BOSTON — I wrote a rather nerdy column in February about the Davies J-Curve, the political science theory put forth by James C. Davies in the 1950s.
Davies’ idea was simple but powerful: Political unrest occurs when a people’s rising expectations — about how much money they can make, what they can buy, whether they have enough food or medicine — are suddenly dashed by, let’s say, a global economic crisis that follows the longest expansion in decades.
Here’s how professor Davies put it, in that special language of academia:
"Revolutions are most likely to occur when a prolonged period of objective economic and social development is followed by a short period of sharp reversal. People then subjectively fear that ground gained with great effort will be quite lost; their mood becomes revolutionary."
Since those dark days of winter, the global meltdown — while moving out of the panic stages — has shown very few signs of recovery. Meanwhile political violence and turmoil has blossomed in nearly every corner of the world. In many places, the mood has become quite revolutionary.
First, the economics:
The U.S. unemployment rate — the key figure underlying confidence in the world’s largest economy — is at a 26-year high of 9.5 percent, and President Barack Obama this week warned it’s still rising. Larry Summers, the director of the president’s National Economic Council, was even gloomier, telling the Financial Times: “I don’t think the worst is over. It would not be surprising if GDP has not yet reached its low."
As for the global economy, World Bank President Robert Zoellick has warned 2009 remains a "dangerous year." Recent gains could be reversed easily, Zoellick said, and the pace of recovery in 2010 is "far from certain."
So much for economic cheer. As for the unrest part, it’s been even worse. Here’s a quick rundown of some of the trouble we’ve been following at GlobalPost the past few days, weeks and months. And this list of woes is by no means complete:
But political and economic turmoil is also seeping into the world’s most developed, and presumably more stable, economies.
So what’s the takeaway from all of this strife around the world? Economics matters. A lot.
Of course every country is different, and no single factor can be attributed to the violence and unrest in the examples cited here. All politics is local, as that tired-but-true cliche goes. But economic insecurity runs through these stories like an electrical current. It is a key element, a trigger, and in many cases, the root cause of all the trouble.
So are we headed for even more turmoil, violence, political unrest and revolution? No one knows for sure. Not the economists. Not the political risk consultants. And certainly not the journalists writing about it all.
But the answer will surely depend on how quickly the global economy recovers, and whether people’s resulting expectations about their future economic prospects are met. In other words, we need to get back on the right side of the J-Curve.
And that’s not likely to happen any time soon. And it’s certainly not going to happen as long as business owners and executives, consumers, and investors worldwide continue to fret about the state of the fragile global economy.
So as much as I hate to say it, I’m afraid we’re — still — screwed.
Other coverage of the global economic crisis:
A World of Trouble, the sequel
More recent columns by Thomas Mucha:
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