Shocks and aftershocks

1: Five tipping points that made the modern world.

Global change happens slowly, then all at once. And it’s driven by ordinary people shouting: “What about me?”

I do not know which makes a man more conservative – to know nothing but the present, or nothing but the past. J M Keynes, 1925

Donald Trump is a symptom, not a cause, of a massive global change that began almost two decades ago. In 2007, the Global Financial Crisis – a far bigger disruption than Trump is likely to achieve – marked the beginning of a new era in economics, politics and society. That series of shocks lasted until 2012 and jolted the foundations of the global financial system.

But it did a lot more than that. The financial earthquake was created by an out-of-control American finance industry and signalled the end of the American century, began the retreat from globalisation and called into serious question the continued viability of the “Pax Americana”. It also created the conditions for Trump’s triumph.

The Arab Spring, simultaneous but apparently unrelated, ended with years of murderous civil war and the mass migration of millions of people to western Europe. That, in turn, propelled the far right to a level of influence unparalleled since the deaths of Mussolini and Hitler.

In 2007, Xi Jinping was appointed to the Politburo Standing Committee of the Chinese Communist Party and, in 2012, became the Paramount Leader.

History happens like this. About twice in every century, stresses that have built up over the past 50 years finally become too powerful for existing structures and, usually unexpectedly, an old era ends and a new one begins. It is reminiscent of the pressures that build up when tectonic plates move towards each other: eventually those stresses can no longer be accommodated and earthquakes ensue.

Momentous events occur suddenly and together, changing the way the world is run. In the past 250 years, five such tipping-points can be identified: 1789, 1860, 1914, 1968 and 2007. In each of those, the critical impetus for change has come from social and political groups that have aspirations for a share of national power and wealth that have been denied to them.

Each of these great upheavals was driven, at least in part, by the social class below the ones with power. The path has been anything but smooth. Reactionaries tried always to maintain their own exclusive hold on power and privilege. Eventually, though, the world moved on – until the next time.

Those periods of change, punctuated by social, political and economic earthquakes, can be clearly seen in two measures: the rises and falls of democracy and of economic inequality: how power and wealth are shared out.

At the start of this period, 1789, only one country had any meaningful democracy: the United States. It was highly circumscribed: poorer white people and all women were excluded. So too were slaves, who counted for only two-thirds of a person in the constitution’s calibrations of state populations. But, until the 20^th century, there was no such thing as liberal democracy. Anywhere.

There have been only two major eras of democratic advance: 1860 to 1914 and 1968 to 2007.

Until the third of the five eras, the richest one per cent essentially owned the means of production, distribution and exchange. The composition of that one per cent changed somewhat, with the landed aristocracy pushed partly aside by the rising capitalist class of the Industrial Revolution; but the great mass of people were left out.

The upheavals of the First World War triggered a cascade of aftershocks that continued for half a century. Then the great social movements of the 20h century – civil rights,  the neoliberal period of Thatcher and Reagan set the move to equality back by decades. Trickle-down economics did not work. And, in 2007, another earthquake.

So here we are.

In the early 19^th century, inequality was never as high in the new world – Australia, Canada, the United States – as in Europe. But America’s ultra-rich, after recovering a brief period of declining influence before and just after the civil war, asserted their dominance once again. Industrialisation and railways allowed them to consolidate their ownership of the nation’s economy and, as a direct result, its politics and its society. That influence faded somewhat with the world wars, the depression and Franklin Roosevelt’s the New Deal but, since the end of the 1960s, the grip of the very rich progressively tightened. The US is now as unequal as was at when a different group of the robber barons made their piles a century and a half ago.

Since 2007, inequality in Europe has largely flatlined and, in Australia and Canada, has actually improved. In America, it just kept going.

NEXT: 2: The undeliverable promise of liberalism. In 1776, two documents were published that changed the modern world. They were the American Declaration of Independence and Adam Smith's The Wealth of Nations.