Why 2019 feels like 1929 — and what we can do to change course

“Downton Abbey” opened last week. Below all the aristocratic glamour and excess, remember that the story has a dark underbelly. Everyone watching knows what the 1920s characters did not: Within a few years, not only their genteel way of life but also literally the whole world around them, would be destroyed. 

I am increasingly worried that 2019 feels ever more like 1929. Back then, inequality was at an all-time high. Authoritarian nationalism was on the rise. World War I had exploded the old global order without creating a new one. Then the stock market crash of October 1929 ignited the horrendous cascade of depression, fascism and World War II —arguably the worst 15 years in history.

Fast forward to today. Three intersecting geo-economic and geo-political trends feel a lot like an update of the 1920s:

  • China and the United States seem increasingly determined to decouple their economies from each other — making a second Cold War a reality and superpower war more likely.
  • Populism seems here to stay — eroding the foundations of democracy and increasing the chances of international conflict.

The notion that we could be even remotely near another global paroxysm will strike many as ridiculous and unthinkable. But that’s how everyone at Downton Abbey felt too.

What can we do to ensure the 2020s are not a replay of the 1930s? 

The new big idea in Washington and in Beijing is that, after forty years of ever more engagement, the world’s two leading economies should “decouple” to further their own economic innovations and to strengthen their national security.

I think that is about the worst thing that could happen, and not only for the obvious reason that it would destabilize the global economy and increase prices for consumers all over the world. Decoupling would also jettison all this economic ballast that has stabilized China-U.S. relations for decades. With flash points like Hong Kong, the South China Sea and Taiwan, tying the hands of each side by binding their economies together is the best way to keep the peace. Decoupling would free up militarism on both sides. 

It is easy today to deride American engagement as having failed to change China. But it has had the massive benefit of reducing the likelihood of superpower conflict.

Turning to the future of work, venerable institutions like McKinsey and Oxford University are predicting that automation might eliminate half of all today’s jobs.

Any job that can be automated (routine jobs that require rapid, error-free repetition) will inevitably face obsolescence. But non-routine jobs — not only high-tech jobs for coders and engineers but also personal services jobs like nurses and teachers — are in high and rising demand and aren’t vulnerable to automation.

We need to prepare more people for the world of non-routine work. That means not only more education for more people, but also education that is better targeted. And that doesn’t only mean more computer coding bootcamps. Many of the future’s best jobs will require “soft skills” like teamwork and empathy, about the furthest frontier for robots.

Finally, when it comes to politics, “leadership” is the inevitable bromide to reverse the nativist, anti-immigration and anti-globalization sentiment so prominent today. But providing this leadership means more than political rhetoric. What we need is politicians who speak plainly about deep realities and difficult solutions.

We need leaders who defend technology and globalization by both explaining how they work and how societies have benefited from them. Consumers would lose big time from reversing these megatrends — and not just because of tariffs. Having everything from clothing and steel to smartphones and computer chips “made in America” sounds good — until you realize just how much more consumers would have to pay for them.

Leaders should not only show real empathy for the people who have been dislocated by technology and globalization but also present compelling plans for extending the benefits to them. Education is the answer. Issues of access and affordability are no doubt important. But we must also focus on changing education to match the jobs of tomorrow.

Are we fated to re-live the horrors of the 1930s? Certainly not. But we must acknowledge the profound challenges in front of us. “Downton Abbey” is wonderful to watch. But its underlying point is that the naïve optimism of the 1920s was breathtakingly dangerous. 

Geoffrey Garrett is dean and professor of management at the Wharton School of the University of Pennsylvania. Follow Geoff on LinkedIn.

Tags Anti-globalization movement China China Downton Abbey Globalization Mckinsey Taiwan Trade World history

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