No economist ever lost his reputation by erring on the side of pessimism. In this book, the already much-lauded, HSBC-based thinker, Stephen D King, warns the West of a host of political-economic horrors on the horizon. Rising incomes and lower infant mortality in Africa, for instance, aren’t a good thing because they will “encourage a much larger number of migrants to make the journey across the Mediterranean Sea, an especially porous border”.
The awesome power of social media, replete with new information from around the world is, similarly, almost all bad news since it encourages a greater clustering or “herding” of ideas, with real debate shut down by cyber intimidation: “To gain power, politicians may have to pursue increasingly polarised positions, further undermining the public’s trust in its elected representatives.” The echo chamber has its problems, but there is little sign so far of it upending a vigorous and multisided democratic culture.
But this goes way beyond migration and Twitter. King believes that many of the overarching regulatory bodies that police today’s globalised economies are vulnerable, with the World Trade Organisation undermined by American nationalism and the EU creaking at the seams as the euro pushes the Italian and German economies in different directions. His point is that “globalisation”, far from being a natural process for our times, was always dependent on conscious and careful western leadership; that this is now lacking; and that therefore we are facing “the return of history”.
Within a couple of years of Francis Fukuyama publishing his The End of History in 1992, blowing out raucous laughter at his expense has been one of the easier party games in town. And to be sure, the free market triumphalism of that book deserved to be taken down. The huge success of undemocratic China; Islamist revivalism in the Middle East; and the emergence of modern tsarism in Russia, now make Fukuyama’s vision of all societies, at different paces, converging on the same essentially western capitalist model, look like a delightfully naive late 20th-century period piece. More recently, Brexit, Donald Trump’s triumph and populisms of left and right in Europe, aggressively pose the question for the West: what has globalisation done for (enough of) us?
“Climate change is likely to drive a vast migration
There is no doubt that the failure of the western model to provide a predictable, smoothish path to a better life for most citizens has provoked an era of panicky self-pity. Forget, for a moment, Trump. Look at popular American television — the fear of the wider world in Designated Survivor, 24 or Homeland; the hatred of the elites in Billions; the techno-paranoia underlying Westworld.
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And for those with the eyes to see, there is no doubt that huge demographic changes are reshaping the world in ways the postwar West won’t find easy. King uses the example of Nigeria, and it is a good one. On current trends its population will have risen from 38m (1.5% of the world’s population) in 1952, to nearly 400m by 2050: “if the numbers prove to be anywhere near right, by the turn of the next century Nigeria will account for 6.7% of the world’s population — more than North America (4.5%), Europe (5.8%) and the combined forces of Latin America and the Caribbean (6.4%).”
As for Nigeria, so for the rest of Africa, which King argues might account for almost 40% of the world’s population by 2100. Better medicine but a worse, climate-change affected environment, he argues, is likely to drive a vast migration north into Europe, of a scale that dwarfs the European migration to the Americas in the 19th and 20th centuries.
Now, it is wrong to say that demography is fate, but it is undeniably important. The fact that India is expected to overtake China within the next 10 years as the world’s most populous country; and the vast growth of the young populations of the Middle East are things too big to be ignored in London or Washington.
How will we respond? King warns of the dangers of what he calls gated societies, even gated nations, busily pulling up drawbridges and building walls. But without global leadership, keeping people where they are through stronger development, those walls are going to have to be pretty big. Disengagement is no answer. Keeping out of trouble in, for instance, Syria, simply produced a huge wave of desperate asylum-seeking migrants for which the EU was totally unprepared.
Nor is it the case that trying to shut yourself off makes you safer in other ways. The huge Chinese project of a new railway linking that country through Russia to the West has its endpoint ... where? In Germany, not in Brexit Britain. Given that the UK is not hugely popular in modern India either, despite the best efforts of David Cameron at his time in No 10, the search for powerful trading allies might be harder than we thought. Eventually, King projects a world rather like George Orwell’s Nineteen Eighty-Four in which huge blocs (Eurasia, Eastasia and Oceania) are in a state of constant war. He doesn’t spell out the fate of smaller countries outside those blocs, but it doesn’t sound entirely benign.
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But before we scare ourselves all to death, we should remember that some counter-flows might help the West at just the most important time. The possibilities of using robots close to markets served by their products, suggests a significant reorientation of world industry. Once the designs for electronic cars can be downloaded to a robotic facility anywhere, the competitive advantage of low-labour-cost economies quickly vanishes, particularly if they are on the other side of the world. King calls this “reshoring” and although it isn’t good news for factory workers or trade unions, it will certainly reshape western economies, repatriating some added value.
The biggest flaw of this undeniably gripping account is the weight that King has to place on the vague and optimistic notion of “better” world leadership and, in particular, better western leadership and politics. It is in short supply, old cock. He makes few concrete suggestions to help the rest of us find a way through, though a new world organisation to manage the increasingly complex problem of capital flows and “beggar my neighbour” central-bank behaviour (a Global Organisation for Financial Flows or Goff ) is an interesting thought.
He certainly convinced this reader that the rules-based system formed at the end of the Second World War is long past its sell-by date, and that we need new structures and new forms of leadership if the West is not to be overwhelmed and marginalised. But this is a book to open that debate, not close it.
Yale £20 pp273
