The US Election in Context we Live in Revolutionary Times: The Prelude to the New World Order

Donald Trump is set to be the next US President in January 2017. The outcome that almost everybody said could not happen has indeed happened, to the confounding of pollsters, the media, the US establishment and virtually the entire international community. It will be some time before a consensus is established on the reasons for the failure of the opposing Republican and Democratic candidates. Based on voting results, experts have isolated factors including middle class anger, the collapse of the blue wall in the Rust Belt, suburban moms, lacklustre support from Bernie Sanders’ supporters, millennials and Hispanics, the ‘Silent Majority’ of working class whites, gender discrimination, Russian email hacking and Director James Comey of the FBI as key reasons for Donald Trump’s victory. In fact, it was of course a combination of all of these factors and many more that led to what has been widely labelled as the greatest upset ever in American politics, and one that has the potential to reshape the nature of the current world order. This paper examines the nature of the changes we are experiencing and puts them and those to come in the next few decades in the context of the sweep of history.

We Live in Revolutionary Times

In order to make sense of where the future may take us, it is helpful to consider how we got here. What caused the massive shifts that enabled Brexit and Donald Trump’s presidency? How do they fit within the larger context of history? And ultimately where will these shifts lead to?

The Past 50 Years

Despite the shock reverberating across the world, Donald Trump and Brexit have been decades in the making. The current international order and the belief system that accompanies it – democracy, globalisation and free trade, in particular - has dominated the world since the middle of the 20th Century and was further strengthened, by the end of the Cold War. This system, built on a vision of mankind united in the pursuit of peace and prosperity, was led by the US and its allies following a century of more killing than any other in human history and its principles were enshrined in a series of institutions such as the UN, World Bank and the WTO. In the second half of the 20th century as the world embraced this system, the world prospered such that people the world over are more free, less violent, better educated, healthier and wealthier than ever before . The US was one of the leaders in implementing the new system - and its people have been among the greatest beneficiaries - such that they attracted and welcomed waves of immigration to benefit from and contribute further to the country’s wealth creation.

Since the beginning of the 21st century, the limitations to the 20th century world order have become increasingly evident, not to say its benefits do not well exceed its issues. However, technology increasing automation, along with the relocation of manufacturing to lower cost destinations - key features of the post-industrial economic phase that America is entering - have left significant parts of the population under-employed, in poor quality employment or fearful of what the future holds for them, even though the US unemployment rate is c.5%. All families in my upper middle-class neighborhood regularly enjoy a living standard better than that achieved by John D. Rockefeller Sr. at the time of my birth. His unparalleled fortune couldn’t buy what we now take for granted”
Warren Buffett, Letter to Berkshire Hathaway Shareholders, February 27, 2016
At the same time, this migration of production has supported the growth of emerging countries that are now rising in prosperity through trade, much as the US had done in the previous century to the detriment of Europe. And in, this unsettling period, the world was shaken by the momentous terrorist attack of 9/11 on the homeland of the US followed by two divisive wars. These events played a big role in leading to American fatigue from overstretch and the desire to withdraw from international ‘adventures, which in part has contributed to the cautious US response to the Syrian civil war and indirectly brought a huge wave of migrants and refugees into Europe.

The New Rules of Democratic Politics in the West

“War is peace, freedom is slavery, ignorance is strength."
George Orwell, 1984

For the second time in 2016, the establishment and the broader international community have been blindsided by the outcome of democratic processes. Both the Brexit referendum upset and the US election have made clear that a new set of rules are being written about what it will take to win elections and popular mandates going forward.

1. Anti-Establishment Sentiment. The political establishment have lost credibility to the point that simply being associated with the ‘system’ is sufficient to discredit a candidate in the eyes of a large portion of the electorate. Relevant experience has become a liability rather than an asset and track records, such as Hillary Clinton’s 30 years of public service, are used to pin candidates to a broken system that they have done nothing to fix.

2. Fear-Based Decision Making. Voter opinion appears to be driven by fear and anger, rather than by facts, figures and policy. Both Donald Trump and the ‘Leave’ camp in the UK focused on the threat to their way of life from immigration, diversity and security, with little or no detail on how they would solve the issues they highlighted. Conversely, fear of throwing away the gains of decades – used by their opposers - was not believed because it was perceived to be an establishment view or was drowned out by noisy emotions.

3. Populism and Populist Politicians. Electoral winners have focused on a limited number of key concerns of the population in a highly emotive, offensive and often hateful manner, effectively undermining broader dialogue. Also, 2016 highlights that the perception of representing the masses is more important than actually emerging from them: Donald Trump is an Ivy League educated billionaire and former Democrat while Boris Johnson is an Etonian and Oxford graduate, facts that prevented neither of them from rebranding themselves as populists and attacking the system that they were part of.

4. Anti-Factual Rhetoric. Boris Johnson’s campaign bus was plastered with the claim that the UK sends £350m a week to the EU long after the figure was debunked, while 76% of Donald Trump’s statements during the election were mostly or wholly false , according to fact checking sources. Yet 63% of Republicans still found Trump to be ‘honest and trustworthy’ despite clear evidence to the contrary.

5. Galvanising Dissatisfaction. Both the election and Brexit were won on platforms rejecting globalisation, multiculturalism, diversity, and urbanisation. The winners tapped into widespread dissatisfaction with the trajectory of their economy and society, a view held in clearly defined socio-economic and demographic groups, with voting segmented strongly along income, education, race, geographic and age lines. Studies show that Donald Trump and the ‘Leave’camp targeted and won on average lower educated, lower income and older voters. Democracy is of course designed to place the vote in the hands of this class and in the absence of a trusted or sympathetic establishment, this class is ready to back those that are.

6. Diminish the Credibility of Traditional Media. 2016 has seen a massive loss of credibility for traditional media. Besides their failure to predict the outcome of either election, the US and UK media became increasingly partisan: Donald Trump was more or less actively opposed by the majority of major media outlets, while in the UK the print media particularly tapped into the populist sentiment and actively promoted the ‘Leave’ camp . In both instances the media have abandoned their core mandate to provide impartial, independent and accurate information.

7. Exploit the Rise of Social Media. Low quality dialogue and polls played an important part in the Brexit voting and US election enabled by the internet. Social media offer an alternative form of shaping opinion without professional ethics, review boards, fact checking or standards. Their networked nature provides an echo-chamber for reinforcing one’s own beliefs and for turning rumours into ‘facts’. Social media also allowed people to cross boundaries in a low risk way, posting things (semi-anonymously) that they would never before have spoken out loud, thereby placing the tone of discourse in a vicious downward cycle, something that psychologists are only just beginning to analyse as dysfunctional and dangerous to the pyshce, let alone society as a whole.

8. The Compromising of Powerful Government Institutions. The multiple public announcements made by FBI director, James Comey, regarding the investigation into Hillary Clinton’s use of a private email server many believe may well have helped tip the balance for Mr Trump’s victory. And while Comey may well have ‘simply’ bowed to real or perceived political pressure arising from what was already a high politicised investigation, his actions set a dangerous precedent for the involvement of federal agencies in future elections.

In plain language, the new rules are to malign, frighten, fawn and inspire hate, lie,, use propaganda, practice double-think and compromise anything. Given these are the winning characteristics of recent democratic elections there are serious ramifications for the nearly 50% that lost to these tactics as well as for the increasingly divided societies in other democratic countries as well as the credibility of democracy in autocracies.

 

These demographic, economic and social shifts are creating stress for the economic and political order. The long-term attrition of jobs combined with a sense of being burdened by things foreign have created a significant population in the West that has been, or at least feels as if it has been, left behind on the promised one-way road of wealth creation. And thanks to the integration, interconnectedness and interdependence that globalisation has wrought, no part of the world will be untouched by these issues.

Patterns and Transitions in the Sweep of History

Importantly, these decades long shifts are occurring in the context of the much longer-term patterns and changes playing out across the world, namely the cyclical rise and fall of great powers, currently America, the competition for key resources in times of scarcity, and the transition to the information age and the ‘Third Wave’ society. Each of these provide some insight into the broader drivers of the disruptions in the world currently underway.

The Rise and Fall of American Power. Throughout history, the rise and fall of dominant powers has followed a pattern: rapid expansion, a period of ‘stability’ marked by stagnation (relative to the first phase) and overstretch, and the inevitable decline, often in the face of a new and rising power. This is as true of the Roman Empire, the Ottomans, the Mongols as it is of the British Empire and in turn the US superpower. Statistical analysis provides a pattern that can be applied to America too. “While the 21st Century may have started as an American one, history would suggest that it will not end as one…the election of Donald Trump (if he implements his stated policies) and Brexit are both the results and agents of this decline” By most measures the 20th century has been the American Century, one in which the US rose quickly following the First World War to lead the global economy, attained superpower status following World War II and became the sole world power with the demise of the Soviet Union. While the 21st Century may have started as an American one, history would suggest that it will not end as one – no previous great power has re-risen – unless it is a new America, quite different from the old. Applying the statistical pattern underlying the rise and fall of great powers to America indicates a base scenario. Its power may have begun to plateau in 1950-1960s (when its share of gross world product began to peak as well) and that decline has set in at the start of the current decade, with the fall complete somewhere between 2055 and 2065. Seen in this context the election of Donald Trump if he implements his stated policies (and in a similar fashion Brexit too) are both the results and agents of this decline, enabled by the repudiation of international leadership since the stated mandate is to dismantle it further.

Competition for Resources and the Transition to Alternatives. Over the next three to four decades the world will add three billion people to the global population, clustered in mega-cities and demanding the security and comforts we incumbents take for granted. If the world’s growing population adopts the per capita consumption levels of developed countries virtually every natural resource will soon be exhausted, while the inability to satisfy the emerging masses’ demands will likely cause massive social and political disruption. In the absence of a unifying world order, the battle for the last drop of oil, food, water and commodities, already begun, will therefore be hard fought, with the established “rules” of conduct, eventually breaking down. In parallel to the fight for resources, countries will race for the development of sustainable alternatives, driven by breakthroughs in research and technology, that will enable them to achieve dominance over their competitors. One of these breakthroughs will be profound enough to solve the problem of scarcity and will herald in a new order. This transition period of conflict when we have not yet replaced the old with the new, the ‘Gap Years’ will reshape the world, its order and its leaders, just as it has done in the transition of every previous age of mankind, from bronze to iron, from iron to gunpowder, from sail to steam and from steam to oil. Within this context, Brexit and the election of Donald Trump are phenomena of this transition and an indication that (the population fears) the ‘Gap Years’ are already too painful, will be long and require a sharp increase in a “me-first” approach, rather than sharing, hence their support for those more likely to be aggressive in excluding others and competing to preserve their way of life. The grand idea that we can share under the auspices of united leaders has been lost or at least forgotten for now.

Successive Waves of Development. Developed countries are currently in another defining transition, from an Industrial Age society to an Information Age society, in which the emergence of the new society is pushing away the current industrial age order like a wave. The ‘First Wave’ described by futurist Alvin Toffler in his eponymous book was the settled agricultural society that replaced hunter gather cultures triggered by the Neolithic Revolution. “The voter desperately wants to bring back the Industrial Era with its manufacturing jobs, mass production and mass consumption. Leaders will need to help then understand that this is not going to happen”The ‘Second Wave’, industrial society, spread from Europe to the rest of the world in the 19th century triggered by the Industrial Revolution. The emerging ‘Third Wave’ is post-industrial; a high-technology information or knowledge-based society. In each previous revolution, the old order has sought to resist change, but was unable to stand up to the superior technology, organisation and culture of the new societies. Seen in this context, Brexit and the election of Donald Trump are rear guard actions to arrest change and bring back the Industrial Era with its manufacturing jobs, mass consumption and mass production leading to surpluses.

The Next 50 Years: Successive Revolutions

The uncertainty caused by these transitions have and will continue to result in a series of man-made disruptions that are in effect 21st Century revolutions. Revolutions, have played an important and often bloody role in shaping our world in the past, and are set to shape the world again in the coming decades. In the western mind, there is a common understanding of what ‘revolution’ entails: the forcible overthrow of a government in favour of a new system, usually through violence and often accompanied by mass killing and destruction. Before 2016, the developed world could look from afar upon the structurally poor nations, the developing world and fragile and failed states as the deserving candidates for revolution. Today, the developed world is ready to overthrow itself and enter a new world without a plan.”In the past century, the Russian and the Chinese Communist revolutions, which triggered civil wars and put in place regimes that have killed up to 100m people , have shaped our views of what a revolution is, how it is conducted and what it leads to. However, this conception of revolution is now out of date. Today, revolutions manifest themselves in different ways in different countries. In some it is students protesting on the streets demanding democracy while in others it is pensioners at ballot boxes demanding their country back from immigrants. The Arab Spring, the Brexit vote and the election of Donald Trump are no less revolutions for not having all the elements we have come to associate with previous revolutions. Many of these modern revolutions are occurring within democratic processes and with relatively peaceful transfers of power. Democracy for all its faults has proven to be a form of government that citizens as a rule are loathe to (consciously) overthrow and in this lie its strength and its susceptibility for it to be high-jacked. Given that democracy is highly adaptive and can accommodate radical change, modern revolutions can meet their objectives – no matter how worthy or not - within existing democratic systems, obviating the need for overthrowing the state itself.

For all the differences, 21st century revolutions share a core common theme with previous revolutions, namely, the repudiation by a significant portion of the population of the status quo and its underlying social contract. The perception that the ‘system’ is no longer delivering what was promised to them is and will be the key trigger for these revolutions, leading to the rejection of the bargain between the state and citizen and the trade-offs it entails. Focusing on this theme, the US election and Brexit have occurred as one of many attempted and successful revolutions in recent history, and serve as a precursor to more in the near future.

A Summary of Modern Revolutions - Past and Future

1. The Collapse of the Soviet Union, 1989. The collapse of the Soviet Union marked the first modern peaceful revolution overthrowing a superpower. Starting with the fall of the Berlin Wall and the popular uprisings across Eastern Europe, the dissolution of the Soviet Union was a true revolution in the sense that it led to the creation of entirely new states and systems driven by popular will and (semi-)democratic processes.

2. The US Elections, 2008. The US election was a vote for radical change based on the electorate’s hope for and faith in the power of change but was a revolution unfulfilled. However, in the end it served as a precursor to stoke the next revolution. Barack Obama was elected as the first black president by a record breaking 70m Americans, running as an outsider campaigning on the slogan: ‘Change we can believe in’, a promise that could not be fulfilled in the face of unprecedented partisanship in Washington and an effective resistance to overthrow the incumbent industrial regime and so paved the way for the people to ask for an even more radical solution.

3. The Arab Spring, 2011. Spreading from Egypt, the Arab Spring has driven three regime changes, two civil wars and countless major protests against the secular authoritarian regimes that have ruled the Middle East for most of the post-war period. In the face of rising unemployment, lack of opportunity, driven by failed economic models, lack of education and structural demographic factors, national leaders were no longer able to guarantee continued prosperity in exchange for the forfeiting of political and civil rights, sparking massive uprisings and unrest throughout the region.

4. The Indian Election, 2014. 49 years’ of nearly continuous rule by the Congress Party had left India with deep structural problems, stifling corruption and a stalled growth engine leading to the election of the country’s most controversial prime minister in its post-independence history - due to his history with the Hindu nationalist movement and religious strife in his state - one promising sweeping change. To date, the Mr Modi has been successful in revitalising the Indian growth story, and has picked up quite dramatically the pace of reforms, but it would be fair to say that this is a revolution in waiting.

5. Brexit, 2016. Triggered by a breakdown in leadership by then Prime Minister David Cameron, who sought to appease the right wing of his own party by offering a referendum, the Brexit vote was fought and won on a platform of isolationism, economic fear, suspicions of the EU expansionist model, latent racism and the rejection of immigration by many others. The victory of the Leave camp was a huge upset in the UK, the EU, and a call for revolution. Whether this revolution is fulfilled remains to be seen.

6. The US Election, 2016. The US presidential election as outlined in detail above was a vote against globalisation, integration and internationalist liberalist values in favour of isolationism and ‘America First’, and while these are not the views of the majority of the US population they are the ones that have put the next presidential administration into office. With clarity on President elect Trump’s actual policy agenda to be delivered in the new year, the US Election for the time being remains a revolution in waiting.

7. European Elections 2016-2017. General elections in Austria, Germany, France and the Netherlands scheduled for 2016-2017 hold out the potential to be revolutions against the political establishment. Although revolution was averted in Austria and may yet be in Germany and France due to the weight of history and structural electoral processes, respectively, the call for radical change is growing louder and centrist governments who receive a stay of execution will need to decisively. And although Italy’s recent referendum was about constitutional reform, widespread dissatisfaction with the government provides a significant opening for populists in their upcoming election. The revolutions in Europe are waiting to be pre-empted and made irrelevant by effective changes or to sweep the region and break up the Union.

8. China. China’s embracing of capitalism and the liberalisation the 1970s and 80s enabled it to take 800m people out of poverty and this was the highly effective pre-emption of a revolution. However, China, like the other nations mentioned in this list, can no longer consider itself to be a nation safe from revolution. The communist party’s claim to leadership based on the delivery of growth has clearly faltered and its shift to nationalism as an alternative source of legitimacy has proven to be an inferior substitute from an economic perspective. As the contract between the people and the party – a single party in power in return for economic prosperity and opportunity – comes under increasing pressure, as it is even in multi-party democratic states, China’s chances of revolutionary change also increase. The combination of economic stagnation, uncensorable information and political over-stretch place the Party at risk of falling.

9. Africa. Following decades of stagnation, rule by kleptocracies, war and poverty, Africa has emerged as one of the world’s fastest growing regions, albeit from a very low base. The accompanying wealth creation is raising the bar in terms of expectations of governance and the need for governments to deliver services and guarantee freedom and opportunities to their citizens - a step change most have not made sufficiently well to date - creating the seeds for future revolutions not unlike the Arab Spring, with mass civil uprisings demanding what leaders are unable or unwilling to give.

10. Middle East. Finally, the Middle East itself is likely due for further waves of revolution as the promises of the Arab Spring remain largely unfulfilled. In some cases, such as Egypt, regime changes have to date failed to solve the problems that brought them about in the first place. In others, the initial revolutions themselves were cracked down upon by government force. And in the case of Syria, mass killings have not solved the underlying issues and only serve to create a failed state. In all cases, the next waves of revolutions will likely be more violent than their predecessors, as the lessons from the failure of previous attempts are internalized and applied by each country.

Although the timing and shape of future revolutions is of course uncertain, no part of the world is likely to remain untouched. Large enough populations of the world show an unwillingness to continue to respect the status quo including the prevailing values, cultures and peoples that have defined their society. Before 2016, the developed world could look from afar upon the structurally poor nations, the developing world and fragile and failed states as the deserving candidates for revolution. Today, the developed world is ready to overthrow itself and enter a new world without a plan.

The Lessons of Revolutions Past

Lest we comfort ourselves in the belief that ‘disruption’ is intrinsically a constructive force and that the revolutions underway will therefore have a positive medium to longer term impact, it is worth considering the nature and course of past revolutions and the consequences they have had. History provides profound lessons for both sides of the vote during the US election and the Brexit vote. The blueprint is clear for the course that a post-Trump and post-Brexit world takes if the rhetoric goes unchecked into reality. The establishment figures in favour of the revolution imagine they or the tools of democracy can and will control the mass populations that crave change from the excesses. While those against the revolution are only now beginning to form their resistance to either overturn the revolution or pre-empt or fight its excesses. There is little comfort for them from history’s lesson that often revolutions devour not just their own children, but their instigators too. History suggests that both are at risk of under-estimating the nature and force of revolution.

Revolutions are Coups. There is a strong temptation to legitimise revolutions simply because they claim to represent the interests of the majority and often have its support as well. However, history proves that this is often not in fact the case. The French Revolution of 1789 was driven by the Estates General , which formed the National Assembly that assumed control of the government. “In addition to being a revolution, the US election is also a coup by an individual who mobilised the people to overthrow the political establishment.” However, three quarters of the delegates to the Third Estate, which purported to represent the commoners who constituted 95% of France’s population, belonged to the elite of society; they were wealthy landowners, lawyers or government officials. Similarly, the Russian Revolution of 1917, purportedly a mass uprising of the urban industrial proletariat, was largely engineered by a small group of educated Marxists from the very bourgeoisie that the revolution was intended to overthrow. In both cases, revolution was clad in the mantle of populism but amounted to a transfer of power from one group of elites to another, effectively a coup d’etat by another name. Both the election of Donald Trump and Brexit represent coups over the traditional party politicians.

Revolutions Create Instability. The fall of an old order invariably leads to a power vacuum, as systems built over decades or centuries disappear, sometimes overnight, and are only gradually replaced. The result is often a breakdown of order and social instability, as well as fighting between various power factions seeking to take control and shape the new order. The first government following the Russian Revolution was quickly overthrown by the Bolsheviks, leading to the five year long Russian Civil War. The French Revolution triggered continental wars with France’s neighbours as well as a cycle of food shortages, inflation, urban riots and peasant revolts that lasted for years. While the jury is still out for a Trump administration, post-Brexit Britain suggests that the established bureaucracy is not suited or ready for implementing the aims of its leaders.

Revolutions Enable Authoritarianism. The revolutions of the past have given rise to the reigns of autocrats such as Napoleon, Stalin, Mao and Hitler. In times of turmoil, demagogues offer simple solutions to complex problems and promise to restore order in exchange for absolute control, a devil’s bargain that many accept. For many leaders, however, the interest in the welfare and freedom of the people is too often secondary to the accumulation of personal power. The German Revolution of 1918 led to political extremism, a series of uprisings, and numerous putsches, including the Munich Beer Hall Putsch that first thrust Adolf Hitler to national prominence. Revolutionary forces are both unpredictable and uncontrollable, invariably creating instability often for years to come. The unleashing of masses of people chanting hatred for the establishment figures from Hillary Clinton to Paul Ryan and in both the US and UK for the expulsion of minority populations, for the banning of migrants and minorities creates an energy that will not be easily dissipated and clears the way for their societies to take a darker turn.

Revolutions Create Essentially the Same Institutions as the Ones They Overthrow. Even when they were ideologically inclined to deliver power to the ‘masses’, revolutionaries once in power have often created similar institutions to the ones they have overthrown, and ones that proved to be far less efficient and effective. Mao organised production cooperatives devoid of modern technology led by the people’s managers, and implemented a basic and common compensation structure for labour with no financial incentive for innovation, creativity and risk taking. As this structure failed, over time, it was replaced piece by piece by corporations with professional managers, performance and grade related pay, rewards for innovation, creativity and risk taking and ever increasing technology. The elites and the types of capitalised institutions of the West that the communist revolutionaries despised were required for the growth and prosperity of the masses and once again came to run China. The president-elect has already begun to roll back a series of promises, to the relief of many, and seems to be inclined to keep in place the type of institutions, facilities and figures he rallied the mass to oppose, mass healthcare, bankers and military figures, albeit the substitutes seem more radical and right-wing than the incumbents.

Revolutions Kill People – Lots of Them. Revolutions are incredibly destructive in terms of human life, killing people both during their actual course and on a much larger scale by way of the systems that they bring about. In Russia, the revolution and subsequent civil war themselves killed an estimated 7-10 million people and put in power Stalin, who subsequently unleashed the genocides, executions, deportations, and artificial famines of the Great Terror, with an additional estimated death toll of 20-30m . In China, the revolution cost an estimated 10 million lives, while Mao’s violent land reforms, the catastrophic Great Leap Forward and the subsequent Cultural Revolution killed in excess of 45m people . And while the c.20,000 executed in France during the revolution in the Reign of Terror seem miniscule by comparison, Napoleon’s wars left an estimated 3.5 million dead strewn across Europe at a time when the total population was only a quarter of today’s. US and UK democracy promises to save them from the civil wars of the past, but it may well not save the world from the unintended consequences of conflicts that arise from a Europe fractured by Britain’s exit, unchecked killing in Aleppo and a conflict in an abandoned South China Sea.

Revolutions Devour their Own Children. Revolutionary forces, once unleashed are difficult to contain. Much like a genie that has escaped its bottle, revolutionary rhetoric, thinking and standards, first applied to members of the old regime, become the status quo of political discourse and action. As the winners fight over the spoils of the old regime, the logic of supporting the revolution is used to justify one faction’s actions against another. Following the execution of Louis XVI, French ‘revolutionary justice’, in the form of mass guillotinings, was applied in short order against the leading Girondins by Danton, against Danton by Robespierre, and finally against Robespierre himself. In Russia, the revolution’s chief Marxist theorist, Leon Trotsky could not escape a Soviet assassin’s bullet even after over a decade of exile in 1940, while the remainder of revolutionary old guard had been ruthlessly executed by Stalin during the previous years in a bid to consolidate power. President-elect Trump campaign supporters and advisors are currently transitioning into administration roles with the recent public sniping over cabinet appointments foreshadowing potential future conflicts over power and influence.

The Uncertain Future for America and The World Order

What is clear is that revolutions are inefficient and uncompassionate (to say the least) as the means for delivering large scale change. Seen through the unsparing lens of history, the 2016 US presidential election is a revolutionary coup by an individual and his small group of associates (with a debatable measure of help from Russia and America’s own FBI) who successfully mobilised the people to overthrow the political establishment. The election shares many of the elements found in the revolutionary coups of history, even if the process itself was a democratic one, involving many of the same factors including the mobilisation of the masses through ‘us-against-them’ rhetoric, the attacking and neutralisation of the existing elites and the creation of new elites loyal to the leader (as evidenced by the initial set of proposed presidential appointments, which in keeping with past precedents includes a mix of entirely new faces and a number of former establishment figures ready to adapt to the new agenda).

The Big Questions for the Trump Administration and the Establishment

The world is now working furiously to figure out what kind of president Donald Trump will be, which election promises he will keep and which policies he will pursue. President-elect Trump’s values and public and private rhetoric clearly diverge from the western values that have prevailed until now and thus one would expect that the world order he would seek to create will be very different than the one his predecessors have built over generations.

So, where could this lead? If the lessons of previous revolutionary coups hold true, the president-elect will move to consolidate his power as quickly as possible and execute policies that maximise the interests of the new elite: tax cuts for the rich, the marketing of failures as successes, “opening” of libel laws to allow the new elite to stifle criticism, the marginalisation if not elimination of the old elite and investment in infrastructure and sectors in which the elites directly benefit. These can have benefits for the masses of people who supported the coup too of course, but history suggests that this is often secondary as a purpose and recent studies indicate that the “trickle down” effect is too small to benefit the poor significantly. Under this scenario, other promises made during the revolution are reneged on, because they do not serve the interests of the new elite, because they are difficult to execute or because they are not viable. However, history shows that this model of governance is unsustainable in the long-run and leads to decline and counter-revolution. The electorate is the big loser of the resulting instability and lost time, and it is the next leader that is left to clean up an even bigger set of issues than the ones that triggered the revolution in the first place.

At the other end of the spectrum is a Trump administration that moderates the president elect’s tendencies to deliver on the more extreme promises of the election campaign and focuses on a comprehensive economic stimulus. In this case, the Republican Congress prevents the most damaging actions and initiatives while influencing policy into more traditional pathways; this would still include tax cuts and infrastructure spending to create fiscal stimulus but would also enable energy reserves to be exported, tax deals with major corporations to stimulate domestic investment, avoid a trade war with China, recut rather than abandon existing trade deals and reduce rather than withdraw from American military commitments overseas. “The scenario that supporters of Donald Trump have hoped for from day one is one in which a talented team enables the US to surge in economic growth while righting many wrongs under the power of controlling the upper and lower house of congress … and they now have the opportunity to do so” This is of course the scenario that establishment supporters for Donald Trump have believed was possible from day one. This scenario enables the US to surge in economic growth, albeit while boosting indebtedness. It is too early to decide what will be the likely outcome. It is important to recognise that even if the American economy booms, if its success is secured at the expense of its allies and its rivals, America’s international leadership, credibility and global influence will be damaged, potentially accelerating a move away from its status as a Great Power. Initial views indicate widespread discomfort with the tone of a Trump administration , potentially to a greater degree than during the Bush administration, when global favourability of the US plummeted. Under both scenarios, one should not rule out the possibility of a counter-coup by the abandoned elite of the Republican party mid-way through the first term based on a scandal that would turn popular support away from the president.

The Big Questions for the World Order

Regardless of the direction of his presidency, the revolutions that have carried Mr. Trump into power and may likely see Britain leave the EU have reset the geopolitical board and thrown wide open a set of questions for which the world previously had directional, if not definitive, answers. These include:

  • Will America Still be the World’s Major Power in 20 Years? American power in the 20th and early 21st century has been predicated on a combination of factors including economic, military, institutional and soft power, the future shape of each of which has been called into question based on Mr. Trump’s statements to date. “Even if the American economy booms, if its success is secured at the expense of its allies America’s international leadership, credibility and global influence will be damaged, potentially accelerating a move away from its status as a Great Power.” While the president elect has committed to strengthen the military, he has also indicated a desire to reduce the overseas commitments that translate military strength into influence. Similarly, his proposed combination of tax cuts and increased infrastructure have the potential to stimulate the economy while significantly increasing America’s indebtedness, while his economic policies of higher tariffs, reduced immigration, and tighter Fed policy are forecast to actually reduce growth, following a short term bump from fiscal stimulus. President elect Trump has also stated his intent to weaken or de-emphasize international institutions which over the years have been honed by his predecessors to America’s advantage, a position that is influencing the low international confidence in his ability to do the right thing in world affairs.
  • Will China Gain or Lose Under a Trump Administration? Donald Trump’s presidency also brings great uncertainty and opportunity for China, which faces the possibility of a trade war with significant economic costs to both countries. China-US trade today is China’s single largest source of exports and America’s largest source of imports (which have been key enablers of the US’s cost competitiveness), creating strong dependencies that are practically impossible to unravel. A more aggressive approach to trade by America towards all its trading partners, could well align the world against the US and provide China with an exceptional opportunity to make new allies. “A more aggressive approach to trade by America towards all its trading partners, could well align the world against the US and provide China with an exceptional opportunity”On a strategic level, however, the proposed ‘diplomatic contraction’ of the Trump administration in Asia and elsewhere creates a significant opportunity for China to fill the void. A weakening of the security ‘Pivot to Asia’ and the scrapping of the Trans-Pacific Partnership creates room for China to promote its own alternatives for the region and the world. However, whether China can successfully fill the gap left by a receding US also depends on China’s ability to manage its own transformation and its leadership’s ability to meet the evolving demands of its 1.4bn people.
  • Will Russia be Brought into the Fold of Allies or Have the Opportunity to Recreate the Soviet Union? Mr. Trump’s presidency also calls into question the likely shape of the conflict between Russia and the West over regional influence and security. Given that Hillary Clinton was perceived to be hawkish on Russia and one of the proponents of the US led sanctions against Russia, the country clearly appears to be one of the winners of the US election. Indeed, Russian President Vladimir Putin was the first foreign leader to congratulate Mr. Trump, about whom he had made repeated complimentary remarks during the election. However, beyond claiming that he would have “great relations” with Putin, Trump has been light on specific policies and the GOP establishment has historically been at the forefront of aggressive foreign policy towards Russia. Donald Trump’s emerging policy towards Russia will likely depend on Mr Putin’s next moves as much as on anything else. Putin’s Russia has long lamented the fall of the Soviet Union and the ensuing loss of Russian power as a “tragedy”. The rise of Mr. Trump no doubt fuels the hope that this can in some form be restored.
  • What Happens to the World’s Development Trajectory? What will the global development trajectory look like? The past 40 years have witnessed unprecedented global progress, creating not just wealth in the developed world but increasing freedom, health, longevity and education in the developing world. While it is unlikely that these trends will be reversed very easily, a world shaped by mercantilism, isolationism and repudiation of internationalism can see progress on these indicators stagnate. Just as economic hardship and uneven distribution of opportunity and wealth in the developed world has been an important trigger for the current wave of revolutions, more fundamental stagnation in the developing world will likely trigger its own wave of revolutions. The unexpected result of isolationism in the West may well exacerbate rather than solve the ‘problem’ of mass migration and overwhelm the costly systems put in place by western governments to stem the inflow of people. More generally, where nations fight for their own interest and where sharing is practiced to undermine a common rival, rather than an aim to create a broader win-win, is likely a worse world from an economic, security and qualitative perspective.
  • Will the People be Better off? Donald Trump’s concrete plans to make America great are yet to be announced. If they involve the abandonment of US leadership of the world order and the repositioning of America as a merchant trading power, they will likely create a vacuum of power and a destruction of the world order with nothing better to replace it. The interconnectedness and interdependence of “The success of today’s revolutions will ultimately be measured by whether they are successful at creating new wealth and distributing it better, whether it leaves voters better off or just stores up the problem for the next administration.”the world order means that Americans cannot be better off in the longer term without the world being better off. If President-elect Trump choses to play a tactical game the benefits will be zero-sum: America’s gains in trade deals will be other nations’ losses. However, if America under a Trump adminsitration can create real value in a non-zero-sum fashion, there is the possibility that the world can be better off. Where people’s revolutions failed in the past was in their belief that it was enough to redistribute wealth. The success of today’s revolutions will ultimately be measured by whether they are successful at creating new wealth and distributing it better, this is the key to whether the revolution leaves voters better off or just stores up the problem for the next administration.

The answers to these questions are not in Donald Trump or America’s sole gift of course. The future will also be shaped by international responses to America’s actions, mega-trends and macro-economic circumstances, and of course event risk, including the other revolutions that will unfold across the coming decade or so.

Conclusion: Revolution and The Future of Democracy

We are now very clearly in the midst of a highly disruptive period between one world order and the next. Revolutionary change that began in the Middle East has begun to rock the West and seems set to continue to spread globally. This period will see the world add three billion people to its population and require the resources to meet their needs. Post war values enshrined the notion of a world order built on the idea of united nations moving towards the free movement of goods, people and capital and the sharing of major problems facing the world or any one nation. This notion is threatened by a backlash that prioritises the needs of single nations at the expense of others and rejects the voices of large minorities. The louder, angrier and more violent stand to win this without effective resistance from the hurt voices of those that lost the populist votes. The test is now how the “winners” of the voting systems translate the rhetoric into reality. A key challenge for America and Britain will be addressing the fears and concerns of the c.50% of the population that voted against revolution. Delivering what was promised to its supporters is likely to be an even greater challenge, given that many voters have radical expectations that cannot be met without effectively undoing the nation if not the more positive aspects of the world order.

The world need not dive into chaos as a result of the revolutions to date, this would take individual nation states to take actions that avert the latent revolutions in their countries. It would also need leaders to forge a resistance to the force of fear that calls for breaking things up. Importantly, leaders would need to demonstrate that they are determined to address the real and perceived concerns of their populations and then follow this up with credible actions. This in itself will not be palatable to many of the current batch of leaders in nations “We are now very clearly in the midst of a highly disruptive period between one world order and the next. Revolutionary change that began in the Middle East has begun to rock the West and seems set to continue to the East.” awaiting revolution and beyond the capability of many of them. At a national level they will need to act on controlling immigration, rejuvenating decrepit and abandoned cities, creating mass jobs through individual entrepreneurism, embracing technology-led change, slashing taxes, redistributing income without damaging risk taking and much more. At international levels, they will need to forge deeper and more effective links to tackle common issues and build a bridge to the future and this will not prove easy in the face of the weight of nationalist agendas in so many parts of the world. Selling the mass population on the idea that the world should build a bridge to the future, together, is no doubt proving more difficult than selling hate and division. The pace of change is far more rapid and suggests that 2017 will bring a good indication of how the game might play out in the first round of many to come.

With Britain and its leaders floundering in the wake of Brexit, it is up to America to show the world that revolutionary change can be managed in the context of a democracy. Three elements appear to be critical: the first is the formation of a new social contract that addresses the predatory elements of its system of enterprise while creating a radical shift in inclusion and opportunity for the mass population. The second element is the role played by the “resistance”, protecting the weak from the newly empowered and angry, much like the movements that fought invaders during World War II. In the context of a constitutional pluralist society such as the US, this resistance will not only check arbitrary government rule but also shape policy constructively through peaceful means such as mass movements. The third element is the need for talent to come forward to forge the country anew. Talented individuals will be required to join the new Administration en masse and at all levels to contribute to the success of the nation and to be a voice on the inside to temper the extremes. “Managing revolutionary change in a democracy requires the presence of a “resistance”, protecting the weak from the newly empowered and angry”For good or bad the coming decades are likely to see repeating waves of revolution shake the foundations of nation states, regions and global institutions, creating chaos from which a new world order will need to be forged. If America can successfully manage its own revolution, it will have planted the seed for a new platform that engages with the world in a constructive manner as the international order is reshaped. Failing to do so on the other hand will have a high price, both for the US and for the world.

Notes:-

2 As reported by Politico and Fox News among others.

3 See the November 2016 Sign of the Times:The Shape of the World to Come – Part I: How the World is Progressing

4 See the July 2016 Sign of the Times: :Brexit and the Other Forces Destabilising and Reshaping the World

5 Source: Politifact

6 Trump received no endorsements from major US newspapers

7 Although to be fair, Trump supporters make the same argument about the US media

8 Including Trump’s own former campaign manager, Corey Lewandowski

9 Source: Patel and Hansmeyer: American Power-Patterns-of-Rise and Decline, published in ‘Obama and the World New Directions in US Foreign Policy’ Inderjeet Parmar (2014)

10 Alvin Toffler, ‘The Third Wave’ (1980)

11 Sources: Norman Lowe: Mastering Twentieth Century Russian History (2002), R.J. Rummel: China’s Bloody Century: Genocide and Mass Murder since 1900(2007), Robert Conquest: The Great Terror: A Re-assessment (1992); Frank Dikotter: Mao’s Great Famine (2010); Roderick Macfarquhar and Michael Schoenhals: Mao’s Last Revolution (2006)

12 The French Estates-General were a legislative and consultative assembly representing the French estates of the realm: the clergy (First Estate), the nobles (Second Estate), and the common people (Third Estate).

13 The American Revolution is an exception subject to number of important differences: While the French, Russian and Chinese revolution sought to overthrow ruling governments in existing states, the American War of Independence was fought by a colony to secure self-rule from what had become a foreign power, creating an entirely new state. In this regard the American Revolution has more in common with the colonial wars and independence movements of the 20th century than with other revolutions.

14 Source: Lowe

15 Source: Conquest

16 Sources: Dikotter: Macfarquhar and Schoenhals: ; Rummel

17 E.g. Campaign manager Kellyanne Conway’s numerous tweets criticizing Mitt Romney as a potential pick for Secretary of State

18 E.g. Louis XVI’s own cousin, Louis Philipp, the Duke of Orleans, chose accommodation over exile in the French Revolution successfully reinvented himself as a prominent republican, changing his surname to be known as Citoyen (citizen) Philippe Égalité.

19 Based on the selections and news as of late November, Politico Magazine estimates that the combined wealth of Trump’s cabinet and administration could total US$35bn

20 Source: IMF, Causes and Consequences of Income Inequality: A Global Perspective (2015)

21 E.g. Trump’s statement immediately after the election that he would seek to keep key features of Obamacare, a program he had previously promised to throw out on his first day in office

22 E.g. German Chancellor Angela Merkel’s and French President Francois Hollande’s congratulations to Trump were carefully worded statements that made future partnership conditional on the continued adherence to shared values

23 E.g. According to Pew Research favourable public views of the US over the course of the George W Bush administration dropped from 83% to 53% in the UK, from 78% to 31% in Germany and from 77% to 50% in Japan

24 Source: Jan Hatzius, Chief Economist, Goldman Sachs

25 E.g. the US currently enjoys outsized voting or special veto rights in a wide range of multi-national institutions including NATO, the IMF and the United Nations.

26 Source: Pew Research Center: Just 9% of Europeans surveyed have confidence in Trump to do the right thing in world affairs