Conquering the guilt and normalizing

 Last year, the former Japanese prime minister Shinzo Abe was assassinated while he was addressing a public meeting. This is perhaps the first of its kind of act of violence since assassination of Inejirō Asanuma, the then Chairman of the Japan Socialist Party, in 1960. The visuals of Abe’s assassination may have shattered the image of Japan, most people would be carrying in their mind, viz., the image of most courteous people showing remarkable patience and calmness in their public behavior.

The post WW2 generation had only witnessed Japanese people who were extra polite, patient, courteous, and cooperative. These Japanese were very different from the pre-WW2 Japanese, who took pride in their martial and imperialistic traditions. Political assassinations were commonplace. The Japanese Army was considered one of the most brutal forces. The imperialist Japanese occupied parts of Russia, China, and Korea; plundered their wealth, and enslaved their women. The 1945 nuclear attack on Nagasaki and Hiroshima perhaps overwhelmed the Japanese society, burdening it with the guilt of being one of the main characters in the two disastrous world wars and losing its pride to the allied forces led by the US and Russia.

In fact, this is not only in Japan. After decimation of the manifest fascist forces (e.g., Germany, Japan and Italy) and imperialistic forces like Great Britain and Austro-Hungarian empire post WWII, the world has been a rather peaceful place as compared to the preceding 2000yrs. The conflicts post WWII have mostly been contained. Even during the height of the cold war between NATO and Warsaw Pact countries, and shenanigans of star-wars, there had never been a threat of escalation to the scale of a larger World War.

However, if we correlate some of the events and trends in the past couple of years, the picture that would emerge is not very comforting. For example, consider the following events and trends:

·         Assassination of Shinzo Abe.

·         Numerous acts of violence across USA and Europe, apparently perpetrated by random people who are not radicalized.

·         Blatant violation of international laws by Russia in invading Ukraine, and botched attempts of NATO allies to internationalize the issue (contrary to the containment during earlier Crimea invasion).

·         Internationalization of recent hostilities between Israel and Hamas.

·         China is aggressively threatening its neighbors’ territorial and economic integrity.

·         USA handing over Afghanistan to Taliban.

·         Hyper nationalist right aligned leaders/parties winning elections in Italy, Argentina, Netherlands; while hardline leftists won elections (re-elections) in many jurisdictions, e.g., Germany, France, Australia, Chile, Mexico, Bolvia, Brazil, Peru, Honduras, and Columbia, etc. Both the Chinese premier Xi Jinping and Russian premier Vladimir Putin are firmly entrenched in respective offices for as long as they wish, and actively working to polarize the world.

·         Reliance of population on governments for meeting basic needs rising exponentially along with the rise in the financial and fiscal vulnerabilities across the globe.

·         Frequency of mass public protests rising in various jurisdictions.

·         Tendency of governments to overregulate and over govern increasing across jurisdictions.

Besides, the commodity producing emerging economies which felt that they have been at the mercy of the financialized western world due to overwhelming dominance of USD on global trade, have been grouping (expansion of BRICS, BRI of China, etc.) to be in a position to command terms of trade.

I get a sense that the world is now in the last phase of erasing the guilt of the two world wars. In the next two decades, the real threat humanity faces is the threat of the human race returning to its normal self – unabashedly intolerant, violent, greedy, imperialist, as they were mostly in the pre-WW2 era, ending the era of prolonged peace since 1945.

The recent Russia-Ukraine and Israel-Palestine episodes have already demonstrated that territorial occupation is becoming acceptable, just like 19^th century. It is common to hear about imminent alteration of status quo in Taiwan and Pakistan occupied Kashmir. Blatant defense of merciless killing of innocent children and women in Gaza, acceptance of suppression of women by Taliban in Afghanistan, and killing of Uighur Muslims in China indicate the change in global thinking. Regrouping of Arabs with Russia and China alliance against the interest of the western world is also a pointer to the potential shape global order might be taking in next couple of decades.

Where does India stand in this transition of global order and what small investors like me should be doing under these circumstances?

Will share my thoughts on this in the coming weeks.