Major economic changes in recent years have affected people’s jobs:
· New technologies have been disruptive throughout history, and have often been resisted, but few would deny that most people now have easier lives and live longer than those who lived in previous centuries. The job losses caused by industrialisation have been matched in aggregate by the new jobs created. There are losers in the short term, though: those whose skills are no longer required and who need to find alternative employment if they are to maintain their standard of living. Many will never be able to find jobs as good as those they have lost.
· Globalisation has also been beneficial overall (3.5.4.4), but it too has created losers, and what Nouriel Roubini has called “Political Fault Lines”. It has resulted in job losses and increased migration. As Dani Rodrik pointed out, in an article entitled The great globalisation lie, "evangelists presented globalisation as inevitable and advantageous to all. In reality, it is neither, and the liberal order is paying the price".
· As governments try to combat environmental challenges (3.5.7), they have introduced regulations which have cut employment in some traditional industries such as coal mining.
· Changes in tastes can cause job losses. Concern about animal rights has massively reduced the size of the fur industry for example, although there have been increased opportunities to make other kinds of warm garment.
· Local job markets can suddenly change with the departure of a large employer because it failed against competition from other companies.
· As immigrants arrive, whether to fill skills shortages or as refugees or as economic migrants, they unavoidably change the character of neighbourhoods and may put strains on local services. Although immigration usually brings economic growth, it can result in lower wages for some jobs (3.4.3.3).
There will be some people who have been adversely affected by these changes, even though the majority may have benefited from a cleaner environment, lower prices, and increased choice. The election of Donald Trump and the British vote to leave the EU in a ‘Brexit’ were symptoms of public discontent; an Economist article, How to make sense of 2016, described how liberal democracy is now under threat:
“Amid growing inequality, society’s winners told themselves that they lived in a meritocracy—and that their success was therefore deserved. The experts recruited to help run large parts of the economy marvelled at their own brilliance. But ordinary people often saw wealth as a cover for privilege and expertise as disguised self-interest.”
It is argued here that, by almost any choice of criteria for what is acceptable governance, politicians have a duty to respond to the problems faced by those who have suffered – yet they have conspicuously failed to do so (6.3.9). People who have gained from recent economic changes, especially those who have been most successful (6.7.2), need to contribute towards finding solutions for those who have been less fortunate. Everyone should have the opportunity to flourish. A Foreign Affairs article, The Liberal Order Begins at Home, noted that this “will require a new social contract between each state and its citizens—creating a twenty-first century state with a new social purpose that emphasizes inclusion over growth”.
Politicians need to be able to offer a viable and inclusive way forward for people who have been harmed by social and economic change. The following sub-sections explore three kinds of effort required to overcome the problems, followed by a summary of the risks of not responding adequately:
· People need to be confident that the government is paying sufficient attention to their problems (6.7.8.1). Politicians should explain how recent changes have created some winners, and how they will help the losers.
· New jobs are needed, and many people will require retraining (6.7.8.2). Government incentives can direct investment towards the regions most affected and can take account of the need to protect the environment.
· Actions are also needed to respond to population movements (6.7.8.3): providing the necessary public services and infrastructure, and consulting with immigrants and local people about cultural adaptation.
· There are social and political risks in ignoring the problems of change (6.7.8.4). People might be tempted to support damaging and divisive solutions offered by populist politicians, creating political instability.
(This is an archived page: a later version than the one published in Patterns of Power Edition 3a. The latest versions are at book contents).