Senior Analyst gives a preview of the latest issue of The Socionomist
Alan Hall, senior analyst at the Socionomics Institute, explains how 16 years of negative social mood is driving globalization’s unpopularity. Learn more in this new interview.
[Editor’s note: A text version of the interview is below.]
Dana Weeks: I’m Dana Weeks, and today Alan Hall, senior analyst at the Socionomics Institute, joins me. Alan, in the new, September 2016 issue of The Socionomist, you say that social mood regulates globalization. Can you explain what you mean by that?
Alan Hall: Sure. When mood trends positively at large degree, people become more cooperative and inclusive, and as a result, free trade grows stronger. When mood trends negatively at large degree, people become more uncooperative, and opposition, exclusion and protectionism grow stronger. In other words, at large-degree stock-market peaks, it’s all ‘we’; everyone seems to be a potential friend. At bottoms, it’s all ‘they’; everyone seems to be a potential enemy. These are general social tendencies, and they hold true throughout history. We looked at five centuries of data on globalization and found that it has waxed and waned in tandem with waves of social mood.
Dana: You think that “globalization is due for a large setback.” What led you to make this forecast?
Alan: A 500-year chart of international trade data shows a complete Elliott wave advance in globalization from the 1940s, suggesting a major top is due. And in fact, social expressions suggest the setback has already begun. There are signs of distrust of governments and large organizations, expressions of protectionism, nationalism and desires for populist and authoritarian leaders. Brexit is a good example of this trend, but despite all the headlines it got this summer, it was not the only expression we noted. A wide variety of news articles describe growing distrust of central banks, law enforcement, the legal system, schools, employers, governing elites, foreigners and even science. You get the point. The inclusive feelings that drove globalization are changing. It’s less a vision of WE and more a vision of THEY.
Dana: And you’ve also found evidence that globalization as a concept has become less popular?
Alan: Yes, globalization is a lot less popular than it used to be. If you take a look at news articles over the past several decades, you’ll see a shift in their tone at the turn of the century. In the 1990s, you see articles with headlines like “‘Globalization’ Does a World of Good.” But after 2000, typical titles are “Perils of Globalization” and “A Global Boom, but Only for Some.” Lately, for example, all of the leading candidates in the 2016 U.S. presidential race voiced opposition to the Trans Pacific Partnership trade deal. Donald Trump said it’s horrible, Bernie Sanders said it’s disastrous, and Hillary Clinton opposed it and called for a new Trade Prosecutor to protect American markets. And it’s not just politicians, the EU just put major obstacles in the way of its free-trade accord with Canada. The Wall Street Journal and others describe a growing backlash against trade.
We think the global sociometer to watch, in this case, is the inflation-adjusted MSCI World Stock Index, which made its all-time high in March 2000. Since then, it fell 72%, and it is still down 56% today. 16 years of negative social mood is driving globalization’s unpopularity.
Dana: If de-globalization intensifies like you expect, what other social expressions will we likely see?
Alan: There are quite a few, but here’s a partial list: Increased fear of foreigners, tighter borders, increased security, less free trade, less immigration, more tariffs, slower cross-border flows of capital, reduced international cooperation and increased international conflict. Protectionism could become a growth industry, much as airline security has. And there is another trend we anticipated: the increasing threat of infectious disease, that could play right into this fearful trend. We saw that kind of fear during the Ebola panic.
So, for us, the bottom line is that de-globalization is a result of negative social mood. And this trend has further to go. Potentially MUCH further.
Dana: Thanks, Alan. I appreciate you taking a couple minutes to elaborate on what you cover in the 2016 Socionomist.