Evading the Hard Truth of Globalization

Lexington tells the grim truth:

In rich country after rich country, under governments both of the left and of the right, the biggest worry for voters is that middle-class incomes are stagnating and the job-for-life is dead. Politicians instinctively blame their domestic opponents’ wicked or foolish policies. They cannot all be right.

Global capitalism has been a boon to hundreds of millions of people in China and India, but it has hollowed out the industrial base of developed economies. The post-war, competition-light economic boom that enriched the Western developed world — especially the U.S. — is over for good. In its place is extraordinarily intense, globalized competition to provide goods and services. National policies may make the new reality somewhat easier or harder for people who used to work in steel mills, factories and coal mines, but nothing will bring back the era when the U.S. had the world at its feet.

Politicians do not want to acknowledge this. Rather, they persist in blaming someone else (usually immigrants) for how the world has inexorably changed. As Lexington notes, left-wing and right-wing politicians are equally keen to assign responsibility to their ideological enemies:

Your columnist has covered elections on four continents, and the same themes keep cropping up. [Senator Mitch McConnell’s anti-Obama] speech in Kentucky reminded him of one given in 2011 by Ed Miliband, the leader of Britain’s Labour Party, a leftwinger with whom Mr McConnell ought to have little in common. Mr Miliband accused Britain’s Conservative-led government of betraying the “British Promise” of upward mobility, tempered with egalitarianism.the fall from grace.

In Brussels, your columnist used to watch politicians defend what some called the European Dream, involving lots of “solidarity”—ie, farm subsidies, industrial policies to prop up favoured firms, welfare, transfers from rich countries to poor ones and a dose of protectionism. Voters needed a more protective Europe, thundered Nicolas Sarkozy, France’s president from 2007-12, or they would reject it as a “Trojan horse” for globalisation.

It’s hard to win elections by saying that the past in gone forever (lots of people just don’t want to hear that), but that why we call it political courage. Much of the political class of the developed world seems content to tell the public nostalgic fairy tales when what we need are fundamentally new ways to provide for ourselves in the brave new world in which we all live.

[Cross-posted at The Reality-Based Community]

Keith Humphreys

Keith Humphreys is a professor of psychiatry at Stanford University. He served as a senior policy advisor at the White House Office of National Drug Control Policy from 2009 to 2010.