Recognising the uncertainties of 2021 will stop Boris Johnson stumbling from one disaster to another
This year has taught us to take nothing for granted. Most of us subconsciously assume that we can plan our lives around predictable trends, quantifiable risks and rational decision-making by those who govern us. Such confidence has been shown to be horribly complacent.
We are living with what a couple of the country's leading economists - John Kay and Mervyn King - call "radical uncertainty". Even Christmas can be cancelled.
Before I entered parliament, I was involved in scenario planning for the energy company Shell which had the wisdom to plan its long-term investment, recognising that the world was a very uncertain place. We were encouraged to "think the unthinkable".
One of the insights of that team 30 years ago was that the future could well be hydrogen rather than carbon - though, sadly, management was slow to act on it. We adopted a saying: "Those who claim to be able to predict the future are lying even if, by chance, they are later proved right".
A mere five years ago, at the beginning of 2016, who could have envisaged the following? Donald Trump and Brexit; governments deliberately shutting down large parts of their economies to halt a pandemic; a new American car company, Tesla, worth more than all the other leading American, Japanese and German car companies put together; another American company – Apple – worth more than the whole of our FTSE 100. A possible Christmas party game is to think of the many other things which would have rendered us certifiable had we predicted them.
I will try to look forward to the end of 2021 and deal with some of the more obvious "known unknowns", while recognising that, on top of these uncertainties, there is also a host of "unknown unknowns" which may take us totally by surprise. These could arise, among other things, from technological innovation, environmental damage or dormant conflicts.
First, there is Covid-19. As of now, it looks like a race between infection and injection. And the issue is whether and when sufficient numbers will have been given a vaccine to restore "normality". That is uncertain enough especially when we consider that "normality" will only return when most of the world, not just Britain, is inoculated. But what if new strains render the vaccines ineffective? Or, if new strains prove to be more lethal rather than (as with the current variant) less?
Second, there is the economy. Many of us assume that, in 2021, the Western world will follow China out of recession and that we may see spectacular growth rates. But – if the coronavirus battle is prolonged – are governments willing to continue "doing what it takes" if that means continued deficit financing and debt accumulation? If inflation resurfaces, governments and central banks will have to decide whether to live with it – or provoke a further squeeze on living standards by raising interest rates.
Third, there is domestic politics. It is a measure of the uncertainty that a week before the New Year we do not yet know whether the UK will be leaving the EU with a trade deal, or without. There have been numerous studies which point to a slow puncture from Brexit, deflating the economy to a greater or lesser extent, depending on the outcome of negotiations. Whatever their conclusions, Brexit is a leap in the dark.
And it is a leap which could have major knock-on effects: on the future of Scotland and Northern Ireland, even Wales, within the UK and on the prospects of the political parties. Can the improbable Tory alliance between prosperous, middle class Southerners and the former "red wall" in the north survive once Brexit is "done"? Much depends on whether the opposition parties learn to hang together rather than separately.
Fourth, there is global political uncertainty. In a few weeks' time, the voters of Georgia will decide whether President-elect Biden has the power to make sweeping change or has to spend the next four years in permanent negotiation with a hostile Senate.
We can only guess how the new president will react if Russia or Iran or North Korea create a confrontation to test him out. And what if Trump, as the leader of almost half the American electorate, tries to make the country ungovernable? He may prepare for a return to office, for himself or a proxy, overturning everything Biden tries to accomplish.
And lastly, is the crisis in Western democracies the big opportunity for China to set the international agenda? Or could the doomsters who have long (and so far wrongly) predicted that China would hit the buffers, prove to have been right all along?
Assuming they are wrong, we and other countries have a choice between following the path of engagement, laid out by Angela Merkel's Germany, or continuing the drift into a new "cold war" – or possibly a hot one. My recent book China: Engage sets out the logic of working in concert rather than conflict, but I recognise that enlightened self-interest cannot be guaranteed on either side.
A decade ago I was basking in a lot of praise for having warned for some years that the UK was living through a financial bubble which would burst. In fact I got a lot of things wrong and didn't see the bigger global picture. I remain deeply suspicious of forecasts and public figures who pretend to be Mystic Meg. I have been deeply alarmed to discover that our prime minister was in thrall to someone who believed in "super-forecasters".
I do not expect political leaders to know what will happen in 2021, but it would be greatly reassuring to think they were self-aware enough to recognise the big uncertainties.
As Boris Johnson has repeatedly shown, hoping for the best is not a strategy. He and his colleagues would do well to engage in some scenario thinking and contingency planning - as we did in Shell - to avoid another twelve months stumbling from one disaster to another.
Sir Vince Cable is the former leader of the Liberal Democrats and served as secretary of state for business, innovation and skills from 2010 to 2015
