Free Markets and Market Economies. Capitalism. Wealth. Taxation. Spending. Growth. Growth. Growth.
Most of us do not really think about these things. We think about our families. We try to protect them, and ourselves, from uncertainty. We strive for food on the table, a roof overhead, and clothes on backs. Our localized realities drive our choices.
Bootstraps. Hard Work. Self-Reliance. Freedom and Liberty.
These are the Americanisms informing prevailing economic beliefs. The Marshall Plan spread many of these principles throughout post-WWII Europe. In exchange for reconstruction aid, Europe underwent massive change and became the precursor of today’s European Union. Europe largely deregulated, removed interstate borders, and adopted prevailing US trends. Europe saw a huge increase in labor union membership, productivity, and the adoption of “modern” business procedures. Well, perhaps not modern. Perhaps just American.
I wonder if the growing inequity across OECD (Organisation for Economic Co-operation and Development) countries is the result of American self-interest run amok. I wonder if America’s inequity (the 4th highest among the OECD countries) is driving global inequity. Could the practices adopted under the Marshall Plan be responsible for global inequity today? Perhaps. Many people will find holes in this line of questioning. Some with posit the lack of union membership is driving inequity: In the US, states with Right-to-Work laws have higher job growth rates, but lower wages, insurance rates, and pensions. People have jobs, but those jobs might provide less return for labor. Some will posit the embrace of neoliberal structures is the root of inequity. A paper published in the June 2016 issue of the International Monetary Fund’s Finance and Development warned that forty years of neoliberalism has “increased inequality, in turn jeopardizing durable expansion”.
So, we get jobs, but we only take home crumbs? Sounds eerily like the conversations surrounding Brexit and Donald J Trump’s America.
Some will say the cause is simply capitalism, which inherently produces inequity. As you expand equality of opportunity, you likely increase inequity in wealth as opportunity and access are different from actually owning capital. In America, we speak of equality in opportunity but not of equality in capital. In fact, equity of capital is anathema to America.
I venture to connect the dots: Brexit, Trump, Global inequity. What do these have in common? A rejection of the prevailing established norms. Brexit rejected UK dependence on the EU while advocating for economic self-determination. Trump’s victory rejected institutional trends of the past thirty years. Every critique of Trump is rooted in his rejection of norms. Inequity is contributing to this reality. Many Trump supporters expressed exasperation at the establishment, such that anything different would be better. Bernie Sanders supporters made a similar case. And while both the Clinton and Trump campaigns fought bitterly about the best direction forward, both acknowledged the current system is untenable. I fully understand we might never know exactly what caused Trump to win or Brexit to pass. I do not intend to suggest I have the answer, but I do know inequity contributed to each.
I also want to be clear that I am not referring to the idiosyncrasies of Brexit or Trump’s win (there are many factors beyond inequity), but it is important to frame each in a larger context: across the planet people are rejecting the prevailing “normal”.
What happens as we move forward? I fear a future of discontent as the globe sorts this new normal. Climate Change and the broad automatization of labor are major challenges we face. What lessons can be learned today to attenuate future discord?
We know that Climate Change is impacting the globe, even if the politics are controversial (the science is not). We know that robots are replacing workers across economies. We know that profits go to owners. It would be easy to envision a future where capital and profits are derived from robots (in a similar fashion to chattel slavery in the Americas) and healthy air exists for the highest bidder. What will happen to the billions of people living on less than $1 USD? How could they possibly participate in such an economy, let alone survive in it?
We must begin to address these concerns now, or we will find ourselves living in a foreign world whose normal few are prepared to handle.
Though, considering the dire reality billions face today, I am not sure it could be called a new normal.
Perhaps it is just normal.
And that is our problem.