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.
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.
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:
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.
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).
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.
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.