EPILOGUE:
The genesis of the nation-state is the stipulation of a social
contract by which people form nations to maintain social
order within them. The basis of that contract depends on the
willingness of citizens to relinquish some rights to their government
in exchange for peace and stability. Every politician’s
legitimacy springs from the consent of the electorate to ratify
this social contract.
At the root of the contract is a belief in the state of nature,
synonymous with anarchy and chaos. In this state, an individual’s
action is bound only by his or her conscience, as life takes
place outside the rule of positive law. Rogue economics resembles
such a state of nature—chaotic, anarchic, and lawless.
Inside it, globalization outlaws act to their exclusive personal
advantage.
Though occurring now for the first time on a global scale,
this anarchic state of the economy has existed before. The
Industrial Revolution witnessed a massive economic upheaval
guided by lawless greed and rampant exploitation. It embodied
many of the rogue characteristics of the present economic
turmoil: slavery, income inequality, piracy, prostitution, pollution,
criminality, and fraud. It also shared with the current
situation many positive outcomes: rapid economic growth
and technological advancement. When the dust eventually settled,
the world saw itself redesigned by the ruthless, invisible
hand of capitalism. China and India no longer held the first
rung as the largest contributors to world GDP; England had
surpassed them.
Yet, during the Industrial Revolution, the privileged classes
were largely unaware that the great transformation that was
improving their lives came directly from a brutal and exploitative
economy. The concept of human equality had just arrived,
and many people remained skeptical and suspicious of it,
associated as it was with violent upheavals and revolutions.
Today, Western consumers, too, are largely blind to the
dark forces that fuel the current economic changes. The market
matrix and the illusionist theater of modern politicians
prevent them from seeing the economic anarchy that is
sweeping across our planet. Trapped in a web of fantasies
and commercial illusions, they do not see the spread of rogue
economics at the fringes of their world. Yet, day by day, its
corrosive force increasingly penetrates our sheltered, fantastical
world. The pressure of the outlaws, the spreading of
corruption and greed, has become apparent in Western society
and is eroding the very foundation of the nation-state,
which becomes weaker and weaker. As the transition to the
market-state proceeds, the state progressively risks becoming
a powerful instrument controlled by globalization
outlaws.
Myths and illusions have replaced ideology as the source of
the legitimacy of politicians. But the populism of the new
myth manipulators can and will fail as people inevitably break
through the tangled web of lies and illusions that imprisons
them.
Those on the front lines of the battle that is reshaping our
world are the masses of the developing world, the exploited
men, women, and children, the middle classes of the Western
world, the young disenfranchised inhabitants of the barrios of
the global village—all must fend for themselves. They live in
constant fear because they rightly sense that the state can no
longer protect them. Fear of the environment they live in, fear
of globalization, fear of the future prompt them to retrench
to ancient forms of community. Modern tribalism has
emerged as the natural response of the residents of the global
village to rogue economics.
Modern tribalism seems to be the winning formula for coping
with the economic strains of globalization and providing
the socioeconomic structure to prosper inside the anarchy of
rogue economics. The economic miracle of China and the
exceptional success of Islamic finance stand as testimony to this
new type of socioeconomic tribalism. As this formula spreads
across the vast impoverished Chinese andMuslim populations,
its economic benefits are likely to trickle down, and with economic
growth, people will enjoy prosperity and feel entitled to
social order and stability. At that point, they will want to negotiate
a new social contract. It will not look like Jean-Jacques
Rousseau’s version to end the state of nature described by
Thomas Hobbes in the Leviathan, because the new social contract
will be drafted in China and the Middle East.
The Industrial Revolution did end up benefiting the poorest
sections of society, the grandchildren of the starving peasants
forced into the Dickensian work houses. Economic exploitation
paved the way for workers’ associations and trade unions
that sought to protect the rights of their members against
industrial capitalists. Trade unions became a type of economic
tribe by sheltering workers from the abuses of industrialization.
Fear of their working environment mixed with a sense
of having been abandoned during the turmoil of the Industrial
Revolution prompted workers to form unions. Eventually,
economic growth brought prosperity, and trade unions negotiated
better labor contracts. Socialism and Communism, as
political ideologies, were born out of the workers’ unions’
early struggles. Left-wing parties waged battles for equality,
and these included the renegotiation of the social contract.
A similar scenario is likely to emerge when the dust created
by rogue economics eventually settles. The winners may be
the populations of China and Islam, who have so much to
gain. Though it is too early to predict, we can imagine some
of the main provisions and stipulations of the new social contract.
For a start, the post-globalization social contract will
define a clear separation between the state and the individual.
While the latter will have a free hand in commerce and economics,
the former will maintain the monopoly of politics,
which will include foreign policy and monetary policy. Islamic
finance will provide the structure of the new monetary standard,
which will once again be pegged to gold, as we saw after
the Industrial Revolution. The gold dinar will become the
benchmark of monetary stability and receive a global endorsement.
The fiduciary nature of money will require the
involvement of the state to guarantee that paper money maintains
its value in gold. People will willingly delegate such
responsibility to the politicians, and in return, they will have
stable exchange rates.
Politicians will refrain from intervening directly in commerce
and economics. Islamic finance, with its encoded value
system, will reduce and eventually crush the power of the outlaws.
The rogue nature of the economy will be trimmed by
sharia economics. The outlaws will be shunned through a
code of ethics that prohibits such businesses as gambling,
prostitution, pornography, and trade in illegal drugs. Hedge
funds and private equities will be regulated by a financial system
that rejects the concept that money can create money.
Patents and trademarks will disappear, reducing capitalism’s
ancient privileges, giving impetus to hard-working
individuals, who will flourish thanks to this form of liberalization.
History will lose its shine and be recycled to fit the
needs of the moment. The quality of fake goods will improve
until it becomes all but impossible to distinguish the original
from its replica. Western brands’ commercial edge will vanish.
This simple fact will trigger a massive redistribution of
wealth at global levels.
Central governments will delegate key responsibilities to
local authorities. Taxation, for example, will be levied
locally. Central governments will, however, retain the
monopoly on defense. In exchange for physical protection,
communities will pass along a share of their wealth to the
central governments.
The media will see their power reduced by the proliferation
of information on the Internet. As long as the contractual parties
stick to the new social contract, political issues will be
debated but will not lead to great upheavals.
The new world order will be ruled by an invisible axis
stretching from Beijing to Cape Town. Europe and America
will lose out. Africa and theMiddle East will provide the necessary
resources for new global economic leadership.
Eventually, nanotechnology will consolidate this scenario, but
that is a topic for another book.
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