By Graham Vanbergen: It’s telling, isn’t it, when three-quarters of business executives in a recent survey concluded their businesses were facing major disruption because of world events. Worse still, 98 per cent thought their business models would have to change, and 70 per cent thought their jobs were at risk anyway. This is the sentiment from those that usually emit a positive outlook about the years ahead even in recessionary moments.
The general feeling is that the post-war consensus (a period where both the Conservative and Labour party agreed to focus on domestic policy in Britain) has ended, the great moderation (a period of decreased macroeconomic volatility from the mid-1980s to the financial crisis in 2007) has vapourised, and in many Western countries, especially Britain, the social contract (an implicit agreement among the members of a society to cooperate for social benefits, for example, by sacrificing some individual freedom for state protection) has been torn up right in front of our eyes by out of control and incompetent populists.
Words of the year from business leaders mainly include ‘uncertainty’ and ‘disruption’ because those two things define the political, economic and cultural environments that are now the norm.
Three of the many problems that Britain faces explain exactly what is wrong. First, having more Prime Ministers, cabinet reshuffles, sackings, metaphorical stabbings, infighting and squabbling in one year than we would expect in a decade or more means no effective policy is emerging to settle HMS Britannia in story waters. The current incumbent in Downing Street knows that the local elections in May this year will be another disaster. That being the case, Boris Johnson will take this opportunity to make his comeback. The only thing that can possibly come of this is more political instability.
Second, political incompetence stretching to 2015 with the following economic nightmare that is Brexit – is making the economic environment much worse than expected. The numbers are bleak by any standard. Britain is already in a recessionary cycle, but against peer nations, it will be longer and deeper. Third, the cultural divide means not being able to unite. The tools to get Brexit over the line included the culture wars, which pitted families, communities and the entire country at odds with itself.
There are other problems too. Technology is now running at such a fast pace that 56 per cent of business leaders think that tech innovation is happening so fast that their company cannot keep up. Another 88 per cent think global supply chains need to be reconfigured because of deglobalisation.
The financial crisis sent shockwaves through the entire world. It destabalased everything. Trillions of taxpayers’ money went to saving banks. The consequence was that austerity was applied in an attempt to keep national debt down to manageable numbers. Then the pandemic came. It has pretty much the same effect. Then Putin’s ruthless attack on Ukraine – again caused governments to spend billions. In Britain, political corruption is now higher than it was a hundred years ago and only worsens matters.
The vast majority of people under than age of 50 do not really know much of the events that caused so much angst in decades gone by, such as the cold war (nuclear threats 1947 to 1991), rampant inflation (23 per cent in 1975), 15+ per cent interest rates (17 per cent in 1979 to 15 per cent in 1989). They are used to the decades of calm. Even after the financial crisis – the only thing that happened after the initial shock was the flat-lining of interest rates that fuelled property price inflation. But the long period of loose fiscal policy is over.
Looking at the world right now – we have the great disruption. And it isn’t just all of the above. Whilst free-market capitalism went into overdrive, and geopolitical tensions calmed in pursuit of profits, the world we live in – our home, is on fire, both metaphorically and literally. So bad is the situation that scientists are rapidly and collectively concluding we are entering a new geological epoch dominated by humanity’s impact on the environment. The Anthropocene is described as a period of time when human activity started to have a significant negative impact on the planet’s climate and ecosystems.
The current period, known as the Holocene, is the last of 42 periods in the last few hundred million years. But the Holocene has only lasted 11,650 years. The Anthropocene Working Group, a group of geologists whose role it is to gather enough scientific data for the ultimate arbiter of geological timescales, the International Commission on Stratigraphy (ICS), to decide whether the Anthropocene should be formally adopted. The fact that this is even a debating point should be of great concern to us all.
Meanwhile, back in our own self-serving worlds, not only is capitalism failing, but so is democracy itself in many countries. And one only has to look at the ‘land of the free’ to see how bad things really are. Nearly half of all Americans believe civil war is coming – within a decade. Right now, that seems more than just possible.
In addition, we are only becoming much more aware of a hybrid-augmented intelligence system that is already ubiquitous. and is a typical feature of the next generation of AI. And whilst artificial intelligence is a term applied to computers, robots, or machines that exhibit aspects of human intelligence and reasoning, such as visual perception, speech recognition, and decision-making – there is a downside to this remarkable technology, of course. The next generation of AI is not as stable as you might imagine.
Automated job losses, privacy violations, deepfakes and bias caused by bad data will be the least of our problems. Market volatility and socioeconomic inequality are also expected. Security risks are as yet unknown. Techno-solutionism (the view that AI can be seen as a panacea when it is merely a tool) is a bigger risk than we give credit for. Discrimination and threats to judicial systems are also a problem.
The one thing we can rely on predictively is this. For as long as humans have attempted to co-exist, peace and harmony has not been its lasting legacy or the norm. The period from 1945 to 2003 was relatively peaceful. From there, the slide back into warfare and resources-based aggression has become ever more threatening. It is interesting to note that huge lithium deposits were found in Ukraine just before Russia attacked it. Humanity, for all of its wonderous inventiveness and diversity of cultures, has most of its history written in blood and violence.
Predicting the next five years is now impossible, and it would be irrational to think we could possibly know what the next 20 years have in store for us or why. The great disruption will be a period, that will go down in history for the convergence of all these problems.