The world has changed...

„The world has changed…“ is the ominous phrase that opens the prelude to Peter Jackson’s film version of  Tolkien’s “The Lord of the Rings”. It is true of the fictional middle earth as it nears the end of the third age, but it is also true of our world. In a much faster and bigger way than middle earth our world has changed and will continue to do so. It is up to us to direct this change for the improvement of the human condition and the world.

I remember back when I left my home country to pursue a Master’s degree I was the second in my family to do so. Though graduates in the same field from my generation and university about 10% emigrated, the Germany I arrived into was a Bureaucratic when it came to getting a work permit. Change came swiftly once the “Vorrangsprüfung” (a test requiring a waiting period up to 6 weeks long to assess whether a German or European applicant could fill the position) was dropped for graduates from German universities. 2012 brought the European blue card making it easier for qualified ex-pats to get a work permit, provided they had a job offer. 

Now the European Union embraces 28 full members and the European monetary union has 17 members. Ex-pat get-togethers around the world can gather up to a thousand people with every nationality you can come up with (and several which probably wouldn’t cross your mind). Trade however, features a different story. 

The 2008 crisis has dampened the mood of globalization and of liberal capitalism. It was even thought by some that the rise of state capitalism would spell the end to the age of liberalization and globalization. It won’t, but Brazil, Russia, and China have certainly not pushed for more globalization or liberalization. Politics in Europe have shifted to the left; even if Merkel’s conservative party did get a huge victory last September.

Their slow does show that their growth is not as sustainable as at some point considered, but it might be too early to assess it, and the change slow enough to provoke a baseline shift rather than the stark evidence on which politics is mostly made.  The decision between liberalization and globalization or state capitalism with strong trade regulations should be made on the basis of decades of history and not the last couple of struggling years.

Looking back to the decades before the boom that preceded the sub-prime crisis, history shows that opening new markets and the creation of new and more widely open trade agreements boosted the world’s economy. The removal of capital controls allowed countries to boost exports and trade more freely. Our conclusions should be based on older facts though.

As Nietzsche realized that once you had apostatized from monotheistic religions, going back to the mythology found in Wagnerian operas wasn’t really an option; he broke his friendship with Wagner. So must we realize that socialism or versions or it, are not an option. Since the fall of the USSR and the economic disaster it was in it should be obvious that socialism or state controlled economies do not work.

Attempting to return to those beliefs in a different version is doomed to fail. It is only through understanding and facing our economic reality that we can improve our human condition. Concentrating power in the hands of a government with little accountability is not the way to go.