Sitting on a Powder Keg

Globalization has led to a problematic gap between haves and have nots.

One of the defining characteristics of globalization is its tendency to produce winners and losers by polarizing communities – economically, socially, and politically – within and between nations.

Globalization's benefits have been privatized, while its costs have been socialized. The appearance of severe inequalities – in incomes, opportunities, and future prospects – after decades of generally narrowing gaps, has been one of the most worrisome consequences. The triumph of neo-liberalism has social democracy on the run most everywhere, and not least in Canada. However much this may please special-interest groups such as business communities and the wealthy, a smaller state almost inevitably translates into program and service reductions for the disadvantaged and those least able to defend their interests.

For the past several years, I have spent about a month a year teaching at the London Academy of Diplomacy at the University of East Anglia. During those very pleasant interludes, it has struck me that London has become a world city primus inter pares – a cosmopolitan global crossroads and network node for business, finance, culture, and education. If you are lucky enough to find yourself in a position to benefit from its status as a world city, London presents vast possibilities, and is a wonderful place to live and work. There is really no place quite like it, and these features make the rioting there, and in other U.K. cities, all the more disturbing.

What caused the social unrest in the U.K.? The Mark takes a critical look at the responses to the U.K. riots here.

Yet, for those stuck at the bottom – disenfranchised and alienated, with little to lose and less to look forward to – desperate measures hold considerable appeal. On the surface, the riots in the U.K. may appear as acts of thuggery and criminality, but those were not merchant bankers or international financiers in the streets; they were mainly members of the underclass, and, at a more profound level, the violence may be interpreted as a response to growing distributive injustice and a failure of political vision. While the parallel is not exact, the rioters bore many similarities to those who torched schools and cars in the Paris suburbs in the fall of 2005.

Meanwhile, most of the culprits behind the financial crisis of 2008, which triggered the Great Recession, got off without penalty, and the institutions in which they worked were bailed out at enormous public expense. Now, many have returned, and are up to their same old tricks. It is not too difficult to understand that cutting social support for the poor while shoveling out public money to the rich is a recipe for unrest.

With the combination of last week's global market meltdown, the near-complete political dysfunction in the United States – which led to the sovereign debt rating downgrade – and the extreme vulnerability of the highly centralized systems upon which globalization depends, we are entering uncharted territory.

The downgrading of the U.S. credit rating reveals deeper structural problems plaguing the global economy. Read one expert's take here.

Think Fukushima, or the collapse (several times in recent years) of large sections of the North American power and communications infrastructure. Resilience is receding as our reliance upon technology increases.

Think, as well, of the larger context: Climate change, the increasing frequency of extreme weather incidents, rising food and water insecurity, the approach of "peak oil," and diminishing biodiversity have, in combination, created conditions of acute volatility and uncertainty.

On top of all this are the still-uncertain implications of a power shift to the Asia-Pacific, and the huge issue of whether or not the emergence of that new order can be peacefully accommodated.

All things considered, it is difficult to avoid the conclusion that we may be sitting on a powder keg, with the disturbances in the U.K. symptomatic only of the fuse igniting.

If this observation is even close to the mark, then things may actually get worse – and possibly very much so – if the world reaches some still-indeterminate tipping point.

Something has to give.

A radical course correction seems essential ... if it is not already too late.

Photo courtesy of Reuters.