Introduction

In retrospect, 2020 was, to say the least, an eventful and extraordinary year around the world. Some have said that life will never be the same again based on these notable instances:

1. The United Kingdom left the European Union on January 31, 2020.

2. The Dow Jones Industrial Average (DJIA) lost 13% of its value in one day on March 16, 2020, due to the COVID-19 pandemic.

3. The number of COVID-19 victims, which emerged in spring 2020, reached 1.98 million worldwide by January 13, 2021, including 17,883 in Canada and 385,000 in the United States.

4. Joe Biden won the US presidential election on November 5, 2020. The sitting president contested the election results.

5. Natural disasters took a heavy toll on many countries. In the United States, Hurricane Laura on August 29, 2020, caused damages estimated between $4 billion and $12 billion. The Cameron Peak Fire burned approximately 700,000 acres in Colorado in 2020. In Australia, during the first seven months of 2020, 47 million acres were burned, and nearly three billion animals were killed or displaced. These deadly blazes also displaced thousands of people and killed at least 34. Wildfires destroyed 13,000 square kilometers of the Brazilian Amazon.

And the list could go on. Coincidentally, Jackie Sarlo of the New York Post aptly reported that "the year 2020 certainly experienced its fair share of world-shifting events." 

A Broader Perspective

As terrible as these events may appear, societal collapse is not on the horizon. In fact, when reviewed over a broader time range, their impact seems less significant. 

Consider the events listed earlier in historical context: 

• The 1918 Spanish Flu killed between 25 and 40 million people over two years, coinciding with the end of World War I, which limited military assistance. Thus far, COVID-19 has claimed 1.98 million lives worldwide, but it is unlikely to reach the same proportion.

• The DJIA lost 22% when the market crashed in 1987.

• National election results in the US were contested five times in the past: in 1800 (Thomas Jefferson vs. Aaron Burr), 1824 (Andrew Jackson vs. John Quincy Adams and others), 1876 (Rutherford B. Hayes vs. Samuel Tilden), 1960 (John F. Kennedy vs. Richard Nixon over voter fraud allegations), and 2000 (George W. Bush vs. Al Gore over disputed ballots in Florida). The 1860 election, which led to the Civil War over slavery, is excluded here.

•Hurricanes and wildfires are seasonal ecological events, possibly intensified by climate change.

Explaining Causes and Effects

How can the causes and effects of the 2020 events—or major socioeconomic and political events in general—be explained? 

In the dynamics of social evolution, economic dominance, backed by technology, has permeated all spheres of human activity. As a result, income inequality is rampant. In 2020, the top 1% of U.S. households held 15 times more wealth than the bottom 50% combined. As discussed in my recent book, More Inequality Divides – Less Inequality Unites, wealth concentration in the upper social stratum is greater than ever. High-skilled employees are in demand due to technological development, while automation has led to corporate downsizing. The middle class, the largest segment of most societies, has become the universal victim of this economic transformation. 

The late economist Lester C. Thurow, in The Future of Capitalism (1996), provides insight into the potential sources of these events and their manifestation over time. Though some variables have changed, his arguments remain robust. 

Economic Tectonic Plates

In geology, the invisible movement of continental plates floating on the Earth’s molten core causes earthquakes and volcanoes. Thurow posits that, similarly, an invisible mixture of technology and ideology causes visible political and socioeconomic events. He identifies five economic "tectonic plates": 

1. The End of Communism: Capitalism no longer has a major political and economic competitor. However, considering the rise of China and India, Francis Fukuyama’s The End of History better frames this as humanity reaching "the end-point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government."

2. A Technological Shift: Service centers are no longer tied to developed countries where skills are available, thanks to information technology.

3. Demographic Diversity: Population growth is slower in developed countries than in developing ones, driving migration for better living conditions. Aging populations in developed nations require increased social benefits budgets. As noted in my previous book (Toussaint, 2017, p. 111), the number of centenarians will substantially increase by the end of this century.

4. A Global Economy: The interchangeability of goods and services globally creates winners and losers, with unevenly distributed gains.

5. An Era of No Dominant Power: Unlike the First Industrial Revolution (1760–1840, led by Great Britain) and the Second (1870–1940, led by the UK, Germany, and the US), dominance is complex. The US remains an economic and military superpower, but other nations’ military capabilities remain closely guarded.

Effects and Punctuated Equilibrium 

Understanding the effects of these changes is crucial. A change process is often invisible. For example, no one sees a volcano forming from tectonic plate movement, but its eruption radically alters the landscape. Similarly, a fruit tree’s slow growth is imperceptible, but its spring blooming is striking. 

This aligns with the concept of Punctuated Equilibrium by Stephen J. Gould and Niles Eldredge. Species remain stable for long periods, punctuated by rapid bursts of change that result in new events or species, leaving few traces. This contrasts with Darwin’s theory of incremental change. 

Analyzing 2020 Events

Let’s examine the 2020 events through these lenses: 

1. Brexit

Immigration and unemployment were key drivers. Migration adversely impacted the UK, and in 2008, Southern Europe’s unemployment hit 20%. The UK was unprepared to sustain this relationship. These align with economic tectonic plates 3 and 4.

2. DJIA’s 13% Drop and COVID-19

The accelerated pace of international trade, driven by production interchangeability, increases viral contamination risks. The DJIA’s loss reflects investor anxiety. The fourth tectonic plate partly explains COVID-19’s global spread.

3.Contested US Election

Populism, fueled by globalization’s uneven effects and inadequate macroeconomic policies, thrives on antagonism and non-traditionalism. Unskilled workers’ jobs have been exported, leaving them feeling ignored and receptive to populist leaders. The fourth tectonic plate explains this movement, though populism’s success carries the seeds of its demise through nonconformist leadership and social disconnection.

Conclusion

Economic tectonic plates and punctuated equilibrium can rationalize the emergence and nature of economic and political events. Solutions to the issues arising from these events will be the subject of another article. 

References 

1. Max Roser. "Total COVID-19 Deaths by Region." Our World in Data.  https://ourworldindata.org/grapher/cumulative-covid-deaths-region?time=2020-01-11

2. Jackie Sarlo. "2020 Events: Yep, These Things Happened in the Year from Hell." New York Post, December 31, 2020.

3. Alexander Cohen. "History Tells Us That a Contested Election Won’t Destroy American Democracy." The Conversation, November 4, 2020.

4. Tommy Beer. "Top 1% of U.S. Households Hold 15 Times More Wealth Than Bottom 50% Combined." Forbes, October 8, 2020. 

5. Lester C. Thurow. The Future of Capitalism: How Today’s Economic Forces Shape Tomorrow’s World. Penguin Books, 1996.

6. Carmel M. Toussaint. Technology and Society – Rewards and Challenges. Phronetech Writing, 2017.

7. Stephen J. Gould. Belknap Press: An Imprint of Harvard University Press, May 31, 2007.