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NewsCO.com.au – The great divide is getting wider

May 19, 2017

Posted

May 19, 2017 14:40:50

It is almost two weeks since the budget and I have a confession: I have paid it scant attention.

I have barely skimmed the headlines, turned off the interminable political interviews, faded out of TV news bulletins.

Still it seeps in. All that chatter about the Government being “Labor lite”. The opinion polls and political point scoring. The self-interested squealing of bankers.

I have let it go in one ear and out the other, all of those political parlour games that the media obsesses about. I am better off for it. I have certainly banked some precious hours of my life that I would otherwise not get back.

But it isn’t because I don’t care. Far from it. I care too much and no one seems to be talking about what really matters.

We’re being replaced by robots

Here’s what we are facing right now. The world economy is stagnating. Recovery since the 2008 global financial crisis has been sluggish and unconvincing.

The gap between the wealthiest and poorest is widening and the those numbered in the poorest among us is growing. Entire industries are disappearing, jobs are gone and will not be coming back.

Of those jobs that still exist, those in the know say at least half will be replaced by robots. Not even neurosurgeons are safe.

Full-time work is vanishing, replaced with precarious part-time labour.

Retirement age is being pushed back and government pensions are shrinking.

Average wages have flatlined, yet corporate bosses pay themselves obscene amounts.

Our children will be poorer than us. They won’t be able to live in our prohibitively expensive cities.

Social mobility is waning. A good education is no guarantee of a prosperous future.

If you’re born rich you will stay rich and probably get richer, otherwise good luck.

Don’t look to our politicians for answers. Politics globally is toxic. Democracy is in retreat and populism that exploits our worst instincts and feeds on fear is on the rise.

Should I go on?

Ok. The planet is getting hotter, the seas are rising and the president of the world’s most powerful nation disavows climate science and has said in the past that climate change is a fake Chinese plot to steal American jobs.

The world is stockpiling nuclear weapons. North Korea is developing a missile system that could deliver a nuclear strike to Australia.

China is expanding its military and is locked in territorial disputes that has the region on a hair trigger. Generals in Washington and Beijing are war-gaming worst case scenarios.

I haven’t even mentioned the Islamic State group and global terrorism.

We must stop being complacent

It is for all of these reasons and more that some of the world’s greatest minds, the Bulletin of the Atomic Scientists, has moved the Doomsday Clock 30 seconds closer to midnight.

I listened to one of those scientists this week at the Auckland Writers Festival. Theoretical physicist Lawrence Krauss. Despite the gloom, he said all need not be lost but we must shake ourselves out of our complacency.

He warned that in a world of “fake news” we must cling evermore to “stubborn facts”.

Scientific inquiry, he said, is essential. We must return time and again to evidence and never stop questioning and testing, especially our own beliefs because we are too ready to lie to ourselves.

Krauss has little faith in politicians and is losing respect for the media that, he argues, too often does not ask essential questions.

We the people, he says, hold the future in our hands. We must demand more and not be hoodwinked by fear and demagoguery.

These are indeed the challenges of our time. In a world increasingly divided the future of liberal democratic values are under threat.

This has become topic du jour, particularly post Brexit and the election of Donald Trump in America.

I was fortunate to be included in a panel discussion in Auckland focusing on “the great divide”.

There were urgent questions: What is the appeal of populism? Why are many people feeling left behind in our modern world? Why do those same people feel like strangers in their own country? What world are we leaving for our children?

What emerged is a fundamental question of the future of the nation state — the Westphalian sovereign state that we have known since the mid 1600s after Europe’s bloody 30 years war.

What are the limits and boundaries of sovereignty in a globalised, interconnected world? What principles underpin that world?

In a world of free movement of capital and people, what of questions of identity, cohesion, independence?

And all of this happening in a perilous time of rapid upheaval when we are testing the limits of sustainability.

Social trust is fraying when we need it most

These are issues addressed in two timely new books, The Retreat of Western Liberalism by journalist Edward Luce, and fellow journalist and academic Bill Emmott’s The Fate of the West.

Both traverse similar terrain. Beware of the mantra of endless growth, they say, and don’t trust the arc of history to deliver us to nirvana.

Luce writes: “The idea of history as a separate force with a mind of its own is a bedtime story to help us sleep.”

The progress of human liberty to individual freedom, Luce argues, is under threat. It is challenged by the comeback of non-western views of history with its memories of colonisation and it is under attack from within from nascent populism that rejects the very foundations of liberalism.

Both writers are concerned that social trust is fraying just at a time when we most need it.

Emmott writes: “The source of the West’s evolutionary power has been its openness, its equality of rights and so its social trust.”

Now, he says, this “clash between tribalism and openness reflects feelings not only of fear but also of doubt. Doubt about our ability in open societies to cope with the many threats we see to our civilisation, threats to the way of conducting domestic and international affairs … doubt even about the rightness and sustainability of the open society itself”.

In a climate of fear and mistrust, Emmott poses the question: What is it that leads those who have been left behind to become “willing to support radical forces that would throw away that openness purportedly to restore their sense of equality of restore?”

Luce provides some of the answer. What has changed, he writes, is “the public’s trust that societies are all in this together, including the elites”.

And why wouldn’t people feel like that? Economists and politicians keep telling us about growth and opportunity but we don’t see it.

Where the growth has gone

Luce reminds us economists are notorious for getting the future wrong. As the joke goes, they have predicted ten out of the last five recessions.

Since the 2008 financial crisis forecasts have annually over-estimated next year’s growth. And our politicians are banking future budget surpluses on these unreliable projections.

Growth is a relatively modern phenomenon anyway. Robert Gordon in his book, The Rise and Fall of American Growth, reminds us that between the fall of the Roman Empire and the Middle Ages growth was non-existent.

It accelerated from the 19th century. Between 1870 and 1970 incomes exploded. But productivity since has been waning and despite blips like the tech boom, sustainable growth in the west has been hard to maintain.

Of course, the economic story of our age is China, where from a low base an economic revolution has lifted the country out of poverty. But China’s miracle is an example of authoritarian capitalism and state control, hardly an argument for the future of western liberal values.

In the West we measure growth in averages that are useless. Growth doesn’t tell us how ordinary people are faring.

Since 2009 the US economy has expanded on average by 2 per cent a year, yet incomes did not return to pre-recession levels until 2015.

Luce focuses on the United States, still the world’s biggest economy, but the same trends are visible here.

We have had sluggish at best wage growth. We are seeing an increasing gap between haves and have nots.

Luce points out the world’s wealthiest 1,426 individuals have a combined worth twice the size of the British economy and equal to the combined assets of the 250 million least wealthy Americans.

That’s where the growth has gone.

This isn’t leadership

And jobs? Yes, we hear a lot about job creation. But these new jobs are not secure, full-time positions but jobs in the “gig workforce” — tenuous part-time, independent positions that the McKinsey Global Institute defines as “short-term, piece rate and autonomous”.

Luce tells us that there are 50 million westerners trying to earn their living like this and it is not by choice. Part-time, precarious work is going to be the fate of our children in Australia too.

This is wreaking a terrible toll. Our cities are segregated increasingly around wealth. Postcodes are destiny.

More and more people are describing themselves as among the lower class.

We are a self-medicating society with rising rates of mental illness and suicide.

People are falling out of society lost in a world of mind-numbing video games and no longer even registering for work.

So much is damaged.

Emmott argues that retreat from what has sustained us — openness, equality, inclusion — is not the answer. He says “America First” is not the right slogan. “Stop the world, I want to get off” is not the right approach.

He writes that “we need to clean up and repair our democratic and economic systems”.

Is this the debate we have heard since the budget? Are these the big questions our leaders are addressing?

Of course the National Disability Insurance Scheme is important. Of course taxation is important. Education spending is important.

But this is administration. It isn’t leadership. Our fate is tied to more far-reaching and fundamental challenges.

Krauss and his fellow scientists have moved the clock closer to doomsday.

Don’t worry though, there will be another opinion poll out next week, we can all talk about that.

Topics:

budget,

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