The following article is a thank-you to all followers and visitors of my Blog. Approaching 90,000 views, this entry is a reflection on how global and local policy making is intrinsically linked to social psychology issues of social empowerment and cooperative problem-solving.
The Awareness of Crisis
Our world has entered a stage where we fight for ecological survival and depend on deep societal change on a global scale to make this happen. Rising inequality and the decline of middle classes in developed nations pose the question who, if not educated middle classes, should lead progress. The additional obstacles set out by populist movements, from Brexit to the dysfunctional governance of Donald Trump, have cast shadows over the ability of the Western civilisation to solve the pressing problems of our time. Unlike the US, Europe is geographically exposed to the turmoils created in the Middle East, Eastern Europe and Africa. If for example, climate change continues at its current rate, hundreds of millions of climate refugees might knock on Fortress Europe instead of the currently few million trying to escape the terror of war in Syria.
Many European politicians have understood that solving this conundrum is only possible by developing our primary and secondary neighbours. This translates into fostering political and economic stability and setting the prospect of moderate wealth for the populations of Africa and the Middle-East. The age of nationalistic ‘Me first’ politics is counterproductive in a world where wealth has become an interdependent factor. In a world where everybody is looking for the best deal, everybody loses. Access to education and decent public health care are key prerequisites in the process of distributed and sustainable wealth-creation.
For starters, education and health care never work on a neoliberal market-based scheme of demand and supply. If a person has cancer, cancer cannot be exchanged for a cheaper illness. We can neither return a pre-existing condition because we don’t like its potential ramifications nor can we make our grandparents younger. If we need to provide higher education to our children, they cannot be adopted by a wealthier family to pay for costly tuition fees. Young people cannot pay for education with money that their parents don’t have. The easy way out of student loans translates into debilitating debts where each new opportunity is tied to an added obstacle to future growth. In order to ensure fair public access, the future of health care and education emerges therefore not by market forces but from supranational government-initiated networks. Intellectual elites, for the sake of not undermining their own legitimacy, share the responsibility to contribute to democratic global development.
The recent G20 summit in Hamburg served as an example of maximum investment in bringing world leaders together while yielding minimum outcomes. A community of economic self- interest representation stalls global development and does not facilitate significant cooperative projects that do not only benefit particular investors but global societal development. The lack of democratic legitimization of the world economy has never been more visible. But instead of learning from the lessons of emerging populism, world leaders continue to propagate neoliberal policies.
The Forces Within the Crisis
We see the transformation of capitalism represented by two dominating attitudes. The first is a progressive stand, represented by civil rights groups, NGOs, WHO- and UN-initiatives, attempt to transform and empower communities by bridging systemic ecological, social and biographic divides. The second, diametric aspect is resistance to change. By defending traditional cultural practices, privilege, shareholder interests and protecting monopolies, powerful groups maintain their dominance and influence. Caught in a cycle of self-preservation, they disconnect from social immersion and stall innovation by drafting policies that maintain corporate deregulation. Needless to mention that unilateral stakeholder defensiveness works diametral to an already volatile social contract.
The effects of populism, as I have experienced first hand in Thailand, are toxic not only to the extent of polarising populations during their reign, but to leave populations divided for generations after. Rifts about the ideology of political leadership run deep within the workplace, families and even personal relationships. The long-term effect of populism is the emergence of salient and socially exclusive group identities that undermine social contracts which are already threatened by the particularity of stakeholder interests that puts money before people.
Image: Sponsors of the American Diabetes Association. Screenshot from the documentary ‘What the Health’ (Anderson & Kuhn, 2017).
The perhaps biggest paradigm shift over the past decades is represented by the fact that the current Economy 3.0 model, which is based on democratic consensus among competing stakeholders, turns into a self-defeating system once the finite resources for maintaining exclusive stakeholderships become apparent. There is a widespread scientific consensus, backed by collective experiences of environmental disasters, that the ecological and social costs of doing business cannot be outsourced at the expense of society and our ecosphere indefinitely. The latter development is a negative feedback loop which is disruptive to businesses and communities alike. Popular examples are the emission scandals of Volkswagen and other carmakers, the pollution of oceans by microplastic and the harmful side-effects of a highly industrialised agriculture, in particular promoting monocultures, intensive livestock breeding and its associated high meat consumption. The alliance of food industries (to make people ill) and big pharma (to keep them this way as a stable source of income) is no coincidence. As shady property developers in Germany that prey on refinancing run-down housing estates occupied by social welfare recipients demonstrate, the crisis and misery of many have become a lucrative business for a few. Hiding in offshore accounts or in the darknet, authorities stall preventing criminals from targeting vulnerable populations and eroding their fragile social networks. In other cases, multinational corporations promote harmful products and services. Forces at work are certainly not in favour of progressive initiatives that face powerful adversaries.
Challenges to Transition
By contrast, the Economy 4.0 model promotes cooperation between the Civil Society, Government and Economy. Although the sustainable approach of Economy 4.0 is backed by more transparent collaborative accounts, the question arises how a transition from Economy 3.0 to 4.0 can be facilitated. The frictions created by populist policies and the limitations of stakeholder consensus have already been sketched out, which is how conflicts within the concurrent global transformation emerge. Political agendas that served nations well in the past are increasingly unable to inform new conceptual directions needed within a global environment. Borders to future growth are not only based on the limitation of available resources but also to the degree that social resources can be instrumentalized and exploited. It is not only that resources have a quantitative limit to availability, but that people rightfully expect a decent quality of life.
Supported by media discourse, international exchange and educational initiatives, awareness has emerged that people’s lives are compromised by the same protective stakeholder attitudes which decades ago still served as a guarantor of wealth. The defiant stance of workers in traditional industries, such as the coal- and steel industries, is a symptomatic expression of the dilemma that people are driven into when corporate decision makers fail to provide future prospects for their employees who have thoroughly internalised the limited perspective of their employer’s libertarian ideology. Replacing old ideologies by revolutionary new ones renders likewise futile since the question of the accountability of social change leadership persists. In our particular historical situation, we share the ownership of globalised problems, if we agree or not, which is a significant shift from a single stakeholder perspective that only follows individual business interests.
Image: Solar panels in India. Picture credit UK Department for International Development
Lastly, the dynamics and cascading nature of global problems force all participants to a fast and efficient prototyping of solutions. To avoid prolonged ill-design of policies, problem-solving and social re-design cycles require distributed multi-perspective assessment systems. The philosophy of reflecting cooperation is a huge shift from political parties designing and sugar-coating their particular group-agendas (assuming the mandate of active decision-makers) and presenting it to their voters (assuming the mandate of passive decision-takers). A more proactive, collaborative democratic approach represents, to this extent, not only a framework to substantiate social fairness but it serves as a framework for sustainable social problem-solving and design. Many NGOs and civil initiatives will likewise have to transform themselves to multi-stakeholder initiatives if they seek to initiate sustainable social change.
Running for the Hills: The Emergence of Social Design Initiatives versus Populism
Escaping from impending doom, we run for the nearest hills. Remarkably, it is the local contexts that provide the matrix and ground upon which cooperative social change emerges. The predominance of neoliberal market mechanisms over localised human concerns has already paralysed large parts of society. In the transition from Economy 3.0 to Economy 4.0, we ask questions such as:
Where can people with a medium income still find decent housing in big cities? How can children from lower socio-economic background participate in higher education? How can working parents find qualified care facilities for their children? How can people move socially upward by their honest effort and merit rather than by inheriting wealth? How can the segment of lower-skilled jobs be re-humanized? How can the entire population become enrolled in lifelong learning? How can people find meaning in their jobs and how can they find support in social networks and culture beyond their jobs? How can shared values evolve that benefit all members of society, not only a privileged few? How can local and regional economies switch to sustainable modes of production? How can inequality be diminished? How can countries reduce their national debt? How can cooperative change on a wide societal level be initiated? How can the poorest countries be woven into the vertical creation of wealth and turn into stable democratic societies?
To develop pragmatic solutions to such questions, Economy 4.0 requires grassroots social design initiatives that can respond more efficiently to local challenges as compared to traditional party politics. Much of the frustration and anger against ‘elites’ and traditional political parties stems from the inefficacy of public policy-making in addressing local concerns and issues, a weakness that populists keep exploiting. Populism obscures shared responsibilities by polarising the public view. Populism sanctions any actions by ‘us’ (the people) against ‘them’(the blamed elites) when in fact civil action ubiquitously requires adaptive political and legal frameworks in order for norms to take effect. In this light, populism evades the responsibility that people inherently share for each other.
In regressing to polarising group-mindsets that preceded the level of stakeholdership consensus, populists support the tragedy of the commons: if I can fully blame an external party for my group’s misery, I also abandon the shared ownership of the problem at hand by disconnecting systemic cause and effect. Finding scapegoats is always easier than managing integrative processes between people. The externalising and internalising psychology of populists resembles juvenile psychology which correlates with a diminished set of problem-solving skills.
Capital in the 21st Century and the Definition of Progress
Given the need for local social transformation, the future of complex societies lies not only in more socially-aware programs of political parties, but the grassroots empowerment of local communities to democratise the organisation of local administrations and businesses from within. An additional layer of social design initiatives is needed as a glue between the public sphere and traditional political parties. To demonstrate the efficacy of such integrating and transforming (multi-stakeholder) initiatives is one of our generation’s most pressing challenges.
Progress and prosperity do not come like a bolt of lightning from the top but depend on our personal initiative and ability to develop local contexts. Political frameworks will take on the new role to facilitate such initiatives, rather than fostering top-down social hierarchies guided by single-minded propositions. As many business models depend on taking advantage of disempowered groups, the question emerges how powerful exclusive groups can be motivated to change their modus operandi. This problem is even exacerbated when we consider spillover effects which are hard to quantify. While affluent nations consume most of the planetary resources and contribute to most of the per capita pollution, poorer nations pay the price by being subjected to foreign capital related corruption, floods, droughts and environmental degradation.
Image: Trash collectors in Cambodia. Picture credit Getty Images
Another limit to cooperative small-group social design initiatives lies in addressing large accumulations of capital as described in Piketty’s ‘Capital in the 21st Century’ which require being dealt with by political means. The philosophical and economic question is how super-wealthy elites monopolise resources at the expense of everybody else. As Piketty writes in his opus magnum “It is important to understand that a tax is always more than just a tax: it is also a way of defining norms and categories and imposing a legal framework on economic activity.” (Piketty 2014, p. 520). A normative understanding of socio-economic action that is based on people’s more tangible options for developing autonomy, supportive networks and competencies could replace the current model of Economy 3.0.
For the sake of maintaining the social contract, economic activity should serve the long-term ecological and socio-economic benefit of all, which defines the social-utilitarian aspect of Economy 4.0. The individual effort of activity needs to be rewarded and moderated in terms to how it proves to be of service to others, which describes the libertarian-meritocratic (client- and service-based) aspect of economic activity. As an example, recent discussions in Germany, where typical executive pay exceeds more than 50 times the salaries of ordinary workers, begs the question how excessive pay and bonuses are justified within a client-based context where elites should serve as a role model for the public good. How can people represent their group when they have disconnected themselves economically and socially from it in a significant manner and when they have widely abandoned sharing collective risks, liabilities and consequences? The international bailing out of failing banks by taxpayer’s money is a prominent example. Albert Bandura’s latest work on moral disengagement (Bandura, 2016), which investigates mechanisms of moral disassociation from systemic responsibilities, deserves to become a standard litmus test for monitoring corporate responsibility and accountability.
On the other hand, the oversimplified schemata of ‘capitalism versus socialism’ cannot regulate instances where the complexity of systems include multiple and competing types of nested social motivations. After all, consensus, by cooperation or by negotiation, implies legitimisation by internal audit (to serve ingroup fairness) as well as external responsibilities (to facilitate intergroup agreements). As we define the world differently with such an extended set of criteria to adjust to changed environmental conditions so changes our interpretation of progress. If we cannot make significant global progress happen within the next decades, nobody will.
Image below: G20 protesters in Hamburg, Germany
Anderson, K., & Kuhn, K. (2017).‘What the Health’ [documentary], A.U.M. Films & Media
Bandura, A. (2016). Moral disengagement: How people do harm and live with themselves. New York, NY: Worth Publishers
Piketty, T., & Goldhammer, A. (2014). Capital in the twenty-first century. Cambridge, Mass: The Belknap Press of Harvard University Press.