One thread has run through my work over the past two decades – a growing conviction that we are living through a profound, global economic shift, comparable in its scale and scope with the industrial revolution. The combined impact of globalization and technological change is radically transforming the world economy, national economies, urban economies, and the economic lives of each one of us.
This reshaping of the global economy is the big story of the 21st century. No one person, and indeed no one country, can stop it – and we shouldn’t want to. But it is equally wrong to think this deep economic shift will inevitably or easily or naturally deliver the widely-shared prosperity which is the bedrock of western liberal democracy.
If you believe otherwise, look back two centuries to an earlier great upheaval that reshaped the world – the industrial revolution. It can be tempting to take comfort from that history. After all, for all its dark satanic mills, ultimately, the industrial revolution worked out pretty well. All of us in the western world are healthier, taller – well, there are a few exceptions! – richer, freer and live longer than our early 19th-century ancestors.
But here’s the rub. It took two deep depressions – the Great Depression of the 1930s and the Long Depression of the 1870s – two world wars, and Communist revolutions in Russia and in China before we figured out how to make the industrial revolution work for the vast majority of the population. And it also took the invention of a whole new set of institutions – pensions, public education, public health care, social welfare, trade unions, and even mass democracy itself.
When it comes to today’s economic revolution, a very small and very lucky and very smart group of people is already benefiting. I call this global community of economic winners the plutocrats, and they were the subject of my recent book.
But the other side of the coin is the devastating hollowing out of the middle class in the western industrial democracies. Traditional middle class jobs are being made redundant by the technology revolution or outsourced to lower-wage economies.
Figuring out how to make today’s vast economic transformation work for the middle class is the central political issue of our time. Without a prosperous, secure middle class, our national economy can’t flourish in the long-term. Our democratic society won’t endure, either.
Today’s conventional wisdom is deeply cynical about politics. We portray our elected officials as trivial buffoons at best and as scandal-ridden, self-dealing parasites at worst. What we have lost is our belief that our government represents us all, and that we, collectively, can use it to address the big challenges of our time.
If you believe in democracy – and who doesn’t? – that lost faith is a tragedy. We all desperately need to re-engage with our democratic system, in all its messy glory, and elect leaders whom we charge with the job of solving the 21st-century’s greatest tasks, first and foremost making our new economy work for the middle class.
Over the past few years, as I have been working through these issues for my book, I have felt their urgency ever more strongly. Diagnosing the problem is an important first step, but it isn’t enough. We need to do something about it.
The place for me to do that is at home, in Canada. As the lucky beneficiary of the Canadian public education system, Canadian health care, and Canadian scholarships, I owe our country everything.
We are good at rolling up our sleeves and getting the big things profoundly right. At a time when the rest of the world is struggling to live with one of the human consequences of globalization – mass immigration – Canada is a model for how to make a multicultural, multilingual community really work. We can do the same when it comes to ensuring middle class prosperity in the 21st century. Indeed, we are much better at this than the United States, where income inequality has become an economically and socially devastating chasm. We can’t let that happen to us.
We know some of things we need to do. As University of Ottawa economist Miles Corak has shown, social mobility is one of the casualties of rising income inequality and the hollowing out of the middle class. We must do everything we can to lean against that trend, particularly investing in public education, starting in preschool. Second, we need to become the world’s most attractive destination for entrepreneurship. As traditional middle class jobs vanish, we need to build a platform that makes it easy for driven, inventive Canadians to take risks and create new ones. Third, we need to find ways to realign business incentives with public ones. Toronto is leading the way here, with initiatives like the MaRS Centre for Impact Investing, but there is a lot more to be done.
Toronto itself is a central part of this story. It is a vibrant, diverse, world-class city, which has not yet become a gilded, gated community for the plutocrats, with no room for the middle class, as is happening so quickly in so many of the world’s other metropolises. We need a proud, ambitious, bold, urban vision for Toronto as the world’s magnet for the creative, thriving middle class – precisely what Jane Jacobs found when she moved here nearly half a century ago.
To do this, we need a new vision of politics and what it can and must accomplish.
Chrystia Freeland is a candidate for the Liberal party nomination in Toronto Centre. She is a former senior editor at Thomson Reuters and The Globe and Mail.