There are lots of things wrong with globalization, but efficiency isn’t one of them. Within the past 25 years, a dense network of international production chains and webs of finance have superimposed themselves on national economies. This internationalization of capital has brought significant profits to investors and companies alike. The world champion in exports, Germany, has been a major beneficiary.
The more perfectly the system developed, the more it aroused suspicion among populations in Western industrial nations. For them, global capitalism appears foreign and impervious to political change. This has led to globalization’s widespread rejection, its current status quo. Meanwhile, the alienation it birthed has taken center stage in recent elections, and morphed into political platforms that are neither classically “left” nor “right”. Instead, candidates identify as either friends of globalization or nationally-oriented protectionists.
This came the fore during last year’s US presidential elections, where Hillary Clinton was punished at the polls for supposedly representing a global capitalist elite. Nationalists framed the election as a populist rebellion. The fact that real estate tycoon Donald Trump didn’t make his billions building in the Rust Belt didn’t seem to matter much. Welcome to 2017.
Emmanuel Macron is the very personification of internationalism
This coming Sunday in France, the battle between the globally and nationally minded will be even more prominent. Marine Le Pen and her former party, Front National, are keen on increasing protectionist measures and turning their backs on their European neighbors. This boils down to a kind of mercantilism reminiscent of the 350-year-old policies of Jean-Baptiste Colbert.
In contrast, Ms. Le Pen’s opponent Emmanuel Macron is the very personification of internationalism. Mr. Macron is a vocal proponent of a stronger and more socially responsible Europe, though because he spent a few years in management at the Rothschild investment bank, nationalist rivals condemn him as doing the devil’s bidding. Such indictments leave a suspicious aftertaste, to say the least.
Indeed, a significant portion of the French population considers both Rothschild and Goldman Sachs to be the control centers of an exclusive and nontransparent global capitalism. Which makes it even more ironic that Donald Trump has appointed more former Goldman Sachs employees to governmental office than any president before him.
The most basic critique of global capitalism – that real power is limited to billionaires, chief executives and asset managers – has long united politicians from the left and right. Both sides complain of extreme income disparity, both prefer a state-run industrial policy and both demand income redistribution. This is how “national” and “social” form an alliance.
It’s also the reason why in Germany, the leader of the socialist Left party, Sahra Wagenknecht, sometimes sounds like Frauke Petry of the far right Alternative for Germany (AfD). It’s also why in France the popular socialist politician Jean-Luc Mélenchon is reluctant to praise Mr. Macron.
To save globalization, voters must help eliminate its negative social impact
Resolving the struggle between nationalists and internationalists is now high on the domestic political agendas of numerous countries. What has become increasingly clear is that to save globalization, voters must help eliminate its negative social impact. The fact that new middle classes are rising in India, China or Indonesia is scant solace to those in the West who have experienced downward social mobility. There is justified indignation at the fact that since 1996, the income of the world’s wealthiest 10 percent has risen by 40 percent, while the rest of the global population lags far behind, some incapable of making a living wage.
The industrial elite, who recently met in Berlin for the G-20, will need to offer society more than the familiar calls for tax reduction. They also need to take action to eliminate tax havens and enforce minimum labor standards. Advocates of globalism must convince those whose support they have lost that they too can help shape the world. Otherwise, we’ll be facing the end of globalization and free trade as we know it – without a Plan B.
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