The last few months have seen two electoral events which
have shocked the political establishment. In both cases, the political class,
intellectuals and polling organisations got it completely wrong, predicting
electoral victories for the status quo, and being shocked by the victory of the
anti-establishment options.
There has been a lot of analysis about what this means, why
it has happened, and why it was missed. Most of this analysis, however, is
wrong. The reasons for those votes are also completely wrong and, in many
cases, will achieve completely the opposite outcome that the voters intended.
The elites are scratching their heads. Particularly, the
progressive intellectual elites. How is it possible that large numbers of
voters, in protest against the inequality and lack of opportunity they perceive
in society, have voted for quintessential paragons of inequality? How can
Donald Trump, a multibillionaire who has amassed massive wealth gained from the
work of others, be seen as a better chance for the working class than more
progressive political propositions? How can the British voters vote for an
option which will clearly make their country, and particularly its working
class, poorer, by destroying jobs and pushing the UK into a low corporate
taxation model where workers share more of the burden? This seems to make no
sense, but the fact is that it makes perfect sense.
These voters are angry and scared. The World is changing
very fast, and it is becoming something completely different to the World they
grew up in. Globalisation is going at breakneck speed, and has created huge
wealth. However, it has also created huge inequality, which has been
exacerbated by the 2008 recession, which brought about a huge, obscene even,
transfer of wealth from the taxpayer to financial institutions and their
shareholders. New millionaires are created every day in places like Silicon
Valley. But, to a large percentage of the population, what these people do to
become millionaires is incomprehensible. The thought that you can create
technological tools, trade globally without barriers and be hugely successful
very fast is an insult to the people who have not learnt the skills (and I use
this sentence carefully because I think 99% of people have the capability) to
take advantage of these opportunities. This is logical. The way of life of this
section of society is under siege. They can see their jobs becoming extinct or irrelevant,
they can see themselves being replaced, and they cannot see what the
alternative is. Automation, as well as foreign competition, will render most of
their occupations obsolete. And when this happens, how are they going to
survive?
The inhabitants of Western economies have grown in an
environment in which they were the privileged few. Despite the fact that global
output and wealth was much lower 30 years ago than today, 30 years ago the
great majority of it was shared between a few hundred million, in the West.
Everyone else was brutally poor, and that was not our problem. What has
happened in the last few decades is that we are suddenly having to share our
wealth with many others. With billions of Asians and South Americans joining
the global economy, manufacturing goods and providing services. These guys are
training themselves and building their competitiveness, and they want a share
of the global output. We, used to keeping the great majority of the output to
ourselves, don’t like that.
The huge miscalculation is to think we can stop it. US and
UK have extremely self centered views of the World economy. These views hail
back to a time, not long ago, in fact less than a generation, when their
markets, together with a few countries in Europe, were the only ones that
mattered. They had the consumers and the spending power, and they therefore
called the shots. They could choose who to trade with and in what terms. But
this has changed. So now, Americans want to stop the effects of globalisation
by building walls and isolating, and they think that will protect their jobs and
their economy. But the World economy is going on outside America.
Manufacturing, technical development, and services are produced everywhere and,
more and more, consumed everywhere. By 2100, 9 Bn of the planet’s 11Bn
population will be in Asia, Africa and South America. These markets don’t need
the US and the UK. The World economy can continue to develop without them. By
building walls, the Americans and the Brits will be keeping themselves outside
of the World economy, not keeping others outside of theirs. China famously did
just this in the XIV century. They were the World’s most powerful trading
economy, the most advanced technological society. They were a long way ahead,
technically and economically, of everyone else. And they had built that
position through relentless trading over the silk roads and by sea. But, at
some point in that century, the emperor decided that trading with outsiders was
sharing Chinese wealth, and he reasoned that Chinese wealth, most of the known
World’s wealth, should be for the Chinese people. As a result, China closed its
borders. This allowed Europe and the Middle East to thrive without competition.
Rather than sharing their wealth and leading global progress, China stepped out
and conceded global leadership to incipient economies in Damascus, Baghdad,
Cordoba, Spain, Venice and Genoa. Development continued, global trading
accelerated, but China did not participate. They thought the global economy
would not continue without them, that by closing the gates they were keeping wealth
within, but they were actually keeping themselves away from the newly created
wealth. It has taken China 650 years to regain their position in the global
economy.
Now US and UK are doing the same. They are closing the gates
to 6Bn consumers, to protect their markets of a few hundred million. They think
they are losing their jobs to immigrants, when they are losing them to workers
that compete from a distance and never need to visit their countries. Instead
of taking advantage of their head start to provide higher end services and
products to those growing economies, they stop trading and accelerate the
change in the World Order. It has happened in Egypt in 700BC, in Greece in II C
BC, in Rome in 476, in China in the XIV century, in the Middle East in the XVI
Century and in Spain in the XVII Century. Now, it is the turn of the US and the
UK. Old empires that prefer to ostracise themselves than to participate in more
equitable development. Used to always winning, we don’t like competition.
And this approach is not only doomed to failure and sure to
accelerate our demise. It is also morally wrong. It is based on the premise
that keeping others poor is justifiable to keep our wealth, on the concept that
our life and that of our compatriots is more deserving than that of people from
other nations. Why should this be the case? We are all human beings, with the
same rights, the same aspirations. We should be leading the World in finding
economic models which benefit all by improving wealth distribution and accelerating
wealth generation. Not stepping out of the game and letting others take our
wealth. Because they will. Globalisation will not stop, it will continue.
Geopolitical wealth redistribution is beneficial to 6Bn people, even if a few
hundred million backward thinking individuals in the West see it as negative.
And 6Bn people will, in this modern age, prevail. We can join them, or we can
watch from outside. That is the choice we have. And we are choosing the second
option., at least in UK and US.
