First Brexit, Now Trump: When Will We Finally Take Globalisation Seriously?

09/11/2016 16:04

Don't worry, Trump won't be able to put much of his extremist rhetoric into practice. There are too many checks and balances in the U.S. political system. Both Congress and the Senate may be under Republican control, but the Republican Party is far from synonymous with Trump. And in a highly interdependent world our political leaders don't have nearly as much power as we think.

No, the real danger now is not Trump, Brexit or the rise of the Far Right but the failure of the rest of us - the Broad Middle, as we might call ourselves - to take globalization seriously. The widespread distrust of the political mainstream may be stoked by immigration, unemployment and wealth inequality, but the deeper driver of all these issues is actually globalization. Or, to be more precise, unregulated globalization.

As former UK Prime Minister Gordon Brown pointed out following the Brexit result, "The elephant in the room is globalisation - the speed, scope and scale of the seismic shifts in our global economy. And the most obvious manifestation of the world we have lost is the hollowing out of our industrial towns as a result of the collapse of manufacturing in the face of Asian competition. These towns are home to a disproportionate share of the semi-skilled workers who feel on the wrong side of globalisation and who opted to vote leave. Unable to see how globalisation can be tamed in their interests, they have, not surprisingly, become recruits to an anti-globalisation movement whose lightning rod is migration." As for Brexit, so for Trump.

Voter rebellions of the kind we're seeing are a reaction to the unregulated neo-liberal form of globalization that we've been subject to since the 1980s. While the mobile rich and the multi-national corporations have been the big winners, the middle classes and the poor have been the losers. And now they've had enough. We've all had enough!

But we are the problem! We, the Broad Middle, along with mainstream politicians, have failed to see that we cannot have a global economy that works for all when we don't also have the necessary international agreements and regulations in place. Not only do we need these agreements on climate change, but on raising fair taxes on the rich and the multi-national corporate tax avoiders so that the revenue generated can be re-distributed to poorer nations, allowing their peoples to make a decent living at home instead of having to migrate. A global economy, if it's to work for all, needs to be complemented by binding global agreements, taxes and transnational re-distributions.

But instead of focusing on that objective we've allowed ourselves to be distracted by all manner of other peripheral concerns. While we, citizens, have immersed ourselves in identity politics, anti-war protesting, and the like, mainstream politicians have been treading water, unable to see the new globalized reality through their out-dated national glasses. Only when we focus on binding global agreements will we be taking globalization seriously. For only then can we make common cause with the poor and the disaffected middle classes who should be supporting us but who, because of our distraction, have instead been lured to the political extremes.

As a result, we've left the field wide open to the populists and fear-mongers: the Trumps, Farages, Le Pens and others. But their answer - to resort to protectionism in the form of import tariffs to protect domestic workers - is no more a solution than the present free-trade paradigm. Both paradigms are critically flawed.

The problem with free-trade is that the global free-movement of capital results in a competitive dismantling of social and environmental protections by governments. A 'race to the bottom' ensues in which each government is driven to keep their economy 'internationally competitive', so having to favour the globally mobile wealthy over the nationally rooted middle and lower classes. That's why we're in the mess we're in today. But protectionism is no solution either. For that would only mean a destructive 'race to the top': a competitive tit-for-tat cycle of rising import tariffs across the world. That's a situation the world has witnessed before and which some historians suggest has led to previous world wars. As the 19th Century French economist Frederic Bastiat ruefully noted: "Where goods are prevented from crossing national borders, soldiers soon will".

The deeper lesson, then, is that both free-trade and protectionism are simply equally destructive versions of unregulated globalization: two sides of the same bent coin. Both are destructive, and both are ultimately ruinous. Because both are unregulated. They're both symptomatic of an absence of governmental regulatory cooperation on a global scale.

The only genuine solution lies in binding global agreements. We can't have a just and sustainable global economy without binding governance on the same scale. That doesn't mean a global government, only global cooperation.

Easier said than done, you might say. But achieving global agreements may be easier than we think. What's more, a new book called The Simpol Solution sets out a very clear and practical process by which we, the Broad Middle, can make binding global agreements happen and make them stick. As Noam Chomsky said of the book, "It's ambitious and provocative. Can it work? Certainly worth a serious try". And as Prof. Simon Anholt commented, "I nodded until I got a crick in my neck. I haven't read a book for years that I agreed with so deeply and so consistently - nor felt so keenly that these are messages the world needs to hear. The clarity, simplicity and profound importance of this book are beyond question. Please read it, and please encourage others to do the same."

Are you prepared to take globalization seriously - yes, you?