Who Are The People Left Behind?

Since the Brexit vote, much has been made about the people left behind. This is a class of people who are closely associated with the election of President Trump and, as soon as we have seemingly interlinked events, it has been pronounced to be a trend. There is a world of difference between Brexit and the election of President Trump, but it does pay to consider the similarities between them, especially in terms of what they may bode for the future.

Exactly who are the people left behind? That is a hard question to answer because it is such a broad category that encompasses a wide variety of life experiences. In one context, they are working people who are struggling to make ends meet - the 'JAMs' (Just About Managing) who have entered our discourse. In another context, the people left behind are portrayed as an almost feral under-class, who are not working and are reliant upon a combination of state hand-outs, work in the black economy, and petty crime, to get by. There is an element of truth in both of these caricatures, but it is not the whole truth.

It might help if we were to consider how this situation came about. Over the past 40 years, we have seen the constant decline of the white working class. In the 1970s and 1980s, this was a phenomenon brought about by the automation of factory processes. This was a response to the labour militancy and wage inflation of the 1970s (robots don't strike, take extended tea breaks, and demand ever rising pay increases). It was given a political edge in the 1980s that expressed itself in the popularity of the Thatcherite social aspiration.

The direction of de-industrialisation changed in the 1990s and 2000s. Empowered by improved global transport links, the exercise of organisational control using the Internet, and the availability of very cheap labour on a global scale, companies moved their already de-populated manufacturing from Europe and North America to, primarily, East Asia. Those manufacturing jobs that survived the wave of automation were shipped abroad.

At this point, we might ask about what happened to the displaced labour. The impact of the wave of automation was to swell the numbers of unemployed. The 1970s and 1980s were decades of mass unemployment. In the 1970s, unemployment stayed within the band of 4% to 6%. This was at a time when full employment was a policy objective. In the 1980s, full employment was no longer a policy objective and the unemployment rate rose to 12%, stayed in that region for the best part of the decade, and then started to fall until the early 1990s.

In John Major's recession of the 1990s, the unemployment rate went from 7% to over 10%, but the nature of it was quite different. Whilst Thatcher's recession of the 1980s was essentially a blue collar recession, Major's recession was essentially a white collar one. The impact of automation had moved from the factory floor into the office. There then followed a long period of prosperity during the New Labour years. Unemployment fell from over 10% to under 5% in this period. During the financial crisis of 2007, it rose again to 8%, but has trended downwards over this decade to currently stand in the region of 5%. We now find ourselves at broadly the same place as we were in the 1970s, when full employment was a target objective of government. Why don't we have mass unemployment with all of this de-industrialisation?

The surplus labour displaced by the decline of manufacturing has been absorbed by the growth of the service sector in the economy. Manufacturing, as a percentage of GDP, has declined from over 40% in 1973 to just 19% in 2009. The important change here is that service sector jobs, compared to manufacturing sector jobs, tend to have a wider span of skill sets and a much varied degree of productivity. Some jobs, such as specialist legal staff, are highly skilled and highly productive, and command very high salaries. Some jobs, such as flipping burgers, are relatively low skilled and have low productivity, and consequently are stuck in the region of the minimum wage. This is really important because it is a critical factor in explaining the dramatic rise in inequality over this period.

To the narrative of de-industrialisation, falling productivity, and growing inequality, we need to add the final toxin - immigration. The former Chancellor, George Osborne, used to boast that the UK, between 2010 and 2015, created more jobs than the other EU 27 nations together. In the absence of mass unemployment, one can see that immigration was an employment escape valve that prevented wages from rising amidst a potential labour shortage. The evidence suggests that immigration has helped to keep wages low, and this has fuelled the resentment towards newcomers in some traditional working class communities.

We can focus on the impact of immigration in the jobs market, but that is not the whole story. Coupled with the immigration of the last 15 years or so is the era of austerity since 2010. The scope and provision of public services has been reduced significantly. There is fierce competition for school places, hospital beds, even library books. However, the impact of austerity has not been spread evenly. It has disproportionately been felt in local authority provision - the point at which most state provision is enjoyed by most of the population. It has created the feeling that government is some remote object and has nurtured a resentment across England. Local communities feel that they have not received their fair share of public resources, and that London has received far more than it's fair share. This is borne out by the data, local authority spending per head is far higher in London than elsewhere in England. It has created an anti-metropolitan mood in the country.

That mood was expressed in the Brexit vote. It is seen that London benefits greatly from membership of the EU, whilst the rest of the country pays the cost in terms of depressed wages and over-burdened public services. A similar phenomenon has been experienced in the United States. It has the familiar theme of factory automation followed by off-shoring. In the face of stagnant wages, people maintained their standard of living by taking on debt. The credit crunch exposed the perils of this strategy, which has fuelled much of the anger in the US. The focus in America appears to be more on jobs moved abroad than in the UK, but it also has the toxic narrative of immigration holding down wages and burdening public services. This is the backdrop to President Trump winning the US Presidential election.

In considering who the people are who have been left behind, there appears to be a sharp dichotomy between those who have gained from the process that we could view as globalisation - the movement of jobs out of the US and UK, and the movement of people into the US and UK - and those who have lost from it. The stark rise in inequality suggests that the mechanisms to allow the 'winners' to compensate the 'losers' are either not in place or are not functioning properly. This is what is fuelling the anger amongst those left behind.

The angry people left behind have given us Brexit in the UK and President Trump in the US. Both sets of voters see a form of disengagement as the answer to their problems. Perhaps they are right? However, a far more interesting question concerns what happens if they are wrong? What happens of Brexit goes badly? What happens if President Trump fails to 'Make America Great Again'? These are questions to which we shall turn in the future.

Stephen Aguilar-Millan

© The European Futures Observatory 2017

A Long Fuse Slowly Burning

It is not often that a single graphic can encapsulate an incredibly complex issue both succinctly and simply. This chart does. It shows how the employment prospects for white, "working class", American men have declined over the past twenty years. I suspect that if we were to reach back to include the twenty years before that, then a similar trend would be shown as a consequence of de-industrialisation.

What does it tell us? If you are a white male, with a basic education in the US, then your employment chances have significantly reduced over the last two decades. What it doesn't tell us is that diminishing employment prospects are also associated with diminishing health prospects, with the reduced chance of anything more than a catastrophic old age, and that these reduced prospects will be passed on to your children and grandchildren. This is why white, male, working class voters in America are angry.

At present, they are turning to President Trump for their potential salvation. He may be able to pull the rabbit out of the hat, but we take the view that he is more likely to do more harm than good to the US economy. Just supposing he does harm the US economy, and the employment prospects for this group of people continue to decline, what happens next? Just how more angry can they become? If they are that angry, what will they do?

I have no ready answers to these questions, but they deserve some thought.

Stephen Aguilar-Millan

The Future Growth of Suffolk

This was a session organised and hosted by the Suffolk Chamber of Commerce on behalf of the planning authorities in the English county of Suffolk. The authorities want to consider what the business environment in Suffolk might look like in 2050 so that they can ensure that the vital infrastructure is in place to facilitate that development. The evening was split into three sections - an informal networking session, followed by a briefing that framed a number of smaller group discussions, and finally a plenary session to bring together all of the smaller group discussions. From my perspective, it allowed me to get a feel for how the future is viewed and handled by non-futurists.

In my approach to the first part of the evening - a series of informal conversations - I thought that I could probe into how far the audience had embraced the future. It was, of course, an entirely unscientific sample of those attending who I spoke to, but it did manage to give me an idea of the futures literacy within the room. I managed to speak with transport and IT professionals, and I found their responses quite interesting. When asked about the policy towards autonomous vehicles, one member of the transport team didn't know what they were, let alone what the policy was. Equally, when asking about the transport policy towards drone based delivery services, once again this was news to the people responsible for such policies. I also tried to touch upon the issue of using AI and robots as care assistants (remember, we were looking out to 2050), but I was told that as we couldn't define intelligence, we would be unable to construct an artificial intelligence. I was disappointed by this part of the evening because I had been hoping for more. I had forebodings that the evening would contain a low degree of futures literacy.

The briefing section that followed the networking section framed the later conversations. 2050 was the planning horizon for the exercise. The focus was on jobs, transport, and housing. We were told that the organisers wanted:

"all the key people to come together to make stuff happen".

The exercise felt quite top down, but it did have a specific goal. Apparently the current GVA in Suffolk is £34 billion per annum, and the ambition is to drive that number to £45 billion per annum by 2050. In doing so, we would determine the place of Suffolk in the world.

This intrigued me. The vision of the future we were presented with was a Suffolk in 2050 which is well connected, has housing in the right place, has a skilled workforce to meet future needs, has a working transport infrastructure, has investment opportunities, and which has a high quality of life. Quite an ambitious list, but who wouldn't want those things? I was a bit surprised that the wish list had a heavy focus on the physical infrastructure, whilst the digital infrastructure was unmentioned. It was as if we were being asked to prepare Suffolk to meet the challenges of the 1930s!

It was at this point that we were introduced to the SPIF - Strategic Planning & Infrastructure Framework. This is the chosen delivery vehicle for the vision. It has a pathway to 2050 that contains an ambitious economic vision that balances both local and national priorities. Those of us accustomed to corporate briefings were starting to feel a bit over-full of management-speak by this point, but I kept with it. I'm glad that I did because it was here that the bombshell was dropped. To achieve this vision, 95,000 new homes would be built (i.e. building at about twice the current rate) and 46,000 new jobs would be created. These communities would be placed into an enhanced physical infrastructure that develops relationships across local authority units.

We were presented with three scenarios in which the future is to be framed:

1. Development is dispersed around the county in a more or less even fashion.
2. Development is concentrated in the core county town of Ipswich.
3. Development occurs along the existing transport corridors.

The conversation in the workshops was supposed to focus on the roll out of these competing scenarios.

Our particular workshop tended to ignore this instruction. We were far more interested in learning where the core vision came from and contemplating the chances of success of a plan that is given - almost imposed - upon a community. A number of inconsistencies were pointed out. For example, based on the numbers we were given, there would only roughly be one new job for every two homes constructed. This does seem to be a weakness. It relies upon a demographic model of the fragmentation of family life. There are grounds to believe that this assumption may be wrong (i.e. family life will be more concentrated by 2050 than it is today), in which case one could question the entire reliability of the exercise with regards to housing.

Little consideration was given to what the jobs of the future might look like. The locations outlined in the three scenarios might be entirely unsuitable for a future workforce, but there was little evidence of sensitivity analysis to these core assumptions. Upon questioning, it appears that the authorities participating in the exercise have only a minimal budget to actualise their plans. They don't even have the money to build the roads or houses! In the light of this one has to question the validity of the whole exercise.

After the smaller workshops, we returned to the main auditorium for a plenary session, where each group reported back the two main conclusions of their deliberations. These were a mixed bag of conversations. It is hard to discern a primary theme throughout the reflections. A far more complicated and inter-related set of concerns was raised. For example, it was noted that the conversation needed a delivery framework if it is to be more than just conversation. Implementation needs a robust plan, but one which has sufficient flexibility in delivery. However, infrastructure investment is front loaded, and once started, tends to lock in a certain course of action. If that course of action has a poverty of ambition, then the whole exercise will have become the result of a pointless talking shop.

Listening to these points as they were hurried out was, in a way, inspiring. We were given 16 elements (2 points form 8 groups). It ought not to be beyond our skill to be able to stitch these elements together into a single working system, one that balances the various challenges and inconsistencies. I wonder if that work will be undertaken?

All in all, I found that the evening lived up to expectation. Prior to the event, I was of the view that the agencies involved had not really embraced the future. I feel that this expectation was realised. I was dubious of the likely success of an exercise that is presented as a top down plan. I think that I still have those reservations. I am very uncertain that the core assumption - that the future will be very similar to the past, only more of it - is a reasonable one. We were looking 33 years ahead. It was like assuming that 2017 would be broadly similar to 1984, only more of it. When we put it that way we can see how questionable that assumption is.

This isn't to give up on the exercise. It badly needs a dose of futures thinking. In my opinion, the evening demonstrated a low degree of futures literacy. However, that does create an opportunity to inject a bit of future thinking into the planning sphere, if the planners are willing to accept it. Perhaps we may provide this dose through a pro bono project?

Stephen Aguilar-Millan

© The European Futures Observatory 2017

"War With Russia" by General Sir Richard Shirreff

"War With Russia" by General Sir Richard Shirreff

Coronet 2016

ISBN 978-1-473-63225-7

Normally the scenarios I read are not as long as this one. They also tend to be set a bit further in the future than this. The book outlines the story of a military conflict between Russia and NATO between May and August 2017. The author, as a former Deputy Supreme Allied Commander of NATO, writes from a position of some authority on the matter.

The book contains a message that we all ought to heed. The story is a simple one. Emboldened by his success in Ukraine and Crimea, encouraged by the apparent weakness of the Western Powers over Syria, President Putin decides to roll the dice and invade the Baltic States. The political case is not as weak as some might think. There is a degree of institutional prejudice against the Russian speaking citizens of the Baltic Republics to cause something of a grievance. I was unaware of this prejudice prior to reading this book. It is this discrimination that gives President Putin the opportunity to claim to represent the oppressed Russian minorities.

At that point, the story has a familiar feel. Russia engages in a campaign of disinformation and hybrid war. An incident is fabricated that allows the full scale occupation of the Baltic States. The question gets very interesting when assessing the response of NATO. It is at this point that the underlying assumptions mould the course of the narrative. The key assumptions could be seen as concerning the American response, the European response, and the response from within the Baltic States.

One could argue that the whole scenario became tainted from the second sentence. In it, the author states that, in 2016, the United States elects its first female President. The policy stance that she adopts is to accommodate China and to confront Russia. We now know that this assumption is not correct, and the United States has elected a President who seems willing to accommodate Russia and to confront China. Right from the outset, the reader is left with the question of whether or not this incorrect assumption invalidates the scenario.

On the whole, we take the view that it doesn't. The author makes a plausible case that there are enough US military assets in Europe, posing a sufficient threat to Russian military assets, to ensure that combat is engaged between American and Russian forces irrespective of the political stance in Washington. I am quite willing to believe that the NATO trip-wire in the Baltic States works. From that point on, the narrative becomes a question of whether the Russian forces can consolidate their position in the Baltic States before the American military reinforcements arrive.

Much depends upon how that question is answered by the European NATO nations. The story has the Baltic States invoking Article 5, but the North Atlantic Council being rather equivocal about it. The sympathies of the author leak out as the British representatives are keen to support the Baltic States, the Greek and Hungarian delegates are against collective action, whilst the German representative takinges a non-committal position. I have no doubt that the author writes from a position of authority, but I did find the national stereotypes to be a bit wooden.

In any case, within the story, the political wrangling becomes academic because the Russian forces make the mistake of sinking a pair of British and German warships in Riga harbour. This act, almost automatically, brings the European NATO nations into the conflict. It is at this point that the author makes his political point aimed at domestic UK politics. Without the support of American forces, there is little that the European NATO nations can do to confront the Russian forces.

Britain attempts to send an expeditionary force on HMS Queen Elizabeth - Britain's single aircraft carrier that has no aircraft. Needless to say, the ship is sunk by a Russian submarine, as the episode provides a literary device for the author to outline a number of consequences of the reductions in UK defence spending since 2010. This serves a something of a soapbox, but the points are well made from a very informed source. The theme is then widened to cover the consequences of the European NATO nations failing to keep to the agreed level of defence spending of 2% of GDP. It seems that the British cupboard is not the only one bare.

If the American forces have yet to arrive, and if the European NATO forces are too ineffectual to intervene, it is left to the Baltic States to provide their own defence. They are over-run quickly by the Russian forces, but then engage in a form of guerrilla resistance through what the author terms as the 'Forest Brothers'. I was really surprised to find that this form of civil defence actually exists, is trained, and is armed and ready to engage in this type of asymmetric warfare. The author has them as a very effective force. Whether or not they would be remains to be seen. Either way, the Forest Brothers tie up large numbers of Russian troops until the NATO counter-attack is prepared.

I liked the way in which the counter-attack was conceived and delivered. It is essentially a Special Forces operation, with a focus on the occupation of Kaliningrad. It commences with a massive cyber-attack on the Russian command and control system orchestrated by GCHQ, followed by the Russian tactical nuclear facilities being secured prior to the occupation of Kaliningrad by British and US Forces. I found the politics here interesting. The remaining European NATO allies are not told about the attack until it has occurred simply because the British and American staffs don't trust the other European NATO allies. I have no doubt that not all allies are as equally reliable as each other, but I did find it interesting that the author suggests this line of approach. As I have said before, I have no doubt that this is an informed positon born from experience.

I found the end of the scenario weak. Kaliningrad is occupied, Russian forces withdraw from the Baltic States, and the Russian nuclear capacity is significantly degraded. This neatly occurs in three months and finishes with a rounded and well polished ending. I did like the setting of the final chapter - Brown's in Oxford, a restaurant I happen to know and like. That helped me to overcome my antipathy towards an all too convenient ending.

The plot had five significant pivots, each of which suggests an interesting game in itself. The first pivotal point was when the Russian forces attacked the US forces stationed at the Lielvarde Air Base in Latvia. This gave the Americans sufficient cause to consider that war had been declared. What would have happened if the White House had interpreted the situation differently? The incident could have been interpreted as a regrettable loss of life caused by the ground crews being in the wrong place at the wrong time. It would be interesting to game the American response from within the White House Situation Room, with some arguing for war, whilst others argue for restraint. Given the campaign rhetoric of President Trump, there must be some doubt in European capitals as to whether or not a President Trump would support the invocation of Article 5 in this case. It is certainly an interesting situation to model, both from a European and an Asian perspective.

The next pivotal point came when the Russian air force made the mistake of sinking a British and a German warship in Riga harbour. This event served as a plot device to ensure the participation of the European NATO nations in the defence of the Baltic States. Just suppose that Russia didn't make that mistake. Could the support of the European NATO states be relied upon in the event of a Russian invasion of the Baltic States? This is an interesting situation to game. The author has Britain as an advocate of war, Greece and Hungary as advocates of peace, and Germany as undecided one way or another. Collectively, how would the European NATO allies decide to act? It would be interesting to game the response from within the North Atlantic Council. It is by no means certain that a collective decision for war could be agreed.

The story then moved on to the third pivotal point where HMS Queen Elizabeth is sunk by  Russian submarine. The author renders the ship almost defenceless by assumption. What if the ship was not as helpless as the plot has it? There is an interesting game about political co-operation that could be played out here. For example, could the Royal Navy have "borrowed" some aircraft from, say, France or the US? Couldn't the navies of the European NATO allies have provided a degree of escort protection? All of this pre-supposes a degree of political co-operation that it would be interesting to game.

An important aspect of the story is that the Baltic States vigorously resist Russian occupation. It is important because the occupation diverts defending troops away from Kaliningrad. What if the occupation of the Baltic States had occurred without a great deal of resistance? What if the Russian forces had been more successful in quelling the resistance of the Forest Brothers? These are situations that could give rise to some interesting games - both at the political and the military levels - especially when modelling the post-conflict political settlement.

This led the story into the final key pivot - the occupation of Kaliningrad. The set piece contained a number of assumptions that would have been interesting to game differently. For example, the cyber-attack launched by GCHQ might not have been as effective as the story had it be. Alternatively, the Russian nuclear threat from Kaliningrad might not have been dealt with as effectively as outlined in the book. It seems that there are a number of ways to wargame this aspect of the book differently. What would have been the outcomes from varying some of the key assumptions? This rounds the circle quite nicely because those outcomes might have argued taking a different approach in the first place.

It all speaks to the purpose of the book. This is an exploratory future that has a purpose - to warn us of the dangerous path which the author sees us as taking. It is written as a polemic, which can sit awkwardly at times. The author also brings to the book a number of conflicts which he appears to have had in his professional life. There are a number of complaints against what is seen as the spreadsheet mentality at the top of the MoD - an undisguised attack on a former UK Defence Secretary. I found this to be too simplistic. Maintaining a defensive posture during a time of austerity is far more complicated than the author makes it out to be. One of the consequences of living in a democratic framework is that if the electorate prioritise welfare over defence, then it is only a matter of time before politicians accede to those wishes. Of course, it is perfectly acceptable for the military to argue differently to the public, and that is exactly what this book does.

The book contains a tale of a future war in Europe. It is fairly limited in that it restricts itself to this topic. As I was reading the book, I gave some thought about the wider diplomatic impacts of a Russian invasion of The Baltic States. One theme that came to me time and again was how China might react within this crisis. Would the government of China do nothing? Would they incline towards NATO in order to seize territory, especially energy rich territory, from Russian Central Asia? Or might the Chinese government be tempted to sympathise with Russia as a means of expanding into the South China Sea? These imponderables were not included in the book, which, to my view, rather weakened the case. An open conflict between Russia and NATO is unlikely to be contained as a regional conflict and has the potential to erupt on a more global canvass very quickly.

With the uncertainty surrounding US policy in the near future, a tale of an emboldened Russia gains a certain amount of currency. We hope that this is a future that doesn't come to pass. If it does, then we cannot say that we haven't been warned. It may be that actual future events do not end quite so favourably for us as they do in the book.

Stephen Aguilar-Millan

© The European Futures Observatory 2017