Contemporary pundits discuss globalization as if it were a recent phenomenon. In reality, it is an old story. Moreover, the term globalization is a misnomer. Globalization refers to the global reach of the capitalist marketplace. When analysts examine the devastating effects of globalization, they are describing the impact of capitalism itself. In a thoroughly ruthless manner, private markets for goods and services, the hallmark of the capitalist system, produce winners and losers. In the early 19th century, English manufacturers used cutting edge technology and economies of scale to make cheaper textiles that ruined Indian producers. The Indian textile industry was a big loser in the capitalist marketplace, an early victim of globalization. While England remained the world’s preeminent industrial power throughout most of the 19th century, the economic center of gravity gradually shifted away to other nations like the U.S. and Germany.
By the middle of the 20th century, the U.S. became the world’s preeminent economic and financial power. But America’s dominance was challenged in the 1970’s. Many pundits feared “Japan, Inc.” would enact in the global marketplace what the Japanese failed to accomplish on the battlefield a few decades earlier. However, during the last few decades, another economic behemoth emerged in the east. As China became a central player in the global capitalist economy due to its very rapid and extensive industrialization, the economic center of gravity shifted once again. And the seismic transformation wrought by China’s industrial might generated new winners and losers in markets around the world.
In mid-century America, businesses expected to be decisive winners wherever and whenever they competed. And for a few decades this was largely true. The marketplace losers lived elsewhere, often in far-flung places. But the recent eastward shift in the economic center of gravity meant that key American businesses, like steel and auto producers, experienced what Indian manufacturers did in the early 19th century. The economic and social consequences of defeat in the global marketplace, characterized by declining industrial profits and, in turn, the threat of bankruptcy, shuttered factories, swollen rates of unemployment and the devastation of communities even whole regions of the country, came home to roost in our backyard. For some, the current gravitational shift in the world economy implied the American economy was in secular decline. But perhaps it remained more accurate to say that important sectors of American business became glaring casualties in the ceaseless struggle for competitiveness and profitability in the capitalist marketplace.
One of the important contemporary political consequences of this latest gravitational shift has been the emergence of nationalist populist movements across Europe and the U.S.. The Trump election and the emergence of the French National Front as a mainstream political power are the most important examples of this phenomenon. Fueled by rage expressed by those who feel ignored and dismissed by elites, a broad coalition including industrial workers, young people and those living in rural areas, these movements represent, in Michael Moore’s words about Trump, a “political Molotov cocktail” designed to blow up the existing political system.
Put another way, the Trump phenomenon, the surging popularity of the National Front, and the narrow defeat of populist demagogues in Austria and Holland, express the boiling frustration and anger of those who feel left behind, pushed aside or just crushed by the global capitalist marketplace. Le Pen expressed this quite well when she said French voters would choose between being globalists or patriots. The message was clear: a vote for the National Front represented an act of patriotic duty to protect France from the adverse affects of globalization. Le Pen promised to push for France’s withdrawal from the EU and the euro and to close national borders to immigrants. Her political opponent, Emmanuel Macron, ridiculed her by telling voters France could not withdraw from the global economy. Rather, he promised to render France more competitive.
While it remains important to link the emergence of nationalist populist movements with the economic and social devastation caused by a distribution of winners and losers in the world’s capitalist economy, we must raise some other critical questions: Why do workers in the US and to a lesser extent in Europe, where national unemployment has been stubbornly high for decades in countries like France and youth unemployment represents a ticking time bomb, choose to vent their political anger and frustration towards government and not private enterprises? Why are plant closings, resulting in job loss and declining incomes, understood to be the result of government policies, e.g., unwise trade deals, suffocating economic regulation and “excessive” taxation, rather than the result of corporate decision making? How do corporate decisions to relocate production abroad because of a ceaseless drive to maximize profits, or the fact that companies lose market share because of poor managerial decisions, for example, the refusal to invest in cutting edge plant and equipment in the steel industry or to meet changing consumer demand in the auto industry, remain outside our political debate?
Moreover, why haven’t progressive politicians channeled the palpable anger and frustration of those inhabiting the lowest rungs of the economic ladder? Given ever-expanding income inequality, why can’t progressives persuade the vast majority of the 99% that policies offered by Republicans deepen a profoundly unequal distribution of wealth and remain inimical to their interests? Why hasn’t a progressive analogue to the Tea Party emerged in the US? And here’s a final sobering question: what if Trump or Macron fail to address the concerns of those at the bottom? Will those brimming with passionate intensity choose a more potent Molotov cocktail, one designed to ensure the political center no longer holds?
Neal Aponte, Ph.D.
Editor of Delano