Why we Cannot let Walls Replace our Bridges

One of the first albums I ever bought was John Lennon’s Walls and Bridges. Typical of its time, it came fancy-packaged with lots of bells and whistles, photo inserts, lyrics and a cover that allowed you to mix and match various pictures of the master himself.

Lennon was the edgy-Beatle and he laid bare the honesty of his life experience through his music. Never afraid to enter the political milieu, I suspect were he alive today, John Lennon would have something to say about the current vogue for creating walls, as opposed to bridges.

Soon after World War II, a new international liberal financial consensus was built at the Bretton Woods Conference in New Hampshire. This was based on principles of open and free trade, eventually overseen by institutions such as the WTO and IMF, with security guaranteed by the UN and NATO.

Bretton Woods led to the rebuilding of trust between countries that only a few years earlier had fought against each other in a war that claimed 60million lives.  

Conference participants included the United States and United Kingdom but also France, Germany and Japan – pitched together in an economic collaboration once considered unimaginable.

By the late 1950s, the British Prime Minister, Harold Macmillan, was claiming that ‘you’ve never had it so good’, whilst in the 1960s, over in the United States, John F Kennedy created his Camelot. It’s as if the world had turned from black and white into full techno-colour, and the period following 1945 witnessed unprecedented economic growth across the world.

Yes, there were many, many, downsides and failings – think Algeria, Vietnam, the middle-east and Afghanistan/Iraq. But, the big picture of decolonisation, civil rights, wealth, health and longevity, all led to a general increase in global living standards.

Co-operation between nations expanded to include new regional trading alliances - such as the EU, ASEAN, SADC - as well as the creation of multi-national initiatives to combat challenges such as climate change.  

Then, at some point, the music stopped and - slowly at first, more rapidly recently - a new mood has took hold, seemingly based on angst, fear and desire to build walls not bridges. Sure, the vote for Brexit and election of Trump are important straws in the wind that help illustrate this new direction of travel but, in my view, the roots lie much deeper.

The economic crash of 2008 was often described as a massive heart attack for our post-war liberal economic paradigm.

Before 2008, we had been told that the collapse of the Berlin Wall and growth of China had led to the ‘end of history’ and we waited in anticipation for others to join the party, starting with the BRICs, to be eventually joined by the middle-east and even Africa.

Looking back, I think 2008 was more a stroke than heart attack. Yes, the collapse of the world economy was sudden but, in truth, we were protected from much of its potential brutality, protected if you will, by the monetary and fiscal actions of governments and those very global institutions that had been asleep at the wheel leading to the crash.

Put it this way, the cash machines continued to work and the sky didn’t fall.

This was a very different experience to that of the previous crash in 1929, which led to the great depression of the 1930s and the terror of the 1940s. This time, our damage has been existential.

As if in a stroke, our nervous system has been attacked, slowly, cruelly and, almost ten years later we still lack any sense of when it will end.

Consider these examples to illustrate my point. First, the Office for National Statistics recently published the numbers on household spending, a little known metric that essentially measures our day-to-day economic wellbeing.

In 2016, weekly household expenditure averaged £528.90, still less than in 2006 when it was £547.10. In other words, we are still poorer today than ten years ago. This has never happened before in the 60 years of upward growth since 1945. That’s personal wealth.

Let’s consider the corporate and look at the RBS bank as an example. In 2008, the taxpayer pumped in £45billon to save this institution from collapse and since then it has lost an astonishing further £55billion.  

The RBS is not alone, similar tales are repeated across the world, but the pain in the developed west has been difficult for people to take. The apprehension is expressed in a well-rehearsed playbook - mistrust of the political class, of experts, of the media, of institutions and, of course, of immigrants.

The instinct has been to desire easy answers, in the comfort of an imagined past, in doubling down on self-protection, in building walls and not bridges. This issue is still in motion and trades alliances are under review, protectionism is becoming an attractive proposition.

For countries like the UK, for cities like Derby, this is a massive challenge. Our economic mojo has been outward looking and trade-based. Our communities come from, and relate to, the rest of the world. If bridges are to be replaced by walls then we will struggle.