A defining time for business, globalisation and the legitimacy of power.
There has been a global
implosion of trust. The latest Edelman Trust Barometer just released at the World Economic Forum in Davos
shows “the largest-ever drop in trust across
the institutions of government, business, media and NGOs.”
·
Trust in media (43 percent) is at
all-time lows in 17 countries.
·
At 41 percent, Government is the least
trusted institution.
·
CEO credibility has dropped 12 points to
an all-time low of 37 percent.
·
Government leaders (29 percent) remain
least credible.
In the many years that I have covered this report for
Moneyweb, I have never seen such a dramatic swing in sentiment with well over
half of the respondents believing that the “establishment” has failed them. I
will come back to this and the South African context in a future column.
The “establishment” has become a buzz-word in global politics. It is a metamorphic concept that
in the broadest sense means simply the relationship between power and its
subjects. Power manifests in bodies such as global institutions, governments,
political parties, courts, religious and social institutions, corporates and
companies; or even in sectors and lobbies such as banks, financial services,
pharmaceuticals, agriculture, labour, and others. In this understanding we are
all part of and subject to the establishment, much like being either a motorist
or a pedestrian at different times.
If the establishment is
about exercising power, then its legitimacy will be tested against having the
interest of its subjects at heart; whether they are citizens, clients,
customers, patients, learners and all others dependent upon a service. And if
the Trust Barometer; the widespread anti-establishment rhetoric and the current
W.E.F introspection at Davos on responsive leadership are anything to go by, then
clearly it is losing that legitimacy.
The intensity of the
anti-establishment sentiment is the only logical explanation for the surprising
choice of Donald Trump as President of the United States. It also explains the
swing In Europe to nationalist sentiment and Brexit, where the dictates of an
even bigger establishment, the European Union, on migration and economic
prescriptions were proving to be unpalatable to the British people. The
bureaucratic power of the E.U. was demonstrated earlier in its ability to ride
roughshod over the will of the Greek people and get a government to renege on
promises made to get them into power. That magnificent institution that held so
much promise, now faces potential disintegration.
The same challenges face
globalization. It held much promise and indeed brought many benefits in the
spreading of products, knowledge, technology, innovation, medicines and much
else. But it has clearly failed in a key expectation: that of spreading global
harmony. Because that takes greater regulation and trustworthy political and economic
global institutions. This creates an inherent paradox: the more power is
concentrated and the broader its effect, the more it loses touch with the
people and the less it is seen to represent their individual interests.
Globalization has another
inherent flaw. It has encouraged the free movement of capital, goods and
services; but not the free movement of people. The latter has not only created
imbalanced human development with large numbers excluded from meaningful
participation in economies, but where experimentation with free people movement
has been tried, it has led to regression to national isolationism; albeit under
the severe test of a refugee crisis.
The free movement of
capital has on balance also had unfortunate outcomes. It has exacerbated
inequality and put the world at the mercy of a new force in the form of the
financial sector, where national policies can be totally negated and, more
ominously, national destinies can be affected by the actions of a few
speculators. Indeed, as we saw in 2007, the world economy can be brought to its
knees by behaviour in this sector.
Corporates and companies
have been under pressure to become more inclusive and redefine their purpose to
creating value for all. Where capital
is concentrated in the hands of the few and focuses mainly on returns,
shareholder value and capital growth, sometimes to the point of even damaging its own consumer brand names, then it becomes a highly distrusted feature of the
establishment. This is a global phenomenon, giving some credence to the
“monopoly capital” slogan we hear every day. Linking it to ethnicity, such as
branding it “white monopoly capital” however, is deflective politics, expedient
and disingenuous and unfairly puts blame on an identifiable group of
individuals; thereby becoming a greater threat to racial harmony than tweets
from a beach.
The free movement of goods
and services is also anomalous. It is increasingly being subjected to trade
deals and regulation that more often than not would run fowl of domestic
anti-competitive laws, and represents not the people of the signatories, but
lobby groups and vested interests of big corporations and sectors. Barriers to trade, such as import tariffs and
duties are constantly being used to protect domestic interests – again often in
the interest of a specific sector or lobby group, and not necessarily in the
public interest.
One bizarre outcome of the
anti-establishment furore is the effect it has had on the media. Coupled with
the decline of print media, the proliferation of on-line alternatives and the
growth of social media, there has been an intense attack on the “mainstream
media”. I’m not quite sure what this means, apart from the assumption that it
is “pro-establishment”. But it seems that for a significant part at least, the
real victim of this bare knuckle fight has been journalistic integrity. “Fake”
or “false” news, and rumour mongering is spreading to the point where trust in
all information sources is declining.
We are all part of the
establishment, and at various levels of activity can do much to make it more
trustworthy, or challenge misbehaviour by others. Without that, we simply sow
seeds of social discord.
