 |
| An ardent supporter of Donald Trump put up his own billboard at his home in West Des Moines, Iowa, in January. Damon Winter/The New York Times |
NY TIMES
Why did it take someone like Mr. Trump so long to show up and threaten to upend the nation’s political order?
Look around the advanced market democracies of the industrialized, generally prosperous West. Versions of Trump and the kind of politics he represents have been popping up everywhere.
In Denmark, that haven of social democracy Bernie Sanders loves, a nativist party that rails against immigration, multiculturalism and the loss of sovereignty to the European Union won more than a fifth of the vote in parliamentary elections last year, three times the share it got in 1998.
From the Finns Party, formerly the True Finns, to the UK Independence Party, populist parties with a nationalist, xenophobic streak are all over Europe’s political stage. Marine Le Pen of the National Front got nearly 18 percent of the first-round vote in France’s last presidential elections. In Austria, a far-right party that says immigration must be stopped to protect cultural identity and social peace barely lost an election on Sunday for the largely ceremonial but symbolically important office of president.
Remarkable though he may seem on the American political scene, Mr. Trump perhaps can be best understood as the face of a broader global dynamic: the resistance to policies that encourage global competition and open borders to people who have lived too long on the losing side.
 |
| Workers at a shoe factory in Zhejiang Province, China. A new study finds that benefits from trade to the American economy may not always justify its costs in lost jobs. Lang Lang/Reuters * |
This is not new. “There is something cyclical here,” said Paul De Grauwe, professor of European political economy at the London School of Economics. “We must keep in mind that we have seen these dynamics before.”
The world’s “golden age” of globalization around the turn of the 19th century into the 20th was capped by what came to be known as the Great War. The discontent bred of the worldwide economic devastation of the 1930s ended in another war.
 |
Party ideology in parliamentary elections*
Center-left, center-right
Other parties
Right-wing and far-right
|
“Backlashes against globalization promoted a zero-sum-game thinking: To protect ourselves, we must do so at the expense of somebody else,” said Harold James, an expert on European history at Princeton’s Woodrow Wilson School of Public and International Affairs. “It increases nationalism and the willingness to go to war.”
Anger is built in. Expanded trade and immigration put pressure on the jobs and wages of the working class, yet they also served to deliver enormous wealth and enhanced power into the hands of a tiny elite. In the absence of actions to mitigate the damage and more broadly share the bounty of globalization, it’s no surprise that righteous anger against the establishment has opened the door to unorthodox political entrepreneurs.
In his new book “Global Inequality,” Branko Milanovic from the City University of New York’s Graduate Center documents a shrinking middle class around the industrialized world, not just in the United States and Britain, but also in more egalitarian nations like Germany, Sweden and Australia.
“The middle class allows for both democracy and stability,” he writes. Middle-class people “tend to eschew extremism of both the left and the right.” Workers who feel themselves losing their perch in the middle class may be the most vulnerable of all to a populist appeal.
Mr. Trump may seem unusual to Americans because the United States did not produce the kind of autocratic populist leaders Europe offered the 20th century, men who built power bases blaming others for their ills: immigrants, Jews, foreigners in general.
In the last few decades, Professor Milanovic argues, rising inequality in the United States led not to populism but to what he calls a “plutocratic” equilibrium, where elites purchase political power while the poor are systematically excluded and the working class is encouraged to support the status quo based on issues like gun control and gay marriage.
Perhaps the United States’ more vigorous economy allowed the plutocratic equilibrium to survive. But after a couple of decades in which wages have gone nowhere for all but the most fortunate workers, American voters seem willing to give nativist populism a try.
Mr. Trump may not be president of the United States. The European far right may remain mostly in the minority. Yet these forces are to a large extent driving the agenda — pushing mainstream politicians to turn away from establishment positions.
 |
| The production line of a lamp factory in Suining, China. Despite efforts to revive manufacturing in the United States, economists say the chances of a recovery are slim, and developing countries face extra challenges as industry fades. Zhong Min/European Pressphoto Agency |
Hillary Clinton has rejected the Trans-Pacific trade agreement negotiated by the Obama administration that she once supported. London’s former mayor, the Conservative gadfly Boris Johnson, is gleefully lobbying for Britons to leave the European Union.
What’s scarier, Professor De Grauwe argues, is voters’ sharp turn against reason, opening space for snake-oil salesmen who will promise anything to achieve political power. “The intellectuals have apparently failed,” he said. “So you get guys like Trump that come up with statements that have nothing to do with facts.”
These entrepreneurs offer few solutions: Thousand-mile walls and sky-high tariffs will do nothing to mitigate the pressure bearing down on the working class. If the Trumps of this world came to power, might they compromise, further angering their frustrated base? Or might they instead whip up even more anger?
“Nobody thinks of actually going to war,” Professor Milanovic said. “But small things can happen that the other must react to.”
Responding to overt appeals to naked nationalism is not just about money. It’s also about policies to strengthen workers’ bargaining power; about policies to help displaced blue-collar workers find a productive place in an economy dominated by services.
Aggrieved Americans are unlikely to be won over with more generous food stamps or a bigger earned-income tax credit. Anger brews as well even in countries with more robust social safety nets.
We shouldn’t try to stop globalization, even if we could. But if we don’t do a better job managing a changing world economy, it seems clear that it will end badly again.
* What seems most striking is that the angry working class — dismissed so often as myopic, unable to understand the economic trade-offspresented by trade — appears to have understood what the experts are only belatedly finding to be true: The benefits from trade to the American economy may not always justify its costs.
In a recent study, three economists — David Autor at the Massachusetts Institute of Technology, David Dorn at the University of Zurich and Gordon Hanson at the University of California, San Diego — raised a profound challenge to all of us brought up to believe that economies quickly recover from trade shocks. In theory, a developed industrial country like the United States adjusts to import competition by moving workers into more advanced industries that can successfully compete in global markets.
They examined the experience of American workers after China erupted onto world markets some two decades ago. The presumed adjustment, they concluded, never happened. Or at least hasn’t happened yet. Wages remain low and unemployment high in the most affected local job markets. Nationally, there is no sign of offsetting job gains elsewhere in the economy. What’s more, they found that sagging wages in local labor markets exposed to Chinese competition reduced earnings by $213 per adult per year.
In another study they wrote with Daron Acemoglu and Brendan Price from M.I.T., they estimated that rising Chinese imports from 1999 to 2011 cost up to 2.4 million American jobs.
Global trade offers undeniable benefits. It helped pull hundreds of millions of Chinese out of poverty in a matter of a few decades, an unparalleled feat. It ensured Apple could benefit from China’s ample supply of cheap labor. Consumers around the world gained better-priced, better-made goods.
Still, though trade may be good for the country over all — after netting out winners and losers — the case for globalization based on the fact that it helps expand the economic pie by 3 percent becomes much weaker when it also changes the distribution of the slices by 50 percent, Mr. Autor argued. And that is especially true when the American political system has shown no interest in compensating those on the losing side. [NY Times ]