World's Democracies in Limbo

The Second Coming of the 1930s?

By J Brooks Spector 2 July 2018

A supporter of Republican U.S. presidential candidate Donald Trump gestures towards a protester as Trump speaks during an airport campaign stop in Millington, Tennessee February 27, 2016. REUTERS/Karen Pulfer Focht

Are the elections of Turkish President Recep Tayyip Erdogan and Mexico’s Andres Manuel Lopez Obrador as populist leaders simply harbingers of the way of the future, together with those authoritarians running China and Russia? Is the future to be a new, improved, repeat performance of those terrible 1930s?

The relevance of history in helping predict the future is one of those big questions. If you believe Karl Marx, history repeats itself, yes, but the second time around it becomes farce.

If you believe historian George Santayana, without knowledge of history, society is condemned to repeat it. If you prefer, the original Henry Ford, called history a load of bunk, and, of course, songwriter Sam Cooke advised, “Don’t know much about history…” even as he was convinced love was more than enough to carry us through.

The problem is, of course, even if you know your history; one cannot be sure what precedent is the right one to follow for its predictive power; or even if a real precedent is truly relevant to the anxieties of our own time.

And so here we sit. As we watch the contemporary world, we must consider whether or not history can be a reliable guide to the future of our current circumstances. Sadly, the most likely model for our current times is the early 1930s. If so, this is not a good sign for our collective future.

With all these maybes in mind, let us take a quick look back to the period nearly 90 years earlier to help weigh the evidence. By the early 1930s, the Great Depression had been weighing down on the global economy for several years.

The devastation of the German mark had been followed by the continental credit crisis, the crash of global stock markets, the cessation of war reparations payments, the passage of steep protectionist tariffs – most notably the Smoot-Hawley Act in the US. Taken together, these helped generate a global trade contraction, and encouraged a wave of authoritarian governments moving across much of Europe. (Italy had gotten there first, of course, nearly a decade earlier.) In addition, Japan’s military adventures had expanded into much of an enfeebled, fragmented China as well.

Meanwhile, the after-effects of a forced collectivisation of farms had produced an extraordinary famine across much of the Ukrainian heartland. Not to be forgotten, too, was the environmental disaster of the North American dustbowl, the increasing closure of national boundaries to refugees, as well as the progressive persecution of ethnic and religious minorities all across Europe.

And now, what of our own time? First of all, of course, the global economy is actually performing better than it has been for some years, certainly since the economic fiasco of the 2008-9 financial meltdown. Countries like China are continuing to see major growth and wealth accumulation, as whole bevies of new dollar millionaires see China continue to step forward.

Nevertheless, in many nations around the globe, large proportions of ordinary workers have faced years of wage stagnation (or worse) and the progressive whittling away of their job benefits and retirement pensions. Not surprisingly, this has been producing angst and anger among many ordinary individuals – and their voting behaviour has shown this. Moreover, there are looming possibilities that many of these same people’s jobs are on course to become redundant as a consequence of an accelerating, seemingly unstoppable global wave of automation and an incipient “fifth industrial revolution”.

In contrast to the 1930s, the vast trans-border networks of commercial and manufacturing supply chains means economies from Mongolia to Michigan are increasingly bound up in supply chains for the ongoing manufacturing of intermediate components for use in a manufacturing plant yet elsewhere for another complex product. As observers now frequently note in response to threatening protectionist rhetoric, a complex component that eventually ends up in a vehicle or plane is likely to have crossed international borders a half dozen times or more, before finally being fitted into the completed vehicle.

Arguably, anything that disrupts these relationships in the global economy now has the capacity to be even more capable of generating economic upheavals than was the economic depression of the 1930s.

This growing uncertainty in the interweaving of national economies as well as those even deeper impending changes in those same economies has the chance for unsettling political impacts. In this respect, despite the current prosperity, our contemporary world has disturbing similarities with the 1930s.

The political behaviour we see now is sometimes called populism or populist nationalism; but, importantly, it comes in a wide array of ideological flavours – from the left and the right, and even those whose inspirations are all jumbled up – but all are responding to fears of dislocation and economic drift.

Donald Trump’s contested victory in America a year and a half ago was one example of a population (or at least a big portion of it) increasingly frightened by social and cultural dislocations stemming from changes in the economy, the racial/ethnic shifts in the country’s population, the stagnant (or worse) economic circumstances for older, less educated white men, the presumed threats posed by new migrants and – at least for some – racial prejudice against minorities seen as responsible for those economic uncertainties.

The Trumpian political programme, of course, is a whole smorgasbord of economic and social nostrums, neither cleanly right nor left, and pinioned to a bombastic economic and racially tainted demographic protectionism championing that “big, beautiful wall” and “zero tolerance” on illegal immigration.

And all of it is married awkwardly to tax and regulatory rollback for businesses. Then, of course, there have been all those verbal demonstrations of respect to authoritarian rulers – as if the president is some kind of envious autocratic mini-me, unhappy that he must court an unruly domestic political scene, instead of simply issuing ukases and watching the press kow-tow, the opposition bow and scrape, and the elite he envies forced to eat his dust.

The Trumpian phenomenon was matched by Britain’s Brexit vote as an electorate (or at least a bare majority), feeling itself under threat by outside forces, narrowly voted to leave a multinational economic and political coalition their nation had helped create. That the promised benefits may never deliver just makes it more like the Trumpian takeover of the American polity and that much less like the UK’s political system’s traditional cleavages.

Meanwhile, around the globe, in places as varied as the Philippines, Turkey, Austria, Hungary, Poland, Italy, and Mexico, potent forms of populism have taken hold politically. This is a distant but eerie echo of the rise of fascism and authoritarianism across much of Europe in the 1930s – well beyond just Italy and Germany – that had been offered to respond to economic malaise, joblessness, and banking collapses, and that often fell back upon blaming religious, ethnic or national minorities for all the problems.

This time around, populism has been the fallback for many, as it has been offered as the answer to fears about job stagnation, governmental incompetence and corruption, economic competition from rival nations, fears of the consequences of immigration and other economic disruptions, the excesses of religious zeal, and the disruptive effects of social problems such as drug addiction (in the case of the Philippines).

Of course there is also the much more problematic version of populist autocracy with the circumstances of Venezuela as its economy crumbles, right along with the disintegration of a remaining sense of political freedom, an open press and so forth.

In just the past few months, the shock election of an unruly left-right populist coalition in Italy has driven all of the country’s other established political parties right to the wall, even if the governing coalition’s actual policies remain foggy, save for a hard line against future immigration into Italy from across the Mediterranean.

In Turkey, meanwhile, Erdogan’s major victory at the polls for his “New Turkey” has meant that country has overthrown the political structures of decades, creating a presidency with vast powers, leaving the rest of the government nearly supine and powerless.

The winning promise was to respond to the threats from ethnic minorities such as the Kurds, to rescue the faltering economy after years of strong growth via a vast programme of public works (funding for it unknown) to add jobs, and to rein in any opposition, regardless of whether it comes from the ultra-religious, the intelligentsia, the media, or pretty much anybody else who looked even slightly askance at the new executive presidency.

And now, in Mexico, the newest populist president, Lopez Obrador has trounced his opponents, including Mexico’s PRI, the Institutional Revolutionary Party, which had ruled the country for much of the past century. In this case, Lopez Obrador has come from the populist left, campaigning against corruption and for the complaints of the poor, and advocating respect to his country by Mexico’s neighbours (ie the US).

At least for the moment, both Trump and Lopez Obrador say they will share some mutual respect, although the Mexican president-elect says his country will not be anyone’s piñata in any future discussions over trade agreements such as potential revisions to the North American Free Trade Agreement.

Meanwhile, leaders like Poland’s Andrezj Duda, Hungary’s Viktor Orban, and Austria’s Sebastian Kurz, and even Bavaria’s Christian Social Union head Horst Seehofer (an ostensible ally of German Chancellor Angela Merkel in her cabinet who has a very different view than the chancellor on immigrants) have all taken a much harder edge on immigration than was true for Europe generally, just a few years earlier.

And some leaders – most notably Orban – have taken the position that the media and other sectors must increasingly hew to the ruling party’s diktats and positions.

And then, of course, there are the examples of Russia and China. In the case of Russia, Vladimir Putin, coming off an election where the result was preordained and in which the opposition was barely allowed to contest the election at all, has played the nationalist card to perfection.

Russia is besieged by enemies old and new and that the nation’s future is inextricably bound up in support for an old-fashioned autocratic ruler like the former KGB agent turned populist leader. Only a man like Putin can gentle the wild creatures all around the nation and successfully reassert Russia’s true historic rights to territories like Crimea and support its friends like Bashar al-Assad in his valiant fight against terrorists and their American allies.

Further to the east, Xi Jinping in China has demonstrated the perfection of autocratic rule while gaining the potential to rule China for, well, in perpetuity if he so wishes, following the Communist Party’s most recent congress. He rules a nation that continues to grow massively. Economically it is flourishing under its unique blend of untrammelled capitalism. It has a political system under very tight control out of Beijing; there is a well-focused national government-led drive to capture the next wave of industrial development ahead of rivals; and it has a rapidly growing military both in equipment and forward deployed forces in the South China Sea.

And so there are lessons in all this. In the 1930s, as authoritarian rulers increasingly challenged the western democracies – pre-eminently Britain and France, and much more distantly the US – World War II ultimately resolved the question of which form of government and the mobilisation of a nation – fascism or democratic participation – could win the day. The succeeding international competition, the Cold War, ultimately determined the issue of whether the state-centric Soviet model or the western one could generate a better, stronger, more efficient and energetic economy – and thereby gain the field.

In the five years after World War II, the west, significantly led by President Harry Truman and a number of European like-minded leaders, established the modern rules-based international order: the UN, the institutions that became the World Bank, the IMF and – eventually – the World Trade Organization, Nato, and what eventually morphed into the EU and its related bodies.

At the instigation of Trump, threats against such institutions (and more modern add-ons such as the Paris climate accord and the Trans-Pacific Trade Agreement) are growing under the pressure of breaking down this structure in favour of bilateral arrangements negotiated as if the entire global system was just another real estate lease in mid-town Manhattan, cobbled together with a bunch of predatory bankers, land developers and the usual related legal hangers-on – and threats of lawsuits and maybe even some mob muscle if needed.

This time around, the question is whether the Chinese model of state-driven, but privately carried out, growth and development is the future. This emerging Chinese model has coupled together the muscle of state- managed efforts like the Belt and Road Initiative with private and state capital– and spanning multiple nations across Asia and on into Africa. Will this be more effective and influential than the less tidy, but energetic and opportunistic model usually seen as the province of the US and friends?

But if the Trumpian version of the way forward – what with the withdrawal of America inward, and the picking of trade fights with putative allies and antagonists alike – substantially shapes the future, steel yourself for the kind of confrontations and a global future more like what followed the Great Depression than the post-Cold War world.

Now, nobody but the most dire pessimist would predict an actual major hot war, but more and more, usually very sober analysts are wondering if military abrasions at the margins of power, varied cyber feints, and thoroughly protectionist populisms that rip apart the global supply chains – so important in moving truly poor people out of their absolute penury across Asia and elsewhere – will be the future we must anticipate. That future and a whole crop of populist wannabes eager to be tougher than anyone else. DM

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