Whatever happens in the U.S. election, a few things are certain. Whoever wins is likely to enter office as a very unpopular president.
What may be of far more significance, however, is the likelihood that 2016 could mark the end of a remarkable period of globalization that began in 1989 with the fall of the Berlin Wall. Those of us old enough to remember that event recall how heartrending it was to see brothers and sisters who hadn’t been able to break bread for almost a half century reunited at last. As the Cold War wound down, a wave of optimism some called the “peace dividend” swept through much of the world.
Communism quickly crumbled in Russia and Eastern Europe while China transformed into a bizarre kind of mixed economy that, for lack of a better word, could be called “CINO”—communist in name only. Western Europe still embraced variants of democratic socialism while China and Russia migrated to unattractive mutations of crony capitalism. Even so, a widespread global consensus emerged that free trade could bring huge benefits to the planet’s population.
It’s now clear, however, that billions of people around the world see it differently. For them, the global economy is a race to the bottom, with manufacturers outsourcing production to China, then Vietnam (or more recently, American manufacturers have been “nearshoring” some of it back to Mexico, solely because they can get a better price).
Ultimately, everybody in this game of musical chairs gets screwed, or so many believe. If you lost your good-paying job at a General Motors, saving a few dollars on cheaper patio furniture made in China and sold at Walmart is small comfort.
With the pace of disruption accelerating, the future for working-class citizens looks bleak. Some economists estimate that the move to driverless cars could eliminate another 4 million jobs, including many highly paid chiropractors, personal injury lawyers and auto insurance executives.
Eyeballs around the world will be riveted on the U.S. election for the next month. But one might want to keep a close eye on Europe, where Italy will be voting on whether to vote on their own Brexit. They are hardly alone. Zany nationalist parties are gaining clout everywhere in Europe and beyond.
German Chancellor Angela Merkel, the glue who holds the EU together, is in serious trouble.
Davos Man may be a pariah today, but before one kisses the progress of the last 25 years goodbye, it’s worth recalling that for the first time in history the global poverty rate dipped under 10%. And that a century of similar progress was under way and for no sane reason, a rise in nationalism gave the planet World War I. Another world war may be improbable, but it’s time for serious reflection and adult supervision.
Evan Simonoff
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