Like any building with concrete cancer, trust in a big idea can seem very solid right up until the moment of collapse.
Trust among the general populace in globalisation has been ebbing away over the past 10 years or so since the Global Financial Crisis, but it never seemed like it was about to collapse – until now.
The election of Donald Trump in the US appears to have been that moment of collapse.
Trump’s first act as US President will be to tear up the next big act of globalisation – the Trans-Pacific Partnership.
The modern version of globalisation kicked off in the mid-1980s with the reforms unleashed by British PM Margaret Thatcher and the end of communism in 1989. New Zealand’s version was unleashed by the Lange-Douglas Government of 1984 and it has been full steam ahead ever since.
Both sides of politics and the broad populace essentially agreed on a social contract. It goes something like this: controls on imports and exports of goods, services and capital would be removed and currencies would be freed to float. This would generate an extra boost to economic growth and the benefits would be broadly shared around in the form of higher incomes, cheaper stuff and more vibrant and diverse societies.
The idea was the inevitable disruptions would be followed by stability and a better life.
The big assumption underpinning this social contract is that most people would be broadly better off because of these massive changes, and the few who weren’t better off would be somehow protected or cushioned or compensated and it would all work out better in the end.
This question of who would benefit from stronger economic growth is a crucial one because it has now been long enough to know the answer.
Between 1988 and 2008 real incomes for poor people in emerging countries such as China rose 60-80 per cent, as did incomes for the richest 2 per cent of the globe.
More than half of the actual gains in dollar terms of the economic growth went to the richest 5 per cent of the world’s population.
The world is demonstrably better off overall but big chunks of the population in the developed democracies of the world missed out.
Now these people are revolting.