The populism alibi masks real problems of Western democracies. Behind its demagogic tone, Donald Trump has opened a new chapter in the political debate on the negative social effects of globalization,.
Maybe 2016 will be remembered as the year in which triumphed populism on both shores of the Atlantic, in the US with Donald Trump’s election and in Britain with Brexit. And 2017 could be the year in which, beyond the Channel, populism could turn up on the shores of the continent, taking advantage of electoral events that will happen in the Netherlands, France, Germany and perhaps Italy.
Populism is increasingly used as a universal key for interpreting the crisis of Western democracies. Not surprisingly, the Donald Trump’s victory and Brexit are explained as a populist drift of their democratic regimes. The same key is used to account for the advance of the National Front of Marine Le Pen in France, Podemos in Spain or the Movement Five Stars in Italy. Indeed, they have a different nature. But if we want to find an element that unites them, then we must look back to the crisis of the leftwing parties in the Western democracies.
The inaugural address of Donald Trump can be easily considered a summary of his demagogic approach to the US and the world problems. The tone was not different from that used during the election campaign. More than addressing the Congress, his speech turned to what he considers normal American citizens, and his manner has scandalized the great American and European press.
"Washington - he said - flourished - but the people did not share in its wealth." A statement that could have made any new Republican or Democrat president without raising surprise. For ten years, books, essays and articles from major American political commentators have described the extreme polarization of wealth. The one per cent of American people who was already wealthy has seen tremendous growth of their wealth following the crisis. There is no reason for being scandalized by this Trump's stance.
Nevertheless, the new president has not stopped at the first statement. "Politicians prospered - he added - but the jobs left and the factories closed. The establishment protected itself, but not the citizens of our country ... Their triumphs have not been your triumphs; and while they celebrated in our nation's Capital, there was little to celebrate for struggling families all across our land. We will bring back our jobs ".
The speech had certainly an unusual and shocking tone, coming from a US President. But the economic polarization has been well known to social researchers. William Lazonick, a professor of economics at the University of Massachusetts Lowell, had provided an eloquent illustration of the economic imbalance referred to by Trump, when referring to the decade preceding and following the crisis, has written that, from 2003 to 2012, 449 over 500 companies in the S & P 500 list “used 54% of their earnings—a total of $2.4 trillion—to buy back their own stock..(while) Dividends absorbed an extra 37% of their earnings. That left little to fund productive capabilities or better incomes for workers” (1)
.
It would have been naive to expect by the George Bush’ s administration a policy fighting this pathologic trend, but it is fair to say that not even Barack Obama has sought to correct it. It’s rather remarkable that after the 2008’s crisis the polarization of the revenues and wealth kept to aggravate the inequality deeply hitting working and middle classes.
According to the Roosevelt Institute, “the financial system is no longer an instrument for getting money into productive businesses, but has instead become an instrument for getting money out of them,... The sector overall is now predicated largely on seeking rents through payouts rather than increasing profits through growth"(Ibidem).
Notwithstanding the appalling demagogic tone, the Trump’s speech was pointing out what he considers the negative effects of globalization - the main compass of the American policy since Bill Clinton’s presidency - and his determination to reverse the globalization’s paradigm
The speech on the distorting effects of globalization is not new and is not an invention of the exuberant demagoguery Trump. Twenty years ago Dani Rodrik,, Professor of International Political Economy at Harvard, wrote about the risks involved in globalization, Globalization Gone Too Far?,- an essay in contrast to the worship for the globalization mantra under the Bill Clinton’s presidency. In the following years the academic criticism multiplied as in the more recent (2010) Joseph Stieglitz’s "Bankrupt. The global economy is in a free fall”. So, the novelty is not in the denounce in itself, but rather in the complaint coming by the highest pulpit of the global capitalism’s church.
Indeed, a surprising criticism when you consider that in the Davos' annual world conference, just few days before, the Chinese President Xi Jinping had delivered an unexpected resounding praise of globalization.
Does it mean a change in the leadership of the global economy? In effect, in the Xi' globalization's praise there were, even though less lighting, some very substantial qualifications and limiting clauses. Commenting on the Financial Times the speech, the political scientist Eric Li writes: "In His address, Mr. Xi affirmed China's commitment to preserve and advance economic globalization. But he made a few points that might sound unfamiliar to his audience. He said we needed to adapt to and actively manage economic globalization so as to defuse its negative influence. We must commit to openness, he argued - but openness can only be beneficial to all if it is tolerant of differences. ... China has been a great beneficiary of globalization ... But Beijing has always insisted on its right to determinate the course of its own national development. (“Xi Jumping’s guide to the Chinese way of globalization" - F.T. 29/ 1/.2017).
In other terms, globalization as an opportunity, but also a process that needs to be controlled. In Xi’s words: “China stands on its own conditions and experience ... We learn but do not copy from others. We formulated our own development path through continuous experimentations... No country should put its own way on the pedestal as the only way ".
The Trump's speech has been opposed to that of the Chinese leader, considering the second one as a globalization manifest, and the first as a reckless going back to protectionism. In fact, none of the two theoretical categories has ever existed as an absolute rule, the actual conduct of each country being ultimately dependent on what it considers its prominent interest.
The novelty is that the Trump's stance reopens, at the highest political level, an argument that was considered once for all closed up from the American and European elite. In any case, an issue that cannot be dismissed as "populism", just because it hits the economic and political establishment's interests and ideology.
The deepening of inequality in America is a matter of fact. As it is the impoverishment of the middle classes. Based on the analysis of the vote, Danny Quah and Kishore Mahbubani, two political scientists, have underlined that Trump has gained 53% of the white male electorate with a college degree, while the majority of Americans with an income of less than $ 50,000 have voted for Hillary Clinton, showing that “The poor have-nots were more favorable toward Clinton, while indicating "a shared sense of unease that they no longer control their own destinies”
among the middle classes.(2).
In effect, there are many reasons to be wary of of the Trump’s foreign policy platform. While it has been harshly criticized the stance toward Russia, it’s not hard to understand the intent to establish a positive dialogue with Vladimir Putin. As writes Anatol Lieven on the New York Times “Russia is a regional power struggling to retain a fragment of its former sphere of influence. Moreover, it should be a natural ally of the United states in the fight against Islamist extremism” (Why Trump is right on Russia, February, 15, 2017).
It’s, instead, a historical, and possibly tragic, mistake to put in jeopardy the commitment to two states solution in regard to the Israeli-Palestinian conflict, reversing the 1993 Oslo peace accord, disavowing the traditional US policy, and the resolution of UN’s Security Council, recently adopted at unanimity, based on the “Two States doctrine”, and the recognition of an independent Palestinian State.
Yet the Trump’s victory cannot be simplistically attributed to a sudden populist fever. We would not be dealing with these disconcerting aspects of the new American politics if the Democratic Party’s leadership had not spoken out against the possible victory of Berni Sanders supported by a wide array of the working classes, young, and independent voters, instead of point out on the weak and conservative candidacy of Hillary Clinton
Despite all contradictions, it is a matter of fact the fact that the Trump’s announced policy is an ‘important symbolic reject of the economic and social globalization model of the past three decades, based on the sovereignty of the markets and, the substantial exclusion of the state from the economic and social process. The tough criticism toward the Trump’s platform cannot disregard the disequilibria of the American society feed up by the harsh neoliberal. Ideology that has long dominated the American social policy.
“In functioning democracies – Nobel laureate Michael Spence has written - …Disaffected voters reject the systems that produced the deficiencies. This is a normal and healthy response....In the next few months, we will learn …whether Trump’s efforts to fight offshoring and boost growth and employment have a long-term impact; and whether protectionism prevails. Only then can we determine whether Trump really was the right economic choice for America’s disaffected workers” (3).
May be the working and middle classes' electors would be disappointed by the possibly ineffectual pledges of the new president. Yet, Trump has opened a new chapter in the political debate on globalization not only in the U.S. but even at global level.
It is not a coincidence that in the European Union rightwing parties, as well as left –oriented opinion and movements, look at the Trump's rhetoric with curiosity and interest. The European experience, and singularly the eurozone’s one, is a clear example of a globalization model at a continental level. And it delivers two lessons. The first is its economic and social failure. The second is the new growing popular reject of the eurozone's policy.
The 2017 electoral events in some relevant countries, starting with Holland and France in the spring, and continuing with Germany and, possibly in Italy in the fall, could reserve new surprises. Some unforeseen events, such as Brexit and the Trump’s victory, are, indeed, more than unpredictable, the evidence of a distorted perception by the leaderships of the social and political challenges.
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1. Linette Lopez “American companies have developed a very particular disease — and CEOs hate the cure - Jun. 14, 2016 http://uk.businessinsider.com/american-companies-and-short-termism-2016- [3]...)
2. Eric Li, ”Xi Jinping's guide to the Chinese way of globalization" - FT 19/1/201
3. Danny Quah e Kishore Mahbubani, "The Geopolitics of Populism"https://www.project-syndicate.org/commentary/populism-driven-by-geopolitical-change-by-danny-quah-and-kishore-mahbubani-2016-12
4. Michael Spence, "Four Certainties About Populist Economics" - https://www.c.org/commentary/trump-economic-policy-and-inequality-by-michael-spence-2017-01 [4]