Recent years have resulted in increasingly rapid economic and social change, which require political responses to avoid instability
Major economic changes in recent years have affected people’s jobs:
· New technologies have been disruptive throughout history, and have often been resisted, but few would deny that most people now have easier lives and live longer than those who lived in previous centuries. The job losses caused by industrialisation have been matched in aggregate by the new jobs created. There are losers in the short term, though: those whose skills are no longer required and who need to find alternative employment if they are to maintain their standard of living. Many will never be able to find jobs as good as those they have lost.
· Globalisation has also been beneficial overall (3.5.4), but it too has created losers, and what Nouriel Roubini has called “Political Fault Lines”. It has resulted in job losses and increased migration. As Dani Rodrik pointed out, in an article entitled The great globalisation lie, "evangelists presented globalisation as inevitable and advantageous to all. In reality, it is neither, and the liberal order is paying the price".
· As governments try to combat environmental challenges (3.5.7), they have introduced regulations which have cut employment in some traditional industries such as coal mining.
· Changes in tastes can cause job losses. Concern about animal rights has massively reduced the size of the fur industry for example, although there have been increased opportunities to make other kinds of warm garment.
· Local job markets can suddenly change with the departure of a large employer because it failed against competition from other companies.
· As immigrants arrive, whether to fill skills shortages or as refugees or as economic migrants, they unavoidably change the character of neighbourhoods and may put strains on local services. Although immigration usually brings economic growth, it can result in lower wages for some jobs (3.4.3.3).
There will be some people who have been adversely affected by these changes, even though the majority may have benefited from a cleaner environment, lower prices, and increased choice. Donald Trump’s two election wins and the British vote to leave the EU in a ‘Brexit’ were symptoms of public discontent. An Economist article, How to make sense of 2016, described how liberal democracy is now under threat:
“Amid growing inequality, society’s winners told themselves that they lived in a meritocracy—and that their success was therefore deserved. The experts recruited to help run large parts of the economy marvelled at their own brilliance. But ordinary people often saw wealth as a cover for privilege and expertise as disguised self-interest.”
It is argued here that, by almost any choice of criteria for what is acceptable governance, politicians have a duty to respond to the problems faced by those who have suffered – yet they have conspicuously failed to do so (6.3.9). People who have gained from recent economic changes, especially those who have been most successful (6.7.2), need to contribute towards finding solutions for those who have been less fortunate. Everyone should have the opportunity to flourish. A Foreign Affairs article, The Liberal Order Begins at Home, noted that this “will require a new social contract between each state and its citizens—creating a twenty-first century state with a new social purpose that emphasizes inclusion over growth”.
Politicians need to be able to offer a viable and inclusive way forward for people who have been harmed by rapid economic and social change. The following sub-sections explore three kinds of effort required to overcome the problems, followed by a summary of the risks of not responding adequately:
· Political leadership is needed to explain to people what is happening in times of rapid change (6.7.8.1). Politicians should reassure people with measures designed to help them (and they need to restore people's faith in democracy).
· Many people will require new jobs to replace those that have been displaced (6.7.8.2). There are new opportunities in generating green energy, adaptation to climate change, and infrastructure projects for example. These mostly require public investment, but this will be repaid by the resulting economic growth. And governments can help to steer new jobs to areas in need.
· Care is needed in managing large-scale immigration (6.7.8.3). Politicians need to consult with immigrants and local people about cultural adaptation, rather than trying to politicise the issues to win support.
· There are social and political risks in ignoring the problems of change (6.7.8.4). People might be tempted to support damaging and divisive solutions offered by populist politicians, creating political instability.
(This is an archive of a page intended to form part of Edition 4 of the Patterns of Power series of books. The latest versions are at book contents).