Navigating the New Renaissance

Professor Ian Goldin

Ian Goldin is Professor of Globalisation and Development at the University of Oxford. He is the author of numerous books, most recently, together with Chris Kutarna, ‘Age of Discovery: Navigating the Risks and Rewards of Our New Renaissance’.

The world is living through an extraordinarily confusing period of very rapid change: integration, globalisation and extremism, increasing inequality and unpredictable politics. To understand and navigate this new age, which Mikhail Fridman has called the ‘Indigo Era’ a study of the past is as significant as a focus on the present.

While history may not exactly repeat itself, the Renaissance is the moment in history that seems to resonate most strongly with the present. The fifteenth century in Europe was a period of extremely disruptive change not unlike today, and that disruption was caused by technological leaps, such as the Gutenberg press. It was really an information revolution, and the old authorities, notably the Catholic church and the priests, no longer had a monopoly on knowledge.

Ideas travelled extremely rapidly; there was a hunger to learn and humanity’s mental and physical maps were redrawn. Suddenly, we were no longer at the centre of the universe but were revolving around the sun. Europe was no longer the centre of the earth with dragons on the edge, but part of a globe. Taken together, the changes in science and the arts, as famously articulated by Da Vinci, Michelangelo and others, took Europe from being one of the more backward places on the planet in the 1450s to by far the most advanced within about a hundred year period.

So this revolutionary template is useful not only because it helps us understand how information technologies and invention go hand in hand with economic growth and globalisation, but also how, for many people, that period ended in tears. The economic disruption led to widespread hardship, which in turn fed political confusion and extremism.

In many ways the monk Girolamo Savonarola (who overthrew the Medici in Florence) was what we would today call a jihadist, a fanatical individual who believed that the waves of modernisation had led to a corruption of values. He used pamphlets to capture the imagination of people who felt left behind by the pace of change.

They saw the gold coming back from the New World being put on the domes of their cathedrals, they saw people walking the streets wearing silks, and they saw the new foods and spices, but they didn’t feel part of this progress. A feeling of resentment grew, that change had actually led not only to a challenge to everything that they’d held dear, but also a very rapid rise in inequality. The response was extremism, inquisitions and religious wars.

This seems like an incredibly close parallel to today. Since 1990, not only have physical walls been torn down around the world, but 55 countries have become democratic, China has opened up, and the Soviet Union has collapsed, along with military dictatorships across Africa, Asia, and Latin America.

Simultaneously, in 1990 we saw the launch of the world wide web, which now connects three billion humans. We have moved from a world in 1980 where only 56 per cent of people were literate, to today, when the number is 84 per cent and rising.

This exponential increase in human communication has, just as during the Renaissance, acted as a super-powered engine of creative change and disruption. It has led to the most rapid developmental progress our species has ever known – life expectancies have improved and incomes have soared – which is why I believe so strongly in globalisation.

Yet at the same time the response of citizens around the world really contrasts with the optimism that people should feel during this new Renaissance. People feel very, very frightened by change; they believe it has brought more harm than good, and they suspect that the next generation will be worse off than they have been. The life expectancy of white American males is not improving, and the chances of escaping poverty in the mid-West US today is lower than it was a generation ago.

Around the globe, people are concerned about terrorism, cyber attacks, migration, pandemics, and of course systemic crises – of which the financial crash was the most prominent example. They worry about the unintended consequences and accelerated development. They feel angry and they blame their woes on authority, which is usually represented by centrist parties. Then it’s the extremists, people like Donald Trump or Bernie Sanders, the Corbyns and the Farages, who are the political beneficiaries of the people’s desire to challenge traditional authority. Once again, this is exactly what happened in Renaissance Europe.

So the question now is how we are to sustain this Renaissance, because if the current forces of reaction are left unmanaged, if we take for granted that somehow progress just moves forward, then the anger in the street will lead to more nationalism, protectionism and xenophobia. It will lead to this period of Renaissance ending – and our time being characterised not by the most remarkable progress, but by a series of systemic crises.

So it’s vitally important that we understand how precious this moment is, how wonderful it is, and how much it will benefit the world if we manage to sustain it. In order to do so, we need to learn some hard lessons.

We need to look after and to help the have-nots who feel left behind. In a strange way, you have to be more interventionist when change happens more rapidly because people are being left behind more quickly. That intervention needs to enforce flexibility. It means that if you’re in a town in which industry is collapsing, you have to move towns, so you need housing markets and transport systems that work. It means that if your skills become obsolete, you need to retrain, so we need more flexible education systems.

But it also means that we are going to need more social welfare support, because our societies will churn in the job market much more rapidly in the future. So we need to work out how to pay for that, how to raise the money through tax, how to ensure that successful corporations and individuals shoulder their responsibility in society.

Another hard lesson is that we need to manage better the risks of being more joined up as a world. The financial crisis was a massive wake up call, because our central banks and treasuries are amongst the most effective international institutions, and yet they were completely blindsided.

On the other hand, more systemic risks, like a health pandemic, would need to be managed by global institutions like the World Health Organisation and the United Nations, but these are in fact becoming less effective as we starve them of the necessary leadership and resources, with the result that at precisely the time we need more effective global institutions, they are weak, have not adjusted to the new world and are undermined.

Another lesson we need to learn is about globalisation, which I believe is a hugely positive force. The data show that emerging markets on average are growing at three to five times the rate of the advanced economies (if we set aside countries like Syria and other failed states). At present, it’s not the case that advanced economies are the main beneficiaries from our new Renaissance. So we need to argue the case for more openness and more trade, not less.

Then there is migration, which has become the lightning rod for many people’s concerns about change around the world, as has often happened in history. But this is not borne out by the facts. Some of the countries in the world with the highest levels of migration, like Dubai, which is made up of 98 per cent immigrants, or Toronto, with its 52 per cent immigrant population, are amongst the most prosperous and stable communities and within our countries, cities like London, and New York thrive in part because they have such a high share of migrants.

I believe absolutely fervently in the economic benefit of migration. The reason why Silicon Valley is the most dynamic place in the US is because of migrants. Nor is there any empirical evidence that migration brings down wages. But we need to go out and win these arguments, as they are collectively part of the threat facing our generation.

Overall then, this new Renaissance, like its predecessor, is a period of huge opportunity, but which also presents enormous risks. If we manage these risks, if we find leaders who can defeat the Savonarolas of our day, then we stand on the brink of a new global golden age. If we fail, then a new dark age beckons.