25 January 2017

The Parallel Worlds of Citizens

Nowadays it has become exceedingly difficult to interpret and predict global processes. A
recent case in point is the Brexit referendum, which produced an entirely unexpected outcome despite having been studied by a host of political analysts in advance. Likewise, the expert consensus was proven wrong by the end result of the American presidential elections: even though the Democratic candidate prevailed in the popular vote by a small margin, the real-estate tycoon running on behalf of the Republican Party managed to clinch victory by carrying the swing states, ultimately winning an overwhelming majority of votes in the Electoral College.

If voter behaviour is so inherently impulsive and fickle, what can we say about the economy? For years, the global market price of crude oil had been unrealistically high, until it abruptly dropped to nearly one third of its former level in 2014. From the price of gold to the US dollar/Swiss franc exchange rate, life is full of wild swings and extremities. From mature industries such as car manufacturing to banking services and other state-regulated businesses, the fate of entire sectors can be radically transformed practically overnight. We can no longer rest assured that, in ten years’ time, our personal transportation will satisfy our current definition of “car”, or that the space where we conduct our financial transactions will be called a bank as we know it today.

Theoretically, social processes should be slower to change than economic trends. Our present-day experience, however, has more than once refuted this axiom. All of a sudden, major movements unfold on a social scale, and not only in the destabilised Arab world or North Africa, where the demographic explosion alone would have sufficed to disrupt the regimes that had formed over several decades. There have been astonishing changes in the most advanced regions as well, despite their reputation for establishment and stability. Yet it was only a quarter century ago that it seemed we were really nearing the “end of history”. Of course, the title of Fukuyama’s book sounded as provocative back then as it does today, although it was certainly apt in the sense that, by then, global capitalism had remained the only system standing. The demise of Socialism-Communism as an alternative that could be taken seriously settled a paramount debate and seemed to usher in a global order that, back then at least, could be regarded as permanent. These days one is not so sure anymore, although it is now apparent that Communist- led China and Vietnam continued not so much to topple as to exploit the global market economy and the free movement of goods and capital it enabled. The remaining few Communist regimes now clearly had other things to worry about than how to export their ideology.

This transpired a quarter of a century ago, during the heyday of globalisation. At that juncture of history, nobody could have reasonably harboured any doubt about what would follow in the wake of single-party rule and centralised regimes: transition to open market economy and liberal democracy. True enough, the major financial meltdown we know so well would have been unimaginable at the time. Nowadays, professional debates about globalisation tend to focus on the question of whether it is not slowing down, grinding to a halt, possibly even entering a phase of reversal.

As recently as around the turn of the millennium, the economy of the United States was in the upswing, while the European Union was expanding at a steady clip, economically as well as physically, as it adopted new members in its fold. On the fringes of global capitalism and its semi-periphery (to use a neo-Marxist term), the economic indicators were particularly impressive. The Asian countries opting for the market economy model came along at breakneck speed. Beyond the soaring economy of China, several formerly impoverished countries such as India, Indonesia and Vietnam posted surprising growth figures. In our own narrower corner of the world, too, these were the years of energetic economic progress, with Hungary achieving a GDP growth trend of around four per cent in the early 2000s. Slovakia and Poland pulled ahead even faster, and economic indicators were looking quite good in countries like Ireland and Greece – yes, Greece – as recently as ten years ago.

It was not just these economic indicators that fuelled optimism, but also the worldwide shrinking of income inequalities among countries, although many disbelieved that tendency then as they do today. However, the narrowing gap between the poorest and richest countries almost everywhere went hand in hand with the widening of inequalities within individual countries themselves. The two statements may sound contradictory, but both can be true simultaneously – and they were, moreover they continue to represent the decisive twin trends in the present. Formerly destitute, predominantly agrarian societies in Asia underwent rapid economic development, which pumped up national average income levels and generated a sizeable – in China, a several hundred million-strong – middle class of city dwellers. Overall, peripheral countries experienced a clearly measurable shift toward the standards of their affluent counterparts.

Meanwhile, the advanced triad of the United States, Western Europe and Japan continued to grow as well, albeit at a more modest rate. Concurrently, the hitherto ubiquitous poverty in emerging countries gave way to a rapidly escalating differentiation among income levels. Today in China, a country known for its egalitarian principles not long ago, the gap between the lowest and highest earnings is greater than in the capitalist old guard. Having said that, well-heeled societies have also seen the income gulf widen within their own borders, first and foremost on account of the cost pressure imposed by global economic competition on traditional industrial jobs. The wages of industry workers in the West stagnated even during the years characterised by overall economic growth. In terms of making things worse, some of the jobs migrated over to emerging sectors, leaving old industrial centres in the throes of unemployment and regional crisis. Nevertheless, the developed world managed to keep its economic edge in several other sectors. Macroeconomic indices in the West confirmed ongoing growth, only briefly arrested when overvalued stock markets crashed in the early 2000s.

And, of course, it has been scarcely a decade since the outbreak of a worldwide financial crisis. We tend to call it a global crisis despite the fact that it was first and foremost confined to advanced western economies and societies. That said, the close interdependence that characterises the present era means that the financial crisis in the West has made and will continue to make itself felt in all other systems as well. In precisely this sense, the term “global crisis” is indeed justified, even though the root causes and most devastating consequences of the otherwise not so lingering meltdown that started in 2008–2009 were certainly confined to the developed triad.

By all the usual indicators of economic performance, the United States has now clearly climbed out of the recession, and the European Union average has caught up with pre-crisis levels, although the performance of individual member states varies widely. By contrast, in Japan, the third member of the triad, growth has been minimal to non-existent, the country’s economy hovering near stagnation levels for the past quarter of a century. China and a handful of other quickly emerging countries continued to grow even during the crisis years, but now that they have attained the middle income level, all of a sudden they must face the difficulty, if not the impossibility, of maintaining the same rate and manner of growth. And if China’s growth rate should baulk at this difficulty, which is not inconceivable, in a global system of mutual interdependencies the modest growth of the entire developed world as we know it today could easily be sacrificed.

But why should growth be preferable at all? Should we not be content with what we have achieved? Indeed, can we afford to insist on economic growth even as we are aware of the diverse hazards it poses to the environment? These are all legitimate questions, and have been asked, among others, by representatives of the no-growth movement who met in Budapest recently to outline their arguments in opposition to the current intellectual and political mainstream. Even the reigning elite of economic policy analysts have for some time been warning of an impending permanent (“secular”) economic stagnation in the developed world, due to deep-lying causes. The most inexorable factor is demography. The low rate of live births in tandem with ever longer life expectancy leads to the ageing of societies and arrests the replenishment of capable work force. Moreover, interest rates have plummeted to unprecedented depths as people increasingly prefer savings to investing for the future. The real threat to the developed world these days is not inflation but deflation, which in turn further enervates the rate of growth. A particularly thought-provoking example is Japan, with its dwindling population, vast surplus in savings, and an economy that has been idling for several decades, partly as a result of a very closely knit society aloof to immigration. The American economy is much more dynamic, but there ongoing immigration is a major factor in boosting consumer demand and labour supply, while admittedly generating social tension. Western Europe manifests similar trends in this regard.

Should we really be concerned about “no-growth”, the economic stagnation of affluent countries? We do not have the space here to consider all the serious arguments for and against. Suffice it to call attention to a new phenomenon as one of the most significant consequences of the economic standstill: middle-generation active earners in the developed world today are the first in not-so-recent memory to be deprived of the hope of attaining higher financial standards than their parents did throughout a lifetime of work. The main obstacle to achieving higher income levels, particularly for industrial workers, is presented by globalisation and the technological progress known as digitalisation. Seeing the unheard-of number of those opposing the international flow of capital and goods in the United States, a country hitherto looked upon as the bastion of free trade, and the predilection of middle-aged industrial workers to favour a candidate running on a platform of stemming imports from China rather than his Democratic opponent, commonly regarded as an internationalist – seen in that light, the outcome of the American presidential elections will seem far less surprising. More than a few rigorous professional arguments could be marshalled in support of the claim that American citizens in general, and the most disgruntled blue-collar workers in their capacity as consumers in particular, have profited a great deal from the country’s trade policy of openness. Yet for some reason, these arguments do not seem to reach the groups concerned, and if they do, they will be invariably shrugged off. Those groups are too frustrated, too uncertain, and have been without prospects for too long, to be impressed by powerful arguments. What they need and expect is protection instead.

An equally instructive lesson was served up recently by the British referendum, which culminated in a politically unambiguous result (52:48) while revealing highly disproportionate divisions within it. The vast majority of citizens aged 60 or over went out to cast their vote, decisively in favour of Brexit. Voter turnout among the age groups under 30 was more modest, though still significant. They typically voted for the UK to remain. The vote was also split along lines of education and constituent nationality within the Kingdom: college graduates and citizens in Northern Ireland and Scotland were more likely to prefer to remain, while the majority of industrial workers and the English proper favoured secession. Once again, one could deploy an objective and expert train of thought about the predictable consequences of changing a decades-old institutional framework, and about whether the switch to a new geopolitical order will really help turn into reality the hopes that motivated the so-called Brexiteers in the referendum. Then again, this would be a largely futile enterprise, given that many of those who voted for leaving voted precisely against the experts. As former Tory minister and chief Brexit proponent Michael Gove put it, “people in this country have had enough of experts”.

True enough, many of the Trump and Brexit supporters were led by the urge to outspokenly reject the reigning elite and its experts, the class we in Hungary would call the intelligentsia. Anti-elitist, anti-expert sentiments have been spreading rapidly everywhere, and are quite common today. It is a phenomenon whose causes are easier to understand than its consequences are to predict.

As for those causes, it is hardly surprising that many people who have suffered from a severe financial crisis feel disappointed by their leaders, the official establishment, the overpaid bankers, and the authorities of various fields – all of whom, lo and behold, have completely missed the point. This criticism is now too ubiquitous, too broad-based to be ignored by any profession, let alone by politicians. Beyond that public pressure, big business, economists and opinion leaders would be well served by extensive soul-searching.

If the disenchantment and loss of authority can be laid at the feet of the recession, over time the renown of experts should be restored. But there are other processes that help perpetuate the marginalisation of professionalism. As a young Belgian analyst and diplomat explained at a professional conference devoted to the results of the British referendum, every one of the people he was in touch with in his Twitter and Facebook groups prior to the vote was absolutely certain that Remain would win. However, “apparently there were other groups unknown to me whose arguments I am not familiar with, and who were out of reach of my arguments and views”.

Well said. The decay of social institutions shaping and sustaining public opinion (the singular is significant here) has been most striking in the parts of the world we deem the most advanced of all. What emerges in its wake is parallel, plural public opinions, with little if any overlap between one and the next. National media outlets are yielding to social media; daily papers of nationwide circulation are retreating everywhere. Members of the middle class used to read the same paper or handful of papers, agreeing or disagreeing with the editorials published in them, but their perception of the facts themselves was essentially the same. There used to be one or a few television channels that everybody watched. Each may have had its own slant, but still provided viewers with a common corpus of knowledge and representations of the world around them. Nowadays we can choose from a multitude of thematic channels and portals catering to our specialised interests; the search engines readily supply news and other content tailored to one’s hobby or orientation. One thing that follows from this abundance of information is that man, caught up in the world-wide web, will be less likely to be confronted by alternative views, news and facts that are alien to or remote from his own preferences.

The transformation has affected the domain of work and the role of the great social institutions, including the churches, the military, and political parties, which formerly provided the chief venues and media of shaping opinion, values, and customs. Today, parties with a massive popular base are rapidly becoming the exception to the norm. Whereas a political party, as a gathering of members holding similar views, is always partisan by definition, it is also true that a broad-based mass organisation invariably leaves some room for diversity of opinion among its members. The larger countries have a history of political parties with a membership on the order of millions, such as the GOP and the Democratic Party in the United States, the social democrats and the CSU in Germany, or the Gaullists and the socialists, at one time even the Communists, in France. But most of this is now really history. With a shrinking active membership and ever more emphatic professionalisation, political parties are removing themselves ever farther from the people.

Returning to our home turf, we see the same twilight of parties with a massive social base. In fact, parties of this type, with the exception of the Socialist MSZP, did not really exist at the outset of the democratisation process, when the general interest in public affairs was far greater than it is today. Over the past few decades, formerly vigorous trade unions have gradually wasted away in most western countries. This process of contraction took place with particular speed in Hungary.

To make a long story short, it is undeniable that the era marked by major organisations, movements enjoying a broad-based mandate and nationwide organs, has ended. The alternative for societies now seems to be between eventual atomisation and parallel networks of special interests. In the first scenario, man quickly loses his bearings and as such becomes susceptible to manipulation. In the second, he may retain any number of relationships and connections while being trapped in a microcosm inhabited by himself and likeminded individuals. The parallel societies emerging in this way will have vastly divergent values and assumptions.

The Internet is seemingly tolerant and democratic: “This is what you think and what you believe; this is what I think and I believe.” Yet this very tolerance also creates a playing field in which genuine medicine is lumped together with quackery, the discipline of history with facile conspiracy theories, academic with voodoo economics. Yes, we know that the academia is prone to become hidebound and shroud itself in orthodoxy, and that even the biggest names in science can make mistakes sometimes. Except that they are invariably subject to the pressure of having to argue and prove their case, and that there will always be new researchers, original thinkers to debate their theses, precisely to the extent that those are debatable. Therefore, we have reason to hope that the cumulative edifice of scientific knowledge will continue to be built and refined in spite of any and all external disturbance, rampant sense of crisis and political cacophony. By its very nature, scientific and scholarly debate will remain behind the walls of academia (understood as the domain of science and scholarship). In this way, there is nothing to guarantee the power of expert conclusions to shake the beliefs of those living in an alternative reality.

One could counter by saying that the quacks, the con artists hyped by the media, the demagogues infesting politics, the “celebrities” elbowing earnest experts out of public discourse will all be busted eventually, exposed and held accountable for their lack and pretence of any genuine performance. That this will come to pass is certainly a possibility but far from being a necessity, and if it does, it will take time. For instance, the latter-day anti-vaccination movement is, for the time being, held at bay by fact-based, official health-care regulations, simply because we cannot afford to leave the work of enlightening people to a string of tragic fatalities. On the other hand, were it not for this intervention by governments, we could not be sure at all that this movement would not gain ground, possibly to the point of triumphing at a referendum aimed at giving everyone the exclusive right to decide what is good for his or her child.

When it comes to more complex, more abstract questions, the victory of common sense is even more doubtful. As illustrated by the history of populist regimes in South America, for example in Argentina, such regimes can remain stable for long periods despite a setback in growth from initially quite high levels, caused by the wild and long promises held out by unscrupulous politicians. There, the disenchanted retreated into internal voluntary exile or actually emigrated, while the real victims of the protracted decline appealed for protection to precisely the same regime that should have borne the brunt of the responsibility for it. Closer to home, realistic thinkers recognised relatively early on in the 1950s the irredeemable structural flaws of the planned economy model, but this did not prevent such a sub-optimal system from being sustained for decades. And it would be a mistake to think that it could have survived as long as it did only because it was backed by the USSR, an aggressive foreign power. The truth is that a sufficiently large number of people continued to deem the regime worthy of support, despite all the evidence to the contrary – not just in the camp of its direct beneficiaries, but also among its victims. Propaganda tends to serve regimes well and long in maintaining the “alternative reality” (i.e. the lies). It helps deny or at least downplay uncomfortable facts, sometimes even to present them as sabotage inflicted by some well-picked enemy.

This goes to show that past experience cannot be relied on to corroborate the reasoning we use to reassure ourselves, saying that the trouble cannot be all that great as long as the proof is in the pudding, that the end result will settle the debate between chefs professional and self-appointed. Furthermore, these days it is more doubtful than ever whether society will be able to quickly correct the course after a misstep by having recourse to the facts and weighing the actual consequences. In the minds of adults reared on reality shows and computer games, actual reality, understood as the concatenation of unique, unrepeatable moments, easily becomes confused with virtual reality, in which there is no genuine suffering, damage or irreversible event, where the only price you pay for a rash decision is that you must start the game from the beginning. We have ample evidence to show that online searches for the subject of a referendum multiply in number the day after the vote. It is often after the fact, after casting the ballot, that we really want to find out about the cause we have just voted for or against. It is when the meaning of “game over” truly sinks in, when we realise that, in the real world, a quick reset is far more difficult, if not downright impossible, to execute on command than in virtual reality.

Obviously, these phenomena are not unique to the developed world, which is one reason I do not think we should be lamenting the twilight of the West. We should much rather be concerned about the twilight of the experts, for reasons I hope to have made sufficiently clear.

Explanations aside, one harbours all the more doubt about the consequences to come. In any event, assuming reasonable human beings, crisis-proof social structures, and a functional mechanism of checks and balances, we have reason to expect that corrections that make sense will be made in the mid-term or in the longer run. We still have reason to believe that, in a well-debated world, we will retain our ability to convince one another of the truth – as long as we accept the bare minimum premise that we all share one and the same reality.

Translation by Péter Balikó Lengyel

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