How long can this last?
"The more privilege you have, the more opportunity you have. The more opportunity you have, the more responsibility you have." Noam Chomsky
The entire world has adopted a common leadership model and globally connected economy designed by few, approved by industrialists annually and policed by two global institutes.
The modern governance model gave us freedom tagged with constant surveillance. We also have universally available technologies which make our lifestyle comfortable and entertaining, crushing all social values. People have gradually woken up to the fact that leadership and the economic model we have adopted failed to act on social justice but people seem powerless to change. Despite the progress made over the decades such as improved life expectancy at birth, vaccines and drugs to prevent and treat many diseases, improved mobility of people and global connectivity, our humanity is walking into an unknown destiny with total failure of leadership and an uncertain economy. The reckless leadership and an uncertain economy are endangering the entire world population threatening our very existence. We must remain optimistic, yes; are there boundaries of optimism?Weapons of war
I was born at the height of the Korean War; I retired more than a decade ago. There is not a year without a war. Our history books remind us of miseries of ordinary people's experience and their struggle against empires and colonialism. In the 20th century humans experienced two World Wars, Korean war that started in 1950 with no peace treaty yet, Vietnam war, Balkan War and two Gulf wars. Millions of civilians were killed during these wars. There were numerous low-level conflicts destabilising the economy and development efforts. Unfortunately, stories, movies, and TV dramas of war history are presented as glory which disrespects the millions who were murdered and millions who endured lifelong disability. What is even worse is exaggeration of the actual events to glorify killing and maiming of people as victory. It is a cognitive dissonance. Should we continue to glorify wars with victory parades?
With every passing year humans have refined the art of killing with new technology so that we can kill more and kill efficiently. Is it scientific thinking? Several countries have even weaponised space to remain military dominance. It is now a context of who can kill more and how fast you can kill. The war technology, including delivery systems available today are far more lethal than the world has ever seen. It can incinerate perhaps millions at a time remotely and do so successively without blinking. The weapons of war in today's inventory, ready to be deployed, are multiple times more lethal than the nuclear bombs dropped in Japan and the chemical weapons used in Vietnam to kill civilians. In addition to the chemical weapon there are also threats of bioweapon in the form of mutated viruses developed in laboratories for which there are no vaccines or cure. There are hundreds of types of virus strains, including smallpox which have been eradicated and stored in various laboratories for research purposes.
The wars used to be based on ideology such as against fascism, authoritarianism, communism and to protect national territories. But today, wars are fought to remain dominant and to control resources, not for any ideology. I hope the readers don't believe that wars are fought to spread democracy. As countries are pushing for limitless goals for development fueled by energy and minerals, no country is safe from war. The weapons of wars are not just limited to physical weapons. Cyber warfare would create havoc in public services by disabling the power grid or disabling telecommunication towers, or by wiping banking records that will stop all economic activities with total chaos.
The rules of war are being openly erased. The selective application of international law has become the greatest threat to our very existence. Might is right has become the prevailing norm of governance - no one is safe.
Fallout from climate crisis
Scientists have pushed climate data to make their case to take action in preventing global warming. But because of our economic necessity politicians and industries are pleading with people to remain optimistic in finding a technological solution in the distant future while normalising impacts of climate change as a given.
Many similar forecasts have been made in the past on population explosion, potential famines due to crop failure, disease outbreaks and so on. Fortunately, most of these forecasts did not materialise in the expected potency, which led people not to take threats from climate change seriously. But one cannot deny the trend we are witnessing and some of the problems we have already faced based on scientific data available in several university studies.
Nature has blessed us with a balanced ecosystem, maintained by biodiversity with symbiotic relationships between various species of plants and animals including insects. But changing ecology due to excessive greenhouse gases generated by human activities have impacted the ecosystem threatening all forms of life on Earth. FAO has reported a decline in agricultural diversity with a drop in the variety of crops which cannot adapt to changing atmospheric temperature and humidity. Earth's land surface has been altered by human activities such as mono cropping culture, artificial forest and urbanisation, millions of tons of pesticides and herbicides poured on the soil which is impacting pollinators such as bees. According to Nature magazine between 2000 to 2012, the population of 139 species of pollinators have declined between 21% to 30%. Coca production in West Africa has dropped by 40% in recent years, attributed to a change in humidity which will impact the market price of coca. WWF has reported a drop in marine life including fisheries by 49% between 1970 and 2012, attributed to ocean pollution, rising sea temperature and overfishing. Recent data would probably be even worse. Environmental scientists predict that if the current trend of ecosystem degradation continues the world could see a decline in plant and animal species by at least one third by 2050. It is important as it has direct negative impacts on human's food chain.
There is a 49% increase of GHGs concentration in the atmosphere in 2021 compared to 1990, the year binding Kyoto Protocol was signed by 192 countries. Carbon particles in the atmosphere have increased from 340 ppm in 1990 to 425 ppm in 2024. The frequency of unseasonal climatic events is attributed to the increasing concentration of GHGs in the atmosphere which traps heat. In addition, the frequency of viral outbreaks, sinking groundwater table, rising sea water temperature, decreasing population of marine life and desertification are all real. Fortunately, it is just that these events are not at the level projected by the scientists. All of these have impacts on all forms of life on Earth. There could be a spike on any of these events leading to catastrophe abruptly like a volcanic event.
When will the global leaders take their responsibility seriously to address blatant human errors, especially reckless leadership, unsustainable economic models, weapons of war and fallout from the climate crisis? It is for our one survival.
Read more articles by Ramesh here.
Or contact Ramesh at ramesh.chauni@gmail.com
Labels: Ramesh
This is an interesting piece, but it suffers from a familiar modern affliction: mistaking anxiety for analysis.
ReplyDeleteIt is certainly true that humanity faces risks such as leadership failures, geopolitical tension, climate change, and technological disruption. Yet to present these as evidence that we are approaching some civilisational breaking point ignores a stubborn fact: by almost every measurable indicator, humanity has never been better off than it is today.
We are richer, healthier, taller, better educated, better fed, and longer-lived than at any point in human history. Extreme poverty has collapsed globally over the past 50 years. Child mortality has fallen dramatically. Literacy, especially among women, has surged. Famine, once humanity’s permanent companion, is now rare and overwhelmingly political rather than natural. Even inequality, often invoked as proof of systemic failure, must be weighed against the unprecedented rise of the global middle class, particularly in Asia.
The essay invokes Newton’s laws as though progress must inevitably provoke catastrophe. But human history suggests the opposite: we repeatedly encounter limits, adapt, and move beyond them. Industrialisation did not end in Malthusian collapse; it produced modern agriculture. Pollution did not doom the West; it produced environmental regulation and cleaner technologies. Energy scarcity did not end growth; it produced nuclear power, renewables, and the prospect of abundant clean energy.
The critique of leadership is emotionally satisfying but historically thin. There was no golden age of wise, selfless leaders. The 20th century, so often romanticised, produced two world wars, genocide, totalitarianism, and nuclear brinkmanship. Today’s leaders may be flawed, but today’s world is vastly less violent, interstate war is rarer, and international cooperation, however imperfect, has prevented catastrophes that would have been unthinkable a century ago.
As for the “unsustainable economic model”: capitalism has defects, but it has done something no other system has achieved: it has lifted billions out of poverty. The middle class is not disappearing globally; it is shifting geographically. China, India and Southeast Asia are experiencing the very rise in living standards that seemed impossible a few short decades ago. That this creates tension and adjustment costs does not mean the system is collapsing; it means it is evolving.
The portrayal of humanity as enslaved, lonely, atomised and powerless is rhetorically powerful, but empirically weak. People today have more choices about how to live, work, love, and think than at any previous time. That freedom can be disorienting, but it is not oppression.
Finally, the essay treats technology, especially AI and cyber systems, as a threat detached from human agency. In reality, technology is the greatest force for human flourishing we have ever unleashed. AI, biotechnology, and clean energy are not harbingers of collapse; they are tools that will make us healthier, more productive, and more resilient, just as past innovations did.
Optimism is not denial. It is confidence grounded in history. Humanity has never been perfect, but it has been astonishingly good at solving the very problems it creates. The future is not guaranteed, but neither is it bleak. The evidence suggests something far more radical: the future will be better than the past.
I fully endorse Thomas Ekvall's rejoinder.
DeleteI very much appreciate your observations. Just to reiterate, no one can deny the progress made, especially over the past seven decades, which I also briefly mentioned in the beginning of the article. You mention of increasing middle class in China, India, etc. Indeed, it is true because these countries do not blindly accept recommendations coming out of international financial institutions, which was what Malaysia also did during Asian financial crisis in mid -1990s. The current model of economy has produced super rich individuals while governments are amassing debt. Japan has 9000 bn debt, US has 38 tr debt, etc. Do you honestly believe that the current financial system and broken leadership can continue to fuel our economy? Ramesh
DeleteRamesh, thank you for engaging. This is exactly where the discussion becomes interesting.
ReplyDeleteOn the role of international financial institutions, I would push back on a common assumption. I am not aware of any case where the IMF, the World Bank, or the regional development banks have advised countries to accumulate unsustainable debt. On the contrary, their standard advice has always been fiscal prudence, revenue mobilisation, and debt sustainability. Countries run up excessive debt largely on their own, often for human and political reasons.
Democratic short-termism plays a role here. It is far easier for elected governments to deliver visible benefits through borrowing than to raise taxes or restrain spending and risk electoral punishment. Churchill’s old quip about democracy being the worst form of government except for all the others still applies rather well in this context.
That said, high public debt is not new. History shows that over-indebtedness gets resolved one way or another, rarely elegantly. The textbook solution is fiscal consolidation combined with growth, but the politically easier and historically more common route has been to inflate debt away. From post-war Britain to the United States in the 1970s, inflation has been repeatedly used to reduce debt burdens in real terms.
For that reason, some caution in how we hold our savings is sensible. Long-dated bonds and low-interest bank deposits perform poorly in such environments. Ray Dalio, among others, has written and spoken extensively about historical debt cycles and the role of diversification into real assets. His work is worth a look; you can find him on YouTube.
And here I will end on a culturally familiar note: Indians have long understood that an allocation to gold is not superstition but insurance. In periods of inflation, currency debasement, or financial stress, that instinct has tended to age rather well.
None of this implies imminent collapse. It does suggest, however, that today’s debt dynamics are manageable only if we are honest about how such episodes have played out before, both economically and politically.
Optimism, yes, but optimism informed by history.
Thanks, Thomas, for reverting back with your thoughts on debt and the role of International Financial institutions. These institutions do talk of fiscal prudence, debt sustainability, etc. but in reality, there are records of pushing debts on countries as well as forced currency devaluation, etc. on many occasions. Other problems associated with these institutions were their famous ‘structural adjustments’ of the 1990s which marginalised most social sectors.
DeleteThese institutions are the God like figure of capitalism which has basically overshadowed all traditional ways of thinking on financial governance. In the coming decades there will be hardships for the majority of people. First issue is the dominance of capitalists on social services and the second is the invasion of governance by AI (which is now the biggest game of the capitalists). Small government is okay, but how small? As the AI is taking hold on public administration there will be mass layouts. Private sector also has limitations on its absorption capacity. Countries are unable to regulate capitalism/capitalists. Here is one simple example. People used to buy Microsoft Office to install in their computers. It has three different prices - student price, household price and business price. Now it is rented out on a monthly/yearly basis. Microsoft has recovered its investment in developing this software decades ago. Unfortunately, other software companies are following this example. Once you don’t renew the rental contract your software would not function. The idea of democracy and freedom has been fully exploited by unregulated capitalism.
Ramesh, thank you for the clarification. By now, it is clear that we are not actually disagreeing on facts so much as on interpretation.
DeleteThere is no question that international financial institutions have made mistakes, particularly in the design and sequencing of structural adjustment programmes in the 1980s and 1990s, and that these sometimes imposed real social costs. Likewise, the concentration of market power in parts of the tech sector and the shift toward rent-based business models deserve scrutiny and sensible regulation. On these points, criticism is not only legitimate but welcome.
Where we diverge is in the broader diagnosis. I do not see capitalism, technology, or AI as forces that are hollowing out democracy or condemning the majority to hardship. I see them as powerful tools that, left entirely unchecked, can produce distortions, but when embedded in functioning institutions, competition policy, and democratic accountability, have repeatedly delivered rising living standards, better public services, and greater individual agency. The challenge, as always, is governance, not inevitability.
I suspect we both agree on the essentials: markets need rules, technology needs oversight, and public institutions must adapt rather than retreat. History suggests that societies do eventually make these adjustments, often imperfectly, sometimes late, but usually without the civilisational rupture that pessimistic narratives anticipate.
With that, our positions are clear, and it may be good to leave it there. I appreciate the exchange.
Thank you.
DeleteThere are cases where WB and IMF pressed countries to borrow that in hindsight wa bad for the country: 1. The 1980s Latin American Debt Crisis
ReplyDeleteIn the lead-up to the 1982 crisis, international financial institutions (IFIs) encouraged developing countries—particularly in Latin America—to borrow heavily to finance development and "import substitution industrialization". When interest rates rose and commodity prices fell, these nations could not repay the debt. Critics argue the World Bank and IMF failed to warn of, or actually encouraged, this over-borrowing, and later enforced strict austerity measures that worsened economic downturns.
2. The 1997 Asian Financial Crisis
Prior to 1997, the IMF encouraged Asian economies (such as Thailand, Indonesia, and South Korea) to liberalize their capital accounts, allowing huge inflows of foreign capital and debt. When the crisis hit, the IMF prescribed high-interest rates and fiscal austerity, which many economists (including Joseph Stiglitz) argued worsened the crisis, making it nearly impossible for local businesses to repay debt and leading to widespread insolvency.
3. "Odious Debt" in Dictatorial Regimes
The World Bank and IMF have been heavily criticized for maintaining or increasing loans to corrupt and dictatorial regimes allied with Western powers, even when funds were known to be misappropriated.
Congo-Zaire (1980s): Loans continued to Marshal Mobutu despite reports highlighting massive misappropriation of funds.
Indonesia (Suharto era): Continued financial support was provided despite, critics allege, the regime’s poor human rights record and financial mismanagement.
Post-Genocide Rwanda: The IMF/World Bank demanded repayment of debts contracted by the Habyarimana regime. Sources ( I am not so sure of validity of these - but I think if we collectively look back we could not say that WB and IMF hav been perfectly diligent in each case - in the end they are political and bend to pressure of the moment: https://www.cadtm.org/The-Case-for-Abolishing-and-Replacing-the-IMF-and-the-World-Bank. and https://www.economicshelp.org/blog/glossary/imf-criticism/
It is certainly true that the IMF and World Bank have made mistakes, sometimes serious ones. No large international institution operating in a political world has a spotless record. But that is a different claim from saying that the IMF or World Bank pressed countries to take on unsustainable debt.
ReplyDeleteLet us look at each of your examples:
Latin America in the 1980s:
Most of the excessive borrowing was driven by sovereign governments and private banks in an environment of negative real interest rates, recycled petrodollars, and strong political incentives to spend. The bulk of the lending came from commercial banks. The IMF entered after the crisis erupted, largely as a lender of last resort. With hindsight, risk was mispriced by almost everyone, but that is not the same as IFIs urging reckless debt accumulation.
Asia in 1997:
The crisis was primarily triggered by weak domestic financial regulation, currency pegs and short-term foreign borrowing. IMF advice on capital account liberalisation was indeed too generic at the time, but debt was accumulated mainly by domestic banks and firms, not because the IMF told governments to borrow heavily. Importantly, many Asian economies recovered rapidly and repaid IMF loans early, which mitigates the narrative of policy failure.
Loans to authoritarian regimes:
This criticism has merit, but it reflects Cold War geopolitics and donor-country pressures, not an institutional desire to promote bad debt. Lending often continued for strategic reasons well outside the control of technocratic staff. That is a political failure, not evidence that IFIs advocate unsustainable borrowing as a development strategy.
In short, the IMF and World Bank are imperfect, sometimes slow to learn, and constrained by politics. But the historical record does not support the claim that they encouraged countries to accumulate debt they knew to be unsustainable. Ultimately, borrowing decisions are sovereign decisions driven by domestic politics, short-termism, and optimism bias. The IFIs typically arrive once problems become unmanageable without their interventions.
Thank you, Detlef, for your endorsement. I note that you recognise the role of capitalism in lifting billions out of poverty. That fact should be reflected in all future development agendas and aid strategies. Had that been done systematically over the past several decades, the outcome would have been much better.
ReplyDelete@Thomas: In the last 35 years, I have not met a colleague or friend who opposed to a regulated market economy. Capitalism is the default. What remains in dispute, despite frequent theatrics to the contrary, is not whether we should have capitalism, but how much regulation is needed to prevent it from undermining itself.
ReplyDelete@Detlef: I actually agree with you on your core point; capitalism is the default, and regulations are necessary to stop it from eating itself. However, that argument was settled a long time ago.
ReplyDeleteWhere we may differ is on the marginal question, which is the only one that really matters in practice: how much regulation, of what kind, and at what cost.
Europe is a useful cautionary tale here. Over the past 20-30 years, we have layered regulation upon regulation; labour markets, product markets, capital markets, energy, technology, with admirable intentions, but little regard for cumulative effects. The result has not been a “civilised capitalism”, but one that is increasingly sclerotic: low productivity growth, weak innovation, chronic underinvestment, and an inability to scale new firms. Capitalism hasn’t been restrained into virtue; it has been regulated into a coma.
By contrast, the societies that have lifted hundreds of millions into the middle class, East Asia above all, did not reject capitalism, nor did they smother it. They regulated selectively, pragmatically, and often temporarily, with growth as the non-negotiable objective. When regulation conflicted with growth, growth usually won.
So yes, the question is not whether to regulate, but whether regulation is actually solving the problem it was designed to solve or quietly creating new ones: rent-seeking, insider protection, risk aversion, and stagnation. A regulated market economy that no longer generates dynamism or opportunity ultimately undermines its own legitimacy.