the planet to prevent us from doing so. The barriers are in our limited capacity to co-operate. We need agreements at the global level and attitudes throughout the world that are compatible with meeting our global challenges.

C.V.

Born: Detroit, 1954

Education: BA, Harvard, 1976, MA, Harvard, 1978, PhD, Harvard, 1980

Career: Has worked as a professor at Harvard, as director of the Earth Institute at Columbia University, as director for the UN Millennium Project and special adviser to Kofi Annan, the former United Nations to Secretary-General, on millennium development goals. Featured in Time magazine’s 100 most influential people in the world in 2004 and 2005

Personal: Married, two daughters and a son

Common Wealth: Economics for a Crowded Planet by Jeffrey D. Sachs is published by Allen Lane at £22. Copies can be ordered for £19.80 with free delivery/plus p&p from The Times BooksFirst on 0870-160-8080

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