French show globalization is right path to recovery
Vive la France! Vive la mondialisation!
The French people over the weekend voted overwhelming for globalization, a capitalist system that has done more to improve living standards and end warfare than any economic system.
Americans should take heart, because in the French election lay the tools to reduce the inequities that globalization created in wealthy countries like ours, while retaining the benefits.
French President-elect Emmanuel Macron has a clear mandate to improve economic freedom in the European Union and while restoring hope to large swathes of the population left behind by trade and technology. What’s required is a conservative’s commitment to fair markets and a liberal’s promise to help workers.
Macron is well-suited to the task. Like President Donald Trump, he’s never held elected office before and shattered the political status quo by paving his own path to power. But unlike Trump, he is an investment banker who served as economics minister in a Socialist government and is committed to centrism.
Macron sees the European Union and globalization as promising experiments that are still in progress and need constant adjustment. He also knows that post-World War II peace and prosperity resulted from global trade and economic interdependence, and he doesn’t want to ruin that.
International trade has lowered the cost of goods for consumers around the world, allowing them buy or save
more. That has raised the standard of living for most people on the planet, according to a study by the Dallas Federal Reserve Bank.
And for the first time in centuries, economic interdependence means no nation state is fighting a declared war against another nation state. Despite a sense that the world is burning before our eyes, there is less fighting and killing per capita today than at any point in human history, according to several research papers from across the political spectrum.
Globalization, though, has losers, particularly people in low-skilled jobs who have seen themselves replaced by machines or overseas labor. Economists and politicians had assumed these people would naturally retrain themselves and adopt new professions, but many didn’t.
Instead, they refused to change or relocate. Rather than consider their lot in life, they found succor in nationalism and victimization, both powerful political forces that can turn voters out at the polls when those who have benefited from globalization stay home.
These aggrieved voters elected a nationalist government in Poland, carried Trump to victory in the U.S., drove the United Kingdom to leave the EU and have come close to installing nationalists in Austria and France. They are a potent political force with genuine complaints.
Another source of anger toward the EU, the United Nations and the international system is the complicated bureaucracy that allows distant technocrats to control issues that have local impact. This creates a sense of lost sovereignty and has contributed to the anti-EU sentiment in the UK and opposition to trade deals in the U.S.
Macron understands that easing the pain of the marginalized worker and reducing the international bureaucracy are critical to keeping globalization on track and reaping greater benefits. Other globalist leaders in Germany and China also recognize these problems and have committed to solving them.
The good news is that getting people back to work and reducing red tape are mutually reinforcing and beneficial.
This is the middle path that I hope we can find in the United States. We need to address the legitimate unhappiness of workingclass and rural Americans to make sure they are not wasting away. That means investment in economic development and education.
The Trump administration, meanwhile, has promised to reduce regulations, making it easier to start a business and thrive without huge compliance costs. As long as those policies don’t encourage worker exploitation or allow companies to pollute other people’s property, then that’s good news.
What we cannot allow is a fortress mentality that leads to less trade and less immigration, because that is tantamount to less wealth and fewer ideas. Globalization is not perfect, but it’s the best system we’ve had so far.
Macron and politicians like him know how to make it work better for all. Let’s see where he succeeds and emulate those policies rather than turn in on ourselves.