So here we are.
The final days of the year and the decade. A period that, like every other, has had its ups and downs.
We started the 2010s in the immediate aftermath of the GFC. Western economies were seemingly falling like dominoes. One after the other.
The entire Eurozone collapsed into a debt crisis. A fault that almost broke the EU entirely.
It was (by far) the most important financial event of the 21st century to date.
Even now we are still grappling with the fallout from this crisis. And even though Australia came through it relatively unscathed, we are not immune to the repercussions.
Meanwhile, this decade also capped off the rise of China.
In 2010 they finally claimed their spot as the world’s second largest economy. And from there they have only grown and diversified further.
That led us to the eventual clash and trade war that has played out over the past two years or so. Although it may finally be coming to an end.
When (or if) they will dethrone the US from the top spot though, is yet to be known. If things keep going the way they are though, it won’t be long.
These are the two defining stories of the past 10 years in my view.
The seeming decline of the West, and the rise of the East.
But, that is what has happened. I’m more interested in what comes next…
More of the same, or a change of course?
When I look at Western society broadly today, I see angst.
All over Europe, the US, Australia, and more; we’re seeing polarisation. People are upset with the way of the world, particularly economically.
The financial crisis has inflamed tensions between all sides. Left, right, or centre — it doesn’t matter. Everyone is angry about something.
What has been fascinating though, is how politicians have latched onto this anger. Sometimes with great success — see Boris Johnson and his call to ‘get Brexit done’. And sometimes with great failure — see Bill Shorten and his ‘unlosable’ election.
Point is, never before has politics seemed so partisan. An outcome that has clearly arisen from this apparent decline of the West.
Whether you or I think this decline is real or not is irrelevant.
The majority thinks it’s real, and that’s all that matters. They are concerned that things aren’t going in the right direction. And neither side can see eye-to-eye on the best remedy to stop this decline.
It’s tribe against tribe, individual against individual — and neither side will give an inch to the other.
So, will this political angst extend into the new decade?
At least in the short term.
Unless we see a major economic boom, I suspect the divide will endure. Which, may strike you as somewhat perplexing given where stock markets are trading at right now.
Investments have been booming lately. But it hasn’t translated into wage growth, and that has left some people concerned and others irate.
Long term though, I think there is a solution. Or at least a new problem — one that can distract us from arguing with each other and instead argue over something else.
See, when I look at the rise of China I see a system that works.
Stay with me here, I promise I’m not insane.
China’s economic rise stems from many factors. They have a huge population, which means plenty of workers. They have a bountiful supply of natural resources. They are in a prime geographic location for global trade.
But, all of that will only get you so far. Managing all of these factors takes an incredible effort. An effort that has been spearheaded solely by the Communist Party since 1949.
They are a nation led by one party and one ideal only. A fact that indisputably gives them great direction.
There is little squabbling among Chinese politicians. After all, dissidents are dealt with silently and permanently…
I don’t agree with their methods, or all of their goals, but they know how to get things done.
They have galvanised their people behind one cause. Albeit, by using fear and intimidation.
What the West needs is some galvanising of its own. For those on the left and the right to not necessarily agree with each other, but at least work together.
You might disagree with me here, and there are counterarguments to be made. But, if you recoil at my suggestion simply because you hate the left or the right — well that’s precisely what is wrong.
The question then is: what event or thing could galvanise us?
How do you get both sides of politics to work together?
If there was an easy answer, then I’m sure someone would have tried it already. Hence, we will have to find some way to make it happen.
For example, perhaps China itself could galvanise us.
If they overstep their mark it could unite Western nations in a backlash. They could serve as a common enemy for both sides. A greater threat to deal with and take down.
Or maybe it could be technology like AI.
By relying more on machines they could become a lightning rod for angst. Or conversely, a force for shedding light on and reducing bias.
Again, these are purely examples of what could happen. They aren’t fleshed out, concrete events that will happen. I just want to get you thinking about what might be coming.
Because, one way or another, the 2020s will bring new and old challenges.
But, how we deal with and address them together, will be fascinating.
Just something to mull over the holidays…
Editor, Money Weekend