Last spring, a Korean friend used the phrase “things people can still do” in broad conversation about business and current events. Last week, I was reminded of the phrase when I took a ride in a driverless car for the first time.
There was a driver, but he was there as a backup in case something went wrong. The car had no steering wheel and the driver had very little to do except start it after the passenger was safely seated. It handled curves and corners better than most drivers and offered a smooth, reassuring ride.
After getting out, I began to think about the future and “things people can still do.” In broad areas the economy, automation and artificial intelligence are putting people out of work. Unemployment in the US is at a 50-year low, but participation in the labor force remains lower than the historical norm. This suggests that the continuing wave of baby boomer retirements is helping to keep the unemployment rate low. The situation is even more stark in Japan, where the working-age population is declining even as unemployment remains low.
As automation and artificial intelligence continue to spread through the economy, dislocation will worsen. Years of deindustrialization in advanced economies in Europe, Asia and North America have weakened the middle class. The problem of income inequality in the US is well known, but other nations have also experienced an increase in inequality and weakening of the middle class.
The consequences are clear: Brexit, Donald Trump, the “yellow vest” movement, to name but a few. The common theme running through these events is an anti-establishment and anti-globalist stance. They reject the neoliberal order established in the 1980s and expanded in the 1990s. Most of the energy comes from the populist right, but some comes from the populist left. Together various stands of the populist wave have turned the established political order on its head.
The elite, meanwhile, continues to support the neoliberal order because they have benefited most from it. The elite has been able to retain their influence because they have the support of much of the broader professional class. In the US that would be the upper middle class dominated by educated and skilled professionals. Though the professional class is facing increased economic stress, it rejects what it perceives as vulgar, if not dangerous, populism.
Where do things go from here? Social and political movements expire on their own. Some lose energy after achieving their goals; other dry up because their goals are vague or unachievable in the first place. Still others fade in face of strong resistance or repression.
The populist wave caught the elite and the professional class unprepared. So far, they have shifted between ignoring it and attacking it, but it has only grown stronger. Ignoring it gives it room to grow, and attacking it only strengthens supporters’ allegiance to the cause.
To develop an effective response, the elite needs to understand that the driving emotion behind the populist wave is fear. It is a fear of being made irrelevant and falling down the social ladder. This explains why the popular movements all have a strong streak of nostalgia running through. Supporters want to return to a mythological golden age of good jobs and social order.
Fear makes people more conservative as they try to hold onto what they have and search order in perceived chaos. At its worst, fear makes people desperate, causing them to move further to the extreme. As the realization that there are ever fewer “things people can still do” spreads, populism-feeding fear will only grow.
Addressing fear in a rapidly changing economy would allow the populists to claim victory, after which the movement would begin to fade. Given the scale of the coming dislocation, the most effective way to counter fear is a universal basic income. The idea has been around for a long time, but interest has increased recently as the pace of dislocation has picked up.
A universal basic income would be to pay adult citizens a set sum each month. The money would not be enough to live on but would give people a sense of security and a cushion during adversity. This would particularly help lower-income people who sit on the frontline of dislocation. Additional taxes, most of which would fall on the elite and the professional class, would pay for the program. The big question, then, is whether they are willing to bear the cost of social stability as the Great Dislocation gains momentum.
Robert J. Fouser
Robert J. Fouser, a former associate professor of Korean language education at Seoul National University, writes on Korea from Pawtucket, Rhode Island. He can be reached at email@example.com -- Ed.