Will CxOs have to navigate a re-run of 1848?

The year 1848 saw a wave of revolutions sweep across Europe, toppling monarchies and reshaping the continent's political landscape. Nearly two centuries later, some observers are drawing unsettling parallels between the tumultuous events of that era and the growing unrest of our own time. As social, economic and technological forces converge in potentially explosive ways, business leaders and decision-makers (CxOs) may soon find themselves navigating challenges reminiscent of that revolutionary year.

The revolutions of 1848 were driven by a potent mix of factors: economic hardship, social inequality, nationalist sentiment and demands for political reform. Today, similar undercurrents of discontent are bubbling to the surface across much of the developed world. Income inequality has reached levels not seen since the Gilded Age. Technological disruption is upending industries and livelihoods. Mass migration is straining social cohesion. And populist movements are tapping into a widespread sense that established political and economic systems are failing to serve the interests of ordinary citizens.

The echoes of 1848

One of the key triggers of the 1848 revolutions was a series of poor harvests that led to rising food prices and economic hardship for the working classes. Today, inflation is once again squeezing household budgets, with food and energy costs spiking in many countries. In the UK, food price inflation hit 19.1% in March 2023, the highest rate in 45 years. Though it has since moderated, the impact on living standards remains acute.

Another parallel lies in the realm of technology and communication. The printing press played a crucial role in spreading revolutionary ideas in 1848. Now, social media serves as an even more potent accelerant for dissent and mobilization. The Arab Spring of 2011 demonstrated how platforms like Facebook and Twitter could help catalyze mass protests. More recently, apps like Telegram have become vital organizing tools for protest movements from Hong Kong to Iran.

Migration was also a significant factor in 1848, with large numbers of rural workers flooding into cities in search of industrial jobs. This created social tensions and swelled the ranks of urban malcontents. Today's migration flows are largely international rather than domestic, but the destabilizing effects are similar. In 2023, net migration to the UK reached a record high of 745,000. Such influxes have fueled nativist sentiment and bolstered anti-immigration parties across Europe.

Signs of mounting pressure

Recent events suggest these various pressures may be reaching a critical mass. In France, President Emmanuel Macron's attempt to raise the retirement age sparked months of protests and riots in 2023. The unrest has continued into 2024, with farmers blockading roads and dumping manure outside government offices to protest agricultural policies, and now political deadlock between the Left and Right following his snap election call.

Germany has seen a surge in support for the far-right Alternative for Germany (AfD) party, which now polls second nationally. In January 2024, mass protests erupted across the country in response to revelations that AfD members had discussed plans for mass deportations of immigrants and citizens of foreign origin.

In the United States, political polarization continues to deepen. The January 6th Capitol riot of 2021 remains a stark reminder of how quickly tensions can boil over. As the 2024 presidential election approaches, fears of renewed violence and challenges to democratic norms are mounting.

Even in traditionally stable Switzerland, recent months have seen growing unrest. In March 2024, protests against rising health insurance costs drew thousands to the streets of major cities.

The signs of rising tension, polarisation, anger and discontent can be seen in so many places.

The role of social media

Social media is playing a crucial role in amplifying and accelerating these trends. Platforms like TikTok and Instagram allow protest movements to quickly gain traction and spread globally. The "climate strike" movement inspired by Greta Thunberg is a prime example of how social media can turn local actions into international phenomena.

However, these same platforms also facilitate the spread of misinformation and conspiracy theories, further eroding trust in institutions. A 2023 study found that exposure to political information on social media was associated with increased belief in conspiracy theories and decreased trust in mainstream media.

The algorithmic nature of social media tends to create echo chambers, reinforcing existing beliefs and polarizing public opinion. This makes it increasingly difficult to build consensus or find common ground on contentious issues.

Converging crises

As these various factors converge, the potential for widespread unrest grows. Climate change is likely to exacerbate many existing problems, driving further migration and economic disruption. The transition to renewable energy, while necessary, may cause short-term economic pain and job losses in fossil fuel-dependent regions.

Artificial intelligence and automation threaten to displace large numbers of workers across various industries. A 2023 Goldman Sachs report estimated that AI could replace the equivalent of 300 million full-time jobs. Without adequate retraining and social support, this could lead to widespread unemployment and social dislocation.

The ongoing war in Ukraine and tensions with China are straining global supply chains and fueling geopolitical instability. Economic sanctions and trade disputes are likely to further fragment the global economy, potentially leading to shortages and price spikes for key commodities.

Preparing for turbulence

Given these trends, CxOs would be wise to prepare for a period of heightened social and political turbulence. This may involve reassessing supply chains, diversifying operations geographically, and developing robust contingency plans for various scenarios.

Companies will need to navigate an increasingly complex stakeholder landscape, balancing the demands of employees, customers, investors, and local communities. Strong corporate values and a clear sense of purpose may become crucial in maintaining trust and loyalty.

Investing in workforce reskilling and community engagement could help mitigate some of the social impacts of technological disruption. Companies may also need to play a more active role in addressing societal challenges, from climate change to inequality.

While the specific events of 1848 are unlikely to repeat themselves exactly, the underlying dynamics of social upheaval and political realignment are very much in play. By understanding these forces and preparing for a range of possible outcomes, business leaders can help their organizations navigate the choppy waters ahead. The coming years may well test the resilience and adaptability of even the most well-prepared companies.

Peter is chairman of Flexiion and has a number of other business interests. (c) 2024, Peter Osborn