Brexit – It seems like no-one expected this to happen despite the various pre-referendum polls that put the odds of a Leave win at about 50%. The financial markets priced Brexit in with about a 10% probability. Then, just before the ballots started to be counted, the pound went up against the dollar, David Cameron showed confidence and Nigel Farage as well as Boris Johnson admitted that their Leave campaign has probably lost. All seemed to go as expected by everyone, including the Leave camp. How quickly and unexpectedly things changed. Meanwhile, the main populist perpetrators of the tragically dishonest Leave campaign have fled the scene for others to cope with the unruly mess they left behind. At a time where the status quo of Europe’s political order is so openly questioned and now directly challenged, all Europeans should sit down and think through the next steps before flocking to yet another populist agitator like sheep. This seems a good time to remind ourselves of how far we, as Europeans, have come in terms of not killing one another. I recently came across a quote by Victor Hugo, a great French poet, novelist and dramatist.
A day will come when you France, you Russia, you Italy, you England, you Germany, you all, nations of the continent, without losing your distinct qualities and your glorious individuality, will be merged closely within a superior unit and you will form the European brotherhood, just as Normandy, Brittany, Burgundy, Lorraine, Alsace, all our provinces are merged together in France. A day will come when the only fields of battle will be markets opening up to trade and minds opening up to ideas.
– Victor Hugo on August 21, 1849, addressing the international Peace Congress
What a utopian thought! I can only imagine what euphoria must have swept the room – surely, no more wars on the European continent could follow such progressive thinking. An increasingly liberally minded society would do away with barriers to people and thought. Alas, only two generations later, two devastating world wars followed. Reading this excerpt of Victor Hugo’s speech delivered to the International Peace Congress today is so striking because we seem to have reached this utopian point in time and more. Students across Europe travel the continent freely and study in practically any great city of their choosing – in many cases almost for free. Not just people but also goods can travel across countries without any borders. And then, of course, there is the internet, which is linking people, businesses and ultimately brains so closely together through instant and free communication that it must have blasted Victor Hugo’s wildest dreams. And yet, completely unexpectedly, there is a serious revolt against all that. What on earth is happening? How are the benefits of further integration not blindingly obvious? Do people really want to go back to the days of isolationism and nationalism? I suspect that this is not what over half of the British populace voted for. I suspect that neither they nor many of the other ‘Eurosceptics’ across the continent really want to start digging trenches into the mud again to shoot at their fellow Europeans for liking different food better. What absurdity! Then again, such thoughts must have seemed almost as absurd at the International Peace Congress. What is really concerning, however, is that a vast number of Europeans seem genuinely unhappy and concerned about their future. As ever, those concerns are getting taken advantage of by shameless, immoral figures, using such societal vulnerabilities to stir division and in many cases hate.
This begs two large-looming questions: Why are people unhappy and how can we stop agitators from taking advantage of this period of uncertainty?
I believe that at least some of this has to do with economics. Very often economists point out that on average the current generation of humans is better off than any before them. That is true not just by economic measures but also health and more. The problem is that this completely misses the point. The human psyche works in such a way that it responds to change very strongly but is bad at assessing absolute measures. Your brain rewards you with the right sort of chemical cocktail if you improve in something. There is no such feedback for staying exactly as you are even if you are the best pianist or the richest man in the world. There is a saying that money doesn’t buy happiness – this is actually untrue to the point where your most basic human needs are met. It is also untrue in the sense that incremental improvements in your economic situation will make your brain kick in with that sweet chemical cocktail. The problem really occurs – and that’s when the old saying is true – when you are wealthy and your wealth remains constant. Humans very quickly get used to their current state of affairs and it very quickly isn’t that exciting or special anymore. This is much like a child who always wanted a very special toy but when it finally got it the novelty factor quickly wears off and it lands in a corner with all the other stuff. Soon enough the kid will probably start crying again.
In a sense, that may be what has happened. After the second world war, the West went through a period of unprecedented wealth generation across all of society. The next generation could be more or less certain to take home almost twice as much as their working parents could. This created enormous satisfaction but also a sense of purpose. Money quickly became the new religion and capitalism was to be defended against communism. On the surface at least, it was a pretty clear world order and everyone knew their part to play as salaries rose continuously. Every now and then the world’s economic engine stuttered but the wise leaders of our nations quickly found new ways to source growth that kept the wealth-generation machine going to everyone’s satisfaction. Eventually, capitalism won over communism and globalisation was advancing rapidly – now everybody joined in the game. The early stage of globalisation was no longer enough, so free-trade agreements were put in place, giving another kick to an engine that never fails to stutter every now and then.
It almost seems like we have reached the end of history, which – almost ironically – is exactly the problem. What happens when we can no longer sustain the sheer unbelievable post-war growth? Across many income classes, wages have already been stagnating for almost a decade. GDP growth across the leading economies is barely existent. Fewer and fewer countries manage to eek out growth above their inflation levels. What we are starting to see is that this is not only about ‘making less’ in a year but that this is driving mass-unhappiness to the point where social cohesion and eventually support for the current political system might break. The latter has actually just happened with Brexit. We are like the kid that suddenly has its toy that it always wanted and then realises that it derives no more satisfaction from owning it. A quick glance at history is a helpful and sobering exercise. One would have hoped that Britain’s leaders were in a position to explain to their electorate why moving backwards is such a huge mistake. Alas, it failed and that in itself is very scary, indeed.
Europe and the US, albeit not exclusively, are seeing the biggest upsurge in populism since the second world war with plenty of shady political figures to take advantage of this trend. If Britain’s voters decided to leave the project that is the most successful European peace initiative then, surely, the French may vote to elect an openly racist and xenophobic party? The Austrians are very close – for the second time now, after the last vote was called into question and annulled – to electing the leader of a party founded by Nazis as their head of state. This is an increasingly frightening state of affairs.
What can be done to avoid some sort of political catastrophe, an outcome which has historically always been underestimated but nonetheless occurred again and again?
Firstly, it is paramount to kickstart the world’s stuttering economic engine while ensuring that more people see further growth in wealth and prospects. Until we have reached the point of a more enlightened society, this will be the only way to maintain social cohesion and, in my view, avoid political catastrophe with the resulting uncertainties that bears. The risks of not just a halting but even just a slowing pace of global integration are immense. Our expectations for economic growth are built on the results of a rapidly integrating world. To maintain and meet expectations, this means that we need to advance free trade agreements including TTIP with utmost urgency. While many people seem to think that it is globalisation that drives the current political weather, I think that a slowdown in globalisation is more to blame. Driving growth in order to maintain wealth generation and social cohesion also means looking at new frontiers such as finally making it a priority to integrate Africa into the world economy. We can literally no longer afford the luxury of not trading with every country in the world.
Ultimately, none of this will be enough. Even with technology advancing as rapidly as it does, a shrinking human population in many advanced economies is unlikely to continue its game of exponential economic growth for very long as, eventually, the earth’s resources will be the limit of such growth. This brings the question – what to do once we approach either that point or a more immediate ‘no-growth period’, which we may already have entered for other reasons (such as less willingness to integrate our economies further). While I used to be more optimistic about this, I have become very doubtful that the West’s and later the world’s population will become largely content with their current state of wealth and use their spare time to become philosophers and artists en masse.
For now, people are becoming more and more disenchanted with the current game in town. There is no sense of ownership. People no longer see a clear perspective for themselves and they no longer have a bigger idea of where they are going (such as doubling your income every other decade or defeating communism). Some of this is outlined in Carlo Strenger’s book The Fear of Insignificance. We are starting to see serious problems that will only grow more disruptive if we don’t kickstart the current game or invent a new game altogether, which would be a risk that may not be worth taking (just yet). All of this is despite the fact that we are currently at the absolute peak of decades of exponential growth. This then, is not the time to scale back ambitions. Our leaders need to communicate clearly why this is the right way forward for the world and how we can get better at letting everyone participate in the growth that we are driving. Big, tangible ambitions that capture people’s imaginations and give them a sense of pride, progress and fulfilment are needed. The moon-landing was such an event. The development of Concorde was such a moment. With such monumental achievements in the past, in a sense, society may be a victim of its own success. While recent scientific breakthroughs have been at least equal in magnitude among the scientific community, they were simply too technical to have the entire world glued to their television screens as it was for the moon-landing. Maybe Elon Musk is right – we should at least have the ambition to set up an international Mars colony. A joint effort – that unites countries and sends a clear signal to every world citizen of why we are better together and why the true challenges are global.
And now for a world government – What has changed since – Kohlmann NotesJuly 16, 2017
[…] that it is starting to leave large parts of its population alienated, which I explored in my post Brexit, the Threat to European Peace and a Lack of Human Ambition and that it makes the very concept of nation states somewhat outdated. In my post on Kissinger: […]