“Lower your shields and surrender your ships. We will add your biological and technological distinctiveness to our own. Your culture will adapt to service us. Resistance is futile”

The Borg, Star Trek: First Contact

We are bombarded daily by seemingly real threats to our very existence. These threats include global climate change, the fourth industrial revolution or even immigrants/foreigners. In South Africa, being white or black, depending on your point of view, is also a problem according to this line of thinking. The impression, globally, witnessed in the recent wave of nationalist and populist movements, does seem to indicate that people long to go back to some previous point in time.

One could swear that the Borg are indeed upon us, when listening to calls for walls at the border etc. Some British people really want to leave the EU. It would have been unthinkable just 12 years ago that a successful state would choose to leave the most successful trade group in the history of the world. In the USA, a country built on migration and free trade, there are powerful isolationist forces, yet again. In South Africa the main opposition party has been tearing at itself over ideological differences with, as yet, unclear outcomes. And some of us have attacked other Africans seeking refuge in our country in shameful ways.

The talking heads all tell us this is a new movement and the momentum is not going to go away anytime soon. I have another take on it.

What would the world look like in 20 years?

I was asked this question again the other day. The answer was not immediately apparent to me, but gave me pause to think a bit. This is quite an admission for a highly opinionated economist like me. Am I not supposed to have handy answers ready at all times? Upon deeper reflection, a 20-year horizon is easier to have opinions on than a five year, given how strained many things are globally at the moment. Bad things can certainly happen in the near term. This is equally true in South Africa.

On further reflection, my answer was that the globalisation trend will be fully back on track both internationally and regionally. The current pushback we witness will have been forgotten.

The Brexit experiment will be viewed for the mistake it is and the US will look back at some of the current policies with some embarrassment. I do admit this view requires some justification. I also hope I am right…

Quite simply, I think the current political agenda is driven by emotions and opportunistic politicians, rather than objective rational thought. Much can be blamed on the aftermath of the difficult economic conditions following the financial crisis. The world at large has responded to this perceived and immediate personal threat, albeit in a defensive manner.

The psychologists might say this emotional response is natural and even rational. Fortunately, progress has always been driven by Science since the Renaissance. Yes, it often gets derailed by “silly things” like wars and revolutions, but the process is relentless and real when viewed systemically and over longer time-horizons.

The EU has less than 10% of the planet’s people, generates 25% of its GDP and has broadly 50% of the planet’s social spending. Let that sink in for a moment. The exponential nature of technological progress, now that so much has been digitised, will imply that input price pressures and strain on resources should drop significantly in coming years. This should lighten the burden on humanity to meet its needs rather dramatically. There are issues with the way the EU operates, but mostly the outcomes will be seen as desirable by most people on the planet that aspire to be wealthy and better able to care for their communities. The EU, with its economic affluence and social justice, is still the goal of developmental economists everywhere. Getting there is where things get tricky. The technological changes that are coming will make the process faster and more complex to navigate, but on a whole-of-humanity scale, they should be net positive.

However, there is a caveat and it is a really big one.

For this to happen on a global scale will require a reorganisation of politics. Remember that the concept of the nation-state is relatively new to the planet. So, is the future one of many states each competing on its own again? No, I suspect that when the current wave of populist sentiment passes, countries and people will once again start organising around common interests. This would entail both economics and the environment, hopefully. The UK would seek a rapprochement with the EU and the US will once again realise that its best interests are broadly the same as that of Canada. The disruption that technology is certain to cause, will, unfortunately, place an even greater spotlight on the differences between the so-called rich and the rest.

So, the British interest will be absolutely tied to those of the Germans, for example, but possibly not at all with ourselves or other developing nations. The Americans will realise that it is in their own interests to cosy up much closer to the French, Czechs and Hungarians. They might collectively organise themselves better against the inevitable challenge from the Chinese or South Americans, as technological forces vie for dominance.

The market often spots things that are called “trends” when some smart author writes a book about it. One stand-out slide from a recent Singularity Summit was the market cap of the five largest companies on Wall Street versus the bottom 290odd of the S&P 500. The S&P 500 already represents the juggernauts of the west, but the top five constitute a whopping 50% of the total market cap in this example. The five companies are not traditional multinationals such as Proctor & Gamble or General Motors but rather transnational (or almost non-national) tech companies. These five are Apple, Alphabet, Amazon, Facebook and Microsoft. Even a cursory study of their corporate structures will show a global footprint. The influence of their products cross borders as if they don’t exist. This is the point: borders do not really exist in the digital domain and this will increasingly be the global reality, as more and more businesses become fully digitised.

In conclusion, fishermen know that when you hook a fish it will run several times, before tiring enough to get close to the boat. However, more often than not, the fish will have one last mad rush to freedom, the moment the fish actually spots the angler with the net. This run is as strong as the initial resistance and the fish reacts like it is totally energised. If the angler insists on netting the fish before this end-run, the fish often escapes by jumping about madly and with bravado. Patient fishermen simply let it run one more time…

The reality is that the fish tires soon and then exposes its underbelly and scooping it into the net is easy. Anyone who has ever seen this pale belly of a fish will know that it clearly shows vulnerability. The mad rush by the populists of the world towards so-called freedom is to my mind, similar. Progress is inevitable and their futures lie with others with similar interests and not on their own.

Picture the faces of Messrs Johnson and Trump and then think of the underbelly of a carp or trout and you will know what I mean…the current showing of power by populist isolationists is nothing more than bluster. However, given their respected sizes, if the fisherman tries to net them too soon, their last energy might be spent on capsizing the whole bloody boat. Tread softly, but know that the tussle will end the same as it always does.

Unlike the Borg and their dead-end assimilation, the future of humanity is one of closer integration and co-ordination between like-minded people, but occasional irrational fits should be expected. May I be right please, the alternatives are less than pleasant. DM