Opinion Globalisation

Why globalism is good for you

Donald Trump’s nationalist ideology fails to heed lessons of the
1930s

GIDEON RACHMAN

Donald Trump's base embraces his America First ideology but rising nationalism threatens trade systems
that have alleviated global poverty © FT montage

Gideon Rachman OCTOBER 29, 2018

The difference between globalisation and globalism might seem

obscure and unimportant, but it matters. Globalisation is a word
used by economists to describe international flows of trade,
investment and people. Globalism is a word used by demagogues to
suggest that globalisation is not a process but an ideology — an evil
plan, pushed by a shadowy crowd of people called “globalists”.
In his recent speech at the UN, Donald Trump declared: “We reject
the ideology of globalism and embrace the doctrine of patriotism.”
Last week he again denounced “globalists” at a campaign event,
while the crowd bayed for the imprisonment of George Soros, a
Jewish philanthropist regarded as the epitome of “globalism” by the
nationalist right.

It is not just the radical right that attacks globalisation as an elite

project. Many on the left have long argued that the international
trading system is designed by the rich and harms ordinary people.

But this right-left ideological assault on globalisation is simple-

minded and dangerous. It ignores the benefits that trade has
brought, not just to elites, but to ordinary people all over the world.
It suggests that globalisation is a plot rather than a process. And by
promoting nationalism as the antidote to the dreaded “globalism”, it
unleashes forces that are economically destructive and politically
dangerous.

Between 1993 and 2015 — the heyday of globalisation — the

proportion of the world’s population living in extreme poverty
almost halved. International trade has helped to pull billions of
people into the global middle class and turned once poverty-stricken
countries such as South Korea into wealthy nations. (North Korea,
by contrast, has enjoyed all the benefits of total isolation from global
markets.)

Mr Trump and his acolytes argue that this Asian prosperity has been
bought at the expense of the middle class in the west. But middle-
class lifestyles in the west now depend, to a significant extent, on the
flow of cheap goods from the rest of the world. An iPhone that was
wholly manufactured in the US would cost around $2,000 in the
shops — or double its current price. Competition from cheap labour
in Asia and Latin America has indeed contributed to the stagnation
in real wages in the US. But rather than counteract this through
public policy, the current US administration has driven rising
inequality through regressive taxation.

Mr Trump and his European equivalents have also talked up the

myth that dastardly globalists, like Mr Soros, are encouraging and
funding illegal migration. In doing so, they fan the paranoid
fantasies that led to attacks like the mass killing that took place at a
synagogue in Pittsburgh this weekend. For many anti-Semites,
“globalist” has become a synonym for Jew. It should not need
stating, but it is absurd to suggest that “globalists” have caused the
violence in Syria or Honduras from which migrants are fleeing.

Critics of globalisation have every right to start a debate about

migration, trade and investment. But their “solutions” are often half-
baked, and risk worsening the economic situations of the people they
purport to help.

Brexit is, sadly, a prime example. The Brexiters’ complaints about

the EU echo many of Mr Trump’s complaints about “globalism”.
“Europe” is blamed for uncontrolled migration, international
bureaucracy and elitism. The Brexiters think of the EU as an
ideological project. They ignore the extent to which European
legislation is often a set of practical solutions to cross-border issues
such as the free flow of goods and the establishment of common
trading standards. Attacking those solutions is a bit like ripping out
the plumbing in a house. Unless you have a very precise idea of what
you are doing (and nobody has accused the Brexiters of that), you
simply create a horrible mess.
What is happening in the UK is a microcosm of what could happen
in the rest of the world if and when a Trump-inspired assault on
international trade and global supply-chains gathers force. The
tariffs that Mr Trump has imposed on goods from China and
elsewhere will increase the cost of living for Americans. Meanwhile,
fears of a global trade war already weigh heavily on the stock market.

The biggest dangers, however, are not economic but political. By

repeatedly denouncing “globalists”, Mr Trump has encouraged the
idea that America faces an unpatriotic enemy within. That, in turn,
stokes the conspiracy theories that are now spilling over into
violence on US soil.

The political risks are also international. The rise in economic

tensions between the US and China is merging with a rise in military
tensions over issues such as Taiwan and the South China Sea. Both
Washington and Beijing are increasingly using the language of
conflict rather than co-operation.

All this is reminiscent of the backlash against globalisation in the

1930s, a process chronicled by Harold James, a Princeton historian,
in The End of Globalisation. Mr James showed how surging
protectionism in the 1930s went hand-in-hand with a rise in radical
ideologies and a drift to war. He thinks it “highly likely” that today’s
“de-globalisation” will also culminate in war.

“Globalist” business people and financiers doubtless have their

flaws. But at least their instinct is to see foreigners as customers,
rather than enemies.

gideon.rachman@ft.com