By Daniel Archibald | CFA
Only a few short months ago the thought that Britain would vote to leave the EU, or that Donald Trump would be the Republican nominee for US president, or that Bill Shorten would get to within a few hundred votes of becoming the prime minister of Australia - any one of these scenarios - would have been rightfully laughed down. But here we are, mid-2016, with much of the political world in upheaval. The democratic process that would seek to protect the rights of the citizen has been turned largely on its head. The revolution has begun.
As with most revolts against the establishment, the momentum behind this year's surprising vote results has been the anger of the middle class. With feelings of disenfranchisement and the belief that the system is unfair, the 90% have spoken en masse. But what exactly are they saying:
Fair share
Current research has highlighted the low growth in wealth for the lower and middle classes in much of the developed world. Though measures of real wealth are difficult to gauge (e.g. how do you measure the benefits of owning a smartphone or having access to the internet), it is apparent that wealth, as measured by real wages, has been stagnant for the lower and middle classes for much of the past few decades. This was evident in the Brexit vote, with regions that had seen a decline in real wages over the recent past voting heavily for a change to the system.
Anti-globalisation
Like with many economically progressive ideas, benefits can tend to more clearly favour the rich and white collar end of town, whilst the poorer parts of the community have to deal with the negative consequences. This is a core reason for the anti-immigration and anti-trade sentiment that is flowing around the world. This again is about 'fair share'; even though the overall effect of globalisation is a better future, the pain for the gain is often felt more by the lower and middle classes of society. This is true of less-skilled workers who see their jobs being taken by new arrivals, or the factory-hand who sees their job being moved to a lower cost nation. And there are many politicians willing to seize upon such opportunities and promise walls in exchange for votes.
Anti-establishment
Politicians have long been one of the least liked employee group and recent trends have not helped their case for greater appreciation. At the forefront of democratic dysfunction stands the Federal Government of United States of America. The make up of the U.S., with 50 states all with their own strong legislatures, has always made it difficult for the U.S. congress to get much done, but the Obama presidency has shown just how little politicians can achieve. The deep partisanship and strong lobby network are likely the main reason for inactivity and it is this lack of accomplishment that has led to many U.S. citizens calling for a change to the way things are done. This is not a problem isolated to America, with much of the world upset to some degree with their governing regimes.
As with most things, the level of political tensions in any one area of the world will likely go through cycles. Hopefully, the anger that voters are now showing will subside in the near future. Further escalation, on the other hand, might be the start of some kind of new world order.