The Global Revolution
The 21st Century will not be like the 20th. The global revolution we are now witnessing could well have impacts on societies' economic, political, legal, social, cultural and spiritual institutions as profound as those of the Neolithic revolution in 8,000 BC and the Industrial Revolution in the mid 19th century. Dr. Thomas Marx, Director of the Center for Global Research and Understanding, identifies eleven trends that are defining and shaping the 21st Century as the first piece in a continuing series of dialogues that will explore the implications of each trend in depth.
The Global Revolution
The common view of Globalization as an economic phenomena characterized by huge increases in the magnitudes of trade in goods and services, capital flows, foreign direct investment, off shoring, advanced technology and increased economic interdependence does not come close to capturing the multiple dimensions or full implications of the global revolution that is dated from the mid 1980s.
The global revolution has economic, legal, political, social, cultural and spiritual dimensions and impacts that will rival those of the Neolithic Revolution in 8,000 BC, and the Industrial Revolution in the latter 19th Century. The transition from hunting and gathering to agriculture, and then some 10,000 years later from agriculture to manufacturing gave birth to, shaped and defined the roles of the institutions of modern society.
Every society must decide three fundamental economic questions to survive: What to produce; How to produce it; and For Whom. The unique economic, political, legal, social, cultural and spiritual institutions that define a society all bear importantly upon these decisions. Critically, the influence exerted by theses institutions affect individual incentives to work, save, invest and innovate - the bases for economic growth, rising living standards and individual freedoms. Legal institutions, for example, that guarantee private property rights encourage productive effort and innovation whereas the absence of such protections absolutely discourages work, investment and innovation. The Global Revolution, like the Neolithic and Industrial Revolutions before it, will have profound affects on the structure, form, values, and influence these institutions exert on its citizens and ultimately on the nation's economic and social progress.
Here we identify and briefly describe eleven fundamental, interrelated trends that are part of the global revolution that is defining and shaping society's institutions in the 21st Century. Subsequent contributions to The Global Revolution will explore the full dimensions of these trends and their implications for the structure of society, economic growth, individual liberty, and the ways in which humans live and relate to each other.
Demographics is destiny, demographers are quick to remind us. And, indeed, current demographic trends may be the most clear, sure and important factor defining the 21st Century.
Differential population growth rates among developed and developing nations; the rapid aging of the population in the U.S., Japan and in China that will soon have 400 million people (more than the entire population of the U. S.) over the age of sixty; the changing ethnic composition of major nations including the U.S. that is turning in the melting pots for mixing bowls; and increasingly popular alternatives to the traditional family unit will dramatically change the human composition of societies around the globe and their economic, political and social agendas, regardless of trade volumes and technological developments.
Less than 5% percent of the world population lived in cities of 100,000 or more in 1900. Today, 45% of us do, and by 2025 over 60% of the world population - some 5 billion people -will live in major cities.
The challenges to city planners, transit authorities, community health organizations, and basic city services are as enormous as they are apparent. More fundamentally, however, urbanization changes the structure, goals, values, life styles and aspirations of the family unit, and the roles and responsibilities of every family member.
Transition from Manufacturing to Services
The share of GDP accounted for by manufacturing is declining in many nations as China assumes the primary role of producing goods for the world to consume. Less than 15% of U.S. GDP is now accounted for by manufacturing - less than the share accounted for by health care services. Overall, services account for 80% of U.S. GDP, and its share is climbing rapidly in developed countries around the globe. Not surprisingly, employment in manufacturing in the U.S. accounts for no more than 11% of the workforce, down from nearly half in the 1940s. Like the decline in employment in agriculture following the Industrial Revolution, the loss of manufacturing jobs will likely continue until it loses significance. Such fundamental changes in What we produce and How we produce it has profound impacts on every aspect of society as noted by Karl Marx: "The way a society gets its work done shapes most of the other things that the society believes and does."
Innovation and speed to market are the keys to competitiveness in the global economy of the 21st Century that moves at the speed of light compared with earlier "ages." The next decade is destined to produce the greatest advances in technology the world has ever seen. Advances in communications, transportation, clean energy, super computers that can "think," robotics, nanotechnology, exotic materials, space exploration and genetics will change humankind (literally), and What and How it produces everything.
The Knowledge Worker
The primary source of these advanced technologies is the highly-educated, specialized knowledge workers who are replacing blue-collar workers as the backbone of the workforce in the 21st Century. The impact of these knowledge workers on society extends well beyond their contributions to technology and innovation. These workers have values, beliefs, life styles, aspirations and expectations that are fundamentally different from those of the blue-collar workers they are replacing, and upon whose shoulders they are standing to reach to the top of the Maslow pyramid.
Incongruence Between Global Corporations and Nation States
Business organizations are becoming larger and more global as nation states, defined by traditional political boundaries, decline in size, scope and influence (e.g., witness the collapse of the Ottoman, British and Soviet empires in the 20th Century). Nations states are less able to regulate, control and govern the corporate leviathans, and less able to exercise sovereignty over monetary, fiscal and social policies that are increasingly constrained by what Thomas Friedman vividly labels the "golden straightjacket." Henry Kissinger advises that ... "the gap between a global system for economics and the global political system based on the state must be addressed as a dominant task in 2009." Closing this gap may require nation states to gravitate towards Ohmaeian economic regions, Fukuyamaian democratic polities or Huntingtonian civilizations.
Effective governance of global corporations requires effective global institutions of which the WTO may be the only one. Today's global institutions (e.g., United Nations, NATO, World Bank, ILO, IMF and G8) reflect the military outcomes of WWII, not the economic, political or military realities of the 21st century.
Decline of U.S. Hegemony
The U.S. with less than 5% of the world's population has dominated the world economically, politically, militarily and culturally since the end of WWII. The multi-polar world in the first half of the 20th Century became bi-polar during the Cold War and then uni-polar with the collapse of the Soviet Union. U.S. hegemony, however, may prove short-lived as China, India, Brazil, Russia, and other nation states with growing economies and political appetites demand seats at the table. Making room for them will reorient geo-political relationships around the world. The U.S. will find crafting a Global Consensus to replace the Washington Consensus a daunting challenge requiring a fundamentally new 21st Century mind set.
Transition from Totalitarianism to Democracy
The demand for liberty grows with the rising incomes generated by the global exchange of goods and services as it does with the global exchange of ideas, values and beliefs. The result is that more people, half of the world population, live under democratic governments today than at any time in the history of humankind. This transition towards democracy brings potentially an additional two billion previously isolated people into the global economy creating tremendous market opportunities, competitive threats and labor force tensions.
Transition from Command to Market Economies
Socialism, communism, fascism and totalitarianism have failed dismally to deliver rising living standards and individual freedoms. Command economies characterized by government ownership of resources, regulation of prices, wages and output, "crown monopolies," and the corruption centralized power brings provide few incentives for work, savings, investment and innovation with the expected affects on economic growth and development. Even nations resisting democratic reforms are increasingly turning to market mechanisms to provide needed opportunities and incentives for economic growth - some with spectacular results.
The New ISMS
The ideological war among capitalism, socialism, fascism and communism is ancient history to today's knowledge workers who never read Animal Farm, Brave New World, 1984, Atlas Shrugged or The Road to Serfdom. Today's ideological battles are being waged over fundamentalism, environmentalism and terrorism. Fundamentalism surfaces not unexpectedly when traditional ways of life, beliefs, values, individual dignity, stability, security and hope are threatened by modernization, westernization and globalization. Environmentalism has also taken on global dimensions. Increasing world output ($69 trillion in 2008, PPP) puts additional pressures on clean air and water supplies, biodiversity and endangered species. Resource conflicts (wars?) in the 21st Century will not be limited to oil.
Global terrorism has replaced the cold war as the major threat to world peace with dramatic implications for 20th Century notions of defense and security. Weapons against armies are of little value when fighting ideas grounded in poverty, disenfranchisement and hopelessness. Building bomb shelters, scrambling jets and evacuating cities are as useful as circling the wagons, mounting up and drawing sabers in the war against terrorists who are more vulnerable to bread and butter than to bullets and bombs. The threat of terrorism also goes well beyond life and limb to fundamental issues of privacy, individual freedom and the power of the state.
Financial Crisis of 2009
The financial crisis has brought the largest decline in world trade in 80 years, and with it called into question the future of globalization. Some now contend that all bets are off. Calls for greater government intervention in financial (and other) markets; increased regulation; and for resurrecting hydra-headed protectionism could derail globalization as they did in the 1930s with predictable consequences for economic growth and democratic institutions. The immediate consequences of the financial crisis are clear and horrific; the long-term consequences of misguided policy responses for half a billion people desperately seeking escape form abject poverty are equally clear and horrific.