As the UK EU referendum and the US Presidential election approach there is a common theme in Europe and the US with expressions of political disenchantment with Globalisation and Multilateralism. Commentators dismiss the validity of this disenchantment, in logical terms, but seem less willing to address its causes and the remedies of those causes.
I can’t comment on the reasons for the US issues which see a growing gap between metropolitan and non-metropolitan America with any insight, but it is clear that the gap exists and is growing between the beneficiaries of globalisation and the rest. To dismiss the discontent of the rest who have seen their incomes stagnate during the period of globalisation since the early 90s is short sighted.
In the UK, the EU referendum has become a struggle between the government and the assembled might of economic institutions ( many of them multilateral) and the fears about the level of immigration in the UK. How it will pan out is difficult to forecast.
What is worrying in political terms is the gap between the views of the metropolitan areas and the rest of the country. Polling appears to show that Vote Remain is largely a metropolitan view, together with Scotland and West Wales (two areas who would like to leave the UK or give more power to the EU over London). Those metropolitan areas are the primary beneficiaries of globalisation. Business is the other beneficiary and will continue to seek more common rules as it makes conducting a global business easier. The nation state is an inconvenience in terms of multinational business.
The institutions who have commented on the costs of Brexit, in sometimes apocalyptic terms, are implicit supporters of globalisation and the growth of multilateral standards. You only have to read OECD economic papers to see that. What those institutions don’t do is to comment on the problems of Globalisation in established economies for substantial sections of the population. Making disparaging comments about the discontented doesn’t help either.
A political economy where society becomes polarised in both its views and wealth is not a healthy one. If a sizeable minority are discontented with the political system that tends to lead to unhealthy consequences. A society where the living standards of most of the population are at best stable will put strains on public expenditure and calls for increased taxation. It is unlikely to accept lengthy “austerity”.
From a perspective outside multilateral organisations and business, I worry that not addressing the concerns of those who have not been beneficiaries of Globalisation is a mistake. When he was asked about the impact of the French Revolution of 1789, Zhou Enlai relied “It is too soon to say”. Globalisation is a young phenomenon, it will be interesting to see what electorates make of it over the next few months and years.
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