In a Globalised World, People are Looking Inwards
With the surprise rise of Trump and Sanders, the result of the EU referendum in Britain, and the far-right populists gaining momentum across Europe, globalisation has become a dirty word and its merits seem to have eluded some.
These sentiments are springing up across the world, even among establishment politicians like Hillary Clinton who denounced TPP - a pact she helped create. Trump is an obvious isolationist politician – if you can call him that – having called for a dismantling of NAFTA and a trade war with the American worker’s supposed arch enemy, China. Outright support for free trade won’t win you an election anytime soon, clearly. In Britain 52% of the electorate said no to globalisation in the EU referendum, and in Germany tens of thousands marched against TTIP, a trade agreement that would bring the EU and USA closer than ever before.
Why is this? What has made so many people distrust the free trade and shiver at the term globalisation? Well, this anti-free trade sentiment is part of a greater retaliation against the effects of an increasingly interconnected and open world. The marches in Germany were for a fear of corporate dominance; the British vote to leave the EU reflected concerns over immigration and its potential effects on jobs, public services, and “Britishness”; and Trump’s isolationist economic policy feeds off the American blue-collar workers’ fear of or anger towards job loss to developing economies where labour is available at a lower rate.
This interconnected world is at the hands of an elite. In America, the flag-bearing party for international free trade elected Trump as its presidential nominee and the Democrat party narrowly avoided Bernie Sanders who shares similar isolationist ideas with Trump. Both what has happened in the US and the result to leave the EU in Britain stem from a rage at the system which voters feel no longer work for them. Trump and Farage employed a rhetoric of distrust. Distrust of the elites (Washington and Brussels), distrust of immigration, and distrust of a “rigged system” – as Trump referred to it.
The financial crisis of 2008 certainly played into these politicians’ hands: between 2005 and 2014, before government benefits are taken into account, 70% of households in wealthy countries saw their real incomes plateau or drop off. Several of the less-skilled workers in these countries undoubtedly feel as though their backs are against the wall and that globalisation, and hence a fall in demand for their labour, is to blame. Furthermore, voters that support Trump in the US, and Brexit in Britain, feel that life is worse now than it was 50 years ago, and believe that it will only get worse. I wrote about this very revealing statistic in another post. Some are certainly justified in blaming globalisation for their hardship. The rewards of international trade have certainly not been evenly spread and the lower prices in supermarkets are certainly no substitute for job loss in an uncompetitive industrial job.
A solution like that in France and Sweden involving mainstream party alliances to limit the influence of nationalist parties may well work in the short-run, but in the long-run it would be risky and could be perceived as the establishment rigging the system to choke the “little guy” that populists claim to stand up for. More must be done to help those who draw globalisation’s short straw, but there is a fundamental difference in voting for isolationist policies to abandon globalisation altogether, and improving globalisation so it’s not perceived to only benefit a corporate elite, regardless whether that truly is the case.