Depending on your school of thought, you may believe that globalization has its roots in the modern era due to international commodity trade, which experienced an uptick in the 1750s. Or, like Adam Smith, you may attach huge significance to Vasco Da Gama’s and Christopher Colombus’ campaigns around the world in the 1490s, and even claim that this truly set off globalization. If you’re Thomas Friedman, you may believe in three waves of globalization: Globalization 1 (1492 to 1800, a la Adam Smith), Globalization 2 (1800 – 2000, a la O’Rourke and Williamson), and Globalization 3 (2000 – today). Globalization, as we know it, is a process of integration. People, goods and ideas spread across the world, leading to increased interaction between the world’s cultures, economies and governments.
Whichever your school of thought, however, many agree that since the global economic crisis of 2008 which was triggered by the collapse of Lehman Brothers, many of the benefits of globalization have begun to be rolled back. The crisis led to the narrowing and reduction of size of these global connections. Many argue that the economic crisis was in fact caused by globalization, and the inequality that it had consistently been creating over the years.
The prevailing theory before the crisis was that globalization led to an increase in incomes for countries, and that this increase benefited everyone across societies, from the rich to the poor. The opposing school of thought says that while globalization does lead to an increase in incomes, these benefits do not accrue evenly to all citizens, and that there are clear losers both relative to other citizens, and even absolutely – globalization causes them more harm than good.
The income inequality comes about as such: say we have two countries (one developed, one developing), and one factor of production to consider – labour (the developed country with highly skilled labour, the developing one with low skilled labour). These two countries then decide to increase trade openness by reducing tariff barriers to trade. The developed economy of course finds it cheaper to buy products from the developing country due to the reduction in tariff barriers and the lower cost of labour since the labour is not as highly skilled as theirs. This leads to an increase in the pay of the low skilled workers in the developing country, and a reduction of those in the developed country where labour is highly skilled. Thus, in the developing country, incomes are going up, while in the developed country, income inequality is growing due to the loss of potential jobs and reduction of demand for their skills. This increased openness tends to hurt regular people in developed countries. Of course, this only happens to countries that produce “competing goods”. In the case of non-competing goods, which are those either country did not produce in the first place, the effects are wildly different. Reduction of tariff barriers would lead to a reduction in their price in the importing country without changing the wages and prices of goods in the exporting country. In the long term, it is argued, if the good in question forms a large enough part of the consumption basket of the poor, it would actually reduce income inequality.
This income inequality thus creates new challenges, such as welfare and other social support structure concerns on the part of the government. And, we must never forget that globalization only continues to exist due to the goodwill of populations around the world, which has been on the decline since the 2008 global economic crisis. Fringe right wing nationalist groups, also known as the far right, have quickly become mainstream due to their capitalization on the pain of those affected. They have positioned themselves as against “the global/liberal elite” who are the only ones to have benefited from globalization and increased multiculturalism. They practice extreme nationalism (nationalism is the shared belief that your country is great and superior because you, and the other people in it, were born in it).
Far right parties and groups are anti-immigration, because according to them, immigrants come and take their jobs, and bring “foreign cultures” to their countries. As you can imagine, this contingent is not only nationalist and anti-immigration, but it tends to be authoritarian, xenophobic, racist and inflammatory to others, whom they view as inferior. We cannot ignore the connection this has to globalization and income inequality, and the proclivity of human beings to blame “the other” for their misfortune.
The leaders of these far right movements, from those in the USA, the UK, France, Germany, Austria, Greece, Hungary, Sweden, Denmark, Poland and others, are undeniably xenophobic, racist, authoritarian and insular, but they masterfully manage to conflate their bigotry with the masses’ very real concerns about income inequality, and point a finger outwards at “them.” They are steadily gaining popularity, influence and power, as detailed in the articles linked to above. In Europe, “them” has been refugees in the past year. Before, it was immigrants from poorer EU countries who were “taking their jobs.” The leaders of these movements have claimed that these refugees, most of whom are from Muslim countries, especially Syria, would bring diseases, parasites and terrorism, and that they may be forming an army, and they have said that “Islamism is the Nazism and Communism of our time.” The leaders of these movements forget to mention that the West is quite responsible for the refugee crisis that has seen people from the countries they have started “Wars on Terror” in flee to their countries.
The mainstreaming of far-right nationalism already has had devastating effects, and more are yet to come. The endorsement of Brexit and Donald Trump by the publics has also brought the extremist ideas of the people who made this possible to the fore. In the days after the Brexit vote, racist, sexist and xenophobic attacks were on the rise. The same has happened in the days after the election of Donald Trump. Thoughts and actions that we had formerly managed to make taboo are now OK again.
Yet this is something we should all have on our minds even as we watch it unfold in the West, especially since we are pursuing a deeply pan-African agenda as a continent and their actions will affect us. And because similar events have happened before.
In 1929, what we now know as the Great Depression began. The economies of Europe and Japan were decimated by it, experiencing mass unemployment and poverty. This then led to more aggressive and nationalistic policies and politics which pointed blame at others. This created fertile ground for the fringe, far-right Nazi party to take power in Germany, with Adolf Hitler soon becoming German Chancellor in 1933. A militant cabal also took power in Japan. While there has not been another Holocaust, Hitler espoused many of the ideas far-right nationalists today espouse. Due to pre-occupation with the economic crisis, many countries failed to deal with the rise in fascism and nationalism. Hitler then invaded Poland in 1939 under the claim of defending Germany, and the rest is history.
Many echoes of this past can be seen today, and if history is to be believe, this past could very well be repeated. We should be wise enough to put our foot down regarding nationalism once and for all.