It’s time to acknowledge that Donald Trump and Boris Johnson have far more in common than funny hair, and that the movement once known as conservatism—to which both men retain only the barest connection—is taking on a new form, that of an unabashed, xenophobic nationalism. Trump and Johnson have tapped into a profound trend in world politics that isn’t going away anytime soon. Let’s call it the New Nationalism: a bitter populist rejection of the status quo that global elites have imposed on the international system since the Cold War ended, and which lower-income voters have decided—understandably—is unfair.
[Michael Hirsh | June 27, 2016 | Politico]
Displaced working people of the world are uniting—in their demand, paradoxically, for disunification. The common refrain is “we want our country back.” Back from whom or what is unclear, but the biggest bogeymen appear to be international institutions and open trade. It hardly seems an accident that Trump has made his slogan “America First” (and is often accused of racism and bigotry against Mexicans and Muslims), while the homicidal lunatic who shot and stabbed the anti-Brexit MP Jo Cox to death days before the Brexit vote shouted, over and over, “Put Britain first” (and was apparently a purchaser of white supremacist literature). Or that Trump has signaled his distaste for NATO and the U.S. alliance system around the world while a majority of Britons have rejected the greatest unification project in world history, the EU, and Europhobe-in-chief Boris Johnson, who could now take over the Tories, has all but assumed the mantle of ultranationalist party leader Nigel Farage as he declares this to be Britain’s “independence day.”
Perhaps most unsettling of all is that the U.S. and Europe are only catching up to a trend that has already taken hold elsewhere in the major industrialized nations: In Russia, Vladimir Putin was perhaps the harbinger of this new global nationalism (and Putin is no doubt gloating over the prospective weakening of the EU, whose unity—as well as sanctions—have threatened him). Putin rose to power exploiting the sense of humiliation that Moscow’s proud elites felt at the hands of the West after the Soviet Union collapsed in late 1991, which was followed almost immediately by the Clinton administration’s relentless efforts to bring what used to be the Soviet bloc countries—and post-Soviet Russia itself—into the Western sphere. That policy started with the high-handed (and mostly failed) economic advice Washington gave to Moscow about free-market economics in the early ’90s—the era of “privatization” (ordinary Russians called it “grabitization”), which led directly to the reign of the hated oligarchs. Meanwhile NATO expanded fecklessly into the old Soviet bloc, aggravating anew the raw nerve of Russian paranoia about Western intentions. Cue Putin, and the fierce Russian nationalism he has used to lay claim to Crimea and part of Ukraine.
But in China too, for different reasons, nationalism is the order of the day. For the past two decades the mandarins of the communist party have encouraged nationalist fervor as a replacement for their failed socialist ideology; hence Chinese President Xi Jinping’s slogan of “realizing the great rejuvenation of the Chinese nation.” This has taken the form of aggression in the South China Sea, recalcitrance over open trade and rousing the masses to oppose China’s “humiliation” at the hands of foreign powers, as a 2013 official editorial put it. Even in Japan, which along with Great Britain has been America’s most loyal postwar ally, President Barack Obama was greeted by surprisingly large anti-U.S. protests on his visit in May, when Prime Minister Shinzo Abe hosted the G-7 leaders at the Ise Shinto shrine, which to some critics evoked Japan’s fanatic nationalism before and during World War II.
The question now is how far it will all go, this potential unwinding of the international economic system that too many of us have taken for granted—and which was designed in large part to preserve world peace. To be sure, the mere departure of Great Britain from its uneasy marriage to the European Union does not bode destruction; even in Britain, many voters (especially younger people) see the benefits of a united Europe and international alliance system that is far deeper than any that existed before in history. But it seems very likely that Brexit represents only a beginning, not an end, in the European story. “Brexit is German re-unification in reverse,” Ivan Krastev of the Center for Liberal Strategies in Sofia, Bulgaria, told Politico Europe. “A period in European history that started in 1945 has ended today.”
What exactly is starting anew? Will the next to go be the Netherlands, where anti-immigration politician Geert Wilders is demanding a “Nexit” vote. Perhaps even France, the sine qua non of European unity? Maybe euro-disadvantaged countries like Italy and Spain? Or Hungary, where the increasingly autocratic Prime Minister Viktor Orban has sought to emulate Putin and embraced what he calls “a particular, nationalist approach,” declaring: “The new state that we are building in Hungary today is not a liberal state.” In some of the Western European countries such as France and Austria, the nationalist impulses are cloaked as a defense of the liberal Christian West against the Islamic threat. But the unavoidable fact is that many of these European nationalist parties, which have been dwelt in obscurity for decades, are now enjoying real legitimacy; in May Norbert Hofer’s anti-immigrant Freedom Party just barely lost the presidency of Austria, winning 49.7 percent of the vote.
What is at stake most immediately is the world economy, as the $2 trillion drop in world market values on Friday showed, and U.S. and European markets took another bad hit on Monday. But in the longer run, world peace could be threatened as well. It’s important to note that, starting with the Bretton Woods agreement on world trade and the creation of the United Nations in 1945, this integrated postwar trading-and-alliance system was intended not to make our elites rich, but to keep the peace. The primary impetus behind the EU also was the prevention of another war. While the particulars of the 1992 Maastricht Treaty that created the eurozone were dryly economic, the unspoken subtext was always unmistakably political: Europeans had to unite, if only because continued disunity would keep them at the edge of the abyss. To put it more bluntly, everyone (especially the French, the original architects of the European Union) wanted to be protected from the Germans, and the Germans wanted to be protected from themselves, as then-Chancellor Helmut Kohl used to suggest publicly, saying repeatedly that the question of a monetary union was one of “war or peace.” The German decision to support the European Monetary Union was a frank quid pro quo with the French for allowing German reunification: If the rest of you Europeans allow Germany to grow powerful again, we will hitch our future permanently and peacefully to a larger Europe.
Will things now start to disintegrate? History is not an encouraging guide. Most people, except for historians, forget that the pre-August 1914 era of globalization was also a moment of peace that the world took for granted—a halcyon time when, as John Maynard Keynes wrote, “The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth.” Back then there was complacency too, like that of Norman Angell, who infamously argued in The Great Illusion in 1910, only four years before the destruction of the Great War, that economic interdependence should prevent another major war. Instead there were two.
Today our elites would like to believe that conditions are much different, that democracy and global trade are far more entrenched and institutionalized, and the threat of nuclear Armageddon makes war too scary to contemplate. But perhaps conditions are not entirely different: The unaccountable monarchs of pre-World War I Europe have been replaced by the not-terribly-accountable elites of post-World War II Europe, and no one has a good solution for the dysfunction inside the EU.
How did a positive idea—that of more open trade, and peace-promoting international postwar institutions like the EU—come to be identified with this unsustainable economic system? It certainly wasn’t intentional, but faulty economics and an excess of faith in markets was largely to blame. The advocates of globalization and trade deals and capital markets in both parties plainly underestimated how badly the middle class would be hurt, even as they oversold the benefits of agreements like NAFTA. On the other side of the Atlantic, the problem of unaccountable elites dictating from Brussels has dogged the European project from the start, and in Britain, particularly, Euro-phobia—especially resentment of Germany—has always run just beneath the surface. “We can’t get over the fact that they [the Germans] are much more powerful than we are,” British historian Timothy Garton Ash said in the late 1990s. The war “was our finest hour—and our last.” Boris Johnson and other advocates of Brexit claimed that the EU was choking the U.K. economy with what Johnson called “an opaque system of legislation: the vast and growing corpus of law enacted by a European Court of Justice from which there can be no appeal.” They argued that leaving the EU would mean an extra 350 million pounds a week for the ailing British National Health Service (though after the vote they appeared to back off this claim) and would dramatically cut immigration.
Today, the European Union remains a chimera, neither true working unity nor separate nationalities but something in between that never seems to run smoothly; this is especially true of the Eurozone, whose administrators refuse to confront the central contradiction of the euro concept (of which Britain is not a part): If the weaker and more indebted economies have no monetary means to recover—because they can’t devalue their own currencies—then all European Monetary Union members have to submit to some form of fiscal integration that reduces their individual power over spending and taxes. This was one of the demands made by the rescue deal offered to Greece: Athens lost control of part of its budget. But the Germans, who dominate policy-making, have resisted submitting themselves to such a regime.
Thus, the long-awaited popular backlash has begun. Tellingly, in both the U.K. and the U.S., the rebellion against globalization and integration is embraced by both right and left. Even a former close ally of David Cameron, Steve Hilton, wrote in May that the EU has “become so complicated, so secretive, so impenetrable that it’s way beyond the ability of any British government to make it work to our advantage.” Hilton called the EU “a stinking cesspit of corporate corruption gussied up in the garb of idealistic internationalism,” and a majority of voters seemed to agree.
And that is someone who was known as a conservative. In the United States, Trump has also turned GOP conservatism on its head, seizing the party base for his own after its leaders failed to realize that the angry, often white, often older voters they took for granted no longer embraced trickle-down free trade.
In Europe, much of this trend is driven by anti-immigration fervor, especially since hundreds of thousands began fleeing the civil war in Syria and other unsettled places of the Middle East. But in Europe, as in the United States, the rising anti-immigrant sentiment seems more of a symptom than a cause; xenophobia becomes virulent usually only when people at home feel threatened; and they feel threatened when their jobs do. For the bottom half of societies in the West, the jobs are either not there or not considered good enough.
Postwar globalization achieved two major things: Open trade made conditions more equal between countries, but at the cost of creating more inequality within countries, thanks to the flood of industrial jobs that fled to cheaper shores, seeking a lower “China price,” as it was once called. Under U.S. trade policy embraced by both the Democratic and Republican parties, these trends were only encouraged, and their economic impact dismissed as a minor trade-off in exchange for cheaper consumer prices.
That is at the heart of the present rebellion by lower-income voters, who have borne the brunt of globalization in the major economies, including the U.S. and Britain. In the aggregate global trade does bring growth—but in the richer countries, that growth has been largely captured by elites and white-collar workers, and it often comes at the expense of people who actually make the things that get traded. As the Nobel-winning economist Michael Spence wrote in 2011, fully 98 percent of new U.S. jobs since 1990 have been lower-paying “nontradeable” (meaning not in goods and services that are traded abroad) jobs, especially in government and health care, while “employment barely grew in the tradeable sector of the U.S. economy, the sector that produces goods and services that can be consumed anywhere, such as manufactured products, engineering and consulting services. That sector, which accounted for more than 34 million jobs in 1990, grew by a negligible 600,000 jobs between 1990 and 2008.” Another study showed that the U.S. goods trade deficit with China alone from 2001 to 2013 eliminated or displaced 3.2 million U.S. jobs, three-fourths of which were in manufacturing.
The 2008 financial crisis and Great Recession dramatically accelerated this loss of wealth among lower-income voters, and just as dramatically widened the income gap. That in turn transformed our politics far more than both political parties understood, leading to the Trump-Sanders backlash. Nor is there any fix in sight because neither political party is willing to create a whole new welfare state to help the displaced, who are only going to be worse off, Spence argues, because “it is unlikely that government and health care in the U.S. will continue growing as much as it had before the current economic crisis.”
The EU, meanwhile, with a chronically malfunctioning Monetary Union at its heart, has indeed proved a bureaucratic nightmare. In a 2010 House of Commons study, the UK government estimated that about 50 percent of UK legislation with “significant economic impact” originated from EU legislation, mostly relating to agriculture, fisheries and trade with non-EU states. According to the advocacy group Business for Britain, which campaigned for a renegotiated deal with the EU, Brussels has issued no fewer than 3,589 new regulations totaling 13 million words only since David Cameron was elected prime minister in May 2010.
Thus, we are all finding out that internationalism often isn’t pretty. And in Britain, in other European countries and in the United States what we are witnessing now is a broad-based rejection of the tarnished idea that a world of transnational institutions bodes some kind of happier end state—or even, in what now seems a charmingly quaint idea, the “end of history.”
In the frustrating void left by that flawed ideology—and with nothing else to fill it, since parties across the spectrum refused to deal forthrightly with their various nations’ inequality problems—it’s only natural that the age-old standby, nationalism, would return in force. In the West, perhaps the most common thread is that people appear to feel that their political parties no longer represent them; just as in the United States both Democrats and Republicans signed on to the free-trade globalization agenda for a generation, in the UK both major parties ended up mostly pro-Europe (at least since Margaret Thatcher). And just as clueless about the backlash they were creating as their counterparts across the Atlantic.
The split in the Conservative Party mirrors to some degree what has happened to the Republicans, and Cameron seems as surprised about what just happened to him as Marco Rubio, John Kasich and Jeb Bush were when Trump humiliated them. The same goes for Hillary Clinton, who can’t seem to grasp why so many Democrats love Bernie and hate her. Trump and Sanders simply threw out the old conventional wisdom, which had taken hold of both parties; just as pro-EU ideology dominated both the Tories and Labour in Britain.
That’s why Clinton, the Grand Mistress of this global Status Quo, ought to be quaking over what happened last week: It’s not just Bernie. It’s not just Trump. It’s a political earthquake, and it’s gone global. And Clinton ought to be aware that every time a member of the GOP elite comes forward to endorse her—the latest being Hank Paulson, he of “Government Sachs” provenance—it’s probably only worse news for her campaign.
Is there any way of altering these now-ingrained trends —besides a return to protectionism, mercantilism and perhaps war? It is even possible that Brexit will shock EU bureaucrats into changes they have resisted until now: In the immediate aftermath of the British vote, the foreign ministers of Germany and France issued a paper calling for a European security compact, a common European asylum and migration policy and improvements to the monetary union. Franco-German business leaders, meanwhile, demanded “immediate, credible and visible measures to strengthen the governance” of the Euro area and said their countries should pursue “national reforms to make our economies stronger and more competitive to assure the sustainability of our social model.” Even Boris Johnson sounded a bit conciliatory on Monday , writing in an op-ed in The Telegraph: “I cannot stress too much that Britain is part of Europe, and always will be. … British people will still be able to go and work in the EU; to live; to travel; to study; to buy homes and to settle down.”
But European ministers representing 28 member-states tend to issue a lot of papers, and politicians make a lot of promises they can’t keep (Johnson’s claim about Brits working and living in the EU suggests Britain will not be able to shut down immigration as readily as the Brexiters promised). And even if they went further and took some kind of action, most economists say it’s far too late to counter the most dire effects of globalization. The enrichment of developing countries at the expense of the rest—countries that are now producing high-value-added components that 30 years ago were the exclusive purview of advanced economies—“is a permanent, irreversible change,” says Spence. But what’s clear is that politicians interested in preserving the postwar order will need to figure out a new way to address the political discontent that springs out of the deeply flawed economic model the order is built on. It won’t be an easy adjustment, or an easy gulf to bridge: That model has been far better to politicians and administrators than the voters to whom they owe their jobs.