Shaping the best of all possible futures amid insecurity
WE are living in an age of insecurity. Increasingly, the enlightenment values of liberal democracy, liberal economies and a rules-based international system are being repudiated - despite having delivered progress for the vast majority of people.
We see this expressed in our politics. Popular anger and distrust of elites was compounded by the financial crisis, and has led to growing support for nationalist and illiberal politicians. We see it reflected in fears over slowing economic progress in advanced economies, flat-lining productivity and social mobility, and worsening prospects for future generations. And in social policy, we see it in the mounting evidence of declining subjective wellbeing and trust in many countries.
Many argue that these worrying trends are borne of a misunderstanding of the facts. If only the public understood the evidence, they would be persuaded that it is, in Dr Pangloss' terms, "the best of all possible worlds". People tend to be more individually and locally optimistic while being socially and nationally more pessimistic. This is exacerbated and fuelled by trends in media coverage - the tone of which has become more negative over time, exacerbated by changing patterns in how we produce and consume news, and increasing "competition for clicks".
Nevertheless, we ignore our current malaise at our peril. Focusing too much on past achievements risks us being "enlightenment ostriches" with our head stuck firmly in the data sand. Just as the Enlightenment was about challenging old shibboleths, there are very real tectonic shifts at play today which require us to rethink our economic, social and political models - to address the root causes of our dissatisfaction and equip us for the best of all possible futures.
Any policy prescription for a happier future has to tackle inequality. While the world may have become more equal between countries, domestic income inequality has increased and wealth inequality has usually grown even worse. As writers Richard Wilkinson and Kate Pickett have argued, this not only has a knock-on impact on health, obesity, crime and violence, but is also largely to blame for the crisis in mental health, since relative position in society matters for psychological well-being.
IMPACT OF AUSTERITY
Since the financial crisis, rising inequality has been compounded by the impact of austerity. Rather than saying that globalisation has failed, we should perhaps acknowledge we have failed our welfare states by spending what fiscal space we had on bank bailouts and their aftermath, while drastically cutting public spending and the associated social safety nets. The politics of this decision - while not exclusively responsible - have certainly fuelled the resurgence of identity politics and nationalism globally, accompanied by disaffection with democracy, distrust of experts and rising voter apathy.
Our response has to be multi-dimensional. From an economic point of view, we must acknowledge that recent reforms have not gone far enough. We need to be bolder if we are going to shape a fairer and more equal economy. We should re-assess our approach to the distribution of wealth in society, and across generations, including making tax systems more progressive. We must ensure a reasonable standard of living for low wage earners through minimum wages, wage subsidies where needed and access to public services. And we need to redefine the way in which we organise and measure our economic progress to include wellbeing.
In the context of automation, an ageing population, more heterogeneous societies, and a declining attachment between employers and workers, we also need a new approach to work with greater flexibility, enhanced portability of benefits and more support for workers to transition to new opportunities.
Finally, from a political perspective, we urgently need to shape a more positive and inclusive nationalism - capable of building the commonality, empathy and social solidarity necessary for the modern welfare state. Our democracies have given too much voice to vested interests, and we have lost the art of informed deliberation. We must better balance technocracy and democracy so that our governments can respond to the challenges of a complex world, while retaining democratic legitimacy.
Tomorrow's challenges will not be overcome with yesterday's solutions. New models are needed to turn an age of insecurity into the best of all possible futures.
