Two years have passed since Indranil Ghosh wrote this article on the public’s lack of trust in the global system. Unfortunately, the erosion of trust has continued but Indranil offers four reasons so many people are disillusioned.
As the world’s political and business elites ruminate on world affairs at the Swiss ski resort of Davos, this year they must contend with grave public discontent with the global system. In recent months, protests have multiplied across the globe: self-determination riots in Catalonia and Hong Kong; rebellions fueled by inequality and corruption in Algeria, Chile, Ecuador, Egypt, and Sudan, to name just a few; and the climate-focused strikes around the world led by the activist Greta Thunberg.
Unlike previous waves of protests such as the Arab Spring, which sought regime change as a central objective, the latest uprisings are calling for a fundamental change in the world’s systems of political and economic governance. Unless the leaders convening at Davos can formulate far-reaching reforms, the continued spread of populism, growing anti-capitalist sentiment, more trade wars, and many other dislocations are likely.
The Edelman Trust Barometer, an annual study of the level of trust in institutions across 28 countries, shows the erosion of faith in the system. The results of the recently released 2020 report show low confidence in government and media, with business and NGOs fairing slightly better. This year’s survey also showed a worrying 14 percent “trust divide” at the global level between the “informed public”—defined as wealthier, more educated citizens who are more frequent consumers of news—and the general population. A record eight countries—Australia, Brazil, France, Germany, Italy, Ireland, Russia, and Spain—registered the highest-ever gaps between these two groups. A full 23 countries recorded a double-digit gap. Overall, less than 20 percent of the global population expressed trust in the system, and 73 percent supported a change in the current system of global capitalism.
Why are so many people so disillusioned? There are four broad reasons, and they apply globally.
The Edelman report singles out the first cause: disillusionment with rising inequality and an increasingly insecure economic future. The majority of people in 21 out of 28 surveyed countries are worried about being left behind and “losing the respect and dignity” they once enjoyed.
The majority of people in 21 out of 28 surveyed countries are worried about being left behind and “losing the respect and dignity” they once enjoyed.
Although economic growth and employment are robust in developed markets, trust is lagging because people feel that the benefits of prosperity are accruing to a narrow group of elites. Less than 1 in 3 people in developed markets believe that they will be better off in five years’ time, and 83 percent of workers are deeply concerned about losing their jobs due to factors such as automation, the gig economy, lack of training, cheaper foreign competition, and immigration.
Key points include:
- Discrimination against muslim refugees
- Persistent gender inequity and the #metoo movement
- International trade agreements
Read the full article, The Global Trust Crisis, on TigerHillCapital.com.