Workers against Wall Street

President Obama’s “shock and awe” statism is failing. On the eve of the midterm elections, the US ec

Gary, Indiana

We're hurtling through downtown Gary at about 75 miles an hour but Officer Lilley, at the wheel of our car, remains relaxed. He's telling me languid stories about the AK-47s that the local teenagers carry, about the gangs, the drugs, the overtime. Then the city's "shot spotter" pings an alert on to his laptop, which is wedged right next to the handbrake.

He mutters a call for assistance into his radio and swings the police car on to the forecourt of a gas station where about 30 people are running, pointing, strung out, screaming recriminations. There's been a fight, but the fighters are gone, as is the kid who decided to let off his pistol. Nobody is dead. Everybody is shouting into the face of Officer Lilley, a black cop in a black crowd, who simply drawls soothing phrases back at them.

Eventually seven police cars arrive and the cops fan out to disperse the crowd of onlookers, many of whom they seem to know by name. Two years ago there were times when the city could field only five cars in total on a night shift, but federal dollars have paid for 96 new vehicles and allowed Gary Police to re-employ 11 laid-off officers. This short, sharp exercise in armed social work is possible only because of the fiscal stimulus.

Gary is a city where 84 per cent of the population is black and one-third of the people live in poverty. It is one of the most obvious places on earth where an influx of taxpayer dollars might do some good. It has 3,000 abandoned homes and a decaying infrastructure, and its public finances stand two years away from bankruptcy. Yet what is obvious, amid these wrecked streets and impoverished lives, is how little the stimulus has achieved.

Gary's urban texture - grass and ivy over broken concrete - is testimony to what happens when an economic model fails. In its deserted downtown district, the churches, the concert hall, the theatre, the ballet studio, the Gothic apartments from whose windows steel magnates once surveyed the city's pulsating wealth, stand ruined, unsecured against intruders.

Though atypical of America, Gary's broken landscape is spectacularly typical of what has gone wrong in the country at large. Its meagre progress, two years into the Obama administration, signals the president's failure to solve America's most basic problems and to deliver to the very people whose votes put him in the White House.

The problem for America today is that another economic model has failed: one based on globalisation, cheap credit, home ownership and mass consumption. Six million Americans have fallen below the poverty line since December 2007. The median income has fallen by 4.7 per cent. In the same period, more than 2.5 million homes have been repossessed. And that only compounds the long-term problems America hid beneath the financial euphoria of the boom years - but average real wages have stagnated since the 1990s; the number without health insurance has grown by ten million in a decade and stands at 50 million.

The most basic problem is this: in a system based on credit, the credit system is not functioning. It's easy to spot the malfunction in a city like Gary: I saw one home for sale at $7,900 cash, the scrawled street-corner placard adding, by way of explanation, the word "Foreclosure". The only part of the credit system that does function is the destructive part; the "payday loans" store on Gary's main street is the only thing left with working neon signs. Most of the other shops are closed for good.

With a swollen mass of people unable to borrow, save or spend, the great dynamo of the world economy - American consumption - is sputtering. And the stimulus has not yet managed to restart it.

Eighteen months ago, the mayor of Gary, Rudy Clay, told me that all the city needed was $400m. With that, said the dapper veteran of the civil rights movement, Gary would "fly like an eagle and once again make America proud". In the event, the city was given just $266m - most of that earmarked for education - and for spending not on current costs, but on reorganisation.

Of the $24m Clay applied for to knock down derelict homes, $2m was delivered - and most of the buildings are still standing. It took 18 months for the money to pay for new streetlights to filter through the system. And, with $266m, Gary has managed to create the grand total of 327 jobs. That is more than $800,000 per job.

“We were last in line," Clay complains. "We keep pressing the State of Indiana for more money - to fix our roads, for example - but the problem is they spent all the money. They probably thought, 'Well, Gary voted in large numbers for the president, so the president can take care of them.'" A glance at the city's finances reveals a more complex picture. Its financial controls are archaic, its debts to other agencies high; and its tax base is heavily dependent on one source - a property tax that brings in 80 per cent of Gary's revenue.

In 2008 the Republican-controlled state government of Indiana brought in tax-capping measures that will, by 2012, halve the amount of property tax Gary can collect. While richer, whiter counties surrounding Gary have their own local income taxes, Gary does not - for the simple reason that there is very little income to tax. Within this system, redistribution is impossible unless the state and federal governments make it happen.

But that is where Gary's problems run into the culture war that has gripped America.The governor of Indiana is Mitch Daniels, a fiscal conservative who has made his reputation by balancing the state's books, privatising Indiana's major roads system in the process. Daniels - unlike some other Republican governors - agreed to accept the fiscal stimulus money, but on condition that the state retained control. He then decreed that the stimulus could not be used to fix the balance sheets of near-bankrupt city governments like Gary. Only major, one-off projects would receive federal dollars.

So, in the midst of the largest fiscal stimulus since the Second World War, one of America's poorest cities is being forced to cut taxes and cut spending. By 2012 its entire tax take will not be enough to cover the police, fire and ambulance services. Officer Lilley and his colleagues know that all the problems that fuel the crime - drugs, truancy, poor housing, unemployment - will remain unaddressed.

President Obama's stimulus was formulated with high hopes: two-thirds of the $787bn spent would be delivered not through the Bush-era mechanism of tax cuts, but through the overtly Keynesian channel of public spending. Jared Bernstein and Christina Romer, economists on Obama's transition team, predicted in January 2009 that the stimulus money would "create three to four million jobs" by the end of 2010, 90 per cent of them in the private sector. They projected that unemployment would peak at just 8 per cent in 2009.

The Romer/Bernstein forecast, like much of the Obama stimulus plan, was a triumph of optimism. Unemployment reached 10 per cent a year ago and has not been below 9.5 per cent since, even with the stimulus. Private-sector employment has shrunk. The money has been spent, but the jobs and growth did not follow.

The paucity of achievement is all the more remarkable given that, two months after the Romer/Bernstein report was published, the Federal Reserve was forced to launch its own, much bigger monetary stimulus package, known as quantitative easing (QE). By printing money and using it to buy a mixture of bank and government debt, the Fed pumped $1.75trn into the US economy.

Yet the combined results are poor. Growth is slowing. The threat of deflation is so clear that the Federal Reserve will, on the morrow of the midterm elections, be forced to throw several hundred billions more into QE.

In the housing market, there is already a double dip. Even with mortgage interest rates cut to their lowest ever, the sheer volume of un-sold properties - 1.5 million empty and a further five million trapped in a "shadow" market - has begun to push house prices down again. The banking sector has begun to shudder in turn at the prospect of another round of mortgage losses.

It is this tangible failure of economic strategy that is sapping the energy and credibility of the Obama administration. It has provided the American right with a convincing narrative to unite the plebeian conservative and "coastal elite" strands of Republicanism.

Governor Daniels, a mainstream Republican who is being tipped as the man to run against Obama in 2012, calls Obama's policy "shock and awe statism". But the real shock is how little has been achieved. Statewide, the whole of Indiana has managed to spend $4bn of stimulus money to create 10,000 jobs.

“It's not enough," the governor says, "and I would caution you that while I know the $4bn is real, I cannot say the same about the 10,000 jobs. We just don't know. They [the federal government] don't know."

Nationally, he says, "We've had this perverse outcome in which the private sector has continued to shrink and the public sector has gotten bigger. Frankly, it looks more like a way to take care of favoured constituencies than an economic policy."

So, for the mainstream American right, what explains the failure of the Obama stimulus is "crowding out": it is the size of the state that has prevented the private sector from responding to the crisis with fresh hiring and company start-ups. In addition, consistently large majorities polled by the Pew Research Centre believe that state intervention has benefited the banks and large corporations only - leaving the middle class, the poor and small businesses to rot. Finally, there is a growing fear that the size of the budget deficit will drag the United States into penury. Daniels tells me that the country faces a "survival-level threat".

It is in this context that the narrative of the Tea Party movement has emerged. And you have only to travel a hundred kilometres east of Gary, along the patched-up private motorways of Indiana, to hear it in full voice.

The hall is swaying to the tune of "God Bless the USA" - a song for which everyone except the journalists stands up, many clenching fists against chests. The crowd is 99 per cent white and 100 per cent Christian. Of those to whom I speak during the interval, several believe that the president is neither American nor Christian. One is selling a set of playing cards depicting Obama as a "Kenyan-born, lying, arrogant Muslim communist that hates America".

What the Tea Party objects to is the president's policies of state intervention. What it adds to conventional fiscal conservatism is the idea that all state intervention into economic life is immoral, un-Christian and unconstitutional. The plebeian right is convinced that a city like Gary neither deserves stimulus money nor can use it to any good effect.

Jackie Walorski, a Republican who sits in the Indiana legislature and is standing for the US House of Representatives on 2 November, tells me: "We are watching a freight train of spending in this country. Americans don't live that way. We're the land of capitalism; we're not the land of taking people's public tax money and throwing it into a concept that isn't proven, that has not produced jobs."

Does she begrudge the money spent in Gary? Would she have blocked the cash for schools, more police and police vehicles?

“It's not a question of begrudging," says Wal­orski, a 47-year-old former TV journalist. "Just because it's gone to education, police and fire doesn't mean the money has done anything in those areas. That's not what the key is in this country. You can continue to write cheques but recovery comes from private-sector jobs and holding a line on spending."

What is sapping the energy of Democratic Party supporters, even in a place like Gary, is that if you strip Walorski's words of all the rhetoric, economically they ring true. America's governance system, lacking the basic capacity, and in some places the will, to spend the money, looks ill suited to delivering maximum bang for 787 billion bucks.

But the rhetoric itself has material impact, and way beyond the worried Christian faces assembled to hear it. It is a rhetoric that - intentionally or otherwise - identifies the recipients of state spending as the enemies of the American constitution. From Indiana to the Gulf of Mexico, that means the public sector, migrants and the African-American poor.

When Walorski takes the stage at a Tea Party rally in the small rural town of Angola, Indiana as warm-up act for the Fox News commentator Glenn Beck, she points to a giant US flag behind her and whips the audience to its feet with the warning that they have just days "to fight for who we are in America".

She continues: "If we don't fight for freedom, liberty, individual destiny, they are redefining this country out from underneath us. The battle we're facing is to defend this flag on our turf, our soil. When our soldiers came out of the boats in Normandy they literally walked over the bodies of other soldiers to fight for our freedom. The battle we face today, the ideological war that we're fighting, is for standing up for a constitution. The land of the free and the home of the brave is under assault today."

It is worth unpacking this statement. In the literal text, Obama and the Democrat-voting Congress are the "they" Walorski refers to. But America's airwaves are alive with the angry voices of enraged white Christians, channelled towards coherence by the right-wing commentators. No one on the stage in Indiana needs to assert that Obama is "a racist" with “a deep-seated hatred for white people or the white culture" - because Beck already said so on TV, on 28 July 2009.

Back in Gary, for the black community activists trying to hold things together, it feels as if the word "they" has another meaning.

“When you turn on the TV and hear all this anger, all this vitriol," says Ben Clement, who helps run a community theatre group for teenagers, "well, it's culture-based, race-based, and it's frightening. And it shows that there's a disconnect - it's almost like we're living on two separate planets."

Clement, like many Obama-supporting black professionals, rues the complacency of a generation that has drifted out of activism. "Our parents went through the civil rights movement, but for our generation it's been a time of rest, where we didn't think those were going to be issues. Now, when I see Obama vilified, my stomach tightens up, because he is the best of us, the best of what we have to offer. If they feel like that about him - how would they treat me?"

This is the real culture war - an artillery battle of words in which the two sides never meet.

It has blindsided America's political commentators. The polling organisations record no perceptible increase in the numbers of extreme right- and left-wing views. But distrust and fear are tangible once you get where the American media dare not venture - into the honest and considered thoughts of ordinary people.

So, where does the battle go after 2 November? Economists on the Keynesian left of the Democratic Party are now clamouring for a further fiscal stimulus as they frantically try to recover ground in the ideological war they have essentially lost. Judging by the polling on all possible outcomes, the Congressional arithmetic makes another fiscal stimulus impossible. And even if it were possible, it is difficult to see how a second stimulus could overcome the institutional problems that Gary typifies.

Over at the Federal Reserve, the chairman, Ben Bernanke, is inching towards a further round of quantitative easing. In September, he conceded that even if the Fed did opt for a second round of quantitative easing, the impact of this might be softened: though central bankers have no way of knowing how much increased demand they get from QE, they suspect it works best as an anti-panic measure, not as an additional boost. Once "QE2" is begun, the Fed has in effect fired the last bullet in the clip. It may signal the start of a unique period of policy stasis in which all conventional options have been used up.

One route out would be through a trade war and dollar devaluation - a route as popular among the Democratic grass roots as it is among the Tea Party activists.

Back in Indiana, Walorski swaps insults with the Democratic incumbent, Representative Joe Donnelly, whose support for the stimulus, she claims, has "exported jobs to China". Meanwhile, in the union hall of Local 1066, which represents employees of US Steel Corp in Gary, workers are calling for the government to impose tough trade sanctions against Chinese steel imports.

But, for now, the Obama administration is sticking to the economic doctrines that formed the shared belief set of both parties since the 1990s: globalisation and a strong dollar. Even as Bernanke's promise of further QE caused the dollar to slide against other currencies, the treasury secretary, Timothy Geithner, took to the airwaves to promote keeping the dollar strong. "It is very important," he said, "for people to understand that the United States of America and no country around the world can devalue its way to prosperity . . . It is not a viable, feasible strategy and we will not engage in it."

Another route out is the one offered by Governor Daniels: a new, national, one-year fiscal stimulus of between $400bn and $800bn, including suspension of payroll taxes, in return for equivalent cuts in state spending and a bonfire of business regulations. Though fiscally neutral, a tax cut on this scale could put money where neither state spending nor money printing has yet managed to put it - into the pockets of American consumers.

Yet the problem remains: without restarting the credit market, nothing can sustain growth. There needs to be some kind of defibrillating shock. The American patient, with all its problems of obesity and fast food, has to have its heart restarted before the rehab and the statins can get to work.

For two years, America's political cycle and its economic crisis have been parallel stories, the one played out on brash television shouting shows, the other handled by the super-brained east coast policy elite in the privacy of summits and retreats. After the midterm elections, the two cycles will collide. Either the Obama administration will find a new kind of circuit breaker for the economy, or America will face stagnant growth, deflation and the possibility of a further banking crisis.

In Gary, the people know what they want the president to do: to break with Wall Street, ditch the doctrine of free trade, end foreclosures and deliver jobs. There is, despite the political chasm between the union guys and the Tea Party activists, a parallel desire for politicians to break with the lobbying industry and speak for the people. "He [Obama] has to drive the agenda," says Steve Dunn, a steelworker. "If you ever listen to a speech by Franklin Delano Roosevelt, it's basically you against me; it's the working class against Wall Street. And that's the way things are today - but I don't hear that from President Obama."

The irony of American politics, on the eve of the midterms, is that if anybody owns the narrative of "workers against Wall Street", it is the ultra-conservative, free-market right.

Paul Mason is the economics editor of BBC Newsnight. His reports from the US can be seen at bbc.co.uk/paulmason. A revised edition of his book "Meltdown: the End of the Age of Greed" (Verso, £8.99) is out now.

Picture: Ralph Steadman
Show Hide image

The age of disorder: why technology is the greatest threat to humankind

Disruptive technologies might change the very nature of humanity – and no nation can fight on its own.

Though human beings are social animals, for millions of years they lived in small, intimate communities numbering no more than a few dozen people. Even today, as the evolutionary biologist Robin Dunbar has shown, most human beings find it impossible properly to know more than 150 individuals, irrespective of how many Face­book “friends” they boast. Human beings easily develop loyalty to small, intimate groups such as a tribe, an infantry company or a family business, but it is hardly natural for them to be loyal to millions of strangers. Such mass loyalties have appeared only in the past few thousand years as a means of solving practical problems that no single tribe could solve by itself. Ancient Egypt was created to help human beings gain control of the River Nile, and ancient China coalesced to help the people restrain the turbulent Yellow River.

Nations solved some problems and created new ones. In particular, big nations led to big wars. Yet people were willing to pay the price in blood, because nations provided them with unprecedented levels of security and prosperity. In the 19th and early 20th centuries the nationalist deal still looked very attractive. Nationalism was leading to horrendous conflicts on an unprecedented scale, but modern nation states also built systems of health care, education and welfare. National health services made Passchendaele and Verdun seem worthwhile.

Yet the invention of nuclear weapons sharply tilted the balance of the deal. After Hiroshima, people no longer feared that nationalism would lead to mere war: they began to fear it would lead to nuclear war. Total annihilation has a way of ­sharpening people’s minds, and thanks in no small measure to the atomic bomb, the impossible happened and the nationalist genie was squeezed at least halfway back into its bottle. Just as the ancient villagers of the Yellow River Basin redirected some of their loyalty from local clans to a much bigger nation that restrained the dangerous river, so in the nuclear age a global community gradually developed over and above the various nations because only such a community could restrain the nuclear demon.

In the 1964 US presidential campaign, Lyndon B Johnson aired the “Daisy” advertisement, one of the most successful pieces of propaganda in the annals of television. The advert opens with a little girl picking and counting the petals of a daisy, but when she reaches ten, a metallic male voice takes over, counting back from ten to zero as in a missile launch countdown. Upon it reaching zero, the bright flash of a nuclear explosion fills the screen, and Candidate Johnson addresses the American public: “These are the stakes – to make a world in which all of God’s children can live, or to go into the dark. We must either love each other. Or we must die.” We often associate the slogan “Make love, not war” with the late-1960s counterculture, but already in 1964 it was accepted wisdom, even among hard-nosed politicians such as Johnson.

During the Cold War, nationalism took a back seat to a more global approach to international politics, and when the Cold War ended, globalisation seemed to be the irresistible wave of the future. It was expected that humankind would leave nationalistic politics behind, as a relic of more primitive times that might appeal at most to the ill-informed inhabitants of a few under­developed countries. Events in 2016 proved, however, that nationalism still has a powerful hold even on the citizens of Europe and the United States, not to mention Russia, India and China. Alienated by the impersonal forces of global capitalism, and fearing for the fate of national systems of health, education and welfare, people all over the world seek reassurance and meaning in the bosom of the nation.

Yet the question raised by Johnson in the Daisy advertisement is even more pertinent today than it was in 1964. Will we make a world in which all human beings can live together, or will we all go into the dark? Can Donald Trump, Vladimir Putin and their like save the world by appealing to our national sentiments, or is the current nationalist spate a form of escapism from the intractable global problems we face?

***

Let’s start with nuclear war. When the Daisy advert aired, two years after the Cuban missile crisis, nuclear annihilation was a palpable threat. Pundits and laypeople alike feared that humankind did not have the wisdom to avert destruction, and that it was only a matter of time before the Cold War turned scorching hot. In fact, humankind successfully rose to the nuclear challenge. Americans, Soviets, Europeans and Chinese changed the way geopolitics had been conducted for millennia, so that the Cold War ended with little bloodshed, and a new internationalist world order fostered an era of unprecedented peace. Not only was nuclear war averted, but war of all kinds declined. Since 1945, surprisingly few borders have been redrawn through naked aggression, and most countries have ceased to use war as a standard political tool. In 2016, despite wars in Syria, Ukraine and other hot spots, fewer people died from human violence than from obesity, car accidents or suicide. This may well have been the greatest political and moral achievement of our times.

Unfortunately, we are so used to this achievement that we take it for granted. This is partly why people allow themselves to play with fire, and that includes not only the latest Russian adventures in eastern Europe and the Middle East, but also the choices made by European and American voters.

The Brexit debate in Britain revolved mainly around questions of economics and immigration, while the EU’s vital contribution to European and global peace has largely been ignored. After centuries of terrible bloodshed, the French, Germans, Italians and Britons have finally built a mechanism that ensures continental harmony – only to have the British public throw a wrench into the miracle machine. Meanwhile, Donald Trump mixes calls for US isolationism with plans to strengthen the country’s nuclear arsenal and reignite a nuclear arms race, thereby threatening to undo the hard-won gains of the past decades and bring us back to the brink of nuclear annihilation.

It was extremely difficult to construct the internationalist regime that prevented nuclear war and safeguarded global peace. No doubt we need to adapt this regime to changing conditions in the world: for example, by relying less on the United States and giving a greater role to non-Western powers such as China and India. But abandoning this regime altogether and reverting to nationalist power politics would be an ­irresponsible gamble.

True, in the past, countries played the ­nationalist politics game without destroying human civilisation. But that was in the pre-Hiroshima era. Since then, nuclear weapons have raised the stakes and changed the fundamental nature of war and politics. No matter whom American voters elect to the presidency, the atom bomb is still there and E still equals MC². As long as human beings know how to enrich uranium and plutonium, their survival will depend on privileging the prevention of nuclear war over the interests of any particular nation. Zealous nationalists should ask themselves whether their nation by itself, without a robust system of international co-operation, can protect the world – or even itself – from nuclear destruction.

On top of nuclear war, in the coming decades humankind will face a new threat to its existence that hardly registered on the political radar in 1964: climate change. If we continue with our present course it is likely that global warming, ocean acidification and ecological degradation will result in unprecedented economic, political and social problems, and might well destroy the foundations of human prosperity. What is the nationalist answer to climate change? How can any nation, however powerful, stop global warming on its own? Will the US build a wall against rising oceans?

When it comes to climate, countries are not sovereign, but are at the mercy of actions taken by governments on the other side of the planet. As long as 200 governments pursue 200 different ecological strategies, shaped by their unique needs and interests, none is likely to succeed. With present-day technology, any serious measures to stop global warming are likely to slow down economic growth. Such a policy carries an unbearable political price if it is undertaken by a single country while others continue with business as usual. Any US administration that deliberately slowed down economic growth for environmental reasons would be bound to lose the next election; a Chinese administration that does so courts revolution tomorrow morning. In a nationalist and xenophobic world no government will sacrifice itself for the greater good of humanity, as Trump’s actions show.

***

Indeed, nationalism is even more dangerous in the context of climate change than that of nuclear war. An atomic bomb is such an obvious and immediate threat that even the most ardent nationalist cannot ignore it. Global warming, by contrast, is a much more vague and protracted menace. Hence, whenever environmental considerations demand some painful sacrifice, nationalists will be tempted to put the national interest first, reassuring themselves that we can worry about the environment later, or just leave it to people elsewhere. Alternatively, as in the case of Trump, they may simply deny the problem. It isn’t a coincidence that scepticism about climate change is usually the preserve of nationalist politicians. They have no answer to the problem, and so they prefer to believe it does not exist.

The same dynamics are likely to spoil any nationalist antidote to the third large threat to human existence in the 21st century: technological disruption. New technologies, particularly in the fields of bioengineering and artificial intelligence, will soon give humankind unprecedented, godlike powers. Whereas previously human beings learned to produce food, weapons and vehicles, in the coming decades our main products will probably be bodies, brains and minds. However, it is extremely difficult to foresee the potential impact of such technologies. They open the door to an entire supermarket of doomsday scenarios.

If and when artificial intelligence (AI) surpasses human intelligence, it may be given control of weapon systems and crucial decisions, with potentially calamitous consequences. In addition, as AI outperforms human beings in ever more tasks, it might push billions of us out of the job market, creating a new “useless class” of people, devoid of both economic value and political power. Meanwhile, given enough biometric data and enough computing power, external algorithms could know us better than we know ourselves, and then governments and corporations could predict our decisions, mani­pulate our emotions and gain absolute control over our lives.

On the bioengineering front, breakthroughs in genetics, nanotechnology and direct brain/computer interfaces could unleash deadly new epidemics or disturb our internal mental balance. In past centuries we have gained control of the world outside us and reshaped the planet, but because we didn’t understand the complexity of the global ecology, the changes we made inadvertently disrupted the entire ecological system. In the coming century we will gain control of the world inside us and reshape our bodies and brains, but because we don’t understand the complexity of our own minds, the changes we will make might disrupt our mental system. In addition, bioengineering might for the first time in history translate economic inequality into biological inequality, creating an upper caste of enhanced superhumans, and relegating the poor to the dustbin of evolution.

What is the nationalist answer to these menaces? As in the case of global warming, so, too, with technological disruption: the nation state is the wrong framework to address the threat. Given that research and development are not the monopoly of any one country, even a superpower such as the US or China cannot restrict them by itself. If the US government forbids the genetic engineering of human embryos, it won’t prevent North Korean scientists from doing such work. And if the resulting developments confer on North Korea some crucial economic or military advantage, the US will be tempted to break its own ban. Particularly in a xenophobic, dog-eat-dog world, if even a single country chooses to pursue a high-risk, high-gain technological path, other countries will be forced to do the same, because nobody can afford to remain behind. In order to avoid such a race to the bottom, humankind will probably need some kind of global identity and loyalty.

Whereas nuclear war and climate change threaten only the physical survival of humankind, disruptive technologies might change the very nature of humanity, and are therefore entangled with human beings’ deepest ethical and religious beliefs. Although everyone agrees that we should avoid nuclear war and ecological meltdown, people have widely differing opinions about using bioengineering and AI to upgrade human beings and to create new life forms. If we fail to cobble together globally accepted ethical guidelines, it will be open season for Dr Frankenstein.

When it comes to formulating such ethical guidelines, nationalism suffers above all from a failure of the imagination. Nationalists think in terms of territorial conflicts lasting centuries, whereas the technological revolutions of the 21st century should be understood in cosmic terms. Ever since its appearance on Earth, four billion years ago, life has been governed by the laws of natural selection. During those aeons, whether you were a virus or a dinosaur, you evolved according to the principles of natural selection. No matter what strange shapes life took, it remained confined to the organic realm. Whether a cactus or a whale, you were made of organic compounds. Now science might replace natural selection with intelligent design, and might even start creating non-organic life forms. After four billion years of organic life shaped by natural selection, science is ushering in an era of inorganic life shaped by intelligent design. What has Israeli, Russian or French nationalism got to say about this? In order to make wise choices about the future of life we need to go way beyond the nationalist viewpoint and look at things from a much wider perspective.

***

The nationalist wave sweeping across the world cannot turn the clock back to 1939 or 1914. Technology has changed everything by creating a set of global threats to human existence that no nation can fight on its own. A common enemy is the best catalyst for forging a common identity, and humankind now has three such enemies – nuclear war, climate change and disruptive technology. If, despite these threats, we choose to privilege our particular national loyalties above everything else, the results may be far worse than in 1914 and 1939.

A much better path is the one outlined in the EU’s constitution, which states that “while remaining proud of their own national identities and history, the peoples of Europe are determined to transcend their former divisions and, united ever more closely, to forge a common destiny”. There is still plenty of room in the world for the kind of patriotism that celebrates the uniqueness of my nation and stresses my special obligations towards it. Yet, if we want to survive and flourish, humankind has little choice but to complement such local loyalties with substantial obligations towards a global community.

In previous centuries national identities were forged because human beings faced problems and discovered opportunities that went far beyond the scope of ­local tribes, and which only countrywide co-operation could hope to handle. In the 21st century, nations find themselves in the same situation as the old tribes.

We need a new global identity, because national institutions are incapable of managing a set of unprecedented global challenges. We now have a global ecology, a global economy and a global science – but we are still stuck with only national politics. This mismatch prevents the political system from countering our main problems effectively.

To have effective politics, we must either de-globalise the ecology, the economy and the march of science, or we must globalise our politics. As it is impossible to ­de-globalise the ecology and the march of science, and as the cost of de-globalising the economy will probably be ruinous, the only solution is to globalise politics.

Yuval Noah Harari lectures at the Hebrew University of Jerusalem. His latest book is “Homo Deus: a Brief History of Tomorrow” (Vintage)