The direction of history
We are heading towards closer integration of the world, sometimes called New World Order. Humanity is converging in three ways, intellectually, economically and politically. The spread of religions and ideologies made it possible to unify different peoples under the same set of ideas. Trade and money enabled cooperation between strangers all over the globe. And the increased collaboration between nation-states is paving the way for a single world government.1
A global elite of business people, politicians, bureaucrats, engineers, journalists, scientists, opinion makers, writers and artists now runs the world. No matter where they live, whether it is New York, Buenos Aires, Shanghai, Dubai or Cape Town, these people increasingly have the same interests, the same viewpoints about the world, the same culture, and increasingly live similar lifestyles. The individuals in these elites often have more in common with each other than with their fellow countrymen.1
Globalisation has completely transformed the world. People everywhere around the globe are now interconnected. They cooperate and compete on a global scale. Globalisation started more than 500 years ago when Portuguese explorers set sail for Africa to find new trade routes to the Indies. In 1492 Columbus discovered America while trying to do the same. In the centuries that followed, the world gradually became more integrated because of European colonisation and trade. After the Industrial Revolution, the pace of globalisation greatly accellerated.
And so, Marx and Engels wrote in the Communist Manifesto of 1848: “Because the bourgeoisie needs a constantly expanding market, it settles and establishes connections all over the globe. Production and consumption have taken on a cosmopolitan character in every country. This is true both for materials and for intellectual production, as national sovereignty and isolationism becomes less and less possible to sustain. The bourgeoisie draws even the most barbaric nations into civilisation and compels all nations to adopt its mode of production. It creates a world after its own image.”
World War II ravaged Europe and shifted the balance of power towards the United States. The United States began promoting free trade and democracy and made alliances against the Soviet Union and China to contain communism. To that aim, the United States and its allies fought several wars and supported dictators as fighting communism received priority over spreading democracy. The United States promoted European cooperation, and the United Nations (UN) were also an American initiative. Some of the most well-known subdivisions of the UN are the World Health Organisation (WHO) and the World Bank.
There was a plan behind this. The Council on Foreign Relations (CFR) is an internationally oriented think tank of prominent figures in business, science and politics in the United States. The organisation has been an instigator of these developments. The CFR was established in 1921, at a time when the US was isolationist and European colonial powers dominated the world. In the 1930s, the CFR received funds from the Rockefeller Foundation and the Ford Foundation. Before World War II ended, the CFR, in cooperation with the US government, began making plans for a new world order after the war.
The planners thought that prosperity was the key to political and economic stability and that protectionism had worsened the Great Depression that caused World War II. They believed that open markets would promote democracy and that the United States would benefit from prosperity in other countries. After the war, European countries received loans to rebuild their infrastructure and to buy American products. By helping other countries, the United States gained economic and political influence. Because of the communist threat, the United States also built a military presence around the world.
The end of World War II marked the beginning of the US-dominated global financial order. The planners believed that stable exchange rates would promote trade, so they implemented a system of fixed exchange rates during the monetary conference at Bretton Woods. The gold-backed US dollar became the international reserve currency. This system remained in place until 1971. From then on, market forces determined exchange rates, but the US dollar remained the world’s primary reserve currency.
To a large extent, the post-war world envisioned in Washington became a reality. It was a remarkable feat of geopolitical planning. And it was a significant step in the globalisation process, but globalisation really took off in recent decades. The outcome of this process was not the result of a deliberate design by planners but of several economic, political and technological developments converging. These were:
- the rise of neoliberalism around 1980;
- the fall of communism around 1990;
- personal computers and digital data storage;
- optical fibre and the Internet making it possible to connect people around the globe;
- global standards for data exchange making it possible for every computer to exchange data with every other computer;
- new software enabling cooperation between people and businesses around the globe.
The collapse of communism gave further impetus to globalisation. In 1989 the Berlin Wall fell. A few years later, the Soviet Union dissolved, and the European Union became enlarged. From then on, it seemed that there was no alternative to capitalism.2 Countries like China, India and Russia realised that they had to compete in the global markets and transformed their economies. Every country did this in its own way. For instance, India specialised itself in services and information technology. China became the global industrial powerhouse.
Computers and data storage made it possible to store documents and other data like pictures and recordings digitally. In the 1980s, the personal computer entered the homes of many people. Businesses also used computers, but the impact of information technology remained limited. Exchanging data between computers was still an arduous process because computers often were not yet interconnected, and software suppliers used different data formats.2
That all changed with the Internet. Netscape turned out to be a crucial catalyst. It allowed people on personal computers to look at web pages anywhere around the world. Netscape turned out to be a killer application that made the Internet very popular very quickly. Investors suddenly realised that Internet would change the world and make that large profits for them. It resulted in a massive overinvestment in everything related to the Internet during the Internet bubble of 2000. One of those overinvestments was in optical fibre. As a consequence, the price of data transport dropped dramatically.2
Standards for data exchange emerged. Software suppliers were forced to support them and began to focus on facilitating the interaction, competition and cooperation of people around the globe, effectively enabling the world to turn into a global village where people everywhere can participate. It transformed the way people cooperate. The traditional way of organising is top-down via command and control. The new way of organising is via teams of people sharing responsibility for a task or a product, making more complex cooperation possible. China and India were able to develop and become integrated into the global economy. As businesses began to use more cheap overseas labour, workers in developed nations faced increasing job insecurity and lagging wages.
The rise of China and India
In 1977 Chinese leaders realised that communist China needed to embrace capitalism. For two decades, progress was slow. That changed in the 1990s, but doing business in China remained problematic until China became a member of the World Trade Organisation in 2001. From then on, China conformed to international law and trade practices. And it became attractive to do business with China. Corporations moved their production to China, and China became the industrial powerhouse of the world.
Half the world’s population lives in Asia. In China or India alone live nearly two times as many people as in the European Union and the United States combined. The same applies to Africa. If people everywhere around the globe obtain an equal portion of wealth, then the relative importance of the European Union and the United States will decline. If current trends continue, China will become the most powerful nation soon. The Chinese economy may be the biggest in the world already.
Chinese leaders are preparing for a New World Order under Chinese leadership. China invests heavily in foreign countries. China’s policies include economic colonisation of developing countries like the Western countries did previously. For instance, China grants loans to developing countries to build their infrastructure. If they fail to pay back these loans, China may take possession of assets like mines, harbours and corporations as payment. If India is going to follow suit, it may become China’s contender. At the same time, the importance of nations is declining, and they may even disappear in the future.
Businesses integrate closely with their global supply chains. Doing business has become a global affair more than ever. Issues like trade, climate change, human rights, disease control, organised crime and financial markets require international agreement and cooperation of governments. In the old world order, states were sovereign, which means that at least in theory, there was no higher authority than the state. Their power was restricted only by the treaties they signed.
States are increasingly under pressure to conform to global standards as actions of one nation affect other nations. The global elite influences the decisions on these issues, but they cannot ignore ordinary citizens. The elite believes it acts for the benefit of humankind and that we need more international cooperation or even a global government. That is reflected, for instance, in the words of the British politician Denis Healey. He attended Bilderberg Conferences, in which members of the elite gathered in secrecy. He told The Guardian:
To say we were striving for a one-world government is exaggerated, but not wholly unfair. Those of us in Bilderberg felt we couldn’t go on forever fighting one another for nothing and killing people and rendering millions homeless. So we felt that a single community throughout the world would be a good thing.3
The elite is, first and foremost, a social network. Elite members have friends, and they have friends who have friends too. Meetings like Bilderberg are just the tip of the iceberg. Still, these meetings can influence political agendas. For instance, the European Union has been a discussion topic at Bilderberg, and it may well be that these meetings helped the elite agree on more European cooperation and integration. After two world wars, that seemed a good plan. And it would not have succeeded if most Europeans did not have the same opinion.
Neo-liberalism or neo-feudalism?
Many people in China and India have seen their living standards improve. Globalisation may have been the best development aid ever. Nevertheless, the real winners are wealthy oligarchs all around the world. A 2019 report from Oxfam points out that the world’s 26 wealthiest people own as much as the poorest 50%.4 Without global government or binding international treaties, states end up competing to please large corporations and billionaires. In feudal societies, ordinary people were mere serfs of the elites. Many people today find themselves in a similar situation, at least to some extent.
In the 1970s, the situation in Western Europe and the United States was different. Most people were middle class. Since then, a growing divide between the rich and the poor emerged. It coincided with the rise of neoliberalism in the 1970s. At the time, the ruling class was in trouble, the economy was stagnating, unions had a lot of power, and the cost of welfare became a burden. Business think thanks began to press for deregulation. Since then, governments left more to markets, curtailed labour, and reduced welfare benefits. Wealth and income inequality started to increase. Many jobs moved to low wage countries.
Conspiracy theorists claim that the elite has a secret plan to create a New World Order in which ordinary humans will be mere serfs. Rather than seeing globalisation and the emerging oligarchy as a result of social, political and economic developments, the theory claims that the elites deliberately planned it. Indeed, the United States government, with the help of think tanks like the CFR, designed the post-war world order. It was a historical accident that these plans materialised the way they did. World War II more or less handed over world domination to the United States, and skilful planners have used this to pursue their objectives.
Distrust of government is one of the pillars of a culture centred around individual liberty and non-interference that many people in the United States cherish. The business and political elites have used the United States to create a global empire. And large segments of the population do not agree. They see imperial institutions like the Federal Reserve and the United Nations as tools of the elites. As Healey’s comments on the Bilderberg meetings point out, the elites believed in international cooperation. The idea that the world is interconnected and that your actions affect people elsewhere is at odds with the belief in individual liberty and non-interference.
The mainstream media practise self-censorship by omitting or under-reporting relevant news stories. Against this background, there is a market for independent writers and to come up with new disclosures to keep readers entertained. Truth is not always of the essence, which feeds extreme beliefs. Social media have amplified this process as people can now hook up with others sharing their views while shielding themselves from others that do not agree.
The situation in the United States has parallels with countries just before a revolution. An oligarchy controls the state. The social order is contested from the left and the right, while people at the political centre realise that the political system fails. In Europe, there are similar developments. The situation has not yet advanced to the same point, perhaps because Europeans have more trust in government. In Europe, corruption in the political system is less endemic and political systems allow for multiple political parties so that diverging views can more easily get a voice in parliament.
Politicians come and go, but many officials remain within the governmental institutions for a long time. Often they are specialised technocrats that have the best knowledge of the field. Most of them think they work interest of the public, but they can obstruct elected officials. An unresponsive bureaucracy is an issue with a long history. Chinese emperors already faced it 2,000 years ago.5 One can also say that elected officials can obstruct the work of their bureaucracy.
Interest groups have captured the United States government to profiteer at the expense of the taxpayers. This also happens in Europe, but not to the same extent. Lobbyists and think tanks represent the interests of businesses that live off government contracts or benefit from favourable legislation, for instance, the Military-Industrial Complex. These people work covertly via social networks to influence politicians and other officials. That is not a new phenomenon either.5
Politicians in the United States fund their campaigns with donations from corporations, interest groups and wealthy individuals. And so, they represent their donors rather than their electorate. As a possible consequence, the likelihood of a law passing does not depend at all on voter preferences.6 It fuels distrust in government, and it makes the debate focus on the size and powers of government rather than its quality. Checks and balances have been put in place to limit executive power, but they undermine the effectiveness of government and allow elites to influence the decision-making process.
In the decades after World War II, the secret services of the United States have toppled democratically elected governments and supported dictators all over the world while claiming to promote human rights, freedom and democracy. Geopolitics is a cynical game and a struggle for survival that can conflict with stated morals and principles. The fight against communism has determined US politics during the second half of the twentieth century. And it is impossible to know what would have happened if the United States hadn’t taken up a global leadership role to contain and bring down communism.
Improving the political economy
Social order is the result of the interplay of social groups in a society. In a capitalist economy, wealth and income inequality tend to increase. If governments do not correct this, the economy may suffer, and social tensions may rise. During the neoliberal era, businesses have taken over several government functions. Schemes to profiteer from government proliferated accordingly. Rather than correcting wealth and income inequality, government policies came to enhance them. As the wealthy succeeded in reducing their taxes, governments went into debt. That is another recurring pattern in history.
The recipe is well-known. It is standing up against the oligarchy and creating a clearer distinction between the private and the public realm. People must understand that collective action is the only way to realise certain goals in society. It is possible to have good quality government. Countries like Denmark and Switzerland have it. Neo-liberalism sees government as a problem and society as non-existent. This view is not favourable to collective action and it helps the elite to remain in power and to exploit us with impunity.
As long as societies remain politically divided, this is unlikely to be resolved. A resolution requires setting aside political differences and rally behind common causes about systemic improvements in government and society. That could attract a broad coalition in the political centre. The size of a government matters less than its quality. A government should do the things it does right. The Danish government takes up a broad set of tasks, while the Swiss government is more limited in scope, but in both countries the quality of government is good and people trust their government.
1. Sapiens: A Brief History of Humankind. Yuval Noah Harari (2014). Harvil Secker.
2. The World Is Flat 3.0. Thomas Friedman (2007). Farrar, Straus and Giroux.
3. Who pulls the strings? (part 3). The Guardian (2001).
4. World’s 26 richest people own as much as poorest 50%, says Oxfam. The Guardian (2019).
5. Testing Theories of American Politics:Elites, Interest Groups, and Average Citizens. Martin Gilens and Benjamin I. Page (2014).
6. The Origins of Political Order: From prehuman times to the French Revolution. Francis Fukuyama (2011). Profile Books.