Hydra
The Hidden Cause of a Fracturing World
Trump. Brexit. ISIS. Russia. China and India at the edge. Rising extremism and upheaval across the globe. All this at precisely the moment climate change is accelerating. It’s eerie, no? Let’s think as analytically as we can about it for a moment.
Maybe you think, like many do, that all these are unconnected dots. Just coincidence, fate, destiny. The inevitability of human folly. But they are a pattern. And every pattern points to a cause.
The deeper cause of all these is one and the same. The global economy is stagnant. It is not growing anymore, after a solid half century of continued though dwindling growth — and even what growth it does produce isn’t “good” growth. We’ll get to that. The global economy is stagnant because it is broken. And that is the biggest problem in the world today.
What does it mean for the global economy to be “broken”? It means that its gains are going to the top. “Bad” growth. A rich man parks his money in a hedge fund. That creates quite literally nothing. A poor man educates his kids, creating jobs, trust, human capital, more intelligent citizens, and so on. So economies grind to a halt when gains flow only to the top. While “countries” are “getting richer”, that is a statistical abstraction. It’s truer to say that the rich within countries are getting richer faster than the poor, and so globally the eonomy is grinding to a halt.
Thus a new class of super wealthy, hiding their wealth offshore, accountable to no country, moving between states, is rising. Think Russian oligarchs, or the American super mega rich — economically, they are the same thing. And as they are rising, they are beginning to corrupt nations, societies, and states — whether America, the UK, or South Africa. They are able to buy elections and policies that favor them for a relative pittance: just more toys.
And the result of that is that the average person loses faith in democracy: the rule of law, institutions, the media. In society itself. That is what Trumpism, Brexit, Russia, and ISIS all have in common — whether we want to admit or not.
So the result of a broken global economy is many broken democracies. But not just democracies. Also now the very alliances, unions, treaties that held the old world together. The EU, NATO, and so on. All these are fracturing as a result as a stagnant global economy. So of course we can’t address a truly global problem like climate change when democracy itself is losing ground across the world.
I want to give you an analogy for all this, so you see it with crystal clarity.
Hydra is a monster with many heads. The Hydra that we face today is a stagnant, broken global economy. All the great problems in the world — all the great problems, every last one — are just its heads, its many ugly faces. From Le Pen to Trump to Brexit to ISIS to Russian destabilization, they are all faces of a monster — not its beating heart.
You couldn’t fight the mythical Hydra by cutting off its heads. It would just grow more. The same is true of this Hydra — the broken global economy. There was Al Qaeda, and now there’s ISIS. There was Brexit, and now there’s Trump, and if tomorrow Trump is impeached, another demagogue is simply likely to rise in his place. And so on. Hydra is the monster.
Now. How are we fighting, as a world? We are mostly just swiping away at the faces. We make piecemeal efforts here and there to fight extremism in this country, terrorism in that country, demagogues in this election. But no one is attacking the monster itself.
In a wiser era, the US would have taken the lead to fight Hydra. To fix a broken global economy. The Marshall Plan. Bretton Woods. The Plaza Accord. All these were interventions, efforts, to fix what was broken. The Marshall Plan explicitly redistributed wealth to invest in a ruined Europe. Bretton Woods created a financial system whose goal was to make it impossible for one nation to go so deeply into debt it was left with no choice but war, like Weimar Germany.
Yesterday’s leaders knew something today’s leaders have forgotten: every great cataclysm of modern times has been caused by a failing global economy. Every one. World War II. The Soviet Union’s rise and fall, and the wars, Viet Nam and Korea, it led to. And so on.
There is greater in modernity than the global economy and it’s health, because a global economy is the preeminent achievement of modernity. Not in yesterday’s sense: mercantile empires. But one where you or I, just people, can invest, spend, save, get degrees and move, prosper, live to our fullest potential. All this was never possible before.
It’s a cliche to say “globalization has downsides”. Everything does. It’s truer to say that the fruits of yesterday’s easy growth should have been shared with average people — not hoarded at the top. Doing that was a choice — not destiny. And that choice was Hydra’s womb.
The greatest problem in the world is a broken global economy. The greatest deficit in the world today is a lack of understanding about. The second greatest deficit in the world today is a lack of leadership willing to tackle it. The third greatest deficit in the world today is a plan to fix it.
Here’s the unforgiving truth. These are scary and anxious times. And the longer that we bravely, foolishly, swipe away at Hydra’s head, the stronger Hydra gets. This age of stagnation, upheaval, and rage is likely to last just as long as our willful blindness to the greatest problem in the world.
Umair
June 2017
