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Professor Sergei Guriev is Dean of London Business SchoolHe was rector of Sciences Po in Paris and chief economist of the European Bank for Reconstruction and Development.
It’s hard to be optimistic about the world these days.
Bloody wars are being waged in Ukraine and the Middle East with no clear end in sight. The planet is It’s getting hotter every monthAnd our ability to address the environmental crisis is in doubt. There are growing divisions between China and the West, and within Western societies, social media provides a platform to spread disinformation and promote polarization. Populist politicians They blame “corrupt elites” for their failure to manage cross-border migration, for higher prices and lower living standards, but offer no credible solutions.
All of these problems are real and daunting for those now entering business and leadership careers. Global warming is likely to create hundreds of millions of climate refugees. Wars cost lives and destroy cities; they also affect the global economy. Russia’s invasion of Ukraine alone is likely to have shaved $1 trillion off global GDP (compare IMF economic forecasts in 2017). January and April 2022) When populists come to power, a country’s economy slows down and their democratic institutions are deteriorating. Finally, inequality and polarization undermine our ability to address these problems.
However, we must not forget that humanity has been through worse and survived. As they say in financial markets, past results are no guarantee of future results, but research in the field of social sciences suggests reasons for optimism.
First of all, we must not forget that we can suffer from negativity bias in news communication. The arrival of social media has probably aggravated This is true. The business model of platforms is based on keeping users’ attention. This is easier with disaster reports than with news about progressive advances in the fight against global poverty. Social media makes the world more transparentThis helps expose corruption, but also highlights all the mistakes of the elites in power and reduces confidence in government and political institutions.
There are many problems today, but we must be aware that our perceptions are worse than ours. realityDespite multiple crises, the world has never been so prosperous, educated and progressive. Fifty years ago, more than 40 percent of humanity He lived in extreme povertyToday, that proportion is 10 percent, which is still too high, but has improved a lot.
The climate crisis is real, but the ingenuity of innovators and entrepreneurs has already diminished clean energy generation costs to the point that about 96 percent of new large-scale onshore wind and solar power plants have lower generation costs than new coal and natural gas plants. According to the International Energy Agency, renewables account for 33 percent of the global energy mix, up from 22 percent 10 years ago. Next year, renewables will pass Coal as the largest source of electricity generation in the world.
Secondly, while populist politicians rightly point out that globalization, automation and the global financial crisis left behind For many lower-middle class voters in developed countries, economic problems have economic solutions. Post-crisis austerity policies aggravated the economic situation of the most vulnerable sectors of society. Among other things, there are evidence What suggests that austerity policies contributed to Brexit is that lessons were learned and, during the pandemic, most governments around the world were more generous and avoided fanning the flames of populism.
Another important way to overcome intra-societal divisions is deliberative democracy. Recently, democratic countries such as Ireland, Canada, the United Kingdom and France have turned to various forms of citizen assemblies to address difficult and potentially polarizing issues, from environmental transition to pension reforms, abortion and gay marriage.
Deliberative democracy randomly selects one or several hundred ordinary citizens and asks them to reflect on a given topic.mini-publics“Talk to experts and politicians and propose solutions. These policies are not formulated by “disengaged elites” but by “ordinary people”, which gives them immunity from the polarizing speeches of populists.
Finally, we must recognise that not all democratic electoral systems are equal. In the recent UK general election, the Labour Party won 34% of the vote and 63% of the seats. In the French parliamentary election, Marine Le Pen’s National Rally party came first with 37% of the vote but only 25% of the seats.
Two-party systems, such as the United States, can further promote polarization, as it is difficult to create a centrist third party. An alternative is ranked-choice votingby which voters rank candidates. Those who are less hated than others win (i.e. those ranked second by a majority rather than first by a minority or last by a majority). Therefore, this voting system is more likely to benefit centrist candidates who propose compromise policies. This sounds like a theoretical abstraction (and may be more improved) but it has been increasingly used in parts of the US
The world is in trouble, but there is hope. Humanity is still in favor of democracy. In 2024, half of the world’s population went to the polls; most of these elections turned out better for pro-democratic candidates than many feared. And even non-democratic leaders largely choose to pose as Democrats, showing that they are aware that voters prefer choice and accountability.