With the UK now “dis-May’d” and the US Trumped, many lament that ignorance on how to address the underlying strains from globalization has brought us to this pass.
Five points are key to successfully managing globalization:
- Don’t mortgage your (or the global) economy to finance, with its careering booms and busts—regulate it firmly and fully, with or without global coordination;
- Phase in major shocks slowly—viz. China entry into WTO; free movement of labor from new EU member states; and, if you’re absolutely determined to do it, Brexit;
- Retrain those hit by shocks; train all to anticipate big shocks;
- Don’t just theorize that “overall we’re better off with globalization but some will lose, so we can compensate them”; actually compensate them or don’t do the globalization;
- Get basic macro right so as to encourage new investment, whatever else is going on.
It’s not rocket science and can mostly be accomplished at national level (even inside the EU), but has yet to be proposed as a full unadulterated package to electorates in the UK or the US.
Nor does it require “time travel” to un-do China WTO entry or NMS free-movement because policies now still deviate from this basic recipe: cliff-edge-cum-hard-Brexit; weak and re-weakened financial regulation; lousy education and training; failure to compensate losers while pushing globalization anyway; and deflationary macro.
Policy is not only awry, but the conduct of politicians inflames the consequent protests.
During—and indeed from well before—the recent UK election campaign, Mrs. May displayed a wooden ear matched only by Mrs. Clinton’s tone deafness: both overtly presumed coronation; both campaigned as Royal procession; both derided protest at mis-managed globalization as “fact-free”, “deplorable(s)”, “backward/inward-looking”; both failed to articulate a coherent agenda; both challenged long-cossetted interests— May the elderly; Clinton the TPP—but with the rest of their substantive and political agendas uncorrected, their courage backfired; so both found themselves upstaged by “old-testament prophet-figures” from the left and by crazed nativists from the right.
Bad Economics plus Bad Politics, not globalization, has brought us here.
Now the UK Conservatives have thrown their lot in with the antediluvian naysaying DUP —thereby toying with Northern Ireland’s pivotal Good Friday Agreement—and the US Republicans have cosied up to red-in-tooth-and-claw racists.
The UK might soon re-run its election, a la 1974. But absent a full reset of its core economic and political agendas along the lines above, the definition of madness comes to mind. Likewise, barring unlikely impeachment—merely elevating Mr. Pence, a limp-wristed retread—the US is stuck for the duration of its 2-cum-4 year cycle at least.
In neither case is the effective alternative being boldly advanced.
Testament to that in the UK is the narrative that commeth the hour, commeth George Osborne, yet again. But he championed and still champions the bad economics and bad politics that led to this impasse—laxing and re-laxing financial regulation; cutting education and spending on globalization’s losers to cut taxes and feather-nest the affluent elderly; driving deflationary macro; and instead of resigning as Chancellor given the economic risks inherent in holding the Brexit referendum at all, he grossly mishandled the economic side of the Remain campaign. Mrs. May was and still is right about him—”over-promises, under-delivers“—so his re-emergence is merely symptomatic of the dearth of inspiration on the Conservative benches. Meanwhile, Mr. Corbyn’s electoral advance, reflecting his acute ear for tone, impedes an early reset of the substantive agenda on the left.
And in the US, the broader Republicans are resigned to their lot. And the Democrats have yet to capitalize on the post-election surge of grassroots fervor, including the women’s’ marches: they are still distracted by every Trumpism; still hydra- rather than single- headed; still embroiled in Clinton-Sanders recriminations, semi-fudging these rather than moving on; and, as in 2016, still expecting to win in 2018 & 20 by sitting on their hands and bleating. Clinton’s recent re-emergance, to point the finger of blame elsewhere for her failed campaign serves only to underscore how oblivious she—Tony Blair-like—is to her personal toxicity in party politics.
On both sides of the pond, as bullet-pointed above, there is a clear core economic and political agenda on managing globalization properly to be developed and advanced now. Thus repurposing the centre-left—as opposed to a full-on Macron political “boulversement”—would suffice to put things right.
But neither the UK nor the US centre-left is doing so.
So onwards—and possibly badly backwards—we all lurch.