I’m a hopeful guy by nature, but this makes me worried.
Ok, we’re in the middle of the Knowledge Source Power Challenge. Over the next month I’m giving you eight simple challenges to complete – the eight quickest things I could think of to set you up for a full-power year.
We’ve had a huge response so far, but there’s still time to get involved. You can find Challenge One here, and look out for Challenge Two tomorrow. Complete all eight challenges and you could win prizes.
But today, I wanted to step back and take a look at the bigger picture. Because right now, I think the world really needs us all to be stepping into our power and leaning into good.
Because the way I see it, the worst case scenario, the long-tail risk, the black swan event that must not be spoken, is that 2019 ends in a bloodbath.
I’m serious. There’s easily a few twists and turns that I could see that could set the world on the road to war.
And the key one is this one: Inequality.
Take this chart from Hedge Fund legend Ray Dalio. This charts the share of American wealth going to the bottom 90% and the top 0.1%.
As you can see, the share of wealth going to the elite of the elite is back above 20%.
The last time we were here is 1939. And you all remember what happened then.
But this wasn’t the cause of World War II, and it won’t be the cause of whatever carnage might be in store for us this year if we’re not careful. It’s a little more complicated than that.
Because you look at that chart and you think, oh yeah, the bottom 90% is going to rise up and take up arms against their baby-eating overlords. But that’s not what’s going to happen and it’s not what happened in the past.
Rather, when things get this bad, you get populist responses. Like you know, building a massive F-off wall between you and Mexico.
And when you get populists popping up and popping off all over the place, then things start to get very dicey.
Now at the risk of sounding elitist, I think the unwashed masses (the bottom 90%), aren’t that good at knowing what to do about the problem.
But that’s not really their fault. Nobody knows what to do about it. The political-economy is so complex that any idea that can be communicated via television is probably garbage.
What the unwashed masses are good at though is recognising that there is a problem. And this is where the left has lost the plot in recent times. Rather than seeing the emergence of populist leaders as a symptom of a real pain that was being felt in the community, they saw it as a problem with the community itself.
“What are they complaining about? It’s never been a better time to be graphic designer, run an indy vinyl store or have a beard. Trump supporters are just racist.”
Australia has its version too, though the mining boom kept the malcontent from getting too hot for a fair while there. (That won’t last.)
So anyway, what happens when inequality rises is that you get populist leaders selling quick fix ideas. Like a giant wall.
Populist leaders are a bit crap at dealing with systemic issues. By design, they are not built for complexity. They are built for crash or crash through policies. For firm decisive action.
But the world is complex, and you need complex, nuanced solutions.
Remember where this current outbreak of inequality is coming from. After the GFC, the world started printing money and buying up financial assets. That was fantastic if you owned financial assets, and the more you owned the better it was.
Quantitative Easing and all that may have saved the economy, but it did it by giving the super wealthy a bigger and bigger slice of the pie.
Now we face the consequences.
But none of Trump’s crash or crash through policies deal with any of the real issues, not that I can see. They are strong, optics-driven, and populist.
The real danger is when one populist leader starts butting heads with another. So far we seem to have reasonably cool heads in Europe – though the yellow vest movement makes you wonder how long that can last. Russia has had a populist leader for years, and in China, dictatorship status gives Xi Jinping the luxury of not having to care whether his policies are popular are not, but there’s no doubt he knows he needs to project strength.
All this sets us on a very dangerous path.
And of course the problem is structural. You get inequality down by growing out of it. That’s what happened after WWII. The world needed stuff and we made it. The economy boomed.
But all that’s behind us. Robots are eating our jobs, productivity is falling, and every economy on earth is looking a bit sick.
It’s hard to see things naturally getting better for the unwashed masses, and so malcontent is likely to grow.
We need policies that deliver ‘jobs and growth’ (I’m serious), but given the structural nature of the problem, it is a buttload harder than it sounds.
But without it, the political temperature will keep rising, hot heads will keep getting elected, and war gets closer day by day.
In that context, the world needs us. It needs people who have dealt with their sh!t, and can champion peaceful, inspired and empowered living. Politics presents the problem. Only the community can present the response.
We need to be the examples that our community needs us to be. The counter examples to history’s dreadful desire to repeat.
Maybe it is just our fate to be the thin line between peace and war in 2019. Maybe it just comes down to us.
We need to start living like it does.
Time to flick the power switch.