Globalisation, Chaos and Political Instability

When we step back to analyse what is going on socially and politically in the world it is hard not to be dismayed by the contradictory trends.

On the one hand we have the seemingly inexorable move to globalisation. Both the world’s capital markets and labour markets are seemingly growing more encompassing, demolishing national borders and upsetting conventional wisdom. There are fewer and fewer barriers preventing capital moving to where it can be most productive. Trade and investment barriers are reducing, despite the parochial efforts of different groups to impose or restore them.

And on top of this we see the inexorable spread of technology and its effect not only on our productive capacity but on our way of life and social mores.

Opponents of globalisation often talk about how it exploits the poor in favour of the rich, yet any objective analysis will show the increasing standard of living around the world is aided by globalisation and the removal of trade barriers and the application of technology disproportionately favours third world countries.

Moreover, modern communication technology has ensured that what is happening in the world is largely exposed to all the world. It is difficult for any country to hide its shortcomings, compared to others, from its citizens. It is said that the so-called “Arab Spring” resulted from the power of social media to portray the benefits of Western society to those languishing in the underperforming, largely Muslim, economies of the Middle East. Unfortunately, mere envy is not enough to bridge the economic divide and the movement largely failed because its proponents had neither the social, nor political capital necessary to break out of their traditional ways.

We are all more inextricably connected economically than ever before. Whilst this can surely bring benefits, as I have intimated above, there is also a downside.

In Chaos Theory it is maintained that phenomena in the natural world are so interconnected that the pulsating wings of a butterfly somewhere can result in a cyclone somewhere else. I don’t believe anyone has been able to make such a factual correlation.

But we have seen its parallel in economics. In 2007 we saw some perturbations in the sub-prime market in American housing escalate into a Global Financial Crisis.

On the other hand, counter to this expansionary movement, we have also seen a process of political fragmentation. After the fall of communism in Europe, States that were formed under coercion during the communist regime began to fall apart. Most affected were the East European countries such as Yugoslavia, Romania and Hungary. They basically reverted back to the more historic ethnic divisions. This process has been called balkanisation.

We are seeing something similar to this fragmentation process with the recent surprise Brexit outcome.

Britain entered the Common Market or European Community (EC as it then was) in 1975. A referendum was held initiated by the Labor Government of Harold Wilson. The Wilson Government was itself internally divided by the issue but the referendum was subsequently passed by a majority of 67% having been given the support of the Conservative Party under its new leader and free trade advocate, Margaret Thatcher.

As the name implied at this stage the EC was merely a trading bloc that permitted favoured access for its members. Over subsequent decades the EC morphed into the European Union (EU) which has become a political union imposing various regulations on its members ostensibly to not only improve the economies of member states through trade but to ensure conformity of practice in other areas and also enabling the freedom of movement of the citizens of member countries throughout the whole union. Historically. both Ireland and Scotland have had stronger ties with Europe than England and consequently Britain’s exit from the European Union creates some angst for those countries.

But one is tempted to link Brexit with another political development in our Western democracies. We have seen in Britain, the USA and indeed Australia a growing divide between the ruling political elites and the general populace.

The American philosopher, Michael Sandel recently observed:

One of the biggest failures of contemporary political parties has been the failure to take seriously and to speak directly to people’s aspirations to feel they have some meaningful say in shaping the forces that govern their lives.

In Britain there seemed a real concern among voters that membership of the EU had diminished Britain’s sovereignty and that decisions were being made on issues that impacted on their welfare by unelected EU officials in Brussels. No doubt this concern was exacerbated by the prospect of relatively unfettered access to European countries for refugees fleeing from embattled Muslim States.

Commentator, Kenan Malik has written:

The main political faultline today, not just in Britain but throughout Europe, is not between left and right, between social democracy and conservatives, but between those who feel at home in – or at least are willing to accommodate themselves to – the new globalised, technocratic world, and those who feel left out and disempowered.

This “faultline” has also created a schism between many ordinary citizens and their “so-called” political representatives. It is typical of the political elites to assume that they know better and those that disagree with them are obviously so ignorant that their opinions should carry no weight. The advocates of the Remain case in Britain arrogantly suggested that the proponents for Brexit were obviously misguided and uninformed.

We see similar sentiments arising in Australia around the issue of “same sex marriage”. Penny Wong tells us that it would be dangerous to have a plebiscite on the subject because it would encourage “hate speech”. Yet we know from various surveys that a majority of Australians (more than 70%) want to have their say on this issue. What’s more it is those in Wong’s camp that seem to be most derogatory!

As a result of these trends there is a substantial minority of the citizens in our democratic societies that feel they have no real voice in our democratic processes.

The trend to Balkanisation is a retreat to something such people feel they can get their heads around, a corralling of political interests into a bailiwick which they feel they can influence.

So whilst our politicians are going on about the National Broadband Network and same-sex marriage the average working person is probably just concerned about their job security and providing the basic necessities for their families. Even though the same-sex marriage issue surfaced again in the latter part of the election campaign I suspect there would hardly be 5% of voters who would nominate it in the top 3 issues that concerned them.

A disconnect has developed between a large portion of the population and our political representatives. This is the cognitive gap that Donald Trump and Pauline Hanson seek to exploit.

Although I would argue that all major political parties are failing here, I suspect that the biggest impact results from the disengagement of the Labor party from its traditional constituency.

I come from a Labor family. In my youth the majority of workers belonged to a Union. As you know now barely more than 10% do so. The Labor party represented that constituency pretty well. Labor politicians were drawn from a wide range of occupations, many of them what we would term as “working class”. Now they are largely Labor lawyers, union officials and party apparatchiks. They are largely removed from the daily lives of their traditional constituents.

Labor’s threat from the Greens hasn’t helped matters. They have been distracted to assuage the concerns of the inner city elites rather than their traditional support base.

Workers would also take little comfort from the fact that the unions that once represented them are now more concerned with the maintenance of their power base within the Labor Party and the pursuit of political agendas that have little relevance to the average worker.

The Coalition seems also torn between pursuing its traditional beliefs of individual freedom, smaller government, lower taxation, stronger security and so on and competing for the swinging vote in the middle. It was against this background that the Liberal Party ditched Tony Abbott in favour of Malcolm Turnbull.

This breakdown in traditional politics has left many people feeling disenfranchised.

Since commencing this essay the Federal election has now been held and as I sit typing these last few words it is unclear whether we will have a Government with a small coalition majority or a hung parliament. What is clear is that the coalition has lost considerable support. Interestingly, while some of those who voted for the coalition last election have this time voted for Labor the majority have fled to the minor parties or independents. It is clear that no one has actually won this election, with no party having a clear mandate to govern.

It has left Australian politics in some sort of transition. It should give us a great cause for concern for our immediate future.