Global Squeeze: The Coming Crisis for First-World Nations
Richard C. Longworth
[ I recently posted part one of a look back at Richard Longworth’s 1998 book Global Squeeze, which correctly predicted massive job displacement from China’s entry into the global trading system, describes how developing world countries would move up the value chain, predicts the erosion of middle-class standards of living, the rise of the gig economy, and the deterioration in race relations. He puts his finger on the nationalism vs. globalism debate and anticipated populist revolt. After exchanging a few emails, Longworth graciously agreed to do is own post-mortem of the book and share some thoughts on what’s happened since, including some replies to points I raised. Here’s Longworth’s take – Aaron. ]
No writer can object when one of his books, written in the last century, is exhumed in this millennium and judged to have been a sharp-eyed guide to the future, a global-era version of the Prophecies of Nostradamus. Aaron Renn recently lavished this sort of belated, if not quite posthumous, praise on me and my 1998 book, Global Squeeze. I read this with swelling self-regard right up to the last paragraph, when he announced that he planned a second instalment unmasking me as a sinner after all, a flawed prophet afflicted with cognitive dissonance, which seems to be a mental disorder peculiar to pundits who follow their facts into a blind alley.
Aaron has very kindly asked me to wrestle with this topic myself. I’m grateful for the opportunity, which I plan to use for some thoughts on globalization itself, on its evolution in the twenty years since my book, and on the mindset I brought to this book and a later one on the impact of globalization on the American Midwest, and on my more recent work on global cities at the Chicago Council on Global Affairs. In the process, I’ll try to provide some guidance for all of us caught in the titanic struggle, made vivid by the election of Donald Trump as president, between globalization and its populist backlash.
As I understand it, Aaron indicts me for trying to have it both ways. In both books, I reported on the agonies that this new economy was causing, in the First World Nations and in the Midwest, and on the probable economic, political and social fallout. As Aaron said, I seemed to get most of this right: in other words, I foresaw the backlash that would lead to Trump’s election and, in Europe, to Brexit and the other populist rebellions. Given this, he wonders how I can oppose the nostrums of Trump and the Brexiteers. Even more, how can I continue to see virtue in the global economy and, indeed, justify my work at the Chicago Council, which by definition believes in an American openness to the world and a responsible American leadership in that world?
Good questions. Here are my answers.
The quick and easy answer is that I am a reporter, neither policy-maker nor ideologue. I go out and talk with people, write down what they say, try to get my facts right, and present an accurate description of what I see and hear. This is what reporters do and, so far as it goes, is justification enough.
But there’s more to it than that. All my reporting has been framed by the fact – indisputable but still controversial – that the global economy is here. It’s a given. It’s a reality. It’s not going to go away, short of nuclear war or some other catastrophe. We can’t be for it or against it: that’s like being for or against a hurricane. All we can do it deal with it. In both books and in my work since then, I’ve been consistent that we’re not dealing with it very well.
I’ve also been consistent that, in a democratic society, we have to make this new global economy work for most people or neither globalization nor democracy with survive. In Global Squeeze, I wrote:
Can the global economy and democracy coexist? Not unless democratic governments can channel globalization to the benefit of their citizens…Democracy, or majority rule, will become government of, by and for the losers. This means the triumph of the politics of resentment and envy, which is no basis for a decent society.
I wrote this in 1998. Two decades later, the politics of resentment have indeed triumphed. The anti-globalists, promising change, instead seek to resurrect the past, which is gone. I may have been right about this, but it’s no consolation.
So yes, I insist on globalization, because it’s all we’ve got. It simply has to work. Does this make me a “globalist,” as Aaron suggests? Well, yes, because I’d sure like to seed our economy work. Does it also make me a “populist,” deploring the cruel impact of globalization on American workers? Again, yes, because I hate to see the majority of people impoverished by this economy.
So it turns out that I’m a global populist! How’s that for cognitive dissonance?
Which raises a key issue. Globalism and populism are too often presented as opposing poles, and mutually exclusive. The same with nationalism and globalism. This is wrong. This takes two imperatives – the need for a vibrant economy and the need to spread the benefits of that economy – and makes them irreconcilable. It assumes that both are inflexible and extreme.
An extreme globalism would throw the masses into poverty without a second thought, to serve the market. An extreme nationalism is fascism. An extreme populism would be an autarkic society enforced by peasants with pitchforks. All are caricatures, but it’s the framework within which too much of our national and international debate takes place. By forcing voters to choose between two extremes, we guarantee a bad choice either way.
Eschew extremes. As a foreign correspondent, I’ve seen extremes in action. I was in Western Europe when the wreckage of World War II was still stark. I lived in the Soviet Union, which took an altruistic idea to its murderous extreme. So I support both market capitalism and democracy, having seen up close that the alternatives don’t work, and have supported anything that promised to make them both work. When they didn’t seem to be working very well, I said so.
The solution is political leadership. Because of technology, globalization exists, but the way it works depends on political decision-making. A good reporter earns his pay by looking at this leadership and what it does.
As Aaron pointed out in his review, I’ve seen the damage that unfettered trade can and has wreaked. This was more controversial then than it is now, when everybody except trade economists accepts that NAFTA and the opening to China inflicted unnecessary damage. Again, this is the result of a good idea taken to extremes. Obviously, I don’t oppose trade. I lived in a postwar world that got rich (at least our Western part of it) partially through trade. But trade too often is sanctified and anyone who questions it is a protectionist. I see it as a useful tool, like lower taxes or balanced budgets, that can help an economy in the proper circumstances but can be shelved at other times with no great loss.
So now I’m both a free trader and a protectionist. More cognitive dissonance, for sure. I can live with it.
More dissonance. Globalization is eroding the sovereignty that nations have enjoyed for more than 300 years. This isn’t going to be reversed. But is it easy, or painless? The attachment to nation is real, and it’s under attack. Both views have validity. Is there a middle ground, between extremes?
This nation desperately needs immigrants, skilled and unskilled. No one who lives in Chicago can doubt the sheer economic and social verve contributed by its Mexican immigrants. But immigration also is a cultural insult to people who have lost so much and now see the arrival of immigrants as a challenge to their very identity. Those who favor immigration have the facts but those who oppose it have the emotion, and the votes. Again, attention must be paid to both.
The Chicago Council and I focus a lot of our work on global cities, which are increasingly becoming not only the drivers of globalization but the economic hubs of the nation. In so doing, these cities have sucked much of the vitality out of their hinterlands. The vote for Trump was in part an anti-urban howl from those hinterlands. Does their plight deserve attention? Of course. But should the cities, with the fate of the world’s economy in their hands, put on the brakes? Obviously not.
Aaron sees today’s dysfunction as a failure of the elites who run our society, and feels I am too respectful of these elites. I grew up in postwar America and watched Europe’s revival inside the structures that became the European Union, both projects driven by a few visionaries who could fit around a lunch table. So yes, I have an admiration for the elites who produced this era.
In a note to me, Aaron asks, “what does someone who believes in elite-led government do when the elite lacks the virtue necessary to lead? This situation creates powerful cognitive dissonance” (that neurosis again!).
Well, “elite-led government” is just another word for leadership. Any leadership by definition is an elite. Again, the solution is go with what works. If one set of leaders fails, the solution is to get another, not to declare anarchy.
I began Global Squeeze with the words that have become my mantra for looking and judging the success of societies:
What is the purpose of an economy? If it is not solely for the well-being of the people who live within it, what is an economy for?
Aaron sees this as nationalism. I see this as an obvious condition for a market democracy. No economy persists except by the consent of the governed. When this consent is withdrawn, all else collapses.
I’ve seen this happen in other countries. I don’t want it to happen here. If this is cognitive dissonance, I’ll take it.
Buy Global Squeeze: The Coming Crisis for First-World Nations on Amazon.com.