The U.S. presidential campaign has provided the “developing” world with a remarkable spectacle. Donald Trump’s antics have served as welcome evidence that political tragedy and disaster don’t only happen down here in less rich countries.
But political idiocy coming from the United States is not exactly new or shocking. What has come as a surprise, however, is the ease with which the mainstream political conversation now affirms that globalization has actually been bad for the United States.
All three remaining candidates now accept (to some extent) the premise that the trade deals and global financialization that have made up the last three decades of world history have been mistakes, and that those mistakes need fixing, for America’s sake. Liberal outlets in the United States are piously worried that a kind of de-globalization may even be good for the United States, but would be bad for the world’s poor.
At first glance, this is a stunning reversal. During the same thirty years it has been taken for granted by many in the “Global South” that the United States had been promoting, if not enforcing, a version of globalization that would serve its own interests. Among groups from left-wing social movements, to nationalist politicians, to mainstream development economists, there has been the recognition that the richest country in human history had the power and foresight to forge an order that would be good for itself. It always had before.
The type of globalization arriving in poorer countries, many thought, would maintain the huge gap between the few rich and many poor countries, and therefore needed to be either reformed or resisted.
When Everyone Knew What Globalization Was
You don’t have to be very old to remember 2005, when Diego Maradona joined left-leaning leaders from across South America to joyously defeat and performatively “bury” the proposed Free Trade Area of the Americas, a continental expansion of NAFTA proposed by George W. Bush that they viewed as imperialist.
But that was a late, small victory. By then, the leftists and anti-Americans had largely already lost.
“There was opposition, but majorities in countries elected governments that went along with this [US-led] world because they believed it would be good for them, too.” says Giorgio Romano Schutte, head of international relations at Brazil’s ABC Federal University. By the 1990s, after a brief period of decline, the United States “displayed a remarkable capacity to be the real power in the world and dictate this new order, pushing trade and financial liberalization, breaking down the Soviet Union, breaking down development experiments in poorer countries, and breaking down European social democracy.”
A quick glance at the actual numbers confirms that this globalization has worked out quite well for the United States and other rich countries. They remain much, much, wealthier than the rest of the world, including the people Donald Trump claims are “killing us.”
The United States is not just a little bit richer than Mexico. Americans don’t just have like 30 or 40 percent more stuff. The size of the U.S. economy, adjusted for population size, is more than five times as big as Mexico’s. In 1990, just before the first Clinton took over, the difference was only slightly larger. Americans are seven times richer than the Chinese. If you think the Chinese have stolen America’s lunch, you should take a drive around rural China.
And the United States is nearly twenty times richer than Nigeria, Africa’s largest country. Indians, in the world’s largest developing country, have just 1/35 the wealth that Americans do.
Actually, since the end of World War II, the huge gap between rich and poor countries has remained largely in the same place. The notable recent exception to this rule has been China, which recently pulled off the rare feat of starting off at extreme poverty (1/70 of US wealth per capita in 1990) and just arriving at poverty.
Of the former Communist countries, only 10 percent have achieved the democracy and prosperity they were promised in 1989, leaving them much weaker relative to the United States than they were when the “second world” existed.
Indeed, down here this seems like an especially odd moment for the United States to complain. China is again an exception, but in developing countries, globalization often meant giving up on financial controls and the long-held dream of producing anything more advanced than raw materials. The logic of comparative advantage dictated that from South America to South Africa, poorer countries would either rip stuff out of the Earth and sell it abroad, or allow their people to provide cheap labor.
For a brief, shining moment in the first decade of the century, it seemed like this was kind of working. We spent time lamenting the environmental and human impact, but we also celebrated that there were at least revenues. The BRICS acronym came to symbolize the power these countries might (again) have a chance to attain. The 2008 implosion of the world economy—caused by the United States—offered a space for them to occupy, or so it seemed. But the last four years have brought a brutal reversal. Commodities prices were dependent on Chinese growth, and when they dropped, along with the price of oil, countries relying on this model saw their entire economic and political systems disrupted. Meanwhile, the United States is again ascendant, having once more proved its ability to reinvent itself as the dominant global power.
The United States is still by far the richest large country on the globe. So why is the boss of the world whining about globalization?
The answer to this somewhat contrived riddle is, of course, class. Globalization has been extremely beneficial for the United States, it’s just that most of the profits went to the rich, while the working class was destroyed. If the United States wants to fix its globalization problem, it can just spread their money around a little—there are many, many possible ways to do so—instead of complaining about the world they created.
“Globalization has been a project that has greatly benefitted the incumbent states. That is, Europe and North America,” says Robert Wade, professor of political economy and development at the London School of Economics. But “for the past three decades or so, Americans living on fairly stagnant wages have seen a relatively small proportion of the United States become fabulously wealthy.”
This is the landscape that now greets Clinton, Sanders, and Trump. Cheap foreign-made goods at Walmart, growing inequality as the top 1 or 2 percent benefit from a financialized globe—whose capital is New York—and the disappearance of normal jobs for normal people, who are pushed into low-paying service jobs or unemployment.
Changing Times, Or, Complaining That You Shot Off Your Foot
It’s not just trade, but also technological change that has driven inequality and immiseration of the working class, Wade says. But politically this year, the blame has been heaped on jobs lost to poorer countries.
Trump likes to blame China and Mexico for taking advantage of us—which of course fits nicely into the xenophobic tone of his whole candidacy—and thinks he can wrangle a better “deal” by starting trade wars with them, which would clearly be disastrous. Bernie Sanders, who opposed essentially every trade deal the United States has made, wants to un-do them and then re-do them so that U.S. workers don’t have to compete directly with workers in poorer countries. And Hillary Clinton, who remains married to the high priest of neoliberal globalization as well as to his religion, has been forced to back away from her support for the Trans-Pacific Partnership. She probably won’t change anything, but it’s remarkable that she’s even had to pretend.
The blowback against elite-led globalization has disrupted America’s political system. It seems the North American rich may have overplayed their hand. But the state has the power to fix that system without turning against trade and the real benefits it has had for the world.
Of course, it was never the United States as a whole that pushed this version of globalization. It was the U.S. government, which responds a bit more intimately to the rich than it does to the general population. Globalization is neither inevitable nor does it have a natural form. Globalization has ebbed and flowed throughout human history, and can only ever have the rules that states agree to.
It’s not like we’ve moved towards an absolute idea of “free trade,” as Dean Baker at the Center for Economic and Policy Research in Washington notes. We make manufacturing workers compete with manufacturers in the developing world, but we maintain protectionism for our high-earning professionals like doctors and lawyers. We bar foreigners from practicing medicine, even though bringing them in—with clear standards—would increase health outcomes while reducing prices. But they’d reduce salaries for the rich.
And “all the trade deals the U.S. has negotiated in the last quarter century have sought to make copyright and patent protection stronger and longer. These forms of protectionism often raise the price of the affected products by 1000 percent or more above the free market price,” Baker writes.
It has been precisely these copyright and patent protections that have often been identified by development advocates as barriers to leveling the playing field between rich and poor countries. And as the Panama Papers show, we’ve accepted a model of globalization where elites are allowed to hide away their wealth.
The King Has Left The Building
“Globalization” has not been neutral. But U.S. elites rigged the game so drastically in their favor that their own population has revolted. The contrast is striking between 2016 and campaigns in the 1980s and 1990s, when Reagan and Clinton, respectively, proclaimed they could lead the world towards a bright, interconnected future.
It’s not realistic or desirable to “deglobalize.” But we could “re-globalize,” changing deals and making relations between nations more equitable. And more urgently, the United States could use some of that substantial new globalization cash to improve life under globalization for its own people and stay true to its democratic promise. What has held it back is political obstinacy and ideological opposition—left over from the Cold War, and perhaps being slowly eroded among the young by Bernie Sanders—to using state policy to help anyone but the rich.
There’s so much that is within America’s power, if it could get past the politics. Provide real relief, and job training, to the working and middle-class American victims of globalization. Or simply re-distribute wealth, in the old-fashioned sense. Or move towards “pre-distribution,” changing corporate governance and creating jobs that will support families by simply allowing workers to get their fair share in the first place. There’s the Scandinavian model, which combines free trade with a robust welfare state. There’s the universal basic income experiment. Or there’s an end to over-reliance on start-up culture, which creates profits but not jobs.
There’s a lot the United States could try. But first, the most powerful country in human history could stop blaming its own inequality problem on the rest of the world.