Globalization, Deglobalization and the New Social Trend of Populism
By Ye Jiang
There is no doubt that globalization, which started after the end of the Second World War and has thrived since the end of the Cold War, is confronted with the tremendous challenge of deglobalization. Deglobalization that has emerged in today’s world is closely related to the new social trend of populism. This paper briefly introduces and examines the relations between globalization, deglobalization and the current new social trend of populism. The author invites comments on this paper from experts and scholars of international relations and diplomacy.
1. Globalization is confronted with the daunting challenge of deglobalization.
There have been diverse definitions of globalization and different views on when it started. It is generally believed that there have been two waves of globalization in the world history: the first one lasted from the middle of the 19th century to the early 20th century (before the First World War); the second wave started after the end of the Second World War and has continued until present. The globalization we are discussing now is the latter. The current globalization is a process of tremendous changes in international politics and society worldwide driven by economic globalization, a process whereby the world becomes economically interconnected thanks to the cross-border and cross-region flow of factors of production such as goods, technologies, information, services, currencies and personnel enabled by international trade, capital flow, transnational production and technology transfer. As the British scholar Antony Giddens said, globalization is not only economic, but also political, technological and cultural. It has taken place thanks to the development of the world transport system in the late 1960s. In other words, because of globalization, the social, political and economic activities in one region will have a direct impact on the people and communities in another region. As such, different social sectors are increasingly interdependent in a growing number of areas. International interactions in political, economic, social, cultural and even military fields and their processes have therefore been accelerating, with deepening links of local, national and global affairs.
However, there is no denying that globalization is confronted with the daunting challenge of deglobalization. The concept of deglobalization was put forward in 2001 by Walden Bello, a professor of the University of the Philippines and an internationally renowned left-wing sociologist. In his book Deglobalization: Ideas for a New World Economy published in 2002, Bello pointed out that deglobalization aims to shift the focus from export-oriented production to production in local markets. Obviously, Bello, from an academic perspective, called for changing the direction of globalization dominated by neo-liberalism, under the influence of the left-wing anti-globalization movement in November 1999. (When the third WTO ministerial meeting opened in Seattle, a massive protest took place to call on the WTO to pay attention to issues such as trade environment and policies on workers’ welfare, and to voice dissatisfaction about globalization.)
Ironically, though the concept of deglobalization was brought up by a left-wing intellectual from a developing country in the South, it is the rightists from developed nations in the North that have been promoting deglobalization in recent years. Most strikingly, far-right political parties in major Western (Northern) countries have demonized globalization as a huge number of immigrants from poor developing countries in the South pouring into rich developed nations in the North and robbing them of a massive number of jobs. As such, developed countries must make deglobalization efforts to protect their own interests, for instance using state power to protect their own markets, stemming the frequent flow of technologies, information, services, currencies, personnel and other factors of production, reducing the interdependence among different areas in current international system and narrowing the scope of interdependence between countries. In June 2016, the referendum in the UK ended up with the victory of the Brexiters. In November, Donald Trump, the protectionist Republican candidate, won the US presidential election. These two events fully reflect deglobalization in developed countries.
European integration has proceeded in parallel with globalization since the end of the Second World War. It is both a response and a boost to globalization. (The free flow of goods, capital, services, technologies and personnel within the EU as part of its integration process is in line with the globalization trend.) Therefore, Brexit has in essence taken deglobalization forward. Worse still, as argued by Western scholars, the devaluation of the British pound against other major currencies in the immediate aftermath of Brexit plunges the prices of British goods to low levels in much the same way as Britain’s abandonment of the Gold Standard. This has given a strong boost to deglobalization. The election of Trump who is extremely conservative and isolationist fully demonstrates the severe deglobalization challenge to globalization. After taking the oath as US president in January 2017, Trump has signed a series of executive orders, formally announcing the withdrawal of the US from the TPP, deciding to use federal funds to build a wall along the US border with Mexico, suspending the entry of refugees into the US, stopping issuing visas to ordinary citizens from seven Middle East countries including Iraq, Iran, Libya, Somalia, Sudan, Syria and Yemen, and banning citizens from the seven countries who hold US visas from entering the US in the coming month until the US State Department and the Homeland Security Department make stricter approval procedures. Undoubtedly, what Trump has done marks the latest development of deglobalization.
In fact, the deglobalization trend that has emerged in Western developed countries dates back before 2016. After the outbreak of the world financial and economic crisis between 2007 and 2008, the Bush and Obama administrations pushed the US congress to adopt the American Recovery and Reinvestment Act of 2009 (ARRA). This act contains explicit protectionist provisions on “buying American products”, which mandates the use of US-made steel and other finished products in public buildings or public projects with investment under the new stimulus plan. At the same time, the EU reinstated agricultural subsidies to protect its market of agricultural products. This shows that the current deglobalization challenge originates in developed countries. It is these deglobalization efforts made by developed countries that have brought globalization to a low ebb. “The ratios of world trade to output have been flat since 2008, making this the longest period of such stagnation since the Second World War. The stock of cross-border financial assets peaked at 57 per cent of global output in 2007, falling to 36 per cent by 2015. Finally, the ratio of FDI inflows as against the total world output has remained well below the 3.3 per cent attained in 2007.”
The deglobalization trend in recent years can be attributed to a number of reasons. For instance, the impact of 2007-2008 global financial and economic crisis still lingers on; the demand for many commodities has significantly declined as the largest investment boom in world history has cooled down after accelerated globalization in the post-Cold War period; the stock of cross-border financial assets has fallen because the global credit boom has come to its end. However, it is worth noting that the deglobalization that originates in Western developed countries is closely related to the zeitgeist that is prevailing in Europe and America. The zeitgeist is populism and is mainly the new right-wing social trend of populism.
2. The new social trend of populism and its impact on globalization.
In their book Twenty-First Century Populism, British scholar Daniele Albertazzi and Australian scholar Duncan McDonnell said populism is an ideology, which puts kind and homogenous ordinary people in confrontation with a group of elites and dangerous “others” and believes that the latter is a group who deprive the rights, values, success, status and voice of the former who are people enjoy sovereignty. In short, populism as an ideology stresses the need to uphold the interests of ordinary people in opposition to the elites, authority and “others”, and maintains that all destructive political means can be used to achieve its goal --- When people emerge as actors of history, they always have erratic or criminal tendencies compared with previous circumstances.
The origin of populism can be traced back to ancient Rome. The English word “populism” finds its root in the Latin word “populus” used in ancient Rome. For example, the Latin equivalent of the Roman people is “populous Romanus”. During the ancient Roman republic period, the Populares, who stood up to the Optimates at the Senatus, tried to use populist means to obtain the ruling position by mobilizing the Roman public. The well known Julius Caesar is one of its representatives. After a period of dormancy in the Middle Age, populism was resurrected during the Religious Reformation in Europe and had resurfaced from time to time in the 18th, 19th and 20th centuries. Since the start of the 21st century, populism has gradually emerged as a new zeitgeist or new social trend. It has exerted important influence on Europe, America and even the world.
As a new social trend, the 21st-century populism in Europe and America still places premium on the power of the public and emphasizes the need for the middle and lower classes to join hands in direct political struggles against the political elites at the top. Yet, this new social trend does not call for abandoning the Western democratic system and embarking on an authoritarian political path. Rather, it believes in fighting the elites, authority and political establishment under the so-called democratic political framework. It is worth noting that the new social trend of populism in Europe and America can be clearly divided into the leftist and the rightist. On the left side, it is represented by the Coalition of the Radical Left in Greece and the leftist democrat Sanders who emerged in the 2016 US election and his supporters. On the right side, it is espoused by Donald Trump, the incumbent US president, Jean-Marine Le Pen, leader of the far-right Front National Party in France, and Nigel Farage, leader of the UK Independence Party. The most prominent difference between the leftist and rightist populism is as follows. The former calls on and pushes the middle and lower classes to oppose the elites and the establishment, while the latter not only fights the elites and the establishment, but also encourages and incites the public to oppose and exclude the “others” or “outside communities” who they believe are protected by the elites and the establishment, such as refugees, immigrants and Muslims. It is therefore can be seen that the leftist populism focuses on the duality of fight between the public and the elites, while the rightist populism underscores the triality of the confrontation between the public and the elites.
More importantly, it is the social trend of rightist populism that has, on the whole, exerted the most significant impact on current international politics and economy, especially on deglobalization. First, the new social trend of leftist populism prevailing in Europe and America has joined forces with traditional populism to form a new type of populist nationalism. Nationalism always places emphasis on dividing human beings into different nations. National identity is the most important group identity, and national interests are the highest interests for every nation. To protect national interests, it is essential to build one’s own state ---- nation state. Only a nation state can increase, expand and strengthen national interests. The populist nationalism, which is formed by combining the rightist populism and nationalism in Europe and America, is opposed to the elites, authority and establishment. It is also against free trade, capital export, regional integration, foreign cultures, immigrants and Muslims. It holds that sovereign nation states should protect the interests of the middle and lower classes by adopting trade protectionism, restricting direct overseas investment, rejecting refugees, blocking inbound immigration and withdrawing from regional integration mechanisms. Obviously, this is closely related to Brexit and the election of Trump in the US.
Moreover, the new social trend of rightist populism that has grown in popularity in recent years in Europe and America have bolstered the ranks of European far-right political parties and given them free reins to promote deglobalization. For example, right-wing parties who are skeptical of European integration and globalization have come to power in Central and Eastern Europe. Orban Viktor, leader of Hungary’s FIDESZ, has been prime minister of the country since 2010. He has been critical about EU’s integration policies and acted in public defiance of the UN and other international organizations on the international refugee issue. In Poland, the Law and Justice Party won the majority votes to independently form a government in the 2015 election. At her first press conference, the new Polish Prime Minister, Beata Szydlo, demanded the EU flag to be removed with only the Polish national flag left. This fully demonstrates the negative attitude of the incumbent Polish government towards European integration and globalization.
In France and Germany, the two traditional engines behind European integration and globalization, far-right populist parties have also witnessed a significant rising momentum. Under the leadership of Jean-Marine le Pen, the Front National of France has garnered increasing support, even more than when her father Jean-Marie Le Pen was at the helm. This is because the Front National led by her is promoting populist nationalism which puts French interests above anything else, calls for French exit from the EU, and advocates trade protectionism. Therefore, her party has been popular and supported by the middle and lower class in France. Since 2015, Germany’s far-right party Alternative für Deutschland has enjoyed increasing support. In the upcoming federal parliament election in September 2017, it is very likely to win over 5% of the votes to enter the German Federal Parliament. In addition, EU members in Western and Northern Europe such as the Netherlands, Sweden and Denmark have witnessed the fast rise of rightist populist parties on the political scene. PVV, the far-right populist party of the Netherlands, is very likely to emerge as the biggest party in the 2017 parliamentary election. PVV leader Geert Wilders has promised to hold a referendum on whether the Netherlands will remain in the EU once his party wins the election and forms a cabinet. Pushed by rightist populism, the Netherlands, which is a founding member of the EU, seems to be following in the footstep of the UK. In Sweden, the far-right political party Sverigedemokraterna has become the third largest party in the parliament since 2014. In Denmark, the right-wing populist party the Danish People’s Party is now the second biggest party in the parliament and an important member of the ruling coalition.
Lastly, rightist populism has exerted a strong impact on leftist populism. As such, the two have been aligned on a considerable number of deglobalization issues. Currently, leftist populism focuses on the dual confrontation and struggle between the public and the elites, while rightist populism stresses the triangular confrontation and fight among the public, the elites and others. However, the harsh criticisms of the rightist populists on globalism espoused by European and American elites have been echoed by leftist populists. Therefore, leftist populists have come close to rightist populists and joined forces on such deglobalization issues as opposing free trade, restricting cross-border capital flows, protecting domestic markets, purchasing domestic products and stemming job outsourcing. A case in point is the firm opposition to TPP articulated by both Republican candidate Donald Trump and Democratic candidate Hillary Clinton in the 2016 US election. Although Hillary is different from Trump and is not a populist, her attitude against TPP shows that the rightist populism in the US does have an impact on leftist populism and even center-left democrats.
3. Reasons for the rise of the new social trend of populism.
The current populism in Europe and America, especially the social trend of rightist populism, has a direct impact on deglobalization. Interestingly, it is the current globalization, particularly the deeper development of globalization since the end of the Cold War, that has triggered the rise of the new social trend of populism in Europe and America. Back in 1998, the author published an article on Xinmin Evening News, titled “Globalization: a Double-edged Sword”. In this article, I said that while promoting economic globalization and global development, globalization has caused such global problems as the spread of poverty across the world and environmental degradation. To a great extent, the rise of the new social trend of populism in recent years in Europe, America and even the whole world shows the effects of globalization as a double-edged sword.
First, the deepening of globalization has brought down the actual living standards of the middle and lower classes of developed countries in the North. This has garnered public support for the rise of populism, rightist populism in particular. Economic globalization is, to a great extent, an era of capital victory. It has given rise to extreme inequality in the US, a capitalist country that emphasizes free competition, where the richest 16,000 families have the wealth equivalent to that possessed by the poorest 145 million families, and the richest 20 people have assets more than the wealth held by half of the population. Even in the EU and its member countries which emphasize social welfare and equality, the trend of strong capital and weak labor has not been contained even with the deepening and expansion of the European integration. Since the beginning of the second decade of the 21st century, income inequality among EU members has worsened. The income of the wealthiest 20% of the upper class is 5.2 times that of the poorest 20% at the bottom of society (Statistics of 2014). And the wealth gap is still widening. It is clear that the middle and lower classes in Europe and America have not benefited from globalization. On the contrary, their life has been made more difficult. Therefore, a considerable number of them have become a staunch force in the new social trend of populism against globalization.
Second, since the 2008 world financial and economic crisis, the middle class in developed countries have been weakening and slid into the bottom of society, thus increasing the number of people hostile to the elites who have championed globalization. These disadvantaged people cherish the memory of the past glories of nation states and the protection of their interests. In July 2016, the McKinsey Global Institute published a report titled “Poorer than their parents? A new perspective on income inequality.” According to this report, the fall of the middle class is a common phenomenon in developed economies. In the 25 developed economies worldwide, 70% of the families had suffered from falling incomes, compared with 2% between 1993 and 2005. Undoubtedly, the sharp fall of the middle class inevitably triggers radical political trends and movements. This is closely related to the current social trend of populism and the rise of populist nationalism which combines rightist populism and nationalism in Europe and America.
Third, the deeply frustrated middle and lower classes in Europe and America are no longer tolerant of foreigners who have benefited from globalization. They hate the thriving multiculturalism and the changes in social moral principles as a result of globalization. This has also created conditions for the rise of the new social trend of populism. The lower social classes in Europe and America have been continuously frustrated in the process of deepening globalization. They hate the multiculturalism and internationalism elites who welcome globalization and European integration and the changes in social moral principles that have been driven by globalization, such as universal gender equality, rights of minority groups, and LGBT rights. Therefore, they hope to bring the traditional morals of Western societies back to their own countries.
Lastly, the US and European countries are stuck in a dilemma on addressing issues related to globalization such as refugees, immigrants, lack of growth drivers and declining living standards and social welfare. This has also created a favorable environment for the rise of the new social trend of populism.
Since the global financial and economic crisis broke out in 2008, the ruling elites in developed countries such the US and Europe have done a less-than satisfactory job in ensuring sustained and stable growth, promoting global economic governance, addressing the imbalances in development and tackling the refugee crisis. As a result, people in Europe and the US have been discontented and believe that there will be no way out if they continue to look to the political elites and the establishment who believe in globalization and liberalization, and that only populist politicians who value the interests of the “masses” and put national interests first can really solve the problem. In such a context, the new social trend of populism finds an outlet in Europe and the US and formed among the disheartened middle and lower classes a potent whirlwind against globalization, traditional elite politics and the orthodox establishment. As a result, the present globalization is confronted with the huge challenge of deglobalization.
Ye Jiang is Research Fellow of the Shanghai Institutes of International Relations.
Ye Jiang is Research Fellow of the Shanghai Institutes of International Relations.