tag:theconversation.com,2011:/africa/topics/globalisation-backlash-29119/articlesGlobalisation backlash – The Conversation2019-12-05T16:18:35Ztag:theconversation.com,2011:article/1261222019-12-05T16:18:35Z2019-12-05T16:18:35ZEconomic democracy: how handing power back will fix our broken system<figure><img src="https://images.theconversation.com/files/304493/original/file-20191129-156108-14f6vkt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Democracy needs to apply to our economies, as well as our politics.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-uk-sept-25-2019-pro-1530647648">Amani A / Shutterstock</a></span></figcaption></figure><p>Behind the superficial froth of the UK election campaign, the competing parties are offering fundamentally different visions of the economy, <a href="https://theconversation.com/uk-election-2019-a-choice-between-low-tax-individualism-or-generous-state-with-unknown-price-tag-127738">who controls it and who benefits from it</a>. The Conservatives and, to some extent, the Liberal Democrats, despite their differences on Brexit, offer versions of the status quo, with an economy dominated and driven by private interests. </p>
<p><a href="https://theconversation.com/labour-manifesto-and-business-bold-and-ambitious-but-short-on-detail-says-enterprise-professor-127555">Labour</a> and the <a href="https://theconversation.com/why-vote-green-when-mainstream-parties-are-finally-taking-climate-change-seriously-127577">Greens</a> offer a more radical, and I would argue more democratic, vision that seeks to tackle inequality and open up the economy to more public engagement and participation. The nationalist parties in Scotland and Wales are somewhere between these two poles.</p>
<p>Of course, the whole reason the UK is having its first December general election since 1923 is <a href="https://theconversation.com/uk-general-election-is-on-how-it-happened-and-what-to-expect-now-125955">because of Brexit</a>. In that vote, the winning mantra was “take back control”. It was a slogan that spoke to people’s emotions rather than political and economic reality. Yet it raises many questions about what “control” really means – and who is actually taking it back. </p>
<p>The reality is that we live in a complex, interconnected and, at times, dangerously fluid and unstable global economy. The desire to regain control – and voting for the politicians that promise it – is understandable. But no amount of delusional thinking by Brexiteers can wish inescapable facts of the existing global economic system away. </p>
<p>As most perceptive commentators <a href="https://theconversation.com/anthill-8-goodbye-2016-hello-2017-70717">have noted</a>, Brexit is not an isolated phenomenon. Donald Trump was elected to the US presidency on an <a href="https://theconversation.com/whether-trump-wins-or-not-americas-brexit-moment-is-coming-65386">anti-free trade and anti-immigrant platform</a> of “making America great again”. Similar authoritarian-minded political projects are evident in countries from <a href="https://theconversation.com/india-tomorrow-part-2-the-politics-of-hindu-nationalism-115494">India</a> to <a href="https://theconversation.com/the-new-right-how-a-frenchman-born-150-years-ago-inspired-the-extreme-nationalism-behind-brexit-and-donald-trump-117277">France</a>, <a href="https://theconversation.com/the-rise-and-rise-of-recep-tayyip-erdogan-and-a-slide-towards-autocracy-in-turkey-39456">Turkey</a> and <a href="https://theconversation.com/democracy-is-on-the-brink-in-hungary-so-why-is-no-one-talking-about-it-82163">Hungary</a>.</p>
<p>Instead of looking to these ideologues to “take back control”, we need to fundamentally fix the way we run our economies and hand economic power back to the people. I believe this can – and must – be done through a concept called economic democracy. As I outline in a forthcoming book, <a href="http://politybooks.com/bookdetail/?isbn=9781509533848&subject_id=89">The Case for Economic Democracy</a>, it is key to transitioning toward a more socially just and ecologically sustainable system.</p>
<p>In the past, people have tended to think about the idea of economic democracy in quite a restricted sense. They have focused on developing the collective voice of employees through trade unions and collective bargaining. Or concentrated on cooperative or employee ownership policies. While these remain important, <a href="https://democratisingtheeconnomy.wordpress.com/">my colleagues and I argue that an expanded definition</a> is needed, one that forces us to think afresh about how we might radically democratise the economy as a whole.</p>
<p>In this respect, I argue that there are three critical interlocking pillars to economic democracy: individual economic rights, diverse forms of democratic collective ownership of companies, and the need for greater public participation in economic decision-making. </p>
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<img alt="" src="https://images.theconversation.com/files/304495/original/file-20191129-156095-1bklk84.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/304495/original/file-20191129-156095-1bklk84.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/304495/original/file-20191129-156095-1bklk84.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/304495/original/file-20191129-156095-1bklk84.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/304495/original/file-20191129-156095-1bklk84.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/304495/original/file-20191129-156095-1bklk84.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/304495/original/file-20191129-156095-1bklk84.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Populists have benefited from the lack of economic democracy.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/wilkesbarre-pa-august-2-2018-president-1148319818">Evan Al-Amin / Shutterstock</a></span>
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<h2>The economic democratic deficit</h2>
<p>There is plenty of mainstream media commentary about a global <a href="https://www.theguardian.com/commentisfree/2018/mar/17/the-three-crises-of-liberal-democracy">crisis of liberal democracy</a>, the deepening divide <a href="https://www.washingtonpost.com/opinions/2019/09/19/our-deepening-economic-divide-is-fertile-ground-trumps-demagoguery/">between elites and citizens</a>, and the opportunism of faux “outsiders” <a href="https://www.ft.com/content/a8cc15d8-e35a-11e9-9743-db5a370481bc">such as Trump and Johnson</a> (themselves from wealthy elites). But there is seldom much discussion of the underlying economic fundamentals. </p>
<p>A common feature of disaffected voters is anger toward the excesses of economic globalisation, which was pursued by centre-left and centre-right politicians of the 1990s. The theory ran that reducing the restrictions on business and finance operating across borders – and, in the EU’s case, a single market with freedom of movement for both business and workers – would be good for us all. </p>
<p>But that has not been the experience for many. The collapse of well paid and unionised industrial jobs in Europe and North America, and the shift of work to China and other developing countries, has fuelled a <a href="https://theconversation.com/as-anti-globalisation-politics-fail-nationalism-sweeps-the-world-33102">reaction against globalisation</a>. Or at least against globalisation in its neoliberal, free trade variant. Economic nationalists such as Trump and Victor Orban in Hungary, have capitalised on this reaction.</p>
<p>The 2007-08 financial crisis and the years of state-sanctioned austerity that followed it added to the stagnation of real wages <a href="https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/">for the average worker in a number of developed economies seen since the 1970s</a>. Meanwhile, CEO pay and the wealth of the very rich <a href="https://theconversation.com/the-murky-politics-of-boardroom-pay-63685">shot into the stratosphere</a>. </p>
<p>This has fuelled a sense of alienation and loss of control among ordinary people. The threat posed to work by further automation is likely to further <a href="https://theconversation.com/why-we-should-start-taxing-the-robots-that-are-taking-human-jobs-91295">depress everyday life</a>, adding grist to the mill of populists.</p>
<p>Brexit and the broader rise of right-wing populism show the limitations of democracy under the existing capitalist system. Politically, voters are asked every few years to choose from a limited range of options and then leave everything else in the hands of their political representatives. </p>
<p>In economic terms, people have a diminishing sense of control over the key activities and events that shape their lives. The proliferation of zero hours contracts and casual work, and the decline of stable permanent employment have disconnected <a href="https://theconversation.com/ken-loachs-new-film-on-the-gig-economy-tells-exactly-the-same-story-as-our-research-125743">many from secure jobs and incomes</a>. </p>
<p>In the workplace itself, employees have little say <a href="https://theconversation.com/mays-backtrack-on-workers-on-boards-shows-the-old-guard-is-still-in-business-69235">over their companies’ decision-making</a> process. Trade unions are in retreat and what limited collective bargaining we have is under attack <a href="https://theconversation.com/whatever-happened-to-the-british-general-strike-25965">in most large developed economies</a>. There is still a tradition of cooperatives and employee-owned enterprises nominally committed to democratic practice (though often sadly lacking in reality). But even these are marginal to the dominant corporate <a href="https://www.bloomberg.com/opinion/articles/2018-02-22/big-companies-gaining-monopoly-power-pose-risk-to-u-s-economy">and privatised economy</a>. </p>
<p>In short, ordinary citizens have very little say in how the capitalist economy works. This applies at the macro level – how the economy as a whole functions, who controls it and makes the key decisions on investment, what to produce, how and what to tax, what to regulate and what is produced. And it applies at the individual level of accessing economic resources to lead decent lives, in a way that is fair to others and sustainable in caring for the planet and future generations. Both are critical matters of concern.</p>
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Read more:
<a href="https://theconversation.com/this-small-german-town-took-back-the-power-and-went-fully-renewable-126294">This small German town took back the power – and went fully renewable</a>
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<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/304494/original/file-20191129-156073-1dlp840.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/304494/original/file-20191129-156073-1dlp840.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/304494/original/file-20191129-156073-1dlp840.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/304494/original/file-20191129-156073-1dlp840.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/304494/original/file-20191129-156073-1dlp840.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/304494/original/file-20191129-156073-1dlp840.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/304494/original/file-20191129-156073-1dlp840.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Gig workers.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/turin-italy-august-30-2017-bicycle-706093501">Mike Dotta / Shutterstock</a></span>
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<p>This is the backdrop for understanding the growing popularity of alternative economic policies that seek to give workers and citizens real power and control over their livelihoods. In the UK, the Labour party’s policies to reverse privatisation and create new <a href="https://labour.org.uk/wp-content/uploads/2017/10/Alternative-Models-of-Ownership.pdf">more democratic forms of public ownership</a> are massively popular. A <a href="https://lif.blob.core.windows.net/lif/docs/default-source/default-library/1710-public-opinion-in-the-post-brexit-era-final.pdf?sfvrsn=0">recent opinion poll</a> by the right-wing Legatum Institute think tank found 83% of respondents favoured nationalisation of water companies, 77% for electricity and gas, and 76% for train services.</p>
<p>Other radical proposals include plans to give workers elected representation on company boards. This has <a href="https://www.nytimes.com/2019/01/06/opinion/warren-workers-boards.html">long been done in Germany</a>. It was even mooted by former UK prime minister, Theresa May (who then <a href="https://theconversation.com/mays-backtrack-on-workers-on-boards-shows-the-old-guard-is-still-in-business-69235">u-turned on the issue</a>) and is now part of <a href="https://www.bbc.co.uk/news/business-50508369">Labour’s UK election campaign</a>, as well as both <a href="https://edition.cnn.com/2019/10/14/politics/bernie-sanders-worker-ownership-plan/index.html">Bernie Sanders</a> and <a href="https://hbr.org/2018/08/worker-representation-on-boards-wont-work-without-trust">Elizabeth Warren’s</a> bids for the US presidency. Even more radical, is the endorsement on both sides of the Atlantic of a policy to force larger companies to transfer a percentage of their profits <a href="https://theconversation.com/why-labour-should-focus-on-putting-workers-on-boards-not-inclusive-ownership-funds-127473">to employee ownership funds</a>. </p>
<p>Even in the US, where there is traditional hostility to ideas seen as “socialist”, public opinion appears to be shifting. A poll carried out <a href="https://theweek.com/articles/871555/bernie-sanders-finally-embraces-socialism">by Washington-based think tank the Democracy Collaborative</a> discovered that 55% of people supported the idea of employee ownership funds, while only 20% were opposed. The idea that workers should have the first right to buy their companies when they comes up for sale had 69% support. </p>
<p>Add to this the <a href="https://theconversation.com/i-stand-with-the-climate-striking-students-its-time-to-create-a-new-economy-123893">upsurge in demand</a> to tackle climate change by fundamentally transitioning <a href="https://theconversation.com/climate-crisis-heres-what-the-experts-recommend-we-do-123238">away from a growth-driven carbon-based economic model</a> and it is clear that there is something radical in the air. This, in short, is the case for economic democracy.</p>
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Read more:
<a href="https://theconversation.com/climate-crisis-heres-what-the-experts-recommend-we-do-123238">Climate crisis – here's what the experts recommend we do</a>
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<h2>Individual rights</h2>
<p>But what should this look like in practice? Unlike older visions of economic democracy that started with class or the collective, my starting point is the individual. We should all have the right to participate in a democratic society on equal terms. </p>
<p>Nobel Prize winning economist <a href="https://www.theguardian.com/global-development/2012/nov/22/amartya-sen-human-development-doyen">Amartya Sen has emphasised</a> that individual economic freedom is only possible where citizens have the resources, competence and capability to flourish. Rather than the restricted choice of whatever the market is offering, it is important to create a sense of economic citizenship, one that provides all people with the resources and capability to make meaningful life choices. </p>
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<img alt="" src="https://images.theconversation.com/files/304497/original/file-20191129-156082-jhaaul.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/304497/original/file-20191129-156082-jhaaul.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/304497/original/file-20191129-156082-jhaaul.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/304497/original/file-20191129-156082-jhaaul.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/304497/original/file-20191129-156082-jhaaul.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/304497/original/file-20191129-156082-jhaaul.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/304497/original/file-20191129-156082-jhaaul.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">More choice, please.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-june-30-unidentified-members-trade-80226988">Matt Gibson / Shutterstock</a></span>
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<p>An important mechanism for doing this is to provide everyone with a universal basic income that would cover their essential living requirements: food, shelter and clothing. This idea has provoked plenty of controversy with enthusiasts and detractors on the left and right.</p>
<p>Right wing proponents, <a href="https://theconversation.com/how-basic-income-can-solve-one-of-the-digital-economys-biggest-problems-53081">such as Milton Friedman</a>, support it because they think it could allow governments to cut welfare services elsewhere. Others reject it for <a href="https://www.forbes.com/sites/miltonezrati/2019/01/15/universal-basic-income-a-thoroughly-wrongheaded-idea/">creating indolence and dependency</a>. If everyone was given an income, why would anybody turn up for work? Many trade unionists and social democrats don’t like the idea because they think it would shift focus away <a href="http://www.world-psi.org/sites/default/files/documents/research/en_ubi_full_report_2019.pdf">from workplace rights and public services</a>, allowing further attacks from the right. </p>
<p>The more <a href="https://www.palgrave.com/gp/book/9783030038489">substantive research suggests</a> little evidence that labour market participation falls when UBI is introduced, although some people take the opportunity to reduce hours for positive reasons such as spending more time with family and volunteering. Meanwhile, the biggest positives tend to be improvements in the physical and mental health of participants and the greater likelihood of young people staying on for longer in education. </p>
<p>In response to fears on the left, UBI should not be viewed as a standalone policy but rather part of a progressive agenda of fairer taxation, living wage rates, <a href="https://neweconomics.org/2019/04/the-fight-for-shorter-working-hours">reducing working hours</a> and strengthening employment rights. Framed this way, the idea has much appeal in providing people with real choices. </p>
<p>It would also change the balance of power in the labour market. Rather than coercing people into poorly paid and inhumane forms of work, employers would also be forced to make work more attractive and rewarding. </p>
<h2>Democratic collective ownership</h2>
<p>Under a proper economic democracy, the individual should also have ownership rights and control over the work they do and how it is used. Under capitalism, once we enter employment, we effectively sell the right to own and control our labour to employers. The workplace becomes a managerial dictatorship. </p>
<p>Many thinkers since the 19th century, from <a href="https://monthlyreview.org/2006/10/01/the-meaning-of-work-a-marxist-perspective/">Karl Marx</a> <a href="http://www.ellerman.org/classical-liberalism-and-workplace-democracy/">to liberals</a> such as John Stuart Mill, have recognised that this is unjust. People have a basic right to control their labour and any benefits that accrue from it, whether that’s in the form of income or profit.</p>
<p>Work is a social activity, not an individual one. It involves interaction and cooperation with others. Recognising this, my second pillar of economic democracy is collective, diverse and democratic forms of ownership. This is very different to the <a href="https://theconversation.com/the-rise-fall-and-rise-again-of-businesses-serving-more-than-just-their-shareholders-124618">existing dominance of shareholder capitalism</a>, where companies are privately controlled and largely subject to the whims of the market. </p>
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<strong>
Read more:
<a href="https://theconversation.com/the-rise-fall-and-rise-again-of-businesses-serving-more-than-just-their-shareholders-124618">The rise, fall and rise again of businesses serving more than just their shareholders</a>
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<p>Similarly, while plans to take privatised utilities back into public ownership are important, these entities need to be run along much more democratic lines than in the past. Many older and existing forms of public ownership have been <a href="https://theconversation.com/corbyn-public-ownership-push-reflects-what-is-happening-all-round-the-world-47652">too removed from public control</a>, run by elite officials or boards composed of private sector interests rather than giving the public themselves a role in decision-making. The BBC is a good example of this, set up as a corporation on behalf of the pubic, who in reality have <a href="https://theconversation.com/the-bbcs-biggest-problem-the-public-has-no-control-over-it-59497">little say over how it is run</a>. </p>
<p>As well as providing democratic participation for workers, it’s also important to include users of public services in the way they are run. There are different ways of achieving this and plenty of good examples from around the world <a href="https://labour.org.uk/wp-content/uploads/2018/09/Democratic-public-ownership-consulation.pdf">of how happens in practice</a>. </p>
<p>For example, when the French city of Montpelier de-privatised its water system, taking it back into public ownership in 2016, it set up a water observatory, a citizens forum with the power to scrutinise <a href="https://www.tni.org/files/publication-downloads/reclaiming_public_services.pdf">and hold the new public enterprise to account</a>. It also drew 30% of its board from civil society organisations. </p>
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<img alt="" src="https://images.theconversation.com/files/304498/original/file-20191129-156120-aqwv2x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/304498/original/file-20191129-156120-aqwv2x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/304498/original/file-20191129-156120-aqwv2x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/304498/original/file-20191129-156120-aqwv2x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/304498/original/file-20191129-156120-aqwv2x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=565&fit=crop&dpr=1 754w, https://images.theconversation.com/files/304498/original/file-20191129-156120-aqwv2x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=565&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/304498/original/file-20191129-156120-aqwv2x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=565&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">If Montpellier can do it …</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/triumphal-arch-arc-de-triomphe-montpellier-1284672082">Shutterstock</a></span>
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<p>Another interesting example of a more hybrid form of democratic public ownership comes from Costa Rica. Here, the country’s third largest bank, <a href="https://theconversation.com/costa-ricas-banco-popular-shows-how-banks-can-be-democratic-green-and-financially-sustainable-82401">the Banco Popular</a> is a public enterprise that is legally owned by the country’s workers, with 1.2 million members (20% of the total population). </p>
<p>To own a share, a worker needs to have had a savings account with the bank for one year. The key governing body of the bank is a democratic assembly of 290 elected representatives, which determines the bank’s strategic direction. A quarter of the bank’s revenues fund social projects and it has played an increasingly important role in the country’s rapid expansion of renewable energy, including financing the first Latin American energy supplier to become carbon neutral.</p>
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Read more:
<a href="https://theconversation.com/costa-ricas-banco-popular-shows-how-banks-can-be-democratic-green-and-financially-sustainable-82401">Costa Rica's Banco Popular shows how banks can be democratic, green – and financially sustainable</a>
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</p>
<hr>
<p>Beyond public services, other forms of democratic collective ownership (such as employee ownership, cooperative or mutual societies) could play a greater role across the economy. The Mondragon network of worker cooperatives in Spain’s Basque country is inspirational for many because of its intense democratic ethos across its workforce of more than 70,000. Workers in every cooperative have an annual general assembly. On the basis of one member one vote, the assembly approves the business plan and budget, and elects a governing council (the board of directors). </p>
<p><a href="http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1072&context=books">Key ingredients in Mondragon’s continued success</a> include having its own bank, lots of cooperation across its network, collective knowledge sharing and an emphasis upon lifelong learning alongside job security. These are measures of public effectiveness and social value that contrast strongly with the short-term, profit maximisation <a href="https://theconversation.com/how-shareholder-profits-conquered-capitalism-and-how-workers-can-win-back-its-benefits-for-themselves-103781">mantra of privately-owned firms</a>.</p>
<p>Part of the wider appeal of Mondragon is the sense that its model can be transplanted elsewhere to create whole ecosystems of worker-owned enterprises <a href="http://politybooks.com/bookdetail/?isbn=9781509539024&subject_id=89">at the local and regional level</a>. These could stimulate interesting new initiatives that build the wealth of communities in post-industrial places, from Cleveland in the US to Preston in the UK. </p>
<h2>Public participation and deliberation</h2>
<p>Beyond extending economic rights to the individual and at the business level, my third pillar requires greater public participation and engagement at the macro level of the economy as a whole. This would involve the public becoming more involved in decisions about spending in the wider economy.</p>
<p>One well-researched phenomenon, for example, is the <a href="https://www.participatorybudgeting.org/impacts/">idea of participatory budgeting</a>. This is where governments devote a proportion of their budget directly to citizens groups who are brought together in a series of deliberative exercises to decide on investment priorities.</p>
<p>So far, this has only occurred at the local level. But the results are overwhelmingly positive, both in engaging citizens and in making more socially progressive investment choices. Brazil, beginning with the southern city of Porto Alegre in the late 1980s, <a href="https://www.washingtonpost.com/news/monkey-cage/wp/2014/01/22/brazil-let-its-citizens-make-decisions-about-city-budgets-heres-what-happened/">has been a pioneer of the concept</a>.</p>
<p>Regional assemblies of residents were set up across the city to vote on priorities, which were then fed into city-level planning. Participatory budgeting then spread throughout Brazil with over 120 cities adopting it in the 1990s and 2000s. The idea has also <a href="https://www.participatorybudgeting.org/pb-map/">spread widely across the world</a>. There are currently over 250 schemes in the US, with Chicago and New York being important centres.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/304500/original/file-20191129-156086-iyk5ok.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/304500/original/file-20191129-156086-iyk5ok.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/304500/original/file-20191129-156086-iyk5ok.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/304500/original/file-20191129-156086-iyk5ok.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/304500/original/file-20191129-156086-iyk5ok.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/304500/original/file-20191129-156086-iyk5ok.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/304500/original/file-20191129-156086-iyk5ok.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Brazil led the way with participatory budgeting.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/rising-brazil-flags-crowd-people-holding-1054217222">Shutterstock</a></span>
</figcaption>
</figure>
<p>Advocates of participatory budgets point to how they increase the involvement of women and lower income groups in democratic processes. When sustained over a longer time period, they reduce corruption, improve transparency and public engagement, and create better institutions that involve citizens more regularly into governance processes. The <a href="https://journals.sagepub.com/doi/abs/10.1177/0010414013512601">evidence also suggests</a> that they lead to greater spending on health and education in poorer areas of cities, significantly reduce infant mortality and are linked to the growth of civil society organisations. </p>
<h2>Struggling for economic democracy</h2>
<p>There remain powerful vested interests that will mobilise against more radical initiatives to democratise the economy. Commercial interests have powerful resources to protect the status quo. They can fashion superficial media narratives, that have been notably successful in protecting fossil fuels <a href="https://www.greenpeace.org/usa/global-warming/climate-deniers/koch-industries/">and undermining efforts to tackle climate change</a>. </p>
<p>But, if we are to confront the major economic, social and ecological crises that face us, these interests must be overcome to create a very different kind of global economy. This needs democratic mechanisms that rebalance economic resources and decision-making away from the rich and powerful toward the pursuit of the common good, while safeguarding the planet for future generations. As the examples here demonstrate, these ideas are not unworkable utopias but existing forms of democratic economy.</p><img src="https://counter.theconversation.com/content/126122/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Cumbers receives funding from the European Research Council, ESRC and European Union Horizon 2020 programme.</span></em></p>Unlike older visions of economic democracy which started with class or the collective, the starting point now should be the individualAndrew Cumbers, Professor of Regional Political Economy, University of GlasgowLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/856412017-11-08T10:02:27Z2017-11-08T10:02:27ZThe world is in economic, political and environmental gridlock – here’s why<figure><img src="https://images.theconversation.com/files/192064/original/file-20171026-13331-15k6sti.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Fitria Ramli/Shutterstock.com</span></span></figcaption></figure><p>The <a href="http://www.journalofdemocracy.org/sites/default/files/Foa%26Mounk-27-3.pdf">crisis of contemporary democracy</a> has become a major subject of political science in recent years. Despite this, the symptoms of this crisis – the vote for Brexit and Trump, among others – were not foreseen. Nor were the underlying causes of this new constellation of politics.</p>
<p>Focusing on the internal development of national polities alone, as has typically been the trend in academia, does not help us unlock the deep drivers of change. It is only at the intersection of the national and international, of the nation-state and the global, that the real reasons can be found for the retreat to nationalism and authoritarianism.</p>
<p>In 2013, <a href="http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0745662390.html">we argued</a> that the concept of “gridlock” is the key to understanding why we are at a crossroads in global politics. Gridlock, we contended, threatens the hold and reach of the post-World War II settlement and, alongside it, the principles of the democratic project and global cooperation. Four years on, we have published <a href="http://eu.wiley.com/WileyCDA/WileyTitle/productCd-1509515712.html">a new book</a> exploring how we might tackle this situation.</p>
<p>But before we look into this, what exactly is gridlock?</p>
<h2>Gridlock</h2>
<p>The post-war institutions, put in place to create a peaceful and prosperous world order, established conditions under which a plethora of other social and economic processes associated with globalisation could thrive. This allowed interdependence to deepen as new countries joined the global economy, companies expanded multinationally, and once distant people and places found themselves increasingly — and, on average, beneficially — intertwined. </p>
<p>But the virtuous circle between deepening interdependence and expanding global governance could not last: it set in motion trends that ultimately undermined its effectiveness.</p>
<p>In the first instance, reaching agreement in international negotiations is made more complicated by the rise of new powers like India, China and Brazil, because a more diverse array of interests have to be hammered into agreement for any global deal to be made. On the one hand, multipolarity is a positive sign of development; on the other, it brings both more voices and interests to the table. These are hard to weave into coherent outcomes.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/192087/original/file-20171026-13355-1kc8rmu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/192087/original/file-20171026-13355-1kc8rmu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=420&fit=crop&dpr=1 600w, https://images.theconversation.com/files/192087/original/file-20171026-13355-1kc8rmu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=420&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/192087/original/file-20171026-13355-1kc8rmu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=420&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/192087/original/file-20171026-13355-1kc8rmu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=528&fit=crop&dpr=1 754w, https://images.theconversation.com/files/192087/original/file-20171026-13355-1kc8rmu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=528&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/192087/original/file-20171026-13355-1kc8rmu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=528&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The General Debate of the 71st Session of the General Assembly of the United Nations.</span>
<span class="attribution"><span class="source">Golden Brown / Shutterstock.com</span></span>
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</figure>
<p>Next, the problems we are facing on a global scale have grown more complex, penetrating deep into domestic policies. Issues like climate change or the cross-border control of personal data deeply affect our daily lives. They are often extremely difficult to resolve. Multipolarity coincides with complexity, making negotiations tougher and harder.</p>
<p>In addition, the core multilateral institutions created 70 years ago, the UN Security Council for example, have proven resistant to adapting to the times. Established interests cling to outmoded decision-making rules that fail to reflect current conditions. </p>
<p>Finally, in many areas, transnational institutions, such as the <a href="https://www.theglobalfund.org/en/">Global Fund to Fight AIDS, Tuberculosis and Malaria</a>, have proliferated with overlapping and contradictory mandates. This has created a confusing fragmentation of authority.</p>
<p>To manage the global economy, prevent runaway environmental destruction, reign in nuclear proliferation, or confront other global challenges, we must cooperate. But many of our tools for global policy making are breaking down or inadequate – chiefly, state-to-state negotiations over treaties and international institutions – at a time when our fates are acutely interwoven.</p>
<h2>Crisis of democracy</h2>
<p>Compounding these problems, gridlock today has set in motion a self-reinforcing element, which contributes to the crisis of democracy.</p>
<p>We face a multilateral, gridlocked system, as previously noted, that is less and less able to manage global challenges, even as growing interdependence increases our need for such management.</p>
<p>This has led to real and, in many cases, serious harm to major sectors of the global population, often creating complex and disruptive knock-on effects. Perhaps the most spectacular recent example was the 2008–9 <a href="https://theconversation.com/uk/topics/global-financial-crisis-447">global financial crisis</a>, which wrought havoc on the world economy in general, and on many countries in particular.</p>
<p>These developments have been a major impetus to significant political destabilisation. Rising <a href="https://theconversation.com/uk/topics/economic-inequality-15917">economic inequality</a>, a long-term trend in many economies, has been made more salient by the financial crisis. A stark political cleavage between those who have benefited from the globalisation, digitisation, and automation of the economy, and those who feel left behind, including many working-class voters in industrialised countries, has been reinforced. This division is particularly acute in spatial terms: in the schism between global cities and their hinterlands. </p>
<p>The financial crisis is only one area where gridlock has undercut the management of global challenges. For example, the failure to manage terrorism, and to bring to an end the wars in the Middle East more generally, have also had a particularly destructive impact on the global governance of migration. With <a href="https://theconversation.com/uk/topics/refugee-crisis-20183">millions of refugees</a> fleeing their homelands, many recipient countries have experienced a potent political backlash from right-wing national groups and disgruntled populations. </p>
<p>This further reduces the ability of countries to generate effective solutions to problems at the regional and global level. The resulting erosion of global cooperation is the fourth and final element of self-reinforcing gridlock, starting the whole cycle anew.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/192080/original/file-20171026-13315-hysy1t.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/192080/original/file-20171026-13315-hysy1t.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=323&fit=crop&dpr=1 600w, https://images.theconversation.com/files/192080/original/file-20171026-13315-hysy1t.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=323&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/192080/original/file-20171026-13315-hysy1t.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=323&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/192080/original/file-20171026-13315-hysy1t.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=406&fit=crop&dpr=1 754w, https://images.theconversation.com/files/192080/original/file-20171026-13315-hysy1t.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=406&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/192080/original/file-20171026-13315-hysy1t.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=406&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The vicious gridlock cycle.</span>
<span class="attribution"><span class="source">The Conversation</span></span>
</figcaption>
</figure>
<h2>Beyond Gridlock</h2>
<p>Modern democracy was supported by the post-World War II institutional breakthroughs that provided the momentum for decades of sustained economic growth and geopolitical stability, even though there were, of course, proxy wars fought out in the Global South. But what worked then does not work now. Gridlock freezes problem-solving capacity in global politics. This has engendered a crisis of democracy, as the politics of compromise and accommodation gives way to populism and authoritarianism. </p>
<p>While this remains a trend which is not yet set in stone, it is a dangerous development.</p>
<p>In our new book, <a href="http://eu.wiley.com/WileyCDA/WileyTitle/productCd-1509515712.html">Beyond Gridlock</a>, we explore these dynamics at much greater length as well as how we might begin to move through and beyond gridlock. While there are no easy solutions, this does not mean there are no ways forward. There are some systematic means to avoid or resist these forces and turn them into collective solutions.</p>
<p>Different actors and agencies are devising new ways to solve global challenges, be it <a href="https://www.theglobalfund.org/en/">philanthropies teaming up with governments to tackle disease</a>, <a href="http://www.c40.org/">cities teaming up</a> across borders to fight climate change, or local communities <a href="http://www.rollingstone.com/politics/features/how-sanctuary-cities-are-plotting-to-resist-trump-w453239">taking in migrants</a>. Ambitious agreements like the <a href="https://theconversation.com/uk/topics/paris-agreement-23382">Paris Agreement</a> or the <a href="https://theconversation.com/uk/topics/un-sustainable-development-goals-11649">UN Sustainable Development Goals</a> point toward common projects. And <a href="https://www.theguardian.com/world/2017/sep/26/profound-transformation-macron-lays-out-vision-for-post-brexit-eu">in some countries</a>, politicians are even winning elections by promising greater cooperation on shared challenges.</p>
<p>If we succeed in building a better global governance in the future, we will sap a key impetus behind the new nationalism. If we fail, we fuel the nationalist fire.</p><img src="https://counter.theconversation.com/content/85641/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The research that underpinned the work in Beyond Gridlock was funded by the Global Challenges Foundation (Sweden) </span></em></p><p class="fine-print"><em><span>The Global Challenges Foundation supported two workshops that helped produce our book Beyond Gridlock. </span></em></p>How can we sort out the crisis of contemporary democracy?David Held, Professor of Politics and International Relations, Durham UniversityThomas Hale, Associate Professor in Public Policy, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/764792017-04-26T11:51:13Z2017-04-26T11:51:13ZThe Labour Party must embrace a hard, socialist Brexit to stand a chance of winning the general election<p>The electoral success of a political party depends on many factors. But the most important one is the correct reading of domestic developments and how they are connected to global economic and political trends. Parties must understand both of these environments when developing their campaign strategies.</p>
<p>The British economy is characterised by the <a href="https://www.ft.com/content/2ce78f36-ed2e-11e5-888e-2eadd5fbc4a4">dominance of financial services</a> and the <a href="https://www.ft.com/content/df218f48-9d3c-11e2-a8db-00144feabdc0">crisis of the welfare state</a>. Underpinning this has been 40 years of neoliberal British government policy, promoting privatisation, deregulation and competition. The manufacturing sector has shrunk to just <a href="https://www.ons.gov.uk/businessindustryandtrade/manufacturingandproductionindustry">11% of GDP</a>. </p>
<p>An economy dominated by services has remodelled the country’s entire social and economic life. It has increased inequality – substantially reducing wages for low-paid workers and promoted flexible and precarious employment. Meanwhile, budgets for public provision and investment have <a href="https://theconversation.com/state-of-the-nation-a-dismal-record-for-the-uk-economy-39675">been cut</a>. </p>
<p>The leaders of the Labour Party, Jeremy Corbyn, and shadow chancellor John McDonnell, have <a href="http://www.labour.org.uk/index.php/10-pledges">captured this domestic reality well</a>. It brought the party closer to people and increased its membership <a href="http://blogs.lse.ac.uk/politicsandpolicy/explaining-the-pro-corbyn-surge-in-labours-membership/">massively</a>. Polls in February 2016 showed the party to be <a href="http://www.independent.co.uk/news/uk/politics/poll-jeremy-corbyn-labour-tories-voting-intention-general-election-first-time-leader-a6930721.html">neck and neck with the Conservatives</a>. </p>
<p>But things changed in the run-up to the Brexit referendum of June 23 and have gone from bad to worse. When British prime minister, Theresa May, called the snap election on April 18, her party had a lead of <a href="http://www.bbc.co.uk/news/uk-politics-39631792">more than 17 points</a>. This is because the Labour Party has failed to correctly read the “external” environment it finds itself in. This is the disaffection of British society caused by the crisis of globalisation and European integration. </p>
<h2>The new global context</h2>
<p>Finance-led, neoliberal globalisation has undermined the capacity of the nation state to redistribute wealth <a href="https://economicsociologydotorg.files.wordpress.com/2015/10/the-role-of-the-state-in-the-financialisation-of-the-uk-economy.pdf">for all levels of society</a>. Under globalisation, state intervention has consistently favoured private business, financial services and privatisations. </p>
<p>The EU epitomises globalisation in that it transferred to unaccountable, supranational institutions the key public policy instrument of monetary policy. Countries within the eurozone cannot control their currency to make their economies competitive (something Germany has greatly benefited from), <a href="http://www.tandfonline.com/doi/abs/10.1080/19448953.2010.510012">resulting in higher debt</a>. It is the poor and the working classes that have suffered as a result.</p>
<p>Since the global financial crisis, however, the global political economy has structurally drifted towards a new protectionism. There has been a <a href="https://www.ecb.europa.eu/pub/pdf/other/mb200903_focus01.en.pdf">contraction of global trade</a>; the rise of <a href="https://www.ft.com/content/2dd0ecc4-3768-11e6-a780-b48ed7b6126f">various trade barriers</a>; and a <a href="http://www.economist.com/news/international/21709019-flow-africans-libya-italy-now-europes-worst-migration-crisis-travelling">resurgence of nationalist movements</a> that often <a href="https://theconversation.com/blame-austerity-not-immigration-for-taking-britain-to-breaking-point-61133">blame immigrants</a> for their country’s problems. </p>
<p>So globalisation and European integration failed the working classes, destroying the jobs and security that many previously relied on. The subsequent crisis then failed them further, with austerity making their economic and social situation even worse.</p>
<h2>Capturing the mood</h2>
<p>The conservative establishment in the US captured this trend quite well. Trump snatched the initiative from the Democrats to win the presidency by reaching out <a href="https://theconversation.com/how-class-and-the-rise-of-china-won-trump-the-white-house-69515">to disenfranchised working class voters</a>. </p>
<p>In the UK, both the Conservatives and the Labour Party made the strategic mistake of ignoring these global and societal trends and the degree to which they affect people’s daily lives. Thus, both parties’ official stance in the build-up to the Brexit referendum was to align themselves on a pro-European platform against British society. They lost. </p>
<p>Since then, Theresa May has corrected her party’s mistake by waving the banner of a “hard Brexit” and calling a snap election to reinforce her leadership ahead of Brexit negotiations. The Labour Party must respond to this smart move in kind.</p>
<p>Many Remain supporters hope that Labour will stand up against hard Brexit and adopt a pro-EU strategy, even launching a campaign <a href="http://www.theguardian.com/politics/2017/apr/19/gina-miller-best-for-britain-tactical-voting-against-hard-brexit">to this effect</a>. But this is more likely to benefit the Liberal Democrats, which is the clear pro-EU party. It is also a party without any solid critical positions against the <a href="https://www.theguardian.com/politics/2014/aug/16/lib-dem-rebels-nick-clegg-repeal-nhs-reforms">dismantling of the NHS and privatisation policies</a>. </p>
<p>A victorious campaign for Labour must include a direct and ruthless critique of the <a href="https://static1.squarespace.com/static/56330ad3e4b0733dcc0c8495/t/56b13f5240261dd5dfcb8255/1454456659125/GLJ_Vol_14_No_05_Dale.pdf">EU’s authoritarianism</a>. After all, it imposed a set of unbearable austerity measures and cuts that turned the local poor and unemployed against immigrants, who are wrongly believed to be the source of the problem. </p>
<p>Alongside this critique, Labour must pledge to immediately introduce the socialist elements of EU law upon withdrawal – the pro-labour, pro-migration, pro-environmental and pro-human rights legislation. But it can do so within the sovereign site of the British democratic parliamentary system. </p>
<p>So instead of offering lukewarm support for the EU’s human and workers’ rights treaties, a viable UK opposition would embrace a socialist Brexit, all the while instituting and even enhancing the elements of EU law that protect British workers. This way Labour can align with British society against the EU in order to advance British democracy and all those disaffected by the neoliberal policies espoused by the Tory government. </p>
<p>When it comes to accessing the single market, this is not really a matter of debate in Westminster. Access will not be decided in London but in Berlin, the <a href="https://www.ft.com/content/7fcb38e8-15f5-11e6-9d98-00386a18e39d">real seat of EU power</a> in this time of crisis. And Germany wants a “hard Brexit” because it cannot break the rules it created <a href="https://www.theguardian.com/commentisfree/2017/apr/19/germany-strong-eu-britain-easy-brexit-angela-merkel">and transplanted across the EU</a>. The Conservative Party appears to recognise this and is ready to give the people the Brexit they want, all the while implementing its right-wing agenda and dismantling the welfare state. </p>
<p>The Labour Party cannot go against the tide of de-globalisation and expect to win. It must adapt its policies to the new constraints and develop its pro-social and pro-working class agenda within them.</p><img src="https://counter.theconversation.com/content/76479/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Vassilis K. Fouskas does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Labour must develop its pro-social and pro-working class agenda for an electorate that has been failed by globalisation and EU integration.Vassilis K. Fouskas, Professor of International Politics & Economics, University of East LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/725332017-03-06T11:48:40Z2017-03-06T11:48:40ZWhy internationalisation matters in universities<figure><img src="https://images.theconversation.com/files/158562/original/image-20170227-20702-s066rs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">shutterstock</span></span></figcaption></figure><p>We are living in strange times. The US has elected the most <a href="http://www.counterpunch.org/2016/11/29/regime-change-abroad-fascism-at-home-how-us-interventions-paved-the-way-for-trump/">authoritarian ruler in the country’s history</a>, while the EU has been split by the Brexit vote. </p>
<p>Both Donald Trump’s election and Brexit triggered sharp uptakes in <a href="http://www.independent.co.uk/news/uk/crime/brexit-hate-crimes-racism-eu-referendum-vote-attacks-increase-police-figures-official-a7358866.html">racial violence</a>. In both countries, death threats and hate crime increased rapidly – <a href="https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/maureensullivan/2016/11/29/are-there-really-more-hate-crimes-at-schools-following-donald-trumps-election/&refURL=https://www.google.co.uk/&referrer=https://www.google.co.uk/">particularly in schools</a> – <a href="https://www.nytimes.com/2016/11/11/us/police-investigate-attacks-on-muslim-students-at-universities.html">while hostility towards minorities</a> was higher than anything seen in the past 30 years. </p>
<p>Both events have been attributed (in part) to the <a href="https://www.washingtonpost.com/news/wonk/wp/2016/11/09/how-trump-won-the-revenge-of-working-class-whites/?utm_term=.219be1ac3612">revenge of the white working class</a> – a group of people who have been <a href="http://www.newstatesman.com/politics/staggers/2016/11/white-working-class-another-form-identity-politics">left behind by globalisation</a>. And in line with this thinking, Marine Le Pen, the nationalist leader who is competing to be the next president of France, has spoken about the <a href="https://www.axios.com/the-french-trump-declares-war-against-savage-globalism-2301756254.html">war she will wage</a> on “savage” globalism – which she described as “an ideology with no constraints”. </p>
<p>Against this background, internationalisation is promoted as a top priority in many universities around the world. International students are said to be <a href="https://theconversation.com/the-uk-government-is-undermining-one-of-its-most-valuable-exports-education-29681">more lucrative than home students</a>, and university profit margins increase <a href="http://www.universitiesuk.ac.uk/policy-and-analysis/reports/Documents/2014/the-impact-of-universities-on-the-uk-economy.pdf">in proportion to their ratio</a>. </p>
<p>Indeed, new research into the <a href="http://www.universitiesuk.ac.uk/news/Pages/International-students-now-worth-25-billion-to-UK-economy---new-research.aspx?mc_cid=47981f5766&mc_eid=58af58a7d1">economic impact of international students</a> in the UK shows that between 2014 and 2015, spending by international students supported 206,600 jobs in university towns and cities. The research conducted for Universities UK by Oxford Economics found that, in that period, on and off-campus spending by international students and their visitors <a href="http://www.universitiesuk.ac.uk/news/Pages/International-students-now-worth-25-billion-to-UK-economy---new-research.aspx?mc_cid=47981f5766&mc_eid=58af58a7d1">generated more than 25 billion</a> for the UK economy – providing a significant boost to regional jobs and local businesses.</p>
<p>But while universities need to sustain themselves financially, viewing international students only from an economic point of view means the quality of higher education is cheapened – and the students themselves are commodified.
This is an important point, because internationalisation – in the broadest sense of the term – is about a great deal more than just profit margins. </p>
<p>So at a time when our globally interconnected world is not at peace with diversity, I want to offer four arguments in favour of internationalisation in higher education, that reach well beyond economic sustainability:</p>
<h2>1. For the greater good</h2>
<p>Internationalisation is an ethical imperative. We live in a racist age. Brexit and the US elections have both revealed that if communities do not embrace racial, ethnic, cultural, religious, and national diversity, then the world as we know it will cease to function. </p>
<p>The number of people who favour restrictions on minorities has become evident by their strong showing at the voting booths, and the highly radicalised patterns of recent elections. </p>
<p>So in light of this, universities must do more than simply promote internationalisation in the generic sense. They must actively resist the forces that oppose it.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/158565/original/image-20170227-26306-6y7mnm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/158565/original/image-20170227-26306-6y7mnm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=406&fit=crop&dpr=1 600w, https://images.theconversation.com/files/158565/original/image-20170227-26306-6y7mnm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=406&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/158565/original/image-20170227-26306-6y7mnm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=406&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/158565/original/image-20170227-26306-6y7mnm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=510&fit=crop&dpr=1 754w, https://images.theconversation.com/files/158565/original/image-20170227-26306-6y7mnm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=510&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/158565/original/image-20170227-26306-6y7mnm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=510&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Loving internationalism.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>2. It helps people to grow</h2>
<p>Internationalisation is a necessary means of “self-transformation”. Contact with international students enables people to see the world from vantage points that reach beyond their own backgrounds – and this allows them to learn about new cultures and countries. </p>
<p>It may well be the case that the UK needs international students for monetary reasons too, but if universities do not bring longer term ethical and intellectual considerations to bear on the profit motive, then who will? </p>
<h2>3. Best of both worlds</h2>
<p>Internationalisation is the process through which people contribute to the world, while also being shaped by it. </p>
<p>Successful internationalisation means training students to approach their own cultures, texts, and traditions in different ways and through comparative perspectives. </p>
<p>This is a process through which all involved are transformed, and compelled to think differently about their own traditions.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/158567/original/image-20170227-25959-12m7gda.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/158567/original/image-20170227-25959-12m7gda.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=421&fit=crop&dpr=1 600w, https://images.theconversation.com/files/158567/original/image-20170227-25959-12m7gda.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=421&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/158567/original/image-20170227-25959-12m7gda.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=421&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/158567/original/image-20170227-25959-12m7gda.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=529&fit=crop&dpr=1 754w, https://images.theconversation.com/files/158567/original/image-20170227-25959-12m7gda.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=529&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/158567/original/image-20170227-25959-12m7gda.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=529&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Time for a new internationalism in UK universities.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>4. It helps people to see beyond themselves</h2>
<p>Internationalisation is a comparative project. And it is an agenda with
intellectual implications. It gives students and scholars the opportunity – and indeed the pressure – to view themselves and their cultures in new ways.</p>
<p>But if universities invest in the economic agenda of internationalisation without being prepared to embrace its intellectual consequences, then they embark a doomed project. Internationalisation pursued in this way will end, not only with the failure of its mission, but also with the cheapening of university education. And so for universities to fully internationalise themselves, it is clear that they must look to internationalise their fellow citizens first.</p><img src="https://counter.theconversation.com/content/72533/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rebecca Ruth Gould does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Our globally interconnected world is not at peace with diversity, this is where internationalisation can step-in.Rebecca Ruth Gould, Reader in Comparative Literature and Translation Studies, University of BristolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/736882017-03-06T00:17:35Z2017-03-06T00:17:35ZTrump and Brexit won’t kill globalisation – we’re too far in<p>In Donald Trump’s <a href="https://www.yahoo.com/news/trumps-address-to-congress-boasts-of-new-national-pride-sweeping-nation-053605117.html">long-awaited address</a> to Congress, he said a “new national pride” was “sweeping across” the nation. He went on:</p>
<blockquote>
<p>What we are witnessing today is the renewal of the American spirit.</p>
</blockquote>
<p>With Trump’s electoral victory, as well as the Brexit vote, many of the <a href="https://www.wsj.com/articles/globalization-is-here-to-stay-says-panama-canal-ceo-1477494238">assumptions</a> underlying <a href="http://www.nbcnews.com/video/obama-globalization-is-here-to-stay-721921603992">the future of globalisation</a> have been put into question.</p>
<p>This, together with the rise of Pauline Hanson’s <a href="http://www.abc.net.au/news/2017-02-23/indonesia-concerned-over-one-nations-rising-popularity/8298662">One Nation</a> in Australia and other <a>populist parties in Europe</a>, indicates <a href="https://www.nytimes.com/2016/07/30/us/politics/in-time-of-discord-bashing-trade-pacts-appeals-to-both-parties.html?_r=1">large components</a> of the voting population want trade relations severed, borders enforced, and refugees more tightly screened. </p>
<p>So are we witnessing the reversal of decades of globalisation and moving back toward the nation-state as a political and economic ideal?</p>
<h2>A challenge to globalisation</h2>
<p>The term globalisation has been ascribed to capture the improved connectivity between people and places. It’s driven by enhanced trade, mobility, migration, and human interaction that is generally global in scope. </p>
<p>Globalisation is one of the many processes associated with neoliberalism. This is a political and economic doctrine that, since at least the 1970s, has privileged privatisation, liberalisation, and market-oriented logic. It is also strongly associated with “free” trade and reducing barriers to the movement of goods and labour within and between countries.</p>
<p>Several political structures tied to globalisation have challenged the nation-state as the primary political unit. International bodies such as the United Nations, and multi-national blocs such as the European Union, serve to break down barriers between countries through large-scale political regulation.</p>
<p>Trans-border agencies and public-private partnerships have performed much of what nation-states cannot accomplish on their own, as have non-governmental and non-profit organisations. </p>
<p>The rise of multinational corporations in the second half of the 20th century has also posed a series of challenges to nation-states. Annual revenues of some corporations <a href="http://foreignpolicy.com/2016/03/15/these-25-companies-are-more-powerful-than-many-countries-multinational-corporate-wealth-power/">exceed the GDP</a> of many medium-sized countries.</p>
<h2>A return to the nation-state?</h2>
<p>The current political turn reflects a significant counter trend to globalisation. Instead of being broken down, national borders are being reinforced. Trump’s campaign promise to build a wall on the southern border and the UK vote to re-erect barriers to movement across the English Channel represent a stark shift away from globalisation. </p>
<p>Reacting to concerns about “illegal” migrants, and the well-rehearsed arguments about immigrants <a href="http://www.express.co.uk/news/uk/487645/Migrants-take-British-workers-jobs-says-official-study">“taking our jobs”</a>, <a href="http://www.pewresearch.org/fact-tank/2016/11/09/behind-trumps-victory-divisions-by-race-gender-education/">largely white</a> and <a href="http://www.telegraph.co.uk/news/2016/06/24/eu-referendum-how-the-results-compare-to-the-uks-educated-old-an/">older voters</a> favour inhibiting human movement. Populist politicians are attempting to mitigate the “haemorrhaging” of <a href="http://money.cnn.com/2016/03/31/news/economy/mexico-us-globalization-wage-gap/">jobs across borders</a>.</p>
<p>Multiculturalism is being rejected rather than embraced. Driven by the elusive idea nation-states are defined by demographic and cultural uniformity, political nationalism has become a dominant rhetorical device. </p>
<p>The concept of what it means to be <a href="https://www.nytimes.com/2016/06/17/world/europe/european-union-britain-brexit-voters-english.html">“British”</a>, <a href="http://www.politico.com/magazine/story/2016/08/trump-race-white-america-identity-crisis-214178">“American”</a> and Australian in popular imagination has re-emerged as an important topic. </p>
<p>There are serious efforts to redefine the national economy, pushing back against the perceived encroachment of global interests. Trump’s abandonment of the <a href="https://www.nytimes.com/2016/07/30/us/politics/in-time-of-discord-bashing-trade-pacts-appeals-to-both-parties.html?_r=0">Trans-Pacific Partnership</a> parallels the UK’s withdrawal from the continental customs union. </p>
<p>The assumption underlying the “Make America Great Again” campaign was that the domestic US economy was, at some point, a contained territory generating great wealth that had somehow been eroded from the outside.</p>
<p>So is it true? Are we actually witnessing something more significant than an electoral aberration? Will there be a long-term move away from globalisation?</p>
<h2>Probably not</h2>
<p>Several signs actually point to no. The populist trend <a href="https://theconversation.com/america-has-never-been-truly-isolationist-and-trump-isnt-either-71689">is reflective</a> of dissatisfaction with domestic affairs rather than a sustained disengagement with the rest of the world.</p>
<p>While public sentiment regarding changing national identity or political and economic power is very real, de-globalisation is highly unlikely.</p>
<p>We have yet to see a wall being built in Arizona, and a “soft Brexit” may be the <a href="https://theconversation.com/why-a-soft-brexit-is-in-the-interest-of-both-london-and-brussels-67722">most desirable pathway</a> for the UK, given nearly half its good exports are to the EU. </p>
<p>A quick look at national demographic shifts in the US and UK suggests multiculturalism defines the present and future. <a href="http://www.usnews.com/news/articles/2015/07/06/its-official-the-us-is-becoming-a-minority-majority-nation">US demographers are predicting</a> a “minority majority” in the next 40 years. The fact <a href="http://www.vanityfair.com/news/2017/01/tech-leaders-turn-on-trump-over-muslim-ban">Silicon Valley CEOs</a> have so vocally opposed the Trump administration’s “Muslim ban” demonstrates that aside from being unethical, xenophobia is actually bad for business.</p>
<p>A movement toward closed national economies would also be unattainable. Trump has lauded the <a href="http://nypost.com/2016/12/28/trump-says-sprint-is-bringing-5000-jobs-back-to-us/">“re-shoring”</a> of a few American jobs. But there is ample evidence <a href="https://www.nytimes.com/2015/08/03/business/chinese-textile-mills-are-now-hiring-in-places-where-cotton-was-king.html">this was happening before 2016</a> as factory wages slowly equalise with those elsewhere. </p>
<p>Erecting tariff barriers is also likely to be futile, as the rest of the world continues to globalise at a rapid clip. Terms like “domestic” and “foreign” have become increasingly obscure, and for good reason: globalised economic networks ensure that various components of products are sourced from around the world. </p>
<p><a href="http://www.american.edu/kogod/autoindex/">US</a> “domestic” cars, for instance, often contain less than half American parts while “Japanese” cars are often comprised mainly of US parts and assembled in Kentucky or Ohio.</p>
<h2>Fixing internal affairs</h2>
<p>Clearly, many are unhappy with the current state of affairs in the US, UK, and elsewhere in the so-called liberal-democratic world – including Australia. But it is happening in spite of globalisation, not because of it. </p>
<p>Western political power has been slowly eroded in relative terms since the end of the Cold War. What disquiets the electorate is perhaps not the adverse effects of globalisation, but their countries’ position vis-à-vis the rest of the world. </p>
<p>Domestic issues, particularly the extreme <a href="https://theconversation.com/why-inequality-is-the-most-important-economic-challenge-facing-the-next-president-66806">economic polarisation</a> and inequality of the neoliberal era, are more likely to blame. Globalisation is here to stay, and the economic logic of openness will supersede any cultural or political nationalism.</p><img src="https://counter.theconversation.com/content/73688/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thomas Sigler does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>People are unhappy with the current state of affairs – but this is happening despite globalisation, not because of it.Thomas Sigler, Lecturer in Human Geography, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/730802017-02-15T13:05:34Z2017-02-15T13:05:34ZStoke by-election: why locals feel so frustrated with the candidates on offer<p>One of the more entertaining sights from the Stoke Central by-election contest was a mock-up of an English Heritage blue plaque on the wall of a house that UKIP’s candidate had allegedly not moved into. It read: <a href="http://voxpoliticalonline.com/2017/02/02/paul-nuttall-has-been-reduced-to-being-the-stoke-by-election-campaigns-comic-relief/">“Paul Nuttall. 2016-? Has never lived here”</a>. And that’s rather the point when it comes to this election. All the politicians and journalists claim to care about Stoke, but none of them live there.</p>
<p>Well, I do. I’ve lived in the Stoke Central constituency for nearly 30 years. When I arrived, there were five pits, and the glow of the steelworks lit the city by night. The ceramics industry employed tens of thousands and Michelin had a big production plant that covered the southern end of the city with the treacly smell of cooking rubber.</p>
<p>This was an industrial city, and people round here remember that. They remember when things were different. This has bred a deep sense of loss, as if nothing much good has happened around here since Stoke City Football Club won the League Cup in 1972. Coal, steel and the tyres have gone, and the ceramics industry is a <a href="http://www.visitstoke.co.uk/ceramics-trail/history-19century.aspx">shadow of what it was</a>. A large affordable housing project of the 2000s hit the buffers with austerity and left huge areas of the city <a href="https://www.theguardian.com/housing-network/gallery/2012/mar/02/pathfinders-gallery-claire-leeming">half demolished and sprouting weeds</a>. We didn’t even get a Nando’s until last year.</p>
<p>This sense of being left behind is a big reason why the city voted overwhelmingly for Brexit, and why UKIP see it as a top target seat. And it’s also why nobody believes the politicians that are arriving at the station, from whatever political party, trying to convince people that they care about the city. They come across like snake oil salesmen, all plastic charm and forced enthusiasm for the hearty potters of the potteries. But you know that they can’t wait to get back on the train again, and are really laughing at the place from behind their hands.</p>
<p>That’s why Tristram Hunt went down so badly as the latest MP. Partly because there aren’t many Tristrams in Stoke, but also because he was an outsider as soon as he opened his mouth. Tall, big hair, loud voice. And he lives in London. The shortlist for his candidacy in 2010 contained no one from the city, resulting in the secretary of the local party <a href="http://www.stokesentinel.co.uk/labour-legal-threat-use-rosette/story-12508691-detail/story.html">standing against him in protest</a>.</p>
<h2>Parochial problem?</h2>
<p>Now it would be easy enough to suggest that this sort of parochialism is a problem, and that what Stoke needs is new thinking from outsiders. Calling a place “inward looking” is usually assumed to be an insult, because there is big wide world out there. That’s why cosmopolitan people who arrive in Stoke assume that places like Stoke need saving from themselves, and that they are the white knights to do it.</p>
<p>But most ordinary people live somewhere and stay there. And their views are shaped by what happens in those places. So while the skyscrapers were going up in London Village, Stokies saw boarded shops and empty factories. And the Labour Party have been in power here for most of the last century, so it’s not surprising that they get blamed. And migrants get blamed, too, because many believe their arrival coincided with things getting crap, and they aren’t from round here either.</p>
<p>It’s called representative democracy for a reason, and in order for it to have any legitimacy, people need to feel that the politician concerned does understand the place that they are representing. So, if the candidate <a href="http://www.dailymail.co.uk/news/article-4212654/Ukip-s-Paul-Nuttall-fails-six-towns-Stoke.html">can’t name the six towns of the potteries</a>, then they simply aren’t credible.</p>
<p>This sort of disconnect is partly produced by the centralisation of politics in London, where shortlists are engineered. But it is also due to the powerlessness of local and national politicians in cities like Stoke. Councillors here <a href="https://www.lrb.co.uk/v38/n24/tom-crewe/the-strange-death-of-municipal-england">don’t have the levers to do anything about long term decline</a>. Yet they are the ones that get blamed when a factory closes or the city centre can’t attract developers.</p>
<p>The people of Stoke won’t respond well to outsiders telling them to stop being racist, and that they are better off in Europe. Instead, try to imagine what it would be like to see your home become a dump, and a regular contender for <a href="http://www.stokesentinel.co.uk/world-needed-enema-stoke-trent-shove-pipe/story-21094079-detail/story.html">“worst place to live in England”</a>. And then imagine decades of politicians – local, national, European – telling you that they will do something when they never do, because they can’t.</p>
<p>If Paul Nuttall wins Stoke Central it will be because my neighbours here stubbornly persist in believing in representative democracy, and they want to believe that he will make a change. But without serious power and money moving to the city, he can’t do anything either. If politics remains based in London then the people of Stoke will find out that they have been lied to again. But I suppose they should be used to that.</p><img src="https://counter.theconversation.com/content/73080/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Martin Parker does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>All the politicians and journalists claim to care about Stoke, but none of them live here.Martin Parker, Professor of Organisation and Culture, University of LeicesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/715762017-01-20T07:20:21Z2017-01-20T07:20:21ZFrom New Deal to the art of the deal: how the neoliberal project led to Trump<p>The last fortnight has yielded three spectacles reflecting the demise of the left, the rise of a new reactionary right and a novel political era more generally. </p>
<p>Outgoing US President Barack Obama’s “<a href="https://www.theguardian.com/us-news/2017/jan/11/yes-we-did-obama-lifts-up-america-one-last-time-in-emotional-farewell-speech">Yes we did</a>” speech was a fitting liberal – in the anaemic and disconnected non-Roosevelt, non-New Deal sense – conclusion to a presidency that combined <a href="http://observer.com/2008/02/what-makes-obama-a-good-speaker/">slick oratory skills</a> and a <a href="https://www.ft.com/content/206b98ec-b74f-11e6-ba85-95d1533d9a62">highly compromised health-care programme</a> with increased <a href="http://www.usnews.com/opinion/world-report/articles/2016-10-18/america-is-fighting-a-proxy-war-with-iran-in-yemen">proxy war activity</a>, <a href="increased">drone strikes</a> and, despite an egregious record that left a trail of social destruction, <a href="http://www.theatlantic.com/magazine/archive/2015/09/how-wall-streets-bankers-stayed-out-of-jail/399368/">ineffectual wrist slaps for Wall Street</a>.</p>
<p>President-elect Donald Trump’s <a href="https://www.nytimes.com/2017/01/11/us/politics/trump-press-conference-transcript.html">truly surreal press conference</a>, in contrast, was emblematic of the now tectonic rise of populism around the globe. This was made significantly possible by the elite extension of market-oriented policy from <a href="http://monthlyreview.org/2001/04/01/neoliberalism-from-reagan-to-clinton/">Ronald Reagan</a> and <a href="https://www.theguardian.com/books/2017/jan/04/margaret-thatcher-david-cannadine-review-life-legacy-brexit">Margaret Thatcher</a> on, by both parties of capital and – allegedly – labour.</p>
<p>Finally, we had the general secretary of the Communist Party of China <a href="https://www.weforum.org/agenda/2017/01/full-text-of-xi-jinping-keynote-at-the-world-economic-forum">giving a pro-free-trade keynote speech</a> at the World Economic Forum, emphasising categorically that the world’s woes were not a result of globalisation. </p>
<p>The tale of how we got here is important in order to avoid misdiagnosis and, indeed, incorrect treatment. And while analyses abound, what seems to escape many commentators is that the present crisis of politics has a lot to do with a monster that elites – often liberal – have spent decades breeding: <a href="http://people.umass.edu/dmkotz/Glob_and_NL_02.pdf">neoliberal globalisation</a>. </p>
<h2>The rise of neoliberalism</h2>
<p>Neoliberalism is itself an animal with many heads, operating both at the national and supranational levels as the script of <a href="http://trace.tennessee.edu/cgi/viewcontent.cgi?article=2030&context=utk_chanhonoproj">world market capitalism in the form of free trade agreements</a> and pro-market policy sets. At the micro-dimension, it works as the disciplining tune resonating through our private lives, which are increasingly vulnerable to the individualised risks stemming from the marketisation of everything and the sanctity of competitiveness. </p>
<p>The complacency that policy elites have shown towards neoliberalism’s inherently unequal order – with <a href="https://www.bostonglobe.com/metro/2017/01/18/rich-people-own-much-money-half-world-report-says/y6az3Wtasd5TIf9Q6k3I4K/story.html">eight men owning today as much wealth as half of the world’s population</a> – is at the roots of the despair that have turned millions away <a href="https://www.theguardian.com/politics/2015/feb/20/tariq-ali-interview-renationalise-the-railways">from the “extreme centre”, as British journalist Tariq Ali dubs it</a>. </p>
<p>Their votes have either vanished in the cynicism engendered by a <a href="https://en.oxforddictionaries.com/word-of-the-year/word-of-the-year-2016">post-truth</a> reality in which political promises have long been mismatched with outcomes, gravitated towards eccentric and dangerous characters such as Trump, or – all too rarely – created an opening for progressive politics within and beyond mainstream parties.</p>
<p>Importantly, neoliberal globalisation demanded the death of national development that followed the so-called <a href="http://www.oxfordscholarship.com/view/10.1093/acprof:oso/9780198287414.001.0001/acprof-9780198287414">golden age of capitalism</a> (1945-1973).</p>
<p>The 20th century, which <a href="https://www.theguardian.com/commentisfree/2012/oct/01/eric-hobsbawm-historian">British Marxist historian Eric Hobsbawm</a> famously described as <a href="http://www.goodreads.com/book/show/308060.The_Age_of_Extremes">an age of extremes</a>, was also very much a century of development. It was a century in which great, albeit uneven, progress was made in material conditions and productive capacity. It was also an era in which grand battles were waged over how the world was to be understood and how it was to be changed. </p>
<p>The post-second world war period in particular, saw the consolidation of the century of development. Nation-states – including many new entrants – became the key containers of development. They were home to new class-based outcomes that manifested in projects to forge national economies. And working classes enjoyed leverage and influence over states that shielded society and the economy from Darwinian competition.</p>
<p>But two grand shifts arising out of the contradictions and tendencies of capitalism were to tear these arrangements asunder. The first was the rise of neoliberal policy sets, initially under Thatcher and Reagan, that attempted to recraft state and society along <a href="https://www.theguardian.com/commentisfree/2016/aug/21/death-of-neoliberalism-crisis-in-western-politics">market lines</a>. The second was the reorganisation of global production on the back of both neoliberalism (the software of globalisation) and advances in areas such as information and <a href="http://www.oecd-ilibrary.org/docserver/download/0407091ec004.pdf?expires=1484885573&id=id&accname=ocid195699&checksum=3E829AE9BF1232AF16EFA7531E3EF370">communications technology and logistics</a>.</p>
<h2>Unending history</h2>
<p>Both these shifts liberated capital from its territorial confines and diminished the power and influence of labour. If labour was to use the same strategies as before – strikes, protests and calls for revolution – competitive fractions of capital could now, on the back of policies facilitating the free movement of capital, goods and services, decry the impact on “growth and jobs” and <a href="https://www.cambridge.org/core/journals/review-of-international-studies/article/the-politics-of-capital-flight-exit-and-exchange-rates-in-latin-america/AC3F2E49DC49E11B394DF14897ED3C40">threaten to up and leave</a>.</p>
<p>And when the <a href="http://www.independent.co.uk/voices/comment/fall-of-the-berlin-wall-the-iron-curtain-fell-because-of-mikhail-gorbachev-a-man-now-despised-as-a-9849117.html">Iron Curtain fell (1989-1990)</a> and China’s vast workforce joined the <a href="https://www.imf.org/external/pubs/ft/wp/2007/wp07298.pdf">global economy</a>, the pressure on workers and their ability to collectively organise and safeguard their interests was all but demolished. For elites within the extreme centre, these transformations signalled the passing of ideology, or as American political scientist <a href="https://fukuyama.stanford.edu/">Francis Fukuyama</a> trumpeted, <a href="https://www.theguardian.com/books/2014/mar/21/bring-back-ideology-fukuyama-end-history-25-years-on">the end of history</a>. </p>
<p>Importantly, the software of globalisation was regularly promoted as much by traditional parties of the working class as by those of <a href="https://www.jacobinmag.com/2016/02/atkins-dlc-third-way-clinton-blair-schroeder-social-democracy/">capital</a>. This point is crucial to comprehend <a href="http://www.salon.com/2017/01/08/trump-seduced-white-working-class_partner/">the deep cynicism that traditional working-class supporters</a> now feel for mainstream politics. </p>
<p>In the United Kingdom, where many are dismayed by Brexit, <a href="http://www.bbc.com/news/uk-politics-10518842">New Labour under Tony Blair</a> would do much to extend the marketisation project started by Thatcher and further shift responsibility and risk from state and businesses to the individual. </p>
<p>In the United States, where liberals still seem intent on looking for explanations everywhere but themselves, the <a href="https://ustr.gov/trade-agreements/free-trade-agreements/north-american-free-trade-agreement-nafta">North America Free Trade Agreement</a> developed under Republican president George Bush senior (1989-1993), which had a deleterious impact on American jobs, would be signed into existence without modification by Democrat Bill Clinton (1993-2001). Clinton also <a href="http://www.wsj.com/articles/SB10001424127887323477604579000571334113350">presided over reforms that further facilitated</a> the meteoric rise and experimentation of the finance industry and exposed American workers to new sources of vulnerability. </p>
<p>Crucially, these parties, aided and abetted by the reality that their populations would see negative impacts offset by cheap goods from China and easier access to credit, were ushering in policies that would undo their traditional constituencies of support. </p>
<h2>A terrifying juncture</h2>
<p>To be sure, when the <a href="http://www.economist.com/news/schoolsbrief/21584534-effects-financial-crisis-are-still-being-felt-five-years-article">2008 global financial crisis</a> hit, the <a href="http://www.econlib.org/library/Enc/KeynesianEconomics.html">spirit and rhetoric of Keynesianism</a> were resurrected. Government stimulus took colossal proportions in the form of <a href="https://www.theguardian.com/news/datablog/2011/nov/12/bank-bailouts-uk-credit-crunch">bank bailouts</a>, <a href="http://www.economist.com/blogs/economist-explains/2015/03/economist-explains-5">quantitative easing</a>, and <a href="http://siteresources.worldbank.org/EXTPREMNET/Resources/C11TDAT_193-206.pdf">infrastructure investment</a>. Yet this “<a href="http://www.economist.com/node/14539560">Keynesian revival</a>” was divorced from the systematic redistributive social policy and restrictions on capital that characterised the era of national development. </p>
<p>Instead, it constituted “<a href="http://www.truth-out.org/opinion/item/38682-socialism-for-the-rich-capitalism-for-the-poor-an-interview-with-noam-chomsky">socialism for the rich</a>”: redistribution from the many to the few and the resuscitation of moribund banks and corporations that now had little incentive to reinvest their wealth nationally. Their burgeoning profits could flee to tax havens or be channelled to economies where exploitation offered more lucrative prospects (and the potential for more crises). </p>
<p>And while elites breathed a sigh of relief when <a href="http://www.un.org/en/development/desa/policy/wesp/wesp_archive/2015wesp_chap1.pdf">economic indicators turned modestly positive</a> again, it was no doubt a stretch for the unemployed, the precariat, the vulnerable and the socially immobile to trust they were enjoying the “rising tide lifts all boats” promise of globalisation.</p>
<p>All of this has brought us to an interesting if somewhat terrifying juncture – one that may only engender further cynicism. While we observe the rise of a <a href="http://time.com/time-person-of-the-year-populism/">new pack of alpha males</a> (and possibly <a href="http://www.express.co.uk/news/world/715289/who-is-marine-le-pen-france-national-front-president-eu">a new alpha female in France</a>), who spout selective illiberal rhetoric along with anti-immigrant positions, it is hard to ignore the awkward juggling acts that have to be undertaken. </p>
<p>Trump, for one, seems to be harking <a href="https://www.nytimes.com/2016/03/11/us/politics/-trade-donald-trump-breaks-200-years-economic-orthodoxy-mercantilism.html">back to an aggressive mercantilist position</a> but will inevitably have to confront the massive economic interests in the US, and indeed close to the Republican Party, that have been key forces behind <a href="http://www.ontheissues.org/celeb/Republican_Party_Free_Trade.htm">the promotion of free trade</a>, globalisation and tolerance of undocumented workers. His <a href="http://www.wsj.com/articles/donald-trumps-pro-business-stance-inspires-but-economic-growth-isnt-assured-1483551580">pro-business domestic agenda</a> will likely do little substantively to offset the structural drivers of dissatisfaction and social malaise. </p>
<p>What is truly worrisome about current trends is not just the prospect of yet another round of pillage at the hands of corporate greed under the leadership of an unpredictable egomaniac. The main problem lies in the fact that neoliberal globalisation has rendered nationally based policy-making in the interests of working classes all but impossible. </p>
<p>In times of great social crisis it’s only normal that people seek to regroup, to find support in one another, and wrest politics back from elites and their spin. Unfortunately, while this impulse may at times translate into progressive class-based action, it may also awaken the ghosts of nationalism and reactionary forms of populism (as we witness today). What we need now is unblinkered analysis and coordinated progressive political action beyond the extreme centre at both the national and international levels.</p><img src="https://counter.theconversation.com/content/71576/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>What we need now is unblinkered analysis and coordinated progressive political action beyond the extreme centre at both the national and international levels.Toby Carroll, Associate Professor, City University of Hong KongRuben Gonzalez-Vicente, University Lecturer, Leiden UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/707172016-12-21T16:31:56Z2016-12-21T16:31:56ZAnthill 8: Goodbye 2016, hello 2017<figure><img src="https://images.theconversation.com/files/151265/original/image-20161221-4085-7yn44z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Happy new year.</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>In what has been a year of political turmoil, violence and vitriol, The Conversation’s contributors have sought to explain the reasons behind and the consequences of key events. </p>
<p>From the victory of the <a href="https://theconversation.com/uk/eu-referendum-2016">Brexit</a> campaign that now sees the UK preparing to start negotiations on leaving the European Union, to the <a href="https://theconversation.com/uk/topics/2016-us-presidential-election-23653">election of Donald Trump</a> as US president, it has been a <a href="https://theconversation.com/eu-referendum-how-the-polls-got-it-wrong-again-61639">sobering year for pollsters</a>, and for those whose preferred political currency is <a href="https://theconversation.com/sorry-michael-gove-we-really-do-need-experts-heres-why-62000">hard facts</a>. </p>
<p>But 2017 could see even more shocks to the political establishment, particularly in Europe where key elections are scheduled in both <a href="https://theconversation.com/french-election-2017-meet-the-candidates-69436">France</a> and <a href="https://theconversation.com/merkels-party-slumps-in-berlin-election-but-dont-count-her-out-for-2017-65639">Germany</a>.</p>
<p>In this year’s final <a href="https://theconversation.com/uk/podcasts/the-anthill">The Anthill podcast</a>, we’re saying goodbye to 2016 and looking ahead to some of the economic and political trends that will influence our lives over the next 12 months. </p>
<p>First, we take a critical look at <a href="https://theconversation.com/uk/topics/globalisation-30443">globalisation</a>. Many of 2016’s upheavals have been a backlash against the world’s economic system, which has clearly benefited some more than others. Kingston University economist Steve Keen explains how many of the people who voted for Trump and Brexit have been left worse off by what is dubbed globalisation. </p>
<p>We also ask him what this heralds for 2017 and beyond. And we discuss the future of trade deals with University of Bath international trade expert Maria Garcia. She points out the important difference between rhetoric and reality when it comes to what we can expect from Trump and European leaders. </p>
<p>In the second part of this episode, we’ve pulled together a panel of experts to discuss the big political events to come in 2017 – and help figure out how both our leaders and we as citizens can try to make it a better year than 2016.</p>
<p>Reader in European politics at the University of Westminster, Patricia Hogwood, looks ahead at the challenges facing the European Union, while Andy Price, head of politics at Sheffield Hallam University, mulls over how best to approach the next steps of the <a href="https://theconversation.com/uk/topics/brexit-negotiations-29088">Brexit negotiations</a>. And journalism professor at City University of London, Jane Singer, helps us, as consumers of media, work out how to better hold our leaders to account in 2017. </p>
<p>Thanks for listening. </p>
<p><em>The Anthill theme music is by Alex Grey for Melody Loops. A big thank you to City University London’s Department of Journalism for the use of their studios.</em></p>
<p><em><a href="https://theconversation.com/uk/podcasts/the-anthill">Click here</a> to listen again to any of the episodes of The Anthill on themes from <a href="https://theconversation.com/anthill-7-on-belief-69448">belief</a>, to <a href="https://theconversation.com/anthill-3-rooting-for-the-underdog-62368">underdogs</a>, <a href="https://theconversation.com/anthill-4-fuel-64021">fuel</a> and <a href="https://theconversation.com/anthill-6-into-the-darkness-67267">darkness</a>, or subscribe wherever you get your podcasts from.</em></p><img src="https://counter.theconversation.com/content/70717/count.gif" alt="The Conversation" width="1" height="1" />
Where do we go from here? After a dramatic year, we look ahead to some key economic and political trends that will influence our lives over the next 12 months.Laura Hood, Senior Politics Editor, Assistant Editor, The Conversation (UK edition)Annabel Bligh, Business & Economy Editor and Podcast Producer, The Conversation UKGemma Ware, Head of AudioLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/693602016-11-30T14:41:08Z2016-11-30T14:41:08ZLessons for African regionalism as globalisation takes a beating<figure><img src="https://images.theconversation.com/files/147714/original/image-20161128-22732-19xy0cl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Delegates in conference at the African Union headquarters in Ethiopian capital Addis Ababa.
</span> <span class="attribution"><span class="source">Reuters</span></span></figcaption></figure><p>Even before globalisation had convalesced from the aftershocks of <a href="http://www.bbc.com/news/politics/eu_referendum/results">Brexit</a> another telling blow was dealt by the <a href="http://www.nytimes.com/2016/11/09/world/europe/global-reaction-us-presidential-election-donald-trump.html?_r=0">shock election of Trump</a> as US president-elect. This is a Frankenstein moment in political history. It threatens the traditional ideological divide that for centuries has characterised party politics as leaning to the left or <a href="http://foreignpolicy.com/2016/11/14/the-two-hundred-year-era-of-left-and-right-is-over/">right</a>. These events have also jolted the basic foundation principles of liberalism on which globalisation – and by extension regionalism – rests.</p>
<p>In both the UK referendum and US election, globalisation and ideological party based politics appear to have given way to a new kind of populism. This has emboldened right wing nationalistic parties. </p>
<p>There is already evidence of an anti-globalisation backlash across Europe and the US. This can be seen in the <a href="http://www.bbc.com/news/world-europe-36130006">rising allure</a> of nationalism and of far right nationalist parties mainly against growing <a href="http://www.usatoday.com/story/news/world/2014/03/31/europe-anti-immigration/5706575/">immigration pressures</a>. It has also been ignited by the trans-location of manufacturing to foreign countries seen as favourable low cost production centres.</p>
<p>This gloomy face of globalisation has led to a feeling of disfranchisement among ordinary citizens. Many increasingly feel that they gain little from the public goods accrued from globalisation. Instead owners of multinational corporations and the elites benefit the most. </p>
<p>The standard argument in favour of globalisation, and by extension regionalism, is that it is a force for good and delivers benefits to everyone. But, as <a href="https://www.researchgate.net/publication/259580724_New_Regionalism_in_Africa">Fredrik Söderbaum and Andrew Grant</a> point out, both can also be negative by, for example, promoting conflict and exploitation. And they can easily translate into private gain at the expense of attaining a common public good.</p>
<p>As globalisation continues to take a beating, what is the future of regionalism, which is one of the main tailpieces of globalisation? What lessons can be learnt for African regionalism which envisions a more socially, economically and politically integrated continent by the year <a href="http://agenda2063.au.int/en/about">2063</a>? </p>
<h2>New approaches</h2>
<p>Perhaps the main lesson for the Africa Union and regional trading blocs is increased public participation in decision making. The current framework for regional integration has mainly been characterised by <a href="https://www.researchgate.net/publication/259580724_New_Regionalism_in_Africa">unilateral state-centricism</a> </p>
<p>This state centric preference to regionalism has led to a <a href="http://www1.uneca.org/ArticleDetail/tabid/3018/ArticleId/274/The-role-of-the-civil-society-in-the-Africa-Union-building-process-High-Level-Symposium-reflects-on-Africa-s-integration-agenda.aspx">clear disconnect</a> between elites and ordinary citizens. In essence policies and laws formulated at the highest levels of regional governance structures give short shrift to the day-to-day needs of most people. Instead, they are more geared for the welfare of a few elites in government and large businesses. These groups have positioned themselves to gain out of regional integration efforts. </p>
<p>This is true in the East African Community. Here, big businesses – represented by the East African Business Council – have their interests guaranteed through the privilege of holding an observer status in all the structures of <a href="http://www.eabc.info/partners/east-african-community-eac">regional bodies</a>. Small scale farmers, businesses and civil society groups represented by the umbrella body East African Civil Society Forum enjoy no such status. </p>
<p>This is in spite of the fact that the East African Community <a href="http://www.eac.int/treaty/index.php?option=com_content&view=article&id=196:article-127--creation-of-an-enabling-environment-for-the-private-sector-and-the-civil-society&catid=62:chapter-25&Itemid=321">treaty</a> stipulates the desire for a people centred approach. </p>
<p>The misconceived perception that decisions made by a few elites are good for all could potentially foment resentment by ordinary citizens against regionalism, and by extension globalisation. It is not too difficult to imagine the parallels that led to to Trump’s surprise victory. His <a href="http://www.pbs.org/newshour/making-sense/trump-says-hell-bring-jobs-back-to-america-economists-are-skeptical/">call</a> to bring back industries to American cities echoed with an electorate that had seen their jobs lost due to the relocation of industries. </p>
<h2>Don’t throw the baby out with the bathwater</h2>
<p>Policy makers must develop new approaches to regionalism. The traditional approaches need to be replaced by a hybrid system. This would require governments to be mere facilitators while non-state actors take the lead on how best to conduct integration processes. </p>
<p>This would help get rid of the unilateral formulation of policies by elites with no inputs from the majority of citizens.</p>
<p>But the formulation of a new narrative should not set out to discredit globalisation and regionalisation entirely. Instead efforts should be made to minimise divisive identity based politics promoted by groups that feel left out by a rapidly globalising and integrating world. Policy makers should allow for a more bottom up approach. This would coordinate both state and non-state actors to make regionalism, and by extension globalisation, work for the benefit of all.</p><img src="https://counter.theconversation.com/content/69360/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sekou Toure Otondi does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The misconceived perception that decisions made by a few elites are good for all could potentially foment resentment by ordinary African citizens against regionalism.Sekou Toure Otondi, PhD Candidate, Department of Political Science and Public Administration, University of NairobiLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/644152016-09-16T00:09:21Z2016-09-16T00:09:21ZWhen globalisation meets entrepreneurship it can be a force for good<figure><img src="https://images.theconversation.com/files/137511/original/image-20160913-19251-8gew8n.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Globalisation facilitates technology entrepreneurship</span> <span class="attribution"><span class="source">Image sourced from shutterstock.com</span></span></figcaption></figure><p>Entrepreneurship, the pursuit of opportunities despite lacking the necessary resources at the outset, is often celebrated as a hero of the global economy. </p>
<p><a href="https://theconversation.com/au/topics/globalisation-backlash-29119">Globalisation</a>, on the other hand, is often criticised as a villain contributing to rising inequality. </p>
<p>The contrast between the two was highlighted recently in two opposing posts on The Huffington Post. One bears the headline “<a href="http://www.huffingtonpost.com/rep-scott-peters/entrepreneurs-engines-of-_b_6180284.html">Entrepreneurs: Engines of our Economic Growth</a>” and the other, “<a href="http://www.huffingtonpost.com/rep-scott-peters/entrepreneurs-engines-of-_b_6180284.html">Globalization is Killing the Global: Return to Local Economies</a>”. </p>
<p>Republican presidential nominee Donald Trump arguably appeals to people enamoured by entrepreneurial success and disenchanted by globalisation. But such thinking overlooks what globalisation makes possible – or at least expands the scope for. </p>
<p>Globalisation works hand in hand with entrepreneurship in three important ways. </p>
<p>First, globalisation facilitates technology entrepreneurship by fostering the rise of innovation ecosystems. This might include engagement between new ventures, and large multinational enterprises.</p>
<p>After a decade of studying partnerships between multinationals and new ventures, one of my most vivid memories is of sitting outside the Staples Center in Los Angeles with a small group of technology entrepreneurs from around the world. They beamed with pride as their ventures’ logos flashed on a large neon sign, courtesy of Microsoft, whose worldwide partner conference was underway there. These ventures had been handpicked by Microsoft to be showcased at this event through a global partnering initiative for innovative startups. </p>
<p>Nowadays, many multinationals have managers with job titles that include terms like “startup engagement”. They compete to win the hearts, minds and ideas of new ventures – which benefit from globalisation by gaining powerful partners.</p>
<p>Second, globalisation facilitates transnational entrepreneurship. Diaspora networks of émigrés to various countries take what they have learnt in corporations and use it to create their own businesses in the same or similar sectors. </p>
<p>In some cases, such as the Israeli and Indian technologist diasporas, these ethnic communities support technology entrepreneurship. In others transnational ventures are decidedly low-tech. A fascinating example is the large merchant community from the city of Wenzhou in China’s Zhejiang Province. </p>
<p>The people of Wenzhou have a reputation for being among China’s most successful entrepreneurs, particularly in manufacturing. This track record has been continued by the large network of Wenzhou natives who have gone abroad, especially those in continental Europe. </p>
<p>Apparel businesses in Italian cities such as Prato run by entrepreneurs from Wenzhou appropriate the legitimacy of “made in Italy” garments and the cost advantages associated with employing workers from Wenzhou. While local competitors are not always pleased, this can be a useful mode of value creation with benefits for the local economy, as long as local laws are respected.</p>
<p>Third, globalisation facilitates social entrepreneurship. This involves creating wealth while simultaneously addressing vexing societal problems such as environmental degradation, poverty and poor health.</p>
<p>There are many unique opportunities for shared value creation when both for-profit multinationals and non-profits such as NGOs and the United Nations work with entrepreneurs. To illustrate, the United Nations Children’s Fund (UNICEF) launched a competition in Accra, Ghana seeking to attract ideas for “game-changing” solutions tackling challenges that children face. The eight selected social entrepreneurs, including one who is developing an app to teach children to read, are now working in an incubator managed by a partner-NGO.</p>
<p>Does this mean that globalisation is an unmitigated force for good? No, but it would be foolish to overlook the potential globalisation has for good – via entrepreneurship. </p>
<p>As some Wharton students recently conveyed to Donald Trump in an <a href="https://medium.com/@whartonopenletter/you-do-not-represent-us-an-open-letter-to-donald-trump-94cf73ce11d8#.h63ik49zl">open letter</a>: “diversity and tolerance have been repeatedly proven to be valuable assets to any organization’s performance”.</p><img src="https://counter.theconversation.com/content/64415/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shameen Prashantham does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Globalisation still has the potential to deliver good – via entrepreneurship.Shameen Prashantham, Associate Professor of International Business and Strategy, China Europe International Business SchoolLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/636562016-08-31T20:07:53Z2016-08-31T20:07:53ZIf the backlash against globalisation hurts China, it hurts global growth too<p><em>Most experts say globalisation spreads wealth, bringing people out of poverty and nations closer together. But right now some politicians and their supporters are arguing it simply increases inequality. What’s really going on? Our Globalisation backlash series offers some answers.</em></p>
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<p>Globalisation has contributed to the growth of China for decades but the rise of protectionism in Western economies could curb Chinese trade and investment.</p>
<p>The demise of manufacturing industries in the United States unable to compete against low priced Chinese imports has lead to retaliatory action, most <a href="http://www.forbes.com/sites/kenrapoza/2016/04/23/china-steel-tariffs-may-stick-but-beijing-likely-to-challenge-in-wto/#37eacf874af0">notably on steel imports.</a>
The European Union <a href="http://www.ft.com/cms/s/0/868316f6-22fc-11e6-9d4d-c11776a5124d.html#axzz4H0kyVsIf">has reacted similarly.</a></p>
<p>In Australia there has also been strong opposition to the China Australia Free Trade Agreement, particularly by unions concerned that Chinese companies investing in Australia would bring workers from China. Sentiment also runs strongly against Chinese foreign investment in agricultural land and infrastructure.</p>
<p>Overly restrictive trade and investment measures will have serious implications for future world growth, if the backlash against globalisation intensifies them. </p>
<h2>China was a big beneficiary of globalisation</h2>
<p>No other sizeable economy in history has ever experienced three unbroken decades of near 10% average economic growth as China did during the recent globalisation era, the legacy of economic <a href="http://www.worldbank.org/content/dam/Worldbank/document/China-2030-complete.pdf">reforms begun by leader Deng Xiaoping</a>.
This growth in aggregate output was on average over three times greater per annum than its Western trading partners. </p>
<p>The key factors underpinning this growth were: encouragement of foreign direct investment, specifically in manufacturing, greater internal labour mobility, higher domestic saving due to contraction of social welfare entitlements previously extended by the state sector and an improved investment climate for the private sector with less corruption. </p>
<p>Simultaneously, China’s remarkable integration into the world economy was due to its international merchandise trade expanding at an annual average of 15% during the globalisation era from the early 1980s to 2008. That was more than double the global rate. </p>
<p>After China joined the World Trade Organisation (WTO) in 2001, the <a href="http://www.worldbank.org/content/dam/Worldbank/document/China-2030-complete.pdf">liberalisation of international trade barriers</a> significantly boosted its international merchandise trade. Policies that encouraged foreign direct investment also greatly assisted exports by multinational firms (such as Motorola, Toshiba, Nokia and LG) operating in coastal China. </p>
<p>Export-led growth had been crucial to China’s development strategy before the global financial crisis and a tightly managed exchange rate system was instrumental to its success. China’s export growth has persistently outpaced its import growth, giving rise to trade and current account surpluses.</p>
<p>China’s embrace of globalisation made it a highly open economy relative to most advanced economies in the world. As a proportion of GDP, its total exports plus imports of goods and services remain <a href="http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators">well above comparable ratios</a> for the United States, Japan and Germany. </p>
<p>In China’s development strategy, large trade surpluses were seen to be an objective of economic policy. Since the global financial crisis, China has adopted a policy of re-balancing its economy away from increasing its dependence on exports and investment as the primary sources of aggregate expenditure growth towards domestic consumption and services provision. </p>
<p>This will have profound international implications generating spillovers for trade and commodity prices. Curbing export growth will reduce China’s vulnerability to the backlash against globalisation.</p>
<h2>More foreign investment, less trade growth?</h2>
<p>Due to a slowdown in China’s growth and trade, its current account surplus, mainly reflecting its trade surplus, <a href="http://www.imf.org/external/pubs/ft/weo/2016/01/weodata/weorept.aspx?sy=2005&ey=2015&scsm=1&ssd=1&sort=country&ds=.&br=1&c=924&s=BCA&grp=0&a=&pr1.x=53&pr1.y=18">has fallen from a high</a> of 10% of GDP in 2007 to around 2-3% in recent years.</p>
<p>However China’s central bank, the People’s Bank of China, has accumulated huge foreign exchange reserves over the past decade of over $US 3 trillion. These reserve holdings are the <a href="http://www.imf.org/external/pubs/ft/weo/2016/01/weodata/weorept.aspx?sy=2005&ey=2015&scsm=1&ssd=1&sort=country&ds=.&br=1&c=924&s=BCA&grp=0&a=&pr1.x=53&pr1.y=18">highest of any economy in the world</a> and over twice the value of Australia’s annual GDP.</p>
<p>China’s foreign money holdings are now also managed by its sovereign wealth fund, China Investment Corporation, which has amassed a <a href="http://www.china-inv.cn/wps/portal/!ut/p/a0/04_Sj9CPykssy0xPLMnMz0vMAfGjzOL9DMwMDJ2DDbwMfB3dDBwtDFx9_Y29PL3dTPQLsh0VAbe5RsU!/pw/Z7_N0601CS0J0MAF0A80EMO3JIC03/ren/p=WCM_PI=1/p=ns_Z7_N0601CS0J0MAF0A80EMO3JIC03_WCM_Page.37c7bb2f-53b1-4742-b47e-38d857981f67=2/p=CTX=QCPchina-invQCAportalQCPhome_enQCPMEDIA_enQCPPress_Releases_en/=/">portfolio of high yielding assets</a> worldwide. </p>
<p>This huge arsenal of funds suggests China’s future gains from globalisation will depend more on investing overseas. It’s because of this its foreign investment abroad will play a larger role than previously. </p>
<p>World merchandise trade grew <a href="https://www.wto.org/english/res_e/statis_e/wts2016_e/wts16_toc_e.htm">at under 3% in 2015</a> according to the WTO in line with world GDP growth. This is a major slowdown relative to the peak globalisation period between 1990 and 2008 when world trade growth grew twice the speed of GDP growth. </p>
<p>China’s economy is growing at its slowest rate in 25 years, well below the phenomenal rates experienced before the global financial crisis. Yet, China’s growth remains robust by any standard. It <a href="https://www.imf.org/external/data.htm">increased its GDP</a> last year by the size of Sweden’s.</p>
<p>There is a two way relationship between growth in China and its trading partners in the rest of the world. The global slowdown reduces demand for China’s exports and lowers China’s growth which, in turn, reduces China’s demand for imports, especially commodities, lowering GDP in the rest of the world.</p>
<p>A key reason The Great Depression of the 1930s was so prolonged was that many countries, following the enactment of <a href="http://americastradepolicy.com/did-the-smoot-hawley-tariff-cause-the-great-depression/#.V6103E3ymHs">the Smoot-Hawley Tariff Act</a> in the United States, became highly protectionist which severely contracted world trade. </p>
<p>Luckily, so far we have not seen a repeat of that 1930s experience. Yet if the globalisation backlash results in ever increasing anti-free international trade and investment measures, it remains a clear and present danger to future living standards.</p><img src="https://counter.theconversation.com/content/63656/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tony Makin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If the world starts to restrict trade and crack down on foreign investment, it will affect China’s growth, which will in turn affect the world.Tony Makin, Professor of Economics, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/637072016-08-30T20:13:04Z2016-08-30T20:13:04ZWhy policy differences continue to exist despite globalisation’s evolution<figure><img src="https://images.theconversation.com/files/134733/original/image-20160819-12281-1fs6k2y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Japan astounded the world with its economic performance for decades.</span> <span class="attribution"><span class="source">Reuters/Toru Hanai</span></span></figcaption></figure><p><em>Most experts say globalisation spreads wealth, bringing people out of poverty and nations closer together. But right now some politicians and their supporters are arguing it simply increases inequality. What’s really going on? Our Globalisation backlash series offers some answers.</em></p>
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<p>The study of “globalisation” has been distinguished by unresolved disagreements about exactly what it is and how much of it may have actually occurred. One thing most observers agree on, though, is that economic processes have been central drivers in its evolution and gone further than anything else.</p>
<p>In the first flush of globalisation studies this led to some rather excited claims about the imminent “end of the state” and the possibility public policy would eventually converge on the world’s “best practice”.</p>
<p>In reality, however, national economies continue to look rather different, and so do their comparative performances. Southern Europe’s notoriously high levels of youth unemployment, for example, have added to the general sense of disillusion with the European Union.</p>
<p>Such problems were one of the reasons that Margaret Thatcher <a href="http://www.bbc.com/news/uk-politics-21703018">famously claimed</a> that in an era of footloose capital and powerful money markets and ratings agencies:</p>
<blockquote>
<p>There is no alternative.</p>
</blockquote>
<p>Yet even before the 2008 global financial crisis demonstrated the ratings agencies were either too close to their clients or equally beguiled by the now-discredited efficient market hypothesis, it was clear not every country had embraced neoliberalism, nor succumbed to its excesses and flaws as a consequence.</p>
<p>Whatever the Cold War may or may not have done in the strategic arena, one thing became dramatically apparent in the economic sphere: capitalism was ubiquitous, but it looked very different in Japan, Germany, the US and China.</p>
<p>One of the reasons the global financial crisis did not badly affect China was that its policymakers still retained high levels of control over its version of the free market.</p>
<h2>The varieties of capitalism</h2>
<p>In the absence of alternatives, academic interest increasingly focused on what came to be known as the <a href="https://www.amazon.com/Varieties-Capitalism-Institutional-Foundations-Comparative/dp/0199247757/ref=sr_1_1?s=books&ie=UTF8&qid=1471255232&sr=1-1&keywords=varieties+of+capitalism">“varieties of capitalism”</a>. </p>
<p>While the borders of formerly discrete national economies may have become a good deal fuzzier than they once were, differences persisted – nowhere more so than among Australia’s all-important Asian trade partners.</p>
<p>I wrote <a href="https://www.amazon.com/Competing-Capitalisms-Australia-Competition-International/dp/0333747747/ref=sr_1_1?s=books&ie=UTF8&qid=1471255288&sr=1-1&keywords=competing+capitalisms+beeson">my PhD thesis</a> on what was then Australia’s most important bilateral economic relationship and Japan’s very different competing form of capitalism. While Japan may be a byword for stagnation and underperformance these days, it’s important to remember it astounded the world with its economic performance for decades. </p>
<p>It led the entire East Asian region in an unprecedented and highly successful process of industrialisation.</p>
<p>Equally importantly, Japan provided a blueprint for state-led development, which has been replicated with varying degrees of success throughout East Asia. While they may be loath to admit it, China’s policymakers have <a href="https://www.academia.edu/1922131/Developmental_states_in_East_Asia_A_comparison_of_the_Japanese_and_Chinese_experiences">drawn heavily</a> on the Japanese model.</p>
<p>Concern is growing that China may be about to experience some of Japan’s problems, too. It is struggling to find a balance between state guidance and control and the introduction of a greater role for market mechanisms and the private sector. </p>
<h2>Learning the lessons?</h2>
<p>One of the points that came out of the comparative study of divergent forms of capitalism is that different economic systems have their own strengths and weaknesses. </p>
<p>Crucially, weaknesses may persist and prove impervious to reform – because they are embedded in a political context that mitigates against change, even when it is obviously needed.</p>
<p>Western critics <a href="http://www.worldbank.org/en/news/feature/2012/02/27/china-2030-executive-summary">frequently point to</a> the continuing importance of supposedly inefficient state-owned enterprises in China, or to powerful, politically connected construction companies in Japan, as evidence of the shortcomings of Asian-style “crony capitalism”.</p>
<p>But let he who is without structural defects cast the first reform package. </p>
<p>For example, the pervasive influence of an unreformed Wall Street has become a major problem in the US and a prominent election issue. Similarly, Francois Hollande’s efforts to reform France’s rather archaic and divisive labour relations system reflect a unique constellation of historically contingent forces that distinguish politics and economics in that country.</p>
<p>Capitalism in Australia may have much in common with its Anglo-American counterparts, but it is equally hamstrung by the <a href="https://www.jstor.org/stable/2586011?seq=1#page_scan_tab_contents">path-dependent legacy of the past</a>. There is no greater illustration of this possibility than the endless debates about the federation and the division of tax revenues and responsibilities <a href="http://onlinelibrary.wiley.com/doi/10.1111/1467-8500.12132/abstract">between Canberra and the states</a>.</p>
<p>Many of Australia’s Asian neighbours may be just us astounded and incredulous about the way we do things as we often are about them. Historically embedded relationships, powerful vested interests and even ways of thinking about economic and public policy make it as difficult to bring about change here as it is just about anywhere else.</p>
<p>Consequently, one of the greatest insights that comes from the study of comparative capitalism is that there is actually something to compare in the first place. Significantly, the differences are not disappearing despite the processes associated with globalisation.</p>
<p>On the contrary, the competition between different forms of capitalism I became obsessed with 20 years ago has not disappeared, even if the arena and the key protagonists have shifted somewhat.</p>
<p>The rise of Chinese-style capitalism may yet rewrite the international regulatory rule book in the way the Americans did when they became the world’s most successful economic power.</p>
<p>Or, then again, it may not. The one really universal and unchanging reality about capitalism everywhere is its <a href="https://www.amazon.com/Spectre-Feast-Capitalist-Politics-Recession/dp/023023075X/ref=asap_bc?ie=UTF8">vulnerability to periodic crises</a>. </p>
<p>China may be teetering on the brink of what would be its first major experience of something that has plagued the West for as long as capitalism has existed. How China deals with it really might throw up some important comparative lessons, even if the differences persist.</p><img src="https://counter.theconversation.com/content/63707/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Beeson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>One thing became dramatically apparent in the economic sphere following the Cold War: capitalism was ubiquitous, but it looked very different in Japan, Germany, the US and China.Mark Beeson, Professor of International Politics, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/636552016-08-29T20:07:05Z2016-08-29T20:07:05ZThe least-skilled workers are the losers in globalisation<p><em>Most experts say globalisation spreads wealth, bringing people out of poverty and nations closer together. But right now some politicians and their supporters are arguing it simply increases inequality. What’s really going on? Our Globalisation backlash series offers some answers.</em></p>
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<p>Concern over the employment consequences of globalisation is again driving political debate. Look no further than the United Kingdom’s exit from the European Union and the rise of protectionism in American and Australian politics to see the disenfranchisement of low-skill workers with the effects of international trade. Judging by the dramatic change that has occurred in the global distribution of manufacturing output <a href="https://fas.org/sgp/crs/misc/R42135.pdf">in the past 25 years</a> it’s easy to see why these workers should be so concerned.</p>
<p>In the early 1990s the United States accounted for 30% of manufacturing output, retaining the position as the world’s leading industrial producer that it had held for almost a hundred years. At that time China produced only 5% of global manufacturing output. </p>
<p>Today that position has completely reversed. China produces 25% of manufacturing output and the US only 15%. </p>
<p>Differences in labour costs between the US and China explain much of this transition. Many types of manufactured goods mainly require relatively low-skill labour to produce (especially goods such as textiles and footwear, motor vehicles, electronic consumer goods). </p>
<p>Developing countries, where wages paid to low-skill labour are much lower than in developed countries, are able to produce these manufactured goods more cheaply. As developing countries such as China have increased their engagement with international trade this has caused a large-scale switch in the location of production of manufactured goods – from developed to developing countries. </p>
<p><a href="http://economics.mit.edu/files/11675">Recent research</a> has found that low-skill workers in the US have been made significantly worse off by the transfer of manufacturing activity to China. </p>
<p>The research estimates that, without the rise in Chinese imports, there would be 560,000 extra manufacturing jobs in the US today. As well, workers in industries most exposed to competition from Chinese imports are found to have experienced an average <a href="http://economics.mit.edu/files/11675">income decline</a> of over $500 per annum against annual earnings of $40,000. This negative effect on annual earnings has been largest for workers with the lowest earnings.</p>
<p>Another important finding is the role of location in explaining the impact on the US labour market of increased imports from China. Manufacturing industries facing competition from China are concentrated in particular locations in the US (mid-west and south-east). It is in these regions that the impact on low-skill workers has been largest. </p>
<p>The geographic concentration also explains why it is taking workers who have been adversely affected so long to get back into work. A larger number of job seekers chasing the available job vacancies in a region means longer average times spent out of employment. </p>
<p>Manufacturing workers in the US may have been made worse off by globalisation, but economic theory predicts that there should also have been winners in the US. With increased international trade, the US can produce and export to China more of the goods where it has a comparative advantage as a supplier – such as professional services that require high-skill labour to produce. In other words, China uses the extra income it earns by selling manufactured goods to the US to buy other goods and services from the US. </p>
<p>However, so far there is not much evidence that this has happened. Instead of using its extra income gained from selling manufactured goods to buy more imports from the US, throughout the 2000s China saved that income, maintaining a large trade surplus. The benefits to US workers from globalisation therefore have been muted compared to the prediction of economic theory. </p>
<p>The experience of a rapid rise in imports of manufactured goods from China is, of course, not unique to the US. While much less is known about the impacts on those other countries, what is known is consistent with the US experience. </p>
<p><a href="http://cep.lse.ac.uk/pubs/download/dp1411.pdf">Other research</a> finds that in the UK in the 2000s, workers in sectors most affected by growth in imports from China spent more time out of employment and experienced a drop in earnings. Again, these effects were most pronounced for low-skill workers.</p>
<p>Australia has shared the experience of rising exposure to international trade with the US and UK. From 1960 to the mid-1970s in Australia the share of international trade (exports plus imports) in GDP was constant at about 25%. </p>
<p>Since then the role of international trade in economic activity has increased steadily, now being above 40%. While there has not been much research on the topic for Australia, it seems that the recent rise in China’s manufacturing output has had less impact than in the US or UK. There had already been substantial declines in the share of workers in the Australian manufacturing industry in the 1970s and 1980s, so there was less scope for a negative effect.</p>
<p>What Australia has shared with other developed countries is a commitment to being increasingly open to international trade. To a large degree this policy stance has been motivated by economic theory, which predicts that the gains to the winners from growth in international trade more than offset the costs to the losers. A lack of evidence about the winners from international trade challenges this orthodoxy – or at least suggests that it cannot be taken as an article of faith.</p><img src="https://counter.theconversation.com/content/63655/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jeff Borland receives funding from the Australian Research Council. </span></em></p>Research shows that low-skilled workers are losing jobs and wages in developed countries because of trade, but the evidence still isn’t there as to who are the winners.Jeff Borland, Professor of Economics, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/633712016-08-28T20:10:34Z2016-08-28T20:10:34ZIt’s not just the economy, stupid; it’s whether the economy is fair<p><em>Most experts say globalisation spreads wealth, bringing people out of poverty and nations closer together. But right now some politicians and their supporters are arguing it simply increases inequality. What’s really going on? Our Globalisation backlash series offers some answers.</em></p>
<hr>
<p>In the aftermath of the global financial crisis, America’s Obama administration faced a dilemma. The public wanted banking reform. But administration pragmatists like US Treasury Secretary Timothy Geithner feared that yielding to populist voices might threaten recovery. </p>
<p>Geithner argued that if recovery could deliver “results”, populist appeals for reform should abate. Even if the public did not comprehend why the administration limited its reforms, this would be forgiven if the administration could enable a recovery. As Geithner put it in late 2009: </p>
<blockquote>
<p>“The test is whether you have people willing to do the things that are deeply unpopular, deeply hard to understand, knowing that they’re necessary to do and better than the alternatives. We’ll be judged on how we dealt with the things that were broken in the country.” </p>
</blockquote>
<p>Yet, the past few years have suggested just the opposite. Even as growth has revived and unemployment has fallen, populist pressures have only increased. </p>
<p>Despite important differences, the Tea Party and Occupy movements and the Bernie Sanders and Donald Trump campaigns have all emerged to question the administration’s ties to Wall Street and suggest that fairness remains a core concern. This suggests a paradox: where reform is repressed on ostensibly pragmatic grounds, the result may be less to prevent populist reaction than to inflame it. </p>
<p>Initially, the early global financial crisis spurred public demands for reform. Popular calls urged limits on executive bonuses (particularly as they had been paid by the very firms receiving government aid) and an end to bailouts of firms considered “too big to fail”. </p>
<p>Indeed, Obama himself initially urged such reforms. He denounced excessive bonuses as “shameful” and pledged that “top executives at firms receiving extraordinary help from US taxpayers will have their compensation capped at $500,000”. </p>
<p>However, administration officials also feared that too much reform might threaten recovery. For example, Geithner opposed the president’s own rhetoric, insisting that “the most important thing was to repair the banking system, not to get caught up in vilifying it”. Bill Clinton put it even more colourfully to Geithner, suggesting: “You could take [Goldman Sachs CEO] Lloyd Blankfein into a dark alley and slit his throat, and it would satisfy them for about two days … Then the bloodlust would rise again.” </p>
<p>Geithner’s hope was that a rapid recovery would avert 1930s-styled populist excesses, as an economic result would speak for itself. This would lead him later in the year to stifle efforts at limiting bonuses – even those paid by firms that had received taxpayer bailouts – and ensure that the eventual Dodd-Frank financial reform legislation left scope for the continued provision of bailouts to large firms. </p>
<p>To be fair, in the short run, emphasising recovery may have been the smart thing to do. As John Maynard Keynes wrote in an open letter to President Franklin Roosevelt in 1933, in the depths of the Great Depression: </p>
<blockquote>
<p>“You are engaged on a double task, recovery and reform – recovering from the slump, and the passage of those business and social reforms which are long overdue.” </p>
</blockquote>
<p>In this context, Keynes warned: </p>
<blockquote>
<p>“Even wise and necessary reform may … impede and complicate recovery. For it will upset the confidence of the business world and weaken its existing motives to action before you have had time to put other motives in their place.” </p>
</blockquote>
<p>Recognising the need for some degree of discretion, Roosevelt concentrated in his earliest months on restoring confidence in the banking industry and increasing corporate power as a means to raising profits. Yet over the next several years, his more far-reaching <a href="https://en.wikipedia.org/wiki/New_Deal">New Deal reforms</a> would provide the foundation for breaking the power of finance for a generation – and in the process elevate the market power of labour. </p>
<p>Roosevelt recognised – as do psychologists – that repressing pressures for change often does not make them go away. Instead, it simply defers their emergence to a later date, when they re-emerge in distorted, darkened form. </p>
<p>Put differently, the paradox may be that the utilitarian approach Geithner favoured, even as it reflected a desire to limit populist excesses, contributed to their later intensification. </p>
<p>Results, in this light, do not speak for themselves in sustaining popular support. It is not enough to design good policies if they are not understood. The challenge is also to make them understandable.</p><img src="https://counter.theconversation.com/content/63371/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Wesley Widmaier receives funding from the Australian Research Council. </span></em></p>The people wanted reform but they got excuses, and now populism is winning.Wesley Widmaier, Australian Research Council Future Fellow, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/619502016-07-11T02:24:55Z2016-07-11T02:24:55ZThree reasons free trade has become a political football<p>Surveying democratic election results around the world, it’s clear the high-water mark for globalisation has been met. Free trade, <a href="https://theconversation.com/why-politicans-fail-to-make-the-economic-case-for-free-trade-44082">always questionable economics</a>, is no longer good politics and in many ways has jumped the shark.</p>
<p>We’ve seen Trump on the populist right (or wherever Trump is, as he has his own political pendulum) and Bernie Sanders on the left turning US trade politics upside down. Both helped drive Democratic nominee Hillary Clinton to reverse her position on the Trans-Pacific Partnership (TPP). </p>
<p>Ironically, the Republican Party was originally northern and protectionist, and the southern-based Democratic Party pro-free trade. Now Trump on the right and Sanders on the left have made protectionism popular again.</p>
<p>Brexit in the UK and other populist forces across Europe have sprung largely from an anti-globalisation and anti-immigration platform.</p>
<p>In the Asia-Pacific we’ve seen <a href="http://www.smh.com.au/world/forget-donald-trump-australia-needs-to-worry-about-the-philippines-rodrigo-duterte-20160510-goqkyl.html">Rodrigo Duterte</a> elected in the Philippines and nationalist impulses on the rise everywhere from <a href="http://www.lowyinstitute.org/publications/trade-protectionism-indonesia-bad-times-and-bad-policy">Indonesia</a> to Peru.</p>
<p>In Australia, we’ve seen the rise of the Nick Xenophon Team, with Xenophon himself <a href="http://www.afr.com/opinion/election-2016-why-the-nick-xenophon-party-is-against-free-trade-fundamentalism-20160608-gpej60">questioning the benefits of free trade</a>. And with the revival of Pauline Hanson (who questions both Asian immigration and trade with Asia) and a fractured Senate, there’s likely to be more negative messages on free trade.</p>
<p>The Australian economy can survive a split parliament – the fears that it will harm business confidence are largely exaggerated. But the presence of Hanson in the Senate (with her rhetoric of “Australia is being swamped with Asians”) is far more dangerous given our strong trade, investment and education links with Asia. </p>
<p>What is it that has allowed the Donald Trumps, Nigel Farages and Pauline Hansons of this world to thrive politically?</p>
<h2>Three drivers of anti-trade sentiment</h2>
<p>The first reason has been the rise of inequality in developed economies. </p>
<p>The failure of US real wages to keep up with productivity growth, while the top 1% of US society gets richer (including Trump himself), explains the anger in the US. And instead of blaming labour market deregulation, it is easier to blame immigrants from Mexico and Asia, or the Federal Reserve. </p>
<p>Ironically, if labour markets had been strengthened and workers’ rights and wages supported, free trade might have built a bigger constituency.</p>
<p>The second reason has been the failure of global economic institutions to adapt to changes in the global economy. </p>
<p>We’ve seen the EU overextend to the brink of collapse, the World Trade Organisation (WTO) dead as a Doha and the International Monetary Fund (IMF) and World Bank in a trans-Atlantic straight jacket despite the rise of Asia and the emerging economies. Instead of forging truly open trade agreements, we’ve tried to protect corporate rights alone via the TPP and its forerunner, the Multilateral Agreement on Investment (MAI). If global institutions can’t even aim to have a level playing field, then no wonder large parts of the constituency retreat into isolationism and protectionism.</p>
<p>And finally, it’s the political salesmanship of free trade. </p>
<p>If the politicians who promote free trade deals are also advocating the abolition of penalty rates in the labour market, opposing minimum wage rises and attacking public health and public education, no wonder people get suspicious. And if the same politicians are also <a href="http://www.news.com.au/national/breaking-news/government-can-save-holden-kim-carr/story-e6frfku9-1226778348954">goading the car industry to leave</a> the country, that doesn’t help either. </p>
<p>I have always thought you can make a progressive case for trade, as exporters on average <a href="https://theconversation.com/getting-free-trade-right-can-be-good-for-workers-and-exporters-44659">pay higher wages</a> and provide better occupational health and safety standards, greater job security and more equal employment opportunity than non-exporters. Support for an open economy should go hand in hand with support for improved labour standards. After all, in all economies, developed or emerging, you want wages to rise with improved productivity as you open your economy to trade and investment.</p>
<p>The major parties of the centre have some work to do to tackle these protectionist threats from the populist left and right. A first step is to decouple support for free trade from support for labour market deregulation (whatever that means in practice) and make a pro-worker and pro-environment case for an open economy. And, at the same time, tackle the racist elements of the populist politicians (and their “swamping with Asians” anecdotes). But that’s another story.</p><img src="https://counter.theconversation.com/content/61950/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tim Harcourt does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>First clue: inequality.Tim Harcourt, J.W. Nevile Fellow in Economics, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.