The Globalization Backlash: It’s Both Culture and the Economy, Stupid

Political and economic cooperation across borders is experiencing mounting levels of popular resistance. The outcome of the Brexit vote, the election of Donald Trump, and the electoral success of nationalist forces across the globe seem indicative of a growing backlash against international cooperation. While many thought the process of greater cross-border cooperation to be irreversible, in part because it was expected to lead to a universal acceptance of liberal and capitalist values, isolationism, nationalism and protectionism are back on the political scene with a vengeance.

While Donald Trump’s slogan to “Make America Great Again” is at the heart of his campaign and current administration, Nigel Farage’s mantra of taking back control (“we will win this war and take our country back”) dominated the Brexit campaign. Although we should not overestimate the extent to which current developments represent a ‘real’ break with the past and arguably identification with the nation-state and national interest have always been important aspects of the political belief systems of citizens and elites alike, something seems to be have changed. A growing number of citizens and elites are willing to take considerable economic and political risks to protect what they perceive as vital national interests (be that societal cohesion, national control, borders, trade, etc.).

A fierce debate has developed about the origins of these developments. Are they the result of economic grievances of those who feel threatened by globalization (a term for increasing international cooperation and increasing interdependence), or do current developments represent a cultural backlash based on immigration fears and prejudice. While proponents on both sides of the debate have put forward ample evidence by focussing on either side of it we seem to have lost track of one important point, namely that economic and cultural grievances interact. Opposition to globalization is gaining such a foothold in the political and public domain in advanced industrial democracies, precisely because processes of economic interdependence have coincided with increasing migration flows.

Recent developments in Europe perhaps most clearly illustrate this. There, the financial crisis of 2008 was accompanied by a refugee crisis. Hence, political parties running on anti-immigration platforms combined with an appeal to protect pensions and social provisions for the “native population” have made considerable political strides in virtually all member states of the European Union. The politicization of free trade and the free movement of people have become largely intertwined in the European context.

Sceptics north, south and east

In my recent book Euroscepticism and the Future of European Integration, I show that the recent rise in Euroscepticism and in support for Eurosceptic parties is largely a response to both developments. I suggest that the way people view the EU is intrinsically linked to the national conditions in which they find themselves, as well as their comparison of these conditions with those at the EU level. Euroscepticism is on the rise in Europe albeit for very different reasons. While sceptics in the North demand less intra-EU migration, those in the South wish to see more economic investment and employment programs, and again others in the East wish to see less interference of the EU in minority rights. These differentiated patterns in Euroscepticism are the result of the fact that the financial crisis has exacerbated structural imbalances within the EU, and the refugee crisis has affected certain member states more than others. As a result, the experiences with the EU have become more distinct and varied than ever before. Therefore, coming up with a joint EU response to these challenges has proven so difficult.

This European experience demonstrates clearly that framing economic grievances and cultural concerns as opposing explanations is not fruitful. When we continue to frame the debate as either/or, we are missing out. We need to understand how economic and cultural explanations of recent developments shape both political demand and supply. Work by Italo Colantone and Pietro Stanig has started to do so by showing that exposure to rising levels of Chinese imports increases extreme right vote shares and anti-immigration sentiment. Could exposure to economic hardship, such as job loss, lead to a higher demand for extreme right or socially conservative policies? And if so, does economic dislocation have these effects? Is it due to a loss of social status or an increase in envy, or something else? When it comes to supply, political parties may also drive people to demand more extreme right or socially conservative policies. Governments facing an economic crisis may shift their attention to values or identity-related matters to divert popular attention away from deteriorating economic conditions. Work by Margit Tavits and Joshua Potter suggests that parties on the right may have a specific interest in diverting attention to cultural issues with rising inequality. Rising levels of inequality shrink the constituency favoring less government intervention in the economy, policies traditionally at the core of right-wing platforms, while expanding the share of voters who wish more government regulation and who could thus be receptive to the economic message of left-wing parties. In these circumstances right-wing parties have been shown to shift their emphasis to cultural values to keep their electorate intact.

Although current societal and academic debates are mostly framed in either economic or cultural terms, it is important to realize that these types of explanations are not mutually exclusive. We should focus more of our efforts on trying to understand how cultural and economic fears interact and fuel the recent popular backlash against globalization. It is important to remember that globalization, like European integration, is an inherently complex phenomenon embracing economic, political, social and cultural aspects that bring about tensions. In his seminal book on the topic, Dani Rodrik for example notes that globalization represents a “trilemma” for societies. They cannot be fully internationally integrated, completely sovereign, and democratically responsive all at the same time. Societies will need to make trade-offs, for example in Europe one can think of the trade-off of being part of the single market, but having to follow the jurisdiction of the European court or accepting free movement of people. Much of the current polarization is about differing views about how to make exactly such trade-offs. Therefore, it is crucial for academics, policy makers and journalists alike to understand better how people make them and how parties shape their thinking.

This is the seventh in a Social Europe series on the Crisis of Globalisation sponsored by the Friedrich-Ebert and Hans-Boeckler Foundations.