Sunday, January 08, 2017

Dangerous Twilight Zone

Through the carcass of World War I, League of Nations was born; one of the first global organizations of consequences. Ultimately the league failed to stop the onset of World War II. Only after Humanity paid the heavy price of that war all across the planet, phalanx of global organizations came up to establish the current global order. UN, NATO, WTO, IMF are all children of "that realization by Humanity". Liberal global order has remained since then, augmented further by EU.

But German Vice Chancellor nailed it when he said it is not unthinkable that EU can unravel. Equally and more importantly he put his thumb on the exact reason of possible unravelling of EU - what likes of German Finance Minister Schaeuble type insist for the austerity. No doubt, on the European continent this German reluctance of sharing their prosperity - by way of money transfer from Germany to rest of the Europe - is the root cause of dire economic state in most parts of EU. Apart from Germany and handful of other countries, most European countries have not gotten the necessary public spending to defeat recessionary forces unleashed by 2008 Global Financial Crisis; the crisis all triggered by wild American Financial System.

Wide spread feeling of "assault on national cultural by migrants" is an equally important reason to break EU. Brexit is a classic example of that. Nationalistic tendencies - low hanging fruits in electoral politics - have created avoidable economic hardship for Britain. But such is the force behind the politics of "cultural grievances"; that there are no political costs associated with pursuit of Nationalism despite looming economic degradation of UK. 

Trump victory last year and his looming presidency epitomize these tendencies of Nationalism and breaking of global institutions all formed after WWII. Davos Man, as Greg Ip precisely identifies, had no lovers all over the world and it is good that Trump Presidency wants to bury him. But in absence of any replacement, the death of Davos Man in itself cannot establish alternative global equilibrium. Meanwhile Putin keeps on winning as EU unravels is only a collateral damage and that too President-Elect Trump is trying to ease out.

So the question is where is all this potential unravelling of global institutions going? Another equivalent of WWII? Whose knows, when Xi's Chinese Communist Party is all pushed to the wall and there is no other option than adopting jingoistic hard nationalism policy in dealing with intransigent Donald Trump; the danger of military clash is not far away. The reality is we do not see any strong global political constituency of consequences which can stop the incessant ongoing corrosion and potential collapse of all these global institutions. Trump Presidency is only going to accelerate that process.

Only thing that is clear is Humanity will have to relearn lessons of global co-operation in hard ways in years to come while liberals figure out how to compensate adequately those who are left out by globalization. Unless global progressives, especially in Western countries, find out effective political ways of alleviating cultural anxieties of those left behind by globalization; Trump style restrictive politics will keep winning and will keep increasing inherent risks in the existing global order.

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