A sorcerer out of control? Inequality, Trump, Brexit and reasons to avoid despair

This is the draft editorial for the 50th issue of BODHI Times, the periodic newsletter of the NGOs BODHI and BODHI Australia. I hope the newsletter will be published in early 2017.

In 1848, Karl Marx published the first issue of a slim (23 pages) pamphlet, called The Communist Manifesto. Within it is the famous phrase “Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells.”

This sentence, written so long ago, mesmerises me. It suggests that the forces of capitalism, beyond a threshold, are like a demon, and that capitalism itself (and the society that depends on it) can become victim of the spells which the excesses of capitalism have released. I am not a Marxist, nor a communist, but I do believe in a much fairer global society than we now have. It was partly my attraction for greater fairness that made me study medicine, focussing especially on the health problems of low-income settings – including in 1985 when I spent 10 months away from Australia, as a senior medical student, mainly learning about health problems in Africa and South Asia.

It did not take long for me to decide that purely biomedical approaches (eg better drugs or more doctors) could have little impact on the health issues of what was then called “The Third World”. This understanding propelled me to a career in public health, but in 1997 an experience I had at the Ronald Ross Centenary conference convinced me that fundamental changes in economic and political power are needed even more than vaccines and interventions such as handwashing and more toilets. This experience was the realization while many in public health work for good health, far fewer work for the economic and social reforms which underpin health, which is also necessary (as are moral and spiritual change is also needed).

Friedrich Engels, the great colleague and sponsor of Karl Marx, had similar views. His book The Conditions of the Working Class in England, which documents the harrowing living conditions of the poor in the growing industrialised city of Manchester, during a time of scarcely regulated capitalism in the 1840s, is still recommended to students of public health.

Also in the 1840s, the great German physician, Rudolf Virchow was instrumental in the formation of social medicine. In 1848 he helped establish a weekly publication called die Medizinische Reform (Medical Reform). This publication is reported to have had headlines such as “medicine is a social science” and “the physician is the natural attorney/lawyer of the poor”.

The Gilded Ages

It is unlikely to be a coincidence that the end of the 1840s (also called the “hungry 40s”) was a time of social upheaval in Europe – laissez faire capitalism had raised economic growth, but also deepened inequality, and with it, the risk of revolt against elites. Much later, Hirschman, in 1982, argued that excessively unrestrained market forces (such as in the 1840s, the gilded age of the late 19th century, the 1920s and since about 1980) can undermine the moral values that are its own essential underpinnings, generating the satire “greed is good" in the 1989 film Wall St. Hirschman's arguments support the idea that there are great cycles in the world economy; not just booms and busts, but periods of self-restraint by elites, followed by a gradual forgetting of the consequences of too much inequality. This leads to the relaxation of rules and norms intended to reduce the risk of economic collapse, for example when US President Bill Clinton repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation.

The conjuring  

What happens when inequality runs out of control? It could mean revolution and regicide, but there were times when hyper-capitalism accepted greater regulation and self-restraint, such as during the Depression and following World War II. But those lessons have recently been forgotten, with consequences including Brexit, the election of Donald Trump and the rise of nationalism in many countries. The recently (and still?) dominant ideology – neoliberalism – was doomed to worsen inequality, but it remains to be seen if these new regimes will do any better. These reactions could, as Marx foreshadowed, presage an out of control sorcerer, such as a period of neo-totalitarianism, but this is uncertain. Social media and search engines have apparently been manipulated by narrow interests, and it can be argued such dark methods paved the way for Trump’s election. 

However, this is not the 1930s in Europe and Japan. With vigilance, social institutions and civil society could lead to a more prosperous and fairer future, despite President Trump’s rule, despite the clear existence of a US "shadow state" as documented by David Talbot and many others. Trump's phone call with Tsai Ing-wen, not only gave hope in Taiwan, but must also have heartened Tibetans. 

The early signs of President Trump’s rule are disturbing, such as the proposed appointment of the Goldman Sachs and hedge-fund veteran Steven Mnuchin, for US Treasury Secretary. As Joseph Stiglitz notes,  the expertise he will bring to the job will be in tax avoidance, not constructing a well-designed tax system. Also of concern is the the appointment of Rex Tillerson, the chief executive officer of ExxonMobil, as Secretary of State. But even on climate change the position is not hopeless. The drive toward renewable energy, including its declining prices, is now so strong that greenhouse gas emissions from fossil fuel combustion and industry will continue to decline. Note, however, that even if this occurs, greenhouse gas concentrations will continue to rise, and the rate of increase could even steepen due to reinforcing feedbacks, such as from melting tundra.

Irrespective of the effectiveness of politicians and the big, often neoliberal-minded development foundations (such as the Gates Foundation, the Clinton Foundation*, and even the Wellcome Trust, which continues to invest in fossil fuels) groups such as BODHI and Aryaloka Computer Education   (cover story for newsletter) are needed to reduce inequality and give hope at the ground level. 

* According to the prolific author Professor Michael Hudson, the Saudi Arabian government has been a major funder of the Clinton Foundation, a view supported by a fact checking website.