Humanity is healthier, wealthier, more integrated and better educated than ever. By 2050, nearly three quarters of the world will score as highly on the
Human Development Index as the UK. So why, asks Ian Goldin, are we so pessimistic? Why does “the best century to be alive” also feature resurgent protectionism, xenophobia and extremism?
In truth, says the former economic adviser to Nelson Mandela, we should not be surprised. We have been here before. “We think of the Renaissance as a positive time, we celebrate the revolutions in science, learning and art,” he told the
2016 Edinburgh International Book Festival. “But as anyone who studied the period will know, it was in certain respects a disaster: it led to 200 years of religious wars in Europe, and the spread of diseases which killed most Native Americans.” Contest for the future
Europe from 1450 to 1550 produced the voyages of Columbus and Vasco da Gama, the Copernican revolution, Gutenberg’s printing press and the genius of Leonardo da Vinci and Michelangelo. People, their ideas and products connected as never before – one in three people in Florence was a foreigner – and this led to expanding economies, urbanization, profound innovations and social developments.
– Goldin’s book, co-authored with Chris Kutarna – rocked Europe as scientific discoveries, spreading literacy, Martin Luther and Girolamo Savonarola challenged orthodox doctrine and social order. Meanwhile, the Ottoman Empire threatened to invade. The Renaissance was not only a revival of human creativity but also “a contest for the future.” Age of Discovery
We are engaged in a similar contest, says Goldin. Our age of discovery began around 1990 with the end of the Cold War, the opening up of China, spreading globalization and democracy, the birth of the internet. Globally, these forces delivered unprecedented economic growth, falling poverty and the genius that delivered momentous advances in health, science and technology.
“We are in a Renaissance moment,” he told PROJECT M
. “That means we can address all the problems we face. But it is an extraordinarily dangerous time. And if we don’t manage systemic risks, things will in all likelihood fall apart. Finance, for example, has created more opportunities for more people in more places than ever. But finance has also become a destabilizing system.”
Other risks and opportunities include climate change, aging societies and migration, our dependence on the Internet and revolutionary advances in life sciences. The Renaissance rewrote humanity’s place in God’s creation; the New Renaissance could rewrite humanity itself.
These risks are complex and concentrated, making them difficult to manage and highly contagious – what Goldin terms “the butterfly defect of globalization.” When Thailand flooded in 2011, it destabilized the global auto parts industry. Increasing air travel and urbanization mean an airborne pandemic could infect a billion people within weeks.
is Oxford University Professor of Globalisation and Development. He was Vice President of the World Bank (2003-2006) and has published over 20 books including Professor Ian Goldin Exceptional People (on migration), Is the Planet Full (on population growth) and The Butterfly Defect (on globalization).
Why so glum?
One of the biggest risks, which helps answer Goldin’s question about our pessimism, is inequality.
“When things change more rapidly, if you stay in the same place you are left behind more quickly,” he says. In different Oxford neighborhoods today, life expectancy varies by 15 years. In the US, almost half of all current jobs are at risk of automation. “Mismatches in skills, education, housing and transport systems become more acute … We have to worry more about those left behind.”
Unless we deal with inequality we cannot have a stable future
We have to worry about their losing faith in shared values of justice and fairness: the “American Dream” or
Liberté, égalité, fraternité. And we have to worry about a rift between asset-rich, powerful elderly and opportunity-poor youth, which has proven particularly toxic in North Africa and the Middle East.
For Goldin, growing inequality threatens to eradicate trust in free trade, market-based capitalism and liberal democracy. It helps explain Brexit, Trump and Isis. Such a loss of faith undermines our capacity to manage systemic risks.
“The tragedy of the current age is that although there is no doubt we could eradicate poverty in our lifetime, the world is increasingly unequal,” he told his Edinburgh audience. “Unless we deal with inequality we cannot have a stable future.”
The contest for the future is not some simple ideological battle, says Goldin. He is skeptical of techno-utopianism, free-market fundamentalism and statism. Technology, markets and governments can do immense good but also immense harm. They must be wisely governed.
This is particularly true in a hyper-connected but resource-constrained world. “The market economy leads us to believe rational individual actions, as expressed in consumer choices, sum up to collectively stable outcomes,” Goldin explains. “In a relatively small world with abundant resources that is fine. But that is less and less the case. This is the tragedy of the commons: I love my sushi, you love your sushi, everyone loves their sushi, there’s no more tuna. The same tensions apply to the use of energy, antibiotics and other goods where are there are negative spillovers from individual choices.”
To tackle systemic risks, Goldin argues we must rebalance decision making from self-interested rationality towards moral responsibility. That means recognizing the limits and failures of markets, considering state intervention and above all greater cooperation between governments.
“We believe the more money we have and the more democratic we are, the more we should be able to do what we want. But that idea is totally bankrupt when my choices affect you, or my country’s choices affect yours. Cooperation becomes more important the wealthier we become, and the more our systems are interconnected, and that means giving up some sovereignty.”
Finally, in keeping with his insistence on a moral dimension to governance, Goldin urges us to “stoke virtue” in society by delegitimizing the culture that prioritizes private interests over public goods. Sharing and improving data to restore public trust is crucial, as is empowering society’s guardians by upgrading their skills and knowledge. “Those responsible for financial stability weren’t deliberately negligent,” says Goldin. “They were ignorant. They didn’t understand how the world has evolved.”
Read part 2 of this 2 part special: Bonfire of vanities