Trump rise: Why West is quaking over globalisation

Friday November 18 2016

Japan's Prime Minister Shinzo Abe with US President-elect Donald Trump.

Japan's Prime Minister Shinzo Abe shakes hands with US President-elect Donald Trump in New York on November 17, 2016. AFP PHOTO |CABINET SECRETARIAT 

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"History is back—with a vengeance” proclaimed The Economist magazine’s editorial following Donald Trump’s shock victory in the US presidential election.

The quip was alluding to a thesis advanced by political scientist Francis Fukuyama in an influential 1989 essay, The End of History?, that the collapse of communism marked an eternal triumph of liberal capitalist democracy over all other political ideologies.

The world, Fukuyama declared, was embarking on an inexorable march to a liberal utopia: “What we are witnessing is not just the end the cold war, or the passing of a particular period of postwar history, but the end of history as such: that is, the end point of mankind’s ideological evolution and the universalisation of western democracy as the final form of human government.”

End of history met its match in Samuel Huntington’s “clash of civilisations” thesis, argued in a trenchant 1993 essay, The Clash of Civilisations, and the Remaking of the World Order. Both Fukuyama and Huntington subsequently expounded their theses in full length books by the same titles.

Huntington’s basic tenet was that culture, rather than ideology, politics or economics was the motor of history: “It is my hypothesis that the fundamental source of conflict in this new world will not be primarily ideological or primarily economic.

The great divisions among humankind and the dominating source of conflict will be cultural. (T)he most important distinctions between people are not ideological, political or economic. They are cultural.

People define themselves in terms of ancestry, religion, language, history, values, customs, and institutions. They identify with cultural groups: tribes, ethnic groups, religious communities, nations and at the broadest level, civilisations.”

These two paradigms—the panglossian and the dystopian— have shaped the western worldview of the post-cold war world. Since the September 11 terror attacks, Huntington’s the clash of civilizations has looked the more prescient. The global financial crisis and its aftermath has tempered Fukuyama’s capitalist hubris.

That Thomas Pickety’s book, Capital in the 21st Century, which echoes Karl Marx’s Das Kapital, is a runaway bestseller says a lot about the state of capitalism.

In a blog posted in July 5, Reasons why Trump will Win, now destined to be a classic, radical filmmaker and leftie liberal icon Michael Moore described his ideological fraternity as “living in a bubble that comes with an adjoining echo chamber.” The stupefied reactions that have followed —from the apocryphal to the apocalyptic—certainly bear him out.

Momentous events are often characterised as turning points in history but that is seldom the case. Rather the events are themselves consequences of stealthy processes that with the benefit of hindsight turn out to have been hidden in plain sight. And so it is with the political upheaval that precipitated both the Brexit vote and the Trump election.

Americans of all political leanings have been railing against the political establishment, the edifice they refer to “Washington” for a long time. Trump promised that he was the ideal candidate to run the country or even to reform Washington. He found these angry people and gave them an idea — let’s storm the castle.

The more the establishment and the liberal media denigrating him, the more he fitted the bill. The Economist’s sanctimonious scribes, it would seem, have been living under a rock.

Trump was not the only insurgent in the race. Hilary Clinton’s democratic primary opponent, Bernie Sanders a 74-year-old Jewish socialist, who was not even a member of the democratic party, was just as unlikely a presidential candidate as Trump.

Sanders energised the middle class liberal youth as much as Trump fired up the disenchanted working class. The polls indicated that he was more likely to beat Trump than Hillary.

From a cultural perspective, the first Jewish president would have been as momentous as the first woman president.

Eight years ago, a gangly black rank outsider with a funny foreign name, and a Muslim middle one to boot, upset the Democratic establishment to win the nomination and then went on to win the presidency.

America’s first black president was completely unheralded. His opponent in the primaries was none other than Hillary Clinton. It looks more likely that Hillary Clinton did not lose because of her gender but because she was the establishment candidate in the age of anti-establishment politics.

Across the “pond”, one Jeremy Corbyn, an old school leftist dismissed as a joke by the political establishment on both sides of the aisle won last year’s Labour Party leadership contest with a landslide.

The establishment was convinced that he would be a passing cloud. Earlier this year, the parliamentary party (i.e. establishment Labour MPs) saw an opportunity to oust him following Brexit, accusing him of ambivalence in the EU referendum. Lo and behold, Corbyn won the challenge resoundingly, increasing his vote to 62 per cent from 59.5 per cent in the first leadership contest.

What we see then is an established political order under assault from both the left and the right. Eight years ago, it is the Republican party that was stormed. In 2016, it is the Democratic party that was stormed.

In the UK, it is the Blairite centrist Labour Party that has been stormed by the old left, while the UKIP is disrupting the Tories from the outside. Indeed, it is the UKIP challenge that prompted Cameron to call the EU referendum, in an effort to contain the Euroskeptic column within the party.
What is ailing the West? Three blindspots.

First, is the tendency to confuse theory with reality. In theory, free market capitalism and democracy are harbingers of prosperity and freedom. The reality in many western countries is that capitalist democracy has ossified into corporatist oligarchies that are unresponsive to citizens and impervious to reason. History does not lack in irony, that it is Greece that has provided the stage for its internal contradictions to play out.

The second blindspot is the denial of the unfolding demographic crisis. To be sure, this is less of denial and more of burying head in sand. Those who follow economic development discourse will have heard about a demographic dividend.

A demographic dividend is reaped when a country’s workforce is rising relative to children and old people. The population aging underway in much of the industrialised world does the converse, that is, increasing the ratio of net consumers to net producers.

Population aging is the underlying cause of Japan’s economic stagnation. Aging presents a tricky conundrum for democratic welfare states.

The reforms required to adjust to aging are to the detriment of the old people, yet the median voter is getting older by the day (over 50 in Japan and late 40s in other countries). Older people also tend to have higher voter turn out than the youth. The other solution is immigration— I need not go into its politics.

The third blindspot is about history. It is an incontrovertible historical fact that western political and economic dominance is a legacy of imperialism. At the start of the 19th century, China and India accounted for half the world’s economic output. China alone accounted for a third of global output, while India’s share, 16 per cent, was about the same as the combined share of Britain, France Germany and the US.

A century on, the four western powers share had risen to 40 per cent while the combined share of India and China was down to less than 20 percent. At independence, India’s share of global output had fallen to under five per cent.

At the start of the globalisation era, circa 1980, the four western economic powers accounted for a third of global output, while China and India were down to a combined share of eight per cent. Three decades on, China and India’s combined share is equal to that of the four western powers, at about 25 per cent each.

China’s spectacular economic rise has seen its share of global output increase fourfold, from four to 16 per cent, while the US share has fallen from 25 per cent to equal China at 16 per cent.

In another two decades, western global economic dominance will be history. It should not surprise. Imperialist capitalism was rigged for the imperial powers. The import of globalisation is to level the field.

What is becoming evident is that the globalising leaders of the free world do not seem to have anticipated the consequences of the inevitable rebalancing on their own economies and societies. This may have to do with panglossian faith, the textbook economics proposition that free trade is a win-win proposition for all.

In trade theory, there is an unpalatable long ignored proposition, known as the Stolper-Samuelson theorem, which suggests that free trade could depress wages in industrialised countries.

The fact that US median household incomes have been trending downwards since the mid-90s, despite national income per capita (output per head) continuing to growing steadily lends credence to the theorem.

History isn't ending. Imperialism is. Finally.

[email protected], @DavidNdii