A Case For Globalization In A World of Trumps
On October 28th, Brazilians elected Jair Bolsonaro as their president by a vote of 55% to 45%. Bolsonaro’s victory, while highly contentious, was gleefully celebrated by his supporters as a victory over the political establishment. Brazil is in the midst of a slow recovery from a terrible recession. From 2014 to 2016, Gross Domestic Project (GDP), the total economy’s output, shrank 10% and unemployment rose to 12%. Bolsonaro capitalized on discontent from economic recession, placing blame for it on a variety of groups in order to rally support. He accuses elites of corruption. He paints the media as a political foe, declaring it “fake news.” He criticizes migrants from poor nations and speaks forcefully against Brazil’s immigration policy as one of “open borders.” He views policies to curb climate change and protect the environment as efforts by the international order to control his country, and he rails against unfair trade with China and other countries.
If this story sounds familiar to you, you probably live in the United States and have been exposed to at least a small fraction of President Trump’s rhetoric and policies. Similarly to Bolsonaro, Trump’s unexpected 2016 electoral victory was fueled by rhetoric against immigrants, foreign trade, international organization, and liberal elites. Bolsonaro and Trump both positioned themselves as outsiders ready to take on the entrenched political system and “drain the swamp.” Bolsonaro overtly connected himself to our President with his campaign slogan, “Let’s make Brazil Great,” and Trump has not shied away from this comparison, congratulating the new Brazilian leader over the phone and expressing a desire to work with him in the future. Furthermore, the economic conditions that allowed these nationalist messages in Brazil were also present in America, especially in rural areas. Many families still struggle with the aftereffects of the Great Recession and the impact of broader structural economic change, making nationalist scapegoating a powerful tactic for both Trump and Bolsonaro.
While many likened President Trump’s victory to a dramatic shift in the world’s political landscape, it is just the most notable in a series of unexpected worldwide events fueled by nationalism. In 2014, India’s Narendra Modi and the Bharatiya Janata Party dominated parliamentary elections with a platform of Hindu nationalism that largely blamed the country’s Muslim minority for the poverty and economic inequality that has persisted there for years. A year later, the Law and Justice party of Poland formed a nationalist coalition government, threatening the cohesiveness of the European Union. And in the summer of 2016, in response to an influx of refugees in Europe and a distrust of international regulation, the United Kingdom shockingly voted to leave the European Union. The rise of nationalism has only continued following Trump’s victory, especially in Europe. Hungary and Italy are now both ruled by nationalist governments. German elections have seen massive gains for the nationalist Alternative for Germany party. And Marine Le Pen and the National Front party of France made the country’s recent presidential election much closer than expected.
All of these nationalist movements share a common distrust of globalization and international political institutions. This manifests itself in different ways: religious discrimination in India, anti-immigrant rhetoric in the United States, France, and Brazil, and calls for more national sovereignty in Poland and Britain. However, the root of all of these movements is the same: economic inequality.
As trade, politics, and culture have globalized, inequality has increased within almost every developed country. Globalization has created an increasingly large group of ‘have-nots’, as corporations in developed countries have turned to labor markets in developing countries. The rise in supply of unskilled labor due to an increasingly interconnected global economy has decreased the demand for workers in developed countries, leaving many unemployed and those still with jobs with stagnant or even lower wages. As these corporations found cheaper sources of labor, their profits rose and the rich got even richer, further deepening economic inequality.
However, globalization is not an inherently inequitable force. While inequality within countries has increased, global inequality has dramatically decreased. Communication and transport technology, as well as increased international cooperation and trade, has made the outsourcing of manufacturing much easier. Transnational corporations have created huge numbers of jobs in low-income countries, particularly in Eastern Asia. This raises the income of low-skilled laborers, incentivizes urbanization, and brings in large amounts of foreign investment — all important factors in economic growth. As a result, GDP in these regions has skyrocketed, lifting many of these countries out of the poorest of the poor to middle or even high-income levels.
Furthermore, globalization is not inherently bad for developed countries. On the contrary, it can have extremely positive economic effects for all people. Trade increases options and lowers prices across the economy, making it easier for consumers, especially rural consumers, to access goods. Globalization also increases the wealth of developed nations — an increase that, with the right fiscal policies, can be shared amongst all citizens. Trade’s benefits extend far beyond economics as well. An increasingly interconnected world facilitates a cultural exchange that was not possible in the past. It also fosters and necessitates political cooperation through international organizations such as the United Nations and the North Atlantic Treaty Organization, establishing interdependence and reducing conflict.
Why then — contrary to the widespread benefits of globalization — has nationalism become so politically salient? The answer lies in the the way globalization has progressed. Globalization can and should be a force that improves the lives of everyone, spreading prosperity and lifting up the poor. But it hasn’t. Instead, globalization has left many people behind as inequality has risen. To slow the growth of inequality, many have turned to nationalism in the form of protectionist tariffs, anti-immigration policies, and decreased international cooperation. Inequitable globalization has brought about a World of Trumps.
A World of Trumps is not the answer. Globalization can be and has been politically feasible and economically beneficial, much more so than nationalism. However, we need to redesign our policies so that every citizen benefits from it. This starts with increased investment by the public and private sectors in human capital. It is no secret that the increasingly connected global economy has created broad structural changes domestically. Manufacturing jobs have decreased in availability over the past few decades while other sectors, primarily the service and financial industries, have grown. Rather than let industrial workers wallow in unemployment, our government should implement retraining programs to provide workers, especially those in the middle of their careers, with the skills necessary to succeed in a different type of economy. Private companies can also play a role in this by integrating their employees into new areas of the company such as information technology or communications rather than laying them off. A more global economy also requires an education system that provides those entering the workforce with marketable skills such as computer coding, financial analysis, and business management.
While trade and cooperation are positives for both developing and developed countries, governments and corporations need to work together to find the proper balance between domestic and foreign manufacturing so that corporations, workers, and the government all benefit. Furthermore, the fiscal policy of the government must ensure that the benefits of a globalized economy are shared. This requires a strong progressive tax code, and the government must use its revenue to provide services such as Social Security, healthcare, and investments in infrastructure. Finally, our political system and politicians need to do a better job of reaching out to and representing citizens that feel marginalized by a broader global political order. Citizens must feel that their interests are being considered and represented during distant summits and trade negotiations.
When globalization becomes a force for equality, the wave of nationalist political leaders being elected into office will slow, and our world will move on from its dangerous foray into protectionism, closed borders, and political isolation. Unfortunately, this transition will take time, and nationalist policies may have political support in the meantime. What we cannot support is the racist, anti-Semitic, and xenophobic rhetoric that has saturated nationalist policy. An interconnected world — one in which all people have an equal opportunity to succeed — requires acceptance, respect, and a willingness to work with all people. Any movement founded against these ideals, whether nationalist or not, is detrimental to equitable and successful globalization. Our world can recover from Brexit, trade wars, and even the closing of borders. We will never heal once hate becomes acceptable.