Corona as catalyst: ‘Glocal’ competition

Five centuries of western domination are currently being replaced by a new world order. All the political, economic, military, cultural and ideological cards are already being reshuffled. If the Corona virus rages deep enough, it will ‘only’ catalyze this transition. In this essay, I try to briefly describe three of these major intersections in our time. Part 2: ‘Glocal’ competition / Part 1. Ideological / Part 3. Social

The world is in transition, insisting first of all on ideological reflection within societies. Let us now consider this transition from an international point of view, for there is a second issue that was already on our plate but is now becoming more pressing: how important is national self-determination in a world that gets more and more intertwined and faces more and more threats that require international coordination?

Globalisation is not exactly new. As far as we remember, people get further and further away from home, in search of new opportunities. The result is a succession of winners and losers in history: those who benefit from other nations and those who don’t. Winners gain from free movement of people, goods and services; losers prefer to shut their borders. In the past centuries the West was on the winning side, eagerly calling on their right to free trade when selling — just an example — opium to the Chinese. In our days we see the Chinese, Indians, Poles and Mexicans seizing the opportunities of free movement, and now it is the richest part of the West who responds with America First (Trump), We Want Our Country Back (UKIP) and The Netherlands Is Ours (Party for Freedom).

Behind this nostalgic nationalism and ironic protectionism lies a double motive: loss of western control makes people feel threatened not only economically but also culturally.  Chinese and Russians buy western companies and football clubs; western mosques and Islamic schools are being financed with Turkish and Arabian money. Add to this the alleged islamification of Europe, and in the Netherlands the fight over Black Pete, and for some it is clear that not only western economy but also western culture needs to be defended fiercely.

In the meantime, something else is going on, something without precedent in history: never before did the whole world need to work together to get the whole planet in shape. All nations face the same climate change, nuclear risks, scarcity of water and raw materials, cyber threats, refugee movements, human trafficking, et cetera. Each of these issues requires international coordination to be dealt with in an effective way. No hacker, tsunami or human trafficker, no radioactive water leaking from a nuclear power plant, cares about national borders, trade balances or cultural heritage. In all of these cases, nationalism can only fail.

Now look at the pandemic the world is facing, in the midst of this ‘glocal’ competition. Another planetary issue is binding the nations, precisely when nationalism is on the rise. To which side will the scale tip: to international collaboration or national self-sufficiency? At the moment we see both: each country fighting the same virus as if the rest of the planet (or the EU) does not exist, and scientists working together across the globe to develop a vaccine.

The latter reveals a significant fact, something that shaped the course of Europe’s history but is easily forgotten in nationalist times: science and technology are no local affairs, but determine the fate of all humankind. Countries who shield their science and technology from other countries, may save a patent or two, but will lose the global potential of brainpower, knowledge and innovation.

What, then, to think of the economy? Will corona drive our economies away from each other or towards each other? Here, we can learn an important lesson from history. During World War I, it became painfully clear how vulnerable countries can get when global trade comes to a stop. Several countries faced a dire shortage of food, leading, for example, to a national revolt in the Netherlands. After the war, many countries tried to learn their lesson by aiming for economic self-sufficiency (autarky). This led, however, to winners and losers. Some countries were doing much better in taking care of themselves than others. After a couple of decades, three proud nations who got stuck in their own autarky policy and believed they deserved more land, resources and colonies, started World War II.

Today, we witness again the vulnerability of a globalised world. First physically, then economically. Lack of global trade is leading again to serious shortages, and again it can be tempting for (especially western) politicians to advocate for economic self-sufficiency. In some cases this will make a lot of sense, like with medical equipment and medicines or to reduce CO2 emissions. But also this new self-sufficiency will lead to winners and losers. Famines and civil wars may be the result of other countries closing their factories. And (not as dramatic but relevant for export countries): less import from a country can easily lead to less export to that country.

Another issue has moved up the agenda: when is it appropriate for a nation to defend its self-interests, and when will it only shoot itself in the foot if it does not invest in good relationships and generous collaboration with other nations?

The West is losing control in the world and especially the United States and Great-Britain suffer from a ‘post-imperial stress disorder’. De world is not serving the interests of the West (so much) anymore and quite some politicians take it as a an encouragement for unfettered national self-protection. Corona can enhance this tendency, but the more self-absorbed the West becomes, the more China (and soon India) will fill the international leadership vacuum. Not only because it greatly benefits from international business partners, but also because a number of planetary issues (mentioned above) still call for international coordination. In all these cases, countries will only have it their way if they are able to mobilise sufficient allies when it gets to a vote. China is well aware of this and continues to invest in good relationships, also (and precisely) in corona time. The West is busy with further breaking down its old alliances. Corona makes us realise how much all nations are joined in one fate on a single planet. As westerners we used to have beautiful thoughts on this. Let us hope it will not take too long before we can explain to ourselves again, why we cherished liberty, equality and fraternity as universal values – not for one particular privileged nation, but for all of humankind.

Part 1. Ideological / Part 3. Social / BACK TO BLOGS

Corona as catalyst: Ideological competition

Five centuries of western domination are currently being replaced by a new world order. All the political, economic, military, cultural and ideological cards are already being reshuffled. If the Corona virus rages deep enough, it will ‘only’ catalyze this transition. In this essay, I try to briefly describe three of these major intersections in our time. Part 1: Ideological competition / Part 2. ‘Glocal’ / Part 3. Social

Since 2006, Freedom House reports a decline of freedom and democracy in the world – that is, of freedom and democracy as we westerners like to see it in the world. China plays a major legitimising role in this decline: with its collectivist and paternalistic regime, it defies the ideological bench-mark of the West. No matter how much privacy, journalistic independence and political participation is reduced in Chinese society, no western country is willing to pay the price for a hard confrontation. Too costly, too risky. Some banks are too big to fail, some countries are too big to franchise. A giant like China cannot be reshaped in the image of the West, and under Xi Jinping it has abandoned any hesitation. China stresses openly the non-universal nature of western democracy and the West reveals its impotence by remaining silent. At the same time, nobody fails to see the failure of the “global democratic revolution” (announced by Bush during the Iraq War of 2003), the non-stop arms supplies from the ‘free world’ to autocratic regimes, and the exposure of western hyper-liberalism during the financial crisis. And one group is only too keen to notice it: the authoritarian leaders of this world. They eagerly take all this as an approval of their own aspirations.

Loss of economic power leads to a loss of ideological power. Gradually, it is dawning on us what the impact of this will be for the new world order. The “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” has become an alternative ideology next to Western political thought. Every country is now forced to take position. Neutrality is not an option. Every country will be somewhere on the spectrum between western individualism and eastern collectivism, American liberalism and Chinese socialism.

Even the West will feel drawn towards a more eastern thought. According to the OECD, 60% of middle class consumption will take place in Asia in 2030. Products for the global markets (e.g. movies) will be more and more tailored towards the cultural taste of the East. This will leave the West not unaffected. And we have seen only the beginning of India’s rise. The more this country feels powerful enough to sail its own course (independent of the US), the more we will experience its cultural and ideological influence.

Now look at the pandemic the world is facing, in the midst of this ideological competition. What is drawing more attention as we fight the virus: our individual or collective interest? And who appears to be more effective in fighting the virus: the individualistic West or the collectivist East? Looking more specifically at the authoritarian regimes, it is not difficult to see how this crisis is only increasing their confidence. Corona has created the perfect reason for submitting 1.4 billion Chinese citizens only more to an omnipresent surveillance system.

Also the West has suspended a dramatic amount of freedoms to optimise its fight against corona. Citizens approve, trusting the measures will be temporary. But how temporary is temporary if a pandemic can happen again and all kinds of other dangers are just as menacing? Are we not also facing the threats of climate change, cyber-attacks, nuclear risks, global terrorism, et cetera? And do they not also require a collective response? Should we really restore all freedoms? And would it not be wise to adapt at least some of the digital technologies that are now being used so effectively in Asia? Corona is making a particular issue, already on our plate since the rise of China, only more urgent: the right balance between individual and collective interests, and more specifically between liberty and security. I expect western countries to move to the East in thinking. How far they will move, depends on the degree to which they can still explain to themselves the significance of individual liberty (and responsibility). For liberty means less control, and less control means taking risks for the sake of liberty. And the more insecure our lives become, the greater our faith in freedom will need to be to not sacrifice it to security.

Part 2. ‘Glocal’ / Part 3. Social / BACK TO BLOGS

Corona reveals the world’s peculiarities

A ghost is haunting the world – a virus that enters all nations into a holy alliance. Yet, no matter how much we fight the same enemy, our battle is as colorful as the nations. Whoever wishes to get to know the world can learn a lot these days. In response to the same virus all countries and leaders reveal their own peculiarities. Let me mention a few.

National personalities

  • In egalitarian countries, leaders are quick in calling upon their citizen’s responsible; in hierarchic countries, citizens are quick in holding their leaders responsible.
  • In democratic countries, leaders are checked for accuracy and honesty; in authoritarian countries, leaders tend to avoid criticism through concealment.
  • In more ‘reason oriented’ countries, leaders tend to consider a targeted lockdown to spare the economy and build immunity; in more ‘passion oriented’ countries, leaders tend to reject this as cold and calculated and advocate for a total lockdown.

International reflexes

  • In the United States, we hear Trump speak of the “Chinese virus”; in Russia, we hear people speak of an American bioweapon.
  • In Africa, people suspect the West of using Africans as guinea pigs in the development of a vaccine.
  • In the European Union, old accusations between north and south come to light as soon as financial support is discussed.

Ideological priorities

  • While the US president makes every effort to protect the economy (leading to measures that are long overdue), the Chinese president makes every effort to secure the well-being of its citizens (leading to an even greater state control).
  • While the one European leader calls upon everyone’s sense of public responsibility, the other seizes the moment to rule by decree.

Seen in this light, this corona time is not exactly a revolutionary time. Rather, it is one big affirmation of the status quo. Still, many people state that the world will not be the same after corona. Are they right? I think they are. But let’s not forget that the world was changing already and will change anyway. In the next blogs I will explain why.

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A one-hour overview of major positive and negative trends in today’s world

If you have a spare hour, enjoy the video below in which I take you around the globe, summarizing the major positive and negative trends in today’s world. In 2018, I held this lecture for senior leaders of major corporations in Sydney and Melbourne (companies like Perpetual Limited, QBE, Deloitte, Karrikins Group, Oxford University Press, Worley Parsons and Pearson) in my role as Chief of Vision within World Vision Australia. This video was recorded by QBE in Sydney.

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Europe has a simple choice: be the world’s 4th giant or a bunch of glorious dwarfs

If the GDP projections of PwC are correct, not a single European country will sit at the table when the G8 gathers in 2050. Germany can still join the G8 in 2030, but not the country that is currently most absorbed by defending its sovereignty: the United Kingdom.

Source: PwC (2017)

Of course, projections like these should be taken with a substantial grain of salt. But it sends a crystal clear message to Europe: now is the time to make up your mind! What do you really want? Be the 4th giant in the world – next to China, India and the US – or settle for glorious dwarfness by prioritizing national sovereignty over European unity?

Economically, the EU is already a giant. It is the world’s second-largest economy by GDP. But as long as the EU doesn’t grow up as a political entity (with one democratically chosen leader speaking on behalf of all EU members and citizens), we will continue to see a mind-boggling contradiction t between the EU’s strength as economic power and weakness as political leader, illustrated by the survey below:

Source: Pew Research Center (2017)

Below PwC’s ranking of the top-32 economies in 2016, 2030 en 2050. Europe is rapidly losing ground in the market place. Time to make up its mind. The current EU-approach is neither fish nor fowl, with for example a G20 containing both leaders of individual EU-countries and a representative of the EU. The more the rankings below become a reality, the more European countries will have to decide: splendid isolation as sovereign nations or significant participation as united EU.

Source: PwC (2017)

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18 of the last 20 centuries China and India were the biggest economies

Source: Michael Cembalest, Angus Maddison (2008), updated by Visual Capitalist

A quick look at the above chart and you may be surprised to see that China and India were by far the biggest economies in the first 18 of the last 20 centuries. Sure, it is all based on estimations and using different time intervals on the x-axis is actually not done. But nevertheless, we can draw some valuable insights from this chart.

Until 1800, economic progress was largely linear and linked to population growth. The more people, the bigger the share of GDP in the global economy. Hence the leading position of China and India. Already 2000 years ago, 60% of the world’s population lived in these two countries (thanks to a growing amount of tea, cotton and rice).

Source: Derek Thompson (2012)

But then the Industrial Revolution changed the game altogether: suddenly, productivity started determining a country’s share of GDP in the world’s economy. Europe and the United States could produce way more wealth with their factories than the size of their population would indicate. It gave them a head start in economic power, which they unashamedly translated into military power. China and India faced severe humiliations from the West in the last 2 centuries.

But things are changing dramatically again. China and India are catching up, with China behaving like a petrol engine and India like a diesel engine (needing more time to warm up). The leverage of the West is diminishing, their head start disappearing. And this time, China and India can combine their industrial power with their immense population. Once both countries are ‘up to date’ and ‘up to scale’, their huge work force and internal market will allow them to go above and beyond. China may have reached this point already, India is on its way.

Once all of the catching up is done, we will see an economic world order that shouldn’t surprise anyone: a world order that existed already for 18 of the last 20 centuries and only got disrupted for 200 years.

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Why tomorrow will be less democratic than today

Western-style democracy, emphasizing individual freedoms and rights, is under global pressure and facing decline even in the West. Here are five reasons why.

1. China gets away with an authoritarian approach
Some banks are “too big to fail”, some countries are “too big to franchise”. There is no way Western democracies can shape China in their own image. It is also clear by now that they are not willing to sacrifice political and economic relations with China in exchange for upholding a Western view on democracy and human rights. So, get used to a world where superpowers can be openly undemocratic (according to Western standards) and get away with it. And don’t forget how inspiring it can be for other regimes, and how much it can add legitimacy to their own authoritarian ambitions, to see China ‘win’ with an authoritarian approach.

(Russia is a different and more complicated story, due to its strong army and vulnerable economy. Its military strength demands caution in the West; its economic needs provide opportunities for the West.)

2. Western-style democracy does not seem the ultimate solution any longer
Western-style democracy is a tough seed to sow: in most countries where it was recently introduced, it failed. Democracy is a vulnerable system as it requires discussions among equals and does not stop the election of undemocratic people and parties. Whatever its value, recent history has made it much easier for opponents to dismiss it as a universal solution. In October 2014, an influential journal of the Chinese Communist Party (Qiushi) made the following statement with reference to the enduring violence and turmoil in countries like Afghanistan, Egypt, Iraq and Libya:

The West always brags that its own democracy is a ‘universal value’ and denies there is any other form of democracy… Western democracy has innate internal flaws and certainly is not a ‘universal value’; its blind copying can only lead to disaster.

The days are over when the West could suffice with simply supposing the superior nature and universal resolving power of its democracy.

3. Secular societies lack the resilience to withstand their need for security
More freedom means less security, more security means less freedom. A well-known dilemma in democracies, leading to the question: what will democracies need more in the coming years, security or freedom? The answer is clearly security, for two reasons: 1) the growing amount of threats within and around democracies, making citizens feel more vulnerable, 2) a lack of resilience in democracies to accept risks.

Ad 2) The Democracy Index of The Economist Intelligence Unit shows that the most democratic countries also happen to be the most secular countries in the world. This combination seems to have a price: the less people can surrender to Someone or Something that controls the universe – a God (Jews, Muslims, Christians), Spirit or Life Force (Taoists, Buddhists, New Agers), Social Order (Confucianists, Socialists) – the more difficult it becomes to accept adversities and risks in life. Friends and family can compensate to some extent, but solitude is a major problem in secular societies and only some problems can be fixed by others. So, what we see in secular societies is a lack of resilience: people can be the happiest in the world when their life is in order, but easily get anxious or depressed when things get out of hand. There is little tolerance for anything that threatens the good life. Combine this with the growing threats in the world and we may see a growing willingness in precisely the most democratic countries, to sacrifice freedoms in exchange for more security.

Big question: where will this process end? How much loss of freedom does it take before people start to accept insecurities in exchange for freedom?

4. World issues cannot be solved in a tolerant way
Pandemics, climate change, cyber crime, international crime, global terrorism, nuclear risks – the dangers these issues contain can only be tackled if all countries cooperate. Leave one out, and hackers, criminal organizations and terrorists will pick that country as their hiding place. And so, the more urgent these issues become, the less countries will be patient with those that obstruct the process. World issues, by their nature, don’t care about the sovereignty of states, and so will powerful states when facing a clear and present danger. Authoritarianism will take over, a less democratic world order appear.

5. Democracies cannot be defended in a democratic way
Another notorious dilemma: democratic tolerance can only be defended in an intolerant way. We simply cannot differ about the democratic space to differ. Democratic rules ensure freedom, but only if everyone submits to them. This raises the question: do democracies need to be more intolerant in the coming years, to ensure a fee and open society? The current rise of oppressive groups, in and around democracies, clearly points towards a yes. And so, expect to see more ‘inevitable intolerance’ coming from democracies as a matter of self preservation. Democratic governments will have to be specific about the rules of an open and free society, and they will have to enforce these rules where needed. A process as unavoidable as it is tricky, because of the continuous risk that democracies become too specific about the rules and a source of oppression in their fight for freedom.

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