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Globalization and its discontents

August 1, 2017

I do not believe that globalization is in retreat. The world economy will continue to gravitate to large cities that are home to enterprises whose markets and sites span national borders. Wolfgang Streeck well describes that trend and its political tensions from a leftist viewpoint:

Among the structural cracks in contemporary societies in which Trumpism flourishes is a rapidly growing cleavage between cities and their deindustrialized, more or less rural, hinterland. Cities are the growth pole of postindustrial societies. They are international, cosmopolitan, and politically pro-immigration, in part because their success in global competition depends on their ability to attract talent from all over the world. Cities also require a supply of low-skilled and low-paid service workers, who clean offices, provide for security, prepare meals in restaurants, deliver parcels, and take care of the children of dual career families. The white middle class can no longer afford ever-rising urban rents; they find themselves living in growing communities of immigrants, or they leave and move to the small-town provinces.

Geographical separation has deeply divisive cultural and political consequences. Urban elites can easily imagine themselves moving from one global city to another; moving from New York to Ames, Iowa is another matter. National borders are less salient to urban elites than the informal borders between urban and rural communities. As urban labor markets turn global, job applicants from the national hinterlands must compete with talent from all over the world. Globalization creates an incentive for governments and employers not to invest too much in education. Why bother? They can always poach skilled labor from other countries. This is how the United States combines one of the worst school systems in the world with the world’s best universities and research centers.

There is an almost insuperable cultural barrier between the city and the country, something long known to city and country dwellers alike. City dwellers develop a multicultural, cosmopolitan outlook. As their values converge on their interests, what used to be social liberalism edges into free-market liberalism. Seen from the perspective of the provinces, of course, elite cosmopolitanism serves the material interests of a new class of global winners. Mutual contempt is reinforced by self-imposed isolation, both sides speaking only to and within their camps, one through the media, located in the cities, the other through self-constructed private internet channels.

It does seem neoliberals — whatever they are, if anything — are failing to politically manage that tension. Opening the political door to the national populists and neo-fascists.

In the US, of course, the benefits of trade and of large corporate enterprises traditionally are championed by the right, backed by conservative economists. The right wing rapidly shifted gears on that in the last few years, essentially telling economists like Tyler Cowen that their views were irrelevant. That’s not from a better understanding of the modern economy nor a cohesive policy response to it. It’s more that facts and expertise just don’t matter on the right, when they conflict with the more chthonic forces that actually drive its politics.

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