National Front's Marine Le Pen. Photo: Reuters, Robert Pratta
National Front's Marine Le Pen. Photo: Reuters, Robert Pratta

On the grand boulevards of Paris, men and women donning yellow vests have rocked the French capital for months in the shadow of glorious landmarks like the Arc de Triomphe. What began as a rebellion against rising fuel taxes soon transformed into a mass movement against a slew of austerity measures and economic realities squeezing the French working class.

Since the end of World War II, most of the world has been dominated by the US-led liberal world order. Although the Yellow Vest movement represented neither the right nor the left, the popular anger against the political establishment was enough to hand the once-marginal far-right National Rally party of Marine Le Pen a slim victory in the recent European parliamentary elections. However, the results were less a vote of confidence for Le Pen than a frustrated rejection of President Emmanuel Macron and the neoliberal establishment, leaving the path forward just as murky, a clear sign of the times.

The events in Paris are only a small symptom of the massive disruptions enveloping the globe. The world order that we have known since the end of World War II is coming to an end. For decades, the neoliberal world order led by Washington promised that the mantra of free trade, democracy and unbridled capitalism was the way to global prosperity and stability. For decades, this model was unchallenged. US power dominated the world and the American middle class prospered and thrived, reinforcing the legitimacy of the system at home.

Now, this world order is quickly being unraveled before our eyes as new realities are rapidly being established spurred by three powerful currents: the rise of a geopolitical multipolarism, the Fourth Industrial Revolution, and rising socio-economic inequality.

The rise of a multipolar world

The recent and unprecedented ban on Huawei by the administration of US President Donald Trump was a decisive sign that the trade war with China had shifted from resolving a trade imbalance into a brazen attempt to throttle China’s tech ambitions. Although much had been written about the dangers of the “Thucydides trap” that increasingly defined the dynamic of Sino-US relations, the two nations had for the last decade and a half largely avoided that fate by operating within a carefully crafted framework.

The intensification of Trump’s trade war is a decisive recognition that China represents a major challenge to US domination and that the room for cooperation has become eroded by a sense of intense rivalry. With two highly nationalistic administrations at the helms of Beijing and Washington, hopes for long term compromise  between the two powers are dimming.

The rise of Chinese technology is just one factor fracturing the predictability of the old world order. What has transpired in the last two decades has been a monumental shift of the global economic center from the West to the East. While China is by far the greatest catalyst of this movement and the only nation-state capable of matching the US as a peer power at this time, the “rise of the rest” or the continued growth of Asia and Africa will fundamentally change trade flows and the balance of power. China’s Belt and Road initiative was designed to be both a facilitator and a beneficiary of the shifting gravity towards the East, which is a trend that is irreversible.

The combined blocs of Eurasia and Africa represent more than 6.4 billion people, a large majority of the global population. With the expansion of infrastructure and connectivity between these continental blocs, global trade and commerce is quickly shifting to the East. Twenty-six years ago, 62% of global trade was among developed countries. Now that share is down to 47% and trade between developing countries has accelerated tenfold.

We are rapidly moving toward a world that resembles less the post-Cold War order of a sole superpower than the intense inter-state competition among rival powers that precipitated the two World Wars. Aside from China, other powers such as Russia, Brazil, India and an increasingly independent Europe, whether as the EU or as independent European states, will jostle for space and influence alongside and against the United States. A new era of rapid economic growth will transform Africa, a geographically massive continent with a dramatically rising population base, into a major emerging market.

Global wealth and power is being reshaped throughout the world in unprecedented ways and away from a Western-centric order.

Fourth Industrial Revolution

We are currently on the cusp of the Fourth Industrial Revolution, which will see the mass adoption and development of artificial intelligence, connectivity and robotics. With the advancement of fifth-generation (5G) technology, which will revolutionize the capacity of devices to communicate with one another, and exponential investments into AI research and development, expect nothing less than a massive disruption in established economic and labor structures.

In the coming decades as AI and robotics progress by leaps and bounds, our lives, from the jobs we work, to the way we travel, to the way we communicate will be fundamentally changed.

This technological progress will provide immense opportunities that few of us may conceptualize today. For example, before Internet usage became widespread, how many people could envisage the rise of smartphones, apps, the sharing economy and the associated opportunities thereof? However, every stage of massive technological disruption will inevitably also be coupled with great social dislocation as entire careers and businesses are invalidated.

With the advance of 5G technology, connectivity and communication among devices will reach a plateau that will mark a radical reorientation of technology’s role in society. The very nature of artificial intelligence and robotics threatens to increase significantly the redundancy of human labor as the exponentially increasing capabilities of technology masters ever more skillsets in order to improve corporate efficiency. Therefore we may be entering an age where economic growth and corporate profitability continue to skyrocket while labor participation continues to shrink.

This may lead us to a point where the value of a human population base lies not in its value as a labor force but largely in humans’ ability to consume the goods and services of these largely AI-powered industries.  In this scenario, the division between an elite asset-owning capitalist class and the much larger consumer class may widen to the point that massive social unrest is the result.

Systemic paralysis and rising inequality

To say that liberal democracy as we know it is currently facing a crisis is an understatement. Beginning with the shock election of Trump and the Brexit referendum in 2016, the rise of the far right and the far left, the happy marriage of corporate power and the values of liberalism is being rejected by an increasing wave of voters.

In the recent European Parliament elections, the once-marginalized extreme right represented by Le Pen and Italy’s Matteo Salvini made significant headway into the mainstream. The US, once the champion of liberal democracy, is now dominated by an administration that espouses an agenda of ardent nationalism, while the opposition Democratic Party is at risk of falling to self-proclaimed socialists who are just as anti-establishment as the nationalist right wing.

Western democracy is undergoing a systemic paralysis. Many of the political systems in the Western world face a crisis of inaction, of incessant infighting and a lack of competency in bringing about meaningful change that marks a recognizable improvement in the life of its citizens. In Europe, stagnant economies threaten well-established social-welfare systems with austerity, a trend that will likely increase and continue to feed increasing protests and societal chaos.

The United States, on the other hand, has enjoyed massive GDP growth and wealth building over the past decade, with massive fortunes being accrued in the fields of technology and finance. However, socio-economic inequality is reaching levels not seen since the Gilded Age.

In 1989, the wealthiest 10% of Americans owned 61% of all wealth; now they own 70%. The share of the poorest 50% of Americans had declined from 4% to 1% in 2018. While incomes in the US have certainly grown in the past several decades, the actual income earned by the middle class is rather stagnant when compared with rising inflation and astronomically exorbitant living and housing costs in the large urban areas, known as Superstar Cities, where high-paying jobs are increasingly concentrated.

With the onset of the Fourth Industrial Revolution, which will all but guarantee that increasing wealth and economic growth will largely benefit the owners of technology and assets, socio-economic inequality is nearly absolutely guaranteed to be a rising cause of instability.

Rising dissatisfaction with the status quo is expressing itself in the rejection of neoliberalism through the democratic process. Although it is clear that neoliberalism is dying as Western democracies become more unequal, more divided, more paralyzed and more angry, it is not yet clear what the replacement would be. However, once fringe movements like nationalism and socialism move into the mainstream and as these increasingly conflicting ideologies clamor to seize power, the evolving political culture will likely be fraught with turmoil.

Entering the age of chaos

After the fall of the Soviet Union, eminent political scientist Francis Fukuyama penned his famous book The End of History proclaiming that liberal democracy represented the final chapter of human history. However, history has kept moving and it increasingly appears that the chapter of Liberal Democracy is ending with no prediction of what lies ahead.

We are living in a period of exponential change. On the stage of global geopolitics, the last five centuries of near-complete Western domination is drawing to a close, quickly being replaced by a multipolar world where Western societies are forced to compete and interact with non-Western societies as peers. This new multipolar reality will cause a massive shift of consciousness that few in the West have prepared for.

The transition from a unipolar order to one where several peer powers jostle for power and influence will lead to a significant escalation of tension and unpredictability in the world order. While the chances of a repeat of the global violence that we witnessed in the 20th century remains low because of the ironically fortunate advent of nuclear weapons and the potential of mutually assured destruction between peer rivals, increasing hostility and rivalry between peer states, particularly between the US-led order and the Sino-Russian sphere, is likely to reach fever pitch.

The rising chaos of external factors such as great-power competition that many societies will face in this less stable world order will be matched by the rising chaos of internal factors driven by technological disruption, political dysfunction and increasing social inequality. As technological progress continues unabated with the unprecedented advancement of artificial intelligence, connectivity and automation, the threat of social displacement and an extrapolated rise in wealth inequality is real.

Combined with frustration over the paralysis of our political systems and social division, the catalyst for chaos and disorder is potent. What this means is that the forces that have already begun gnawing against the foundations of liberal democracy will be significantly reinforced. Unfortunately, aside from marginal voices like Democratic presidential hopeful Andrew Yang, who advocates that Universal Basic Income be instituted to combat rising automation, public discourse has barely even begun to grasp the significance of these issues on the future of the societies we live in.

Today, we live in a period of relentless change where the assumptions that were once unquestioned are radically being challenged. The age-old ballasts of power both within and without national borders are being redrawn faster than our collective consciousness can catch up. In summary, we are entering an age of chaos, and it is guaranteed to be interesting.

Frederick Kuo is a published San Francisco-based writer, UCLA graduate and owner of local real estate brokerage Amber Rock Properties. His writings focus on economics and geopolitics within a social and historical context.

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