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Friday, September 24, 2021
The World's Darkest Hour
Chan Kung

I must say that the world has now entered its darkest hour, as it loses its sense of direction. All that can be seen are problems, troubles, predicaments and indescribable anxiety.

While it is true that the U.S. stock market is bullish, too much money has been put in this. Whether this can be explained by Modern Monetary Theory (MMT) remains uncertain. The political struggle between the Republicans and the Democrats has eclipsed rationality, where politicians are opposing whatever supported by their rivals. The measures in response to real world situation have left the elites educated in the best universities like Harvard, Yale, MIT, Brown, and Princeton at loss and helpless.

Then there is the crisis of the evacuation of U.S. troops from Afghanistan. President Joe Biden's team and the Democratic Party did not expect the "Fall of Saigon" to replay itself in Kabul. A large number of Afghan refugees poured into the United States disorderly, more so than what was imagined by the American elites, far surpassed the professional immigration needed to support the American economic and working environment. In addition, there are hundreds of thousands of immigrants from Central and South America, and thousands of them have successfully crossed the border of Texas and entered the U.S. The Biden administration does not know how to react to this. They first cancelled the border wall plan, and then they were busy condemning the border police for using unethical means to prevent refugees from rushing across the U.S. border.

Of course, the impact of the COVID-19 pandemic lingers. American society is at war and confrontations over mask-wearing, including one after another street protests because of this. Perhaps compared with these, because the Australia-U.S.-UK (AUKUS) tripartite agreement and that Australian breaking its submarine deal with France and Europe appears to be a "trivial matter". French President Emmanuel Macron may choose to "forgive", but of course Europeans will remember it. With so many incidents, no wonder the former U.S. President Donald Trump predicted the destruction of the U.S. by 2024.

The U.S. is of course not the only country facing numerous troubles.

There are also many problems in China. Facing the COVID-19 pandemic, China has adopted the most costly method to prevent the outbreak, mainly by the means of testing and lockdown. This of course means the cessation of economic activities, which has affected not only the country itself, but also international trade. China's economic growth now seems likely to come to an unprecedented low level.

There is also the outbreak of debt and industrial problems. The predicament faced by Evergrande Group may just be a small example in China. The situation facing China is accumulated for more than a decade since 2008, where it relied on estate and infrastructure. The capital scale formed by construction and development is truly astonishing, which may be tens of trillions or hundreds of billions yuan. Participating real estate companies and local governments cannot have the same development model or the same development path. Other companies and even local governments will also encounter the same problems encountered by Evergrande Group. The debt crisis has just begun.

There are still many problems facing China. According to the social classification theory, China has shifted from a production-oriented society to a consumption-oriented society. The new economic normal is necessary, while real estate development is unsustainable, and even supply-side reforms can hardly be neglected. The problem lies in the path, scale, and method. How can all these alleviate problems in the society remains unknown.

Other than the United States and China, Russia and Europe have their own problems and troubles. The buzzword "globalization" that has lost some of its popularity tells us that all the negative effects of this world are also global and they are related with each other. If the economic growth rate due to the low base in 2021 is not considered, countries in the world are also experiencing slowing economic growth, instability in the financial capital market, impact of aging population, the influx of immigrants, social disorder, and the intensifying regional conflicts. It is even harder to imagine how bad the economy will be in 2022. In the current world, even wars and conflicts are suddenly increasing and magnifying. In a short period of time, we have seen the war between Armenia and Azerbaijan, and between Israel and Palestine. The situation is not exactly peaceful between Turkey and Greece, and there is unresolved war between Russia and Ukraine, let alone the chaotic situation in the Middle East and Afghanistan.

Helplessness and confusion permeate world, and one could not help but wonder, how could all these happen?

I have actually written about this issue in the discourses on globalization a few years ago. For many economists, the issue of globalization is merely an intriguing economic one, but for me, it is obviously not the case. Globalization is also a cyclical phenomenon with highs and lows. There are many forces driving globalization to the low point, but the main forces are the aging population, the reorganization of financial relations, and the restructuring of global production relations.

Unfortunately, although the current economic development provides many analytical tools that are changing day by day, its basic framework has not changed much. This framework boundary restricts people's vision and restricts the way people view the world. It is precisely because of this that while people are awakening for globalization, they ignore the major changes brought about by globalization, which will also affect the societies of all countries. This is a social reorganization at the level of production relations that has not been completed. As a result, dissatisfactions permeate in the developing countries, and the waves of protest against globalization began one after another. The United States had "Occupy Wall Street" movement, then there was BLM. All these waves of social dissatisfaction are present in all societies. As the dissatisfactions show a growing dominant influence, it is impossible for them not to be used by politicians, so Trump came to power. I believe that Trumpism will continue to exist in the post-Trump era. In fact, the Biden administration is deeply affected by it, and the way he runs the country is not dissimilar with how Trump did it in many areas.

As a realist, I do not believe much in ideology. I think it is an excessive simplification to blame the world's problems entirely on ideology. There are practical reasons for problems to happen. As for the solutions to these problems, we must seek answers from the perspective of historical realism. From the perspective of historical realism, the current world is not a world that has a bright future; on the contrary, it is a world of troubles and confrontations, one that is now in a kind of darkest hour. To get out of such predicament, we cannot rely on the political talents shaped by elite education. The post-war social science theories are also crumbling as well. Historical experience shows that at this kind of time, the world can only rely on courageous, capable leaders.

Such darkest hour is the problem facing the world today, and the world should be aware of it.

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