What the xxxx is happening in the world?

“What the xxxx is happening in the world?”

You’ve probably heard or thought that at some point in the last few years, to a backdrop of stagnating global economies, war in Europe, a realignment of global superpowers, fracturing politics and concerns about the influence of technology.

The institutions, the systems we’ve relied on for decades, have relied on old rules and outdated assumptions that no longer work in an era of rapidly changing new realities.

It is possible to understand what’s happening now, if we understand what led us here.

The crash

Of course, it started with the financial crash of 2007-08.

The legitimacy of the banks and the entire financial services sector came crashing down, dragging the rest of the global economy down with it.

The neoliberal economic model that had dominated western liberal economies since the 1980s deregulated finance, globalised production and privatised risk – but imploded under its own excesses.

It was left to governments to step in and rescue the system, but they didn’t use the opportunity to fundamentally reform it.

Bank bailouts meant governments insisted that there was less money for public spending, introducing austerity economic agendas. This was seen by voters as adding insult to injury, the underfunded crumbling societal fabric symbolic of the erosion of public trust.

The financial system didn’t collapse, but the crash – and governments’ response to it – ensured that economic sterility took hold.

The real fallout from the crash wasn’t the damage it did to economies, though: it was the damage it did to a belief in fairness.

Taxpayers experienced over a decade of low growth and wage stagnation, a generation locked out of affordable housing, and public services squeezed so much they have barely any budget left after spending on statutory services.

Meanwhile asset values have continued to rise to hugely inflated prices, especially in the property market, where weak supply and continued demand help to create a sense that the rules work for capital but not for people.

Trust in politics started to erode, with new voices stepping into the vacuum that the traditional parties had created. However, many of these new voices offered simplistic solutions. Nationalism became a substitute for economic security; identity politics became a substitute for material progress; social media became an accelerant of outrage; and authoritarian leaders promised clarity in complexity.

Exploiting the fracture

And as many liberal democracies struggled to adapt to this new reality, other nations exploited this fracture.

Western economic fragility limited deterrence, while US political turbulence weakened alliance cohesion. Authoritarian regimes exploited both.

Russia is effectively at war with the rest of Europe. In Ukraine, it started seizing territory in 2014, while western leaders were still focusing on balancing their books, then attempted a full-scale invasion in 2022.

Over the last two decades, it has weaponised the disruption of its ‘enemies’, intervening in the elections of sovereign nations with state-funded social media troll farms, exploiting the fractures in democracies, and emboldened enough to conduct assassinations on foreign soil.

Meanwhile, China’s economy has been on an upward trajectory for the last two decades and it now dominates numerous industrial sectors. The extraordinary growth has slowed in recent years, accompanied by tighter internal control of its people. In this context, its continued assertion of sovereignty over Taiwan – responsible for producing most of the world’s silicon chips – is concerning.

The supply chain breakdowns of the COVID era also exposed the extent to which China can leverage its market power – which could be replicated by its market dominance in the rare earth raw materials we are increasingly reliant on.

These powers form two poles of the new tri-polar world we now live in, joining the US – which, 20 years ago, was the only real global superpower.

The US, in turn, has perhaps undergone even more political turmoil than other advanced democracies, resulting in Donald Trump’s second term as president. One year into the four-year term, it’s clear that the established rules of international diplomacy no longer apply and that any claims of US global leadership have been severely weakened.

We’ve experienced all this to a backdrop of unpredictable and extreme weather events, as climate change accelerates and politicians are unable to make significant progress towards a net-zero world, despite declarations and global accords.

Then came COVID, to start the new decade. The fragility in our systems and institutions was laid bare, as many governments acted slowly or ineptly to a global pandemic. It demonstrated that our system had been hollowed out.

The connections

All these crises are not separate.

Economic insecurity feeds political radicalisation, which in turn undermines institutional trust. Distrust fuels susceptibility to misinformation, which destabilises democracies. Destabilised democracies then struggle to address climate, health, technology and security risks.

At the same time, we have an information environment that has been built for speed, not truth, combined with an education system that was built for a slower world. Technology is outpacing regulation, with AI already blurring the boundary between real and synthetic.

It might feel that the world is in chaos, but if you step back, it’s clear that the problem is compounded systemic strain.

The consequences

History repeatedly shows us what happens when systems lose legitimacy. Whether it’s Rome, the Ottoman empire or Soviet Russia, the lessons are there for all to see.

When systems lose legitimacy, people retreat into tribes, complexity feels threatening, leaders with easy answers look attractive, expertise becomes suspect and nuance looks weak.

When that happens, we don’t just lose political consensus: we also lose a sense of cognitive stability.

As our understanding of mental illness has improved, we’ve begun to realise how many of us are affected – with an uncertain, unstable world a major contributory factor in rising levels of anxiety and depression.

Many people feel psychologically destabilised by the chronic uncertainty of daily life in the 2020s. Our very identities are under stress, as old certainties are called into question and we’re exhausted by the accelerating pace of change. Things now move so fast, we’ve lost any narrative coherence in our lives.

What that means for us

The world feels chaotic, complex and random, but in reality, it’s the cumulative consequence of economic design choices, technological architecture, geopolitical shifts, institutional complacency and human psychology under stress.

Realising that matters, because if the problems are systemic, failed systems can be redesigned, remade to work better for all of us.

Seeing those systems clearly allows us to change them and, once we recognise the patterns, the world feels more understandable.