The two back­lashes against glob­al­iza­tion


Glob­al­iza­tion has lifted hun­dreds of mil­lions out of poverty, cre­ated new mar­kets for goods made by poor coun­tries, and re­duced prices for rich-coun­try con­sumers. For that, the eco­nomic and cul­tural back­lashes against it must be re­sisted.

WHEN I left In­dia for grad­u­ate school in the US in 1975, the word “glob­al­iza­tion” was not in use any­where in the world. Back then, cross­ing bor­ders was still a big deal, and get­ting a US visa was no easy feat. When I ar­rived in Amer­ica, to be an In­dian still car­ried a whiff of the ex­otic and un­fa­mil­iar. Nowa­days, glob­al­iza­tion is in­escapable. Over the course of less than three decades, trade bar­ri­ers came down, and the com­bi­na­tion of ac­ces­si­ble air­plane travel, satel­lite tele­vi­sion and the In­ter­net has cre­ated a kind of in­ter­con­nected “global vil­lage.” But two types of back­lash are now cast­ing doubt on glob­al­iza­tion’s fu­ture.

The 2008 eco­nomic cri­sis seems to have been the turn­ing point in pub­lic per­cep­tion. In the years lead­ing up to the cri­sis, mil­lions of peo­ple rose out of poverty and democ­racy be­came more wide­spread than ever, cre­at­ing the gen­eral sense that a golden age had be­gun.

Fran­cis Fukuyama fa­mously ar­gued that in the grand global strug­gle over the fu­ture of hu­man po­lit­i­cal and eco­nomic or­ga­ni­za­tion, the forces of democ­racy and lib­eral cap­i­tal­ism had won a de­fin­i­tive vic­tory.

Then cri­sis struck, and the hubris of that era was quickly dis­cred­ited. Peo­ple be­gan to note a dis­tinct and deep­en­ing dis­par­ity between glob­al­iza­tion’s win­ners and losers, with weak wage growth ac­com­pa­nied by ro­bust re­turns for the wealthy.

In the UK, for ex­am­ple, wages have grown by only 13 per­cent since 2008, but the stock mar­ket is up by 115 per­cent. Ac­cord­ing to an an­nual Credit Suisse re­port, wealth in­equal­ity is now grow­ing sharply in 35 out of 46 ma­jor economies, com­pared to just 12 be­fore 2007.

In the de­vel­oped world, the poor and un­em­ployed be­gan to feel that they had no stake in the glob­al­ized sys­tem. They con­demned the po­lit­i­cal es­tab­lish­ment for pur­su­ing poli­cies that sent their jobs to far­away lands such as China and In­dia. They de­manded a re­turn to the old eco­nomic or­der, and thus to the prom­ise that each new gen­er­a­tion would earn more and live bet­ter than the last.

But the back­lash against eco­nomic glob­al­iza­tion is only half the story. There has also been a back­lash against cul­tural glob­al­iza­tion — en­com­pass­ing cos­mopoli­tanism, mul­ti­cul­tur­al­ism and secularism — driven by those who seek the com­forts of tra­di­tional eth­nic, re­li­gious or na­tional iden­tity.

This iden­tity-fo­cused back­lash is ex­em­pli­fied by US Pres­i­dent Don­ald Trump, whose slo­gan “Make Amer­ica Great Again” was code for “Make Amer­ica White Again.” This mes­sage ap­pealed to the un­em­ployed, bit­ter and in­creas­ingly xeno­pho­bic white bluecol­lar vot­ers who formed the core of Trump’s base. But the US that Trump promised is not com­ing back: By 2030, a ma­jor­ity of the Amer­i­can la­bor force will be non-white.

While Trump is of­ten viewed as a uniquely Amer­i­can phe­nom­e­non, he is ac­tu­ally just one part of a broader re­volt by na­tion­al­ists and tra­di­tion­al­ists against a lib­eral glob­al­ist and cos­mopoli­tan elite, in the name of a more reli­giously and cul­tur­ally rooted iden­tity. Hun­gar­ian Prime Min­is­ter Vik­tor Or­ban, Turk­ish Pres­i­dent Re­cep Tayyip Er­do­gan, and in his own way In­dian Prime Min­is­ter Naren­dra Modi, are all cap­i­tal­iz­ing on this trend. Even in places where far-right, xeno­pho­bic and na­tion­al­ist par­ties and politi­cians have not won power, they have made strides, as the Al­ter­na­tive fur Deutsch­land did in Ger­many’s re­cent fed­eral elec­tion.

Yet the re­sent­ment to­ward the so-called elites into which such lead­ers have tapped can be seen on the left as well. Con­sider the Oc­cupy Wall Street move­ment in the US, which com­prised young peo­ple claim­ing to rep­re­sent the 99 per­cent who were left be­hind as the 1 per­cent con­tin­ued to thrive.

The Demo­cratic Party in­sur­gency, led by Sen. Bernie San­ders, op­posed Hil­lary Clin­ton for much the same rea­son its rightwing coun­ter­parts did: With her well-paid speeches at Gold­man Sachs, she was viewed as a rep­re­sen­ta­tive of the Wall Streetlinked glob­al­ized elite.

Sim­i­lar anti-elite sen­ti­ment, fu­eled partly by work­ing-class re­sent­ment of cos­mopoli­tanism and eco­nomic in­equal­ity, un­der­pinned the UK’s vote to leave the EU. There are now 1,800 bil­lion­aires glob­ally, 70 of whom live in wealthy and cos­mopoli­tan Lon­don, where res­i­dents over­whelm­ingly op­posed Brexit.

But op­po­si­tion to the EU was com­pounded by more fun­da­men­tal is­sues of na­tion­al­ism and iden­tity, in­clud­ing ci­ti­zens’ dis­taste for the large num­bers of non-English­s­peak­ing im­mi­grants from other mem­ber coun­tries.

The eco­nomic and cul­tural back­lashes against glob­al­iza­tion do not al­ways over­lap. While Er­do­gan and Modi, like Xi Jin­ping in China, prom­ise na­tional re­asser­tion, they are still eco­nomic glob­al­iz­ers — the “Davos Man” who has come to rep­re­sent the global elite. But the cur­rent specter of eco­nomic un­cer­tainty is now re­in­forc­ing their na­tivism and chau­vin­ism, just when sim­i­lar ten­den­cies are on the rise in the West.

Taken to­gether, the two types of back­lash against glob­al­iza­tion ex­plain why pro­tec­tion­ist bar­ri­ers to the free flow of goods, cap­i­tal and la­bor have been erected even in de­vel­oped Western coun­tries that long ad­vo­cated greater open­ness.

The num­bers speak for them­selves. In 2007, global cap­i­tal flows reached a record high of $12.4 tril­lion, or 21 per­cent of the global econ­omy. By 2016, the an­nual to­tal had plum­meted to $4.3 tril­lion, or 6 per­cent of the global econ­omy — a lower share than in 1980. With to­tal eco­nomic growth out­pac­ing world trade growth of less than 2.5 per­cent, glob­al­iza­tion has been rolled back decades.

Yet while glob­al­iza­tion is not per­fect, it has pulled mil­lions out of poverty in de­vel­op­ing coun­tries such as China and In­dia, cre­ated new mar­kets for goods made by poor coun­tries, and re­duced prices for rich-coun­try con­sumers. The eco­nomic and cul­tural back­lashes must be re­sisted, and the prom­ise of global in­te­gra­tion re­al­ized for all.

Shashi Tharoor, a for­mer UN un­der­sec­re­tary-gen­eral and for­mer In­dian min­is­ter of state for ex­ter­nal af­fairs and for hu­man re­source de­vel­op­ment, is chair­man of the Par­lia­men­tary Stand­ing Com­mit­tee on Ex­ter­nal Af­fairs and an MP for the In­dian Na­tional Con­gress. ©Project Syn­di­cate


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