The Four Most Influential People of the 21st Century So Far
by Andrew Alexander
The views represented in this article are solely those of the author and may not be construed as in any way representative of the views or policies of Oxford Royale Summer Schools.
The human mind delights in round numbers and renewal, both of which account for the fondness for seeing new centuries as new epochs, ignoring the fact that the two seldom collide. This century, though, is different.
The turn of the millennium coincided with two events which will set the tone for the hundred years that follow: the September 11th attacks in 2001 in the United States, acts which seemed to dash the dreams of progressives that the coming century would see global peace and not the burning friction of the clashes between Asian and Western civilisations that have marked human history to date; and the build up of the debt mountain that is currently being supported by the perversion of the entire monetary system.
Following on from a survey of the most important events in British history, this essay looks at those making history this century. While I have selected only a very small number of people, and such a list will never approach comprehensiveness, it has one feature which deserves to be remarked upon: the figures that it examines are largely figures of the old world – American, German and British leaders and financial figures. For all the excitable futurology of the press, the most important figures of the age are those who can command nations, armies and capital, just as they have always been. Mark Zuckerberg may have enabled the prodigious time wasting that now passes for the working day in the West, but his innovations are not compulsory. The power that derives from information is still only the power to influence – it’s those who act who continue to make history.
1. Angela Merkel
Germany’s Chancellor Angela Merkel has led the Christian Democratic Union since 2000 and the country since 2005, winning the largest proportion of the vote by some distance at the 2013 elections. Her legacy domestically is perhaps the strongest one any politician can leave – that of sound administration, stability and moderation. Germany’s strength in Europe is such that extreme nationalism there would alone be sufficient to destabilise the continent. Mrs Merkel’s steady grasp on domestic affairs has averted this possibility at a time when other European electorates have begun to reach for these alternatives. As Shakespeare noted “the evil that men do lives after them, the good is oft interred with their bones” – in this sense, it is a wise and prudent thing to encourage politicians not to spend their terms in office seeking a legacy. This way lies mischief (cf Tony Blair). Mrs Merkel’s record of domestic restfulness is an example to all.
Where her legacy will long survive her is in Europe. Mrs Merkel has, abetted by the incredible power of institutional entrenchment, steered the European Union (both political and monetary) through stormy seas. There is no doubt that EMU was always a political project. The political investment was so great that it was unlikely that the enterprise would ever be broken up. Mrs Merkel’s intervention ensured that this was the case – her commitment to locking in European neighbours to an internal exchange rate greatly to Germany’s benefit has been exemplary. Her command of private threat and public flattery in the battle to do so has met only with success. The costs to the average man and woman on the continent have at no point been allowed to intrude on the vanity of their national leaderships and the German determination to realise the eternal goal of their foreign policy through mastery of Europe.
The worst moments for the EU have now passed. The nationalism of the electorate in the European Parliament elections would have been dangerous had the EU been foolish enough to delegate executive powers to the only part of its architecture which is directly elected. It did not, and it will wait out the storm behind impregnable walls of complacency and conceit. There was a moment when the storm waged so intensely that the facts – the 75% unemployment in regions of Spain, the destitution of the nation of Greece, the hopeless lapse into industrial impotence in Italy – may have pierced even the hearts of those ruling these places. Angela’s nerve never failed her, and it is she that Europe can thank for the continuity it now enjoys.
2. Barack Obama
It is interesting how few politicians are ever able to transcend party politics and become true symbols of the nation. Arguably only Winston Churchill did so in twentieth century Britain, and his first premiership benefited from the socially adhesive effect of the twin prospects of total war and total annihilation. If you widen the list to those who were at one point in a position to channel national unity through their person but failed, the list expands to include David Lloyd-George, who did not do so because both his Welsh nationality and his temperament made him a natural outsider, and Tony Blair, who arguably achieved this until the 11th of September attacks encouraged him to channel Alexander the Great and diverted him completely from domestic affairs.
Such examples are equally scarce in America. In the last century, only Franklin Delano Roosevelt and, posthumously, John F. Kennedy ever attained such a status. It fell to Barack Obama to be the next to carry this load, and any objective analysis of the impact of his presidency needs to state this fact. Mr Obama has failed to live up to his billing. This is not because he is stupid or immature, but because he is a symbol as much as he is an actor. America is not yet a sufficiently mature nation in matters of the flesh to remain sanguine in the face of the relative ineffectiveness of its first black president. Because Mr Obama is a symbol of racial integration, he has entrenched the deep divisions in American politics that he inherited and left a nation waging a civil war over its soul. His friends cannot accept the failure of a black president because they fear that doing so would in some way prove the detractors of racial equality right. His detractors cannot, on some level, accept that his failure as an administrator is not a failure of multiculturalism but the failure of a man. Because he is damned to being a symbol for other the wars of others, Mr Obama’s presidency will not be fairly assessed in his own lifetime unless America finds a peace on these issues that it is currently missing.
To my mind, Mr Obama’s influence on the world has been deeper even than that of his predecessor. The reason for this is the failure of his Pacific pivot. Islamist maniacs started a war on America that ranged from Afghanistan to the edge of Africa, a war that remains a perpetual menace to America’s Western European allies. Mr Obama did not start the war, but he has elected not to finish it. He is concentrating his focus instead on the Pacific, an area America has no instinctive understanding of and that it cannot influence anywhere like as effectively as it can Europe and West Asia. America under Mr Obama is, by design, no longer the preeminent player in Western politics – Vladimir Putin’s intransigence over Ukraine is proof of that. It is a sufficiently great country that this damage can be reversed, but the question now is whether Americans, weary from the battles of the last decade, wish it to be. The answer from the Obama presidency is an unambiguous ‘no’.
3. Ben Bernanke
The financial crisis broke on Ben Bernanke’s watch. The Chairman of the Federal Reserve responded with three enormous programmes of quantitative easing, introducing into the Western monetary system a toxin that has provided very limited improvements to the appearance of the patient while wreaking such havoc on his inner workings that its eventual withdrawal will risk complete paralysis. The adoption of QE beyond the borders of the monetary madhouse that is Japan is this century’s unique contribution to the financial progress of man. The economic outcomes of the generation now reaching maturity will be in large part conditioned by their ability to navigate a financial world that now resembles a hall of mirrors.
Quantitative Easing – the creation of money that is then used to provide liquidity to private financial institutions by paying above the market clearing rate for assets they wish to sell – was introduced in November 2008 when the Fed started buying bonds securitised on homes. The programme has grown to underpin the very low rates at which governments can now issue sovereign debt. By ensuring that lower risk assets offer no yield at all (because they are not discounted when the Fed is setting the market clearing rate so high), Mr Bernanke has achieved four things.
He has firstly ensured a disconnect between risk and risk premiums across the financial world – returns are no longer fair in the sense that they cover risk and margin, instead they are so low that investors are deliberately penalised for holding low risk assets. As a result, money floods into higher risk investments as it seeks yield, unbalancing the economy and storing up systematic risk.
Secondly, QE allows policy makers to refuse to face up to the inherent problems of the economy sooner – by creating asset price bubbles, QE can masquerade as growth for some time without having a real-world impact. This encourages both financiers and politicians to ignore the structural weaknesses of their industries, weaknesses which develop in time as they are unaddressed.
Thirdly, QE has produced outright government debt monetisation (albeit with under a name which instantly sends the listener to sleep) at a scale never before seen in America and Britain, giving lie to the notion of politically independent central banks.
Most importantly, QE is the single most socially regressive policy intervention from a major government for at least a century. Money creation serves to diminish the value of the unit of currency which is being created. The mechanism for distributing QE monies means that these funds tend to remain within the financial system, their recipients being professional and institutional investors who re-invest, pushing the price of assets up. However, the loss of spending power is felt by everybody, particularly those without asset bases whose wages are fixed (pensioners, the poor). In other words, this policy manages to re-distribute from the asset poor to the asset rich by devaluing the cash which the former hold in lieu of assets. Because of the low standard of education on both sides of the Atlantic (as well as the nonsense title for the programme), this has seldom been noticed by the public, even if they are suffering its impact.
4. Tony Blair
The financial crisis which began in 2007 will eventually be seen as a very hard way to learn a very simple lesson, the same lesson, in fact that Newton recognised in 1687: for every action, there is an equal and opposite reaction. Restated: there are no cost-free actions – the massive government debts that have propped up Western economies since then will need paying back, interest rates must rise, QE must be reversed. All of this will be deeply painful to a world economy currently fuelled entirely by make believe.
This century’s primary exponent of the cost-free action is no longer in public office. He will go on record as having had a very great influence over the destiny of Great Britain since 2000. The distinguishing features of the reforms of the Blair governments were both how radical they were, and how little thought appeared to have been given to consequences on each occasion. New Labour trashed the British constitutional settlement – they set Scottish independence in train through devolution (set in train for a narrow, temporary reasons of electoral advantage), reduced the Houses of Parliament to official echo chambers without powers of restraint over the executive (set in train for a narrow, temporary reasons of electoral advantage), filled Britain with a large number of foreign citizens who overwhelmed its health and education infrastructure and detracted from its social fabric (set in train for a narrow… you get the picture).
From the sale of hundreds of years’ worth of gold reserves to the vandalism of the pension industry, from the conscious elevation of teary weakness to the sainted state of the national mood at Diana’s funeral to the cheerful abrogation of British privileges in the EU for reasons of fairness, Mr Blair’s government was one that governed very frequently against the interests of the people of the country it commanded. In doing so, it set the pattern that most governments seem content to follow in most places so far this century. For this reason alone, Mr Blair richly deserves his place on this list.