The truth is he won because he had correctly diagnosed the illness of the country: a deep seated inequality, that is widening with no apparent solution in sight. So did Bernie Sanders by the way. The two men however had identified different root causes, and hence different solutions to this problem. Bernie blamed the rich (from Wall Street to the 1%). Trump blamed foreigners (from Mexico and especially China). Sanders didn't even get on the final Democratic ticket and Trump won against Hillary Clinton who represented too much of the status quo, whom he successfully blamed for the ills. Truth be told Bill Clinton was then a beacon of centricity, along with Tony Blair with his new labour movement and even China's Jiang Zemin then had a non-confrontational foreign policy. The 90's were indeed an era of globalisation and China's ascension into the WTO and the NAFTA deal are poster events of this fact.
A globalised world with lower inter-country trade barriers allowed Ricardo's Theory of Comparative Advantage, first pronounced over 200 years ago now, to become reality and what a reality it is, especially when you consider the hundreds of millions lifted out of poverty in China alone in those closing decades of the 20th century.
It is therefore not difficult for the masses to believe that China took their jobs and China's growth was at the expense of the US (then and still is the largest consumers in the world buying all the China-made goods). The truth is there was another development in the late 20th century that really came into its own in the 21st century: the information age.
For a long while, information technology made communication easier, analysis faster and record keeping more pervasive but it did not seem to deliver the promised productivity gains. In fact, in many countries productivity growth declined despite the increasing use of technology. However, in the second decade of the 21st century, especially with the rise of AI, the increasing ambidexterity of robotics and the past critical mass of data collections (esp in realtime and remote basis), that we now have many functions performed by (human) labour that can now be done by machines. This ushered in the machine age, esp machines that can learn and increasingly do higher level functions.
It is therefore not at all surprising that the best selling business book is Thomas Piketty's Capital in the 21st century. It is, to date, Harvard University Press' best selling book. In it, Piketty, observed that the rate of return on capital is greater than the rate of economic growth (in other words return on labor) over the long term, the result is concentration of wealth (to the capital holder rather than the labour provider) and this unequal distribution causes social and economic instability. Piketty proposes a global system of progressive wealth taxes to help reduce inequality and avoid the vast majority of wealth coming under the control of a tiny minority.
Piketty has later issued some corrections though what he observed was in fact predicted by another giant of an economist, John Maynard Keynes nearly a century earlier. In his essay, Economic Possibilities of our Grandchildren (and indeed his grandchildren would be nearing their retirement ages now), he argued that we will find that the economic problem, the struggle for subsistence, always has been hitherto the primary, most pressing problem of the human race—not only of the human race, but of the whole of the biological kingdom from the beginnings of life in its most primitive forms, would have been solved. Keynes predicted that Mankind is solving its economic problem and that the standard of life in progressive countries one hundred years hence will be between four and eight times as high. Indeed in the pockets of my children are smartphones with more computing power than Apollo 11 that safely got astronauts to the moon and back half a century ago.
Keynes anticipated technology would be the answer. Mankind would have harnessed it to solve the economic problem. He thought that for the first time since his creation man will be faced with a new problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well. He had assumed that the wealth created for us (by machines) would flow to all peoples, thus allowing us to to cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes. He did not mention nor foresee that mankind had not dealt with the distribution of the wealth created by the machines.
So inequality expanded at an alarming rate and before the 2nd decade of the 21st was barely halfway, we had jingoistic leaders like Trump and Johnson who would persuade their respective populations to withdraw from international/regional collaborations and to put their countries first. Neither would solve the fundamental problems described by Messrs Keynes and Piketty.
Even in well run countries, like Singapore, the electorate voted to have more opposition voices in parliament. Singaporeans too felt the widening inequalities and they too had pinned the blame on foreigners taking their jobs. They also felt (eloquently expressed by a star opposition candidate, Jamus Lim) that the government has taken the side of capital rather than labour. It is little wonder that The Workers' Party (including Jamus) won the seats in parliament.
My children (yes, those with phones smarter than a rocketship) are fortunate to be in the sponsorship and employment of good institutions. So, they will have jobs when they finish their tertiary studies. But when they start working, they will be part of a new generation. They will know that there are others whose skills are not rewarded (or required) by the capitalist system. If they have the inclination as well as the opportunity, they need to find a right way forward for society. One where the economic gains are more fairly distributed not by pulling down the rich or weakening the strong. They have to share the wealth without taking away dignity and without extinguishing the incentive for humans to keep striving. That way, we can then hope for a peaceful future for our grandchildren rather than staring into the spectre of yet another class war.
No comments:
Post a Comment