Several years ago, I became convinced that some of us have an ability to see the future, as, admittedly and quite practically, for those that pay detailed attention to socioeconomic shifts, the future is looking right at them. In 2014, my version of this "anticipated" future appeared to be eerily close to what is currently unfolding around the globe, but expressly in the U.S.: In A Vertical World, I concluded that, in a similar fashion to the 1920s/30s, the U.S. (which back then was afflicted with the penalties of armed conflict and deep-rooted economic malaise) may once again become averse to absorbing the ongoing cost and effort of "policing the world." In simple terms, America would soon be ready to "turn within," especially as unfavorable socioeconomic conditions - mainly as the result of the global financial crisis of 2008/2009 - had not been fully shrugged off.
Quite evidently, "turning within" is a euphemism for the path to nationalism or, at a minimum, elements of it. With this in mind, we acknowledge that the U.S. does not stand alone. As much as the recent Brexit was a determined anti-Westminster vote rather than an anti-Brussels vote, so, too, was the U.S. election outcome one of anti-establishment (or standards). We will see this trend continue in most other parts of the developed world, with major shifts to occur in Europe next, likely led by Italy and France.
Inherent to current developments is a renewed strong-minded protest of society, now blaming post-WWII super-structures (e.g., trade agreements, economic/monetary unions, etc.) for the common person's lack of participation in economic share and position. Around this narrative, the idea of an anti-establishment vote comes with another fundamentally important point of critique: the decline of accepted and valid economic standards, particularly with respect to natural price formation in financial markets. Central bank policy, especially since the dot-com bust in 2000/2001, has set the stage for one of the greatest financial experiments in history - having a profound impact on asset prices and creating a sharp dividing line between the "haves" and "have-nots."
Whenever persistent economic struggle strikes - on a sovereign level, as well as a very personal level - it is only human to assign blame, for all the right or wrong reasons: In Brexit, it was the overarching European idea that was blamed; in the U.S., it is, at its core, the protest against the emergence of a predominantly two-class system, with the "good" middle-class having been eroded over the past 50 years. In real terms related to both household income and commonly acknowledged benefits of society (especially of a wealthy one), Americans have voted with their depleted wallets.
Donald Trump, as the new President of the United States, and with him other populist leaders that are currently entering the global political scene, will have the potential to reintroduce the concept of Realpolitik - a rather pragmatic approach to shaping affairs on practical, but less ethical and moral grounds.
There is another disturbing, yet possibly promising, development to mention. As observed during the Brexit vote, the slim minority of "winning" voters in favor of Brexit (51.9 percent) was led by a) the 50-and-over age group, and b) less-educated voters (I am not passing judgement, but stating the facts). A similar picture is true for the recent U.S. election. Behind the data stands a young generation of global voters, rewarded with the privilege of democratic choice, but not "giving a hoot" to exercise it. The issue at stake - protesting the establishment - may be different altogether, and not even captured. Our parents (and their generation) are "taking their countries back," potentially fearing that, for the first time, their children do not have a better life than the preceding generation. The "children," however, are seeking opinion and another version of democracy - not through elections, but through means of social media - for engagement, as well as to change the establishment.
Brexit, the U.S. elections, and developments in Europe are nothing else but a reminder that it is time to draw the proverbial line and give way to more broad-based social-market capitalism - a system that benefits most members of a given society, inclusive of an affordable approach to education and healthcare. It is time to venture on a new path away from reckless monetary policy, which has provided some economic relief but essentially just benefited those who had investable assets to begin with. Specific to Europe, we are being reminded that the Union, even if noble in its original objectives to secure peace, continues to be flawed in its design, as it does not allow for a transfer (and appropriate balancing) mechanism. With inadequacies not being addressed properly, in Europe and beyond, the world will continue to witness a rise of nationalistic ideas and associated values.
Leaders have come and gone, revolutions have taken place, and societies around the world have reset. It has always been the overemphasis of super-structures, paired with power (economic and/or real) amassed in the hands of a few, that started the process of "cracking" imbalances. With this in mind, in making reference to "the end of the world as we know it," then, strictly speaking, it is not the end to what is measured as knowledge, but rather the end (once again) as it relates to necessary critical observation of long-term changes and their impact on society: seeing the future while the future is looking at us, and making critical choices on this very basis.
With the emergence of newly defined political, economic, and social networks, as in 2014, I continue to foresee a material shift from an East-West-dominated socioeconomic global system - as found in today's horizontal world - to a more North-South-bound framework, from the perspective of the U.S. Overall, globalization should take a different course compared to the post-WWII era, and this one will likely be paired with increased conflict. It is this very development that we can take to heart, study for further insights into the world that is to come, and use to apply changes wherever necessary and possible (even if only from the perspective of us as individuals).
More importantly, we must stay relentless in our mutual pursuits to help "bridge" inequality and avoid the curse related to our human condition that more often ignores the lessons of the past and allows for repeat of the tragedies that have been.
In the beginning and end, we are all one.
Please also see our detailed work in support of The End of the World as We Know It.
With kind regards,Matthias
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