Job and Cultural Insecurity, More than Inequality, Fuels Populism

Job and Cultural Insecurity, More than Inequality, Fuels Populism. YaleGlobal. Pranab Bardhan. February 20, 2018

 For many workers, insecurity is a more pressing concern than inequality. They worry more about jobs threatened by global trade and automation, their communities’ vanishing way of life, and children’s future than inequality and increasing amounts of wealth controlled by a small percentage of the population. Populist leaders, many wealthy themselves, convince substantial numbers of voters that the educated, the experts and established political leaders do not care about the plight of ordinary workers. Middle-class liberals may support the causes that benefit the poor or working class, but they can also “insulate themselves with residences in gentrified cities, assortative marriage patterns and cosmopolitan professional occupations,” explains economist Pranab Bardhan. “Sociologists often point out that the part of inequality that is salient to us is the contrast between our own lifestyle – and housing and school choices – and that of those who may be just above us. The inequality with the billionaires is too distant.” Bardhan offers practical proposals – on wage subsidies, global skill partnerships, and trade union and church initiatives – for countering populism and easing the insecurity over culture, immigration and inequality. [Note: contains copyrighted material].

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Testing the Value of the Postwar International Order

Testing the Value of the Postwar International Order. RAND Corporation.   Michael J. Mazarr, Ashley L. Rhoades. January 8, 2018.

 Since 1945, the United States has pursued its interests through the creation and maintenance of international economic institutions, global organizations including the United Nations and G-7, bilateral and regional security organizations including alliances, and liberal political norms that collectively are often referred to as the “international order.” In recent years, rising powers have begun to challenge aspects of this order. The purpose of this report is very specific: to evaluate the order’s value — to assess its role in promoting U.S. goals and interests, and to measure its possible economic benefits in a number of specific areas. To answer the question of the order’s value, we first had to define the components of the order that we proposed to evaluate for possible value to U.S. interests. We then reviewed broad assessments of the order, as well as detailed empirical work on its specific components. The resulting analysis produced five major findings: the postwar order offers significant value to U.S. interests and objectives; specifically in quantifiable and return-on-investment terms, the order contributes to outcomes with measurable value and appears to have a strongly positive cost-benefit calculus; the postwar order represents a leading U.S. competitive advantage; if the United States wants to continue to lead globally, some form of order is vital; and a functioning multilateral order will be essential to deal with emerging security and economic issues. [Note: contains copyrighted material].

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Measuring the Health of the Liberal International Order

Measuring the Health of the Liberal International Order. RAND Corporation. Michael J. Mazarr et al. September 5, 2017.

As part of a larger study on the future of the post-World War II liberal international order, RAND researchers analyze the health of the existing order and offer implications for future U.S. policy. [Note: contains copyrighted material].

[PDF format, 229 pages, 1.41 MB].

Middle Class: Winners or Losers in a Globalized World?

Middle Class: Winners or Losers in a Globalized World? Center for Global Development. Nancy Birdsall. August 3, 2017.

Globalization is under attack in the West. The debate among pundits is no longer about whether globalization is to blame or not. It is about why globalization is now the bugaboo it has become.

Is the resistance to globalization grounded in economic losses for the once-secure middle class citizens of the Western-style democracies, and the fear of future losses for them and their children? Has anti-globalization grown because the growth of trade has brought economic competition from China, reducing high-wage manufacturing jobs, and more immigrants taking once steady working class “trades” and construction and other service jobs? Or is the anti-globalization movement (Trump’s America First) a by-product of what we call, in the United States, the “culture wars?” Is the rise of protectionism and anti-immigrant, nationalist xenophobia fundamentally about inchoate resentment of a new “cosmopolitan” elite: the corporate “Davos men,” bankers, lawyers, “experts,” even academics, whose globalist attitudes and networks are unmooring Western societies from allegiances to traditional nationalist, ethnic, and religious customs and values? [Note: contains copyrighted material].

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Why Do People Oppose Globalization?

Why Do People Oppose Globalization? YaleGlobal. Farok J. Contractor. June 15, 2017

Politicians are reaping gains by wrapping themselves in flags and directing hostility toward globalization. “Humankind is developing an emerging ‘global consciousness’ – a collective sensitivity to noble thoughts as well as to phobias and ignoble protectionism,” explains Farok Contractor, a professor of global management at Rutgers University. Contractor describes how responses to global connections divide societies. One example is the embrace of Valentine’s Day by many consumers in Asia while some religious fanatics in India target foreign practices for eroding cultural traditions. Likewise, voters in rural United States and Britain, areas with few foreigners, fell prey to scaremongering about immigration while the more educated and wealthy in cities may be less threatened by multicultural ideas. Angst over job losses, stagnant wages and changing industries is real, but unscrupulous media and populists manipulate audiences by blaming globalization, trade and immigration rather than automation or the quest for modernization by majorities in many countries. Contractor concludes that “Globalization is a symptom of human desire and ambition leading to ever-increasing connections.” Nations that resist globalization, rather than engaging in thoughtful examination and policymaking, will encounter many negative consequences. [Note: contains copyrighted material].

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The Payoff to America from Globalization: A Fresh Look with a Focus on Costs to Workers

The Payoff to America from Globalization: A Fresh Look with a Focus on Costs to Workers. Peterson Institute for International Economics. Policy Brief, 17-16. Gary Clyde Hufbauer and Zhiyao (Lucy) Lu. May 2017

Hufbauer and Lu, updating a landmark PIIE study made in 2005, calculate the payoff to the United States from trade expansion from 1950 to 2016 at $2.1 trillion. The payoff has stemmed from trade expansion resulting from policy liberalization and improved transportation and communications technology. The sum translates into an increase of $7,014 in GDP per capita and $18,131 in GDP per household. The potential gains from future policy liberalization could be as large as $540 billion for the United States by the year 2025, or an increase of $1,670 in GDP per capita and $4,400 in GDP per household. On the other hand, 156,250 manufacturing sector jobs were lost annually over the past 13 years, representing less than a percent of the number of people involuntary separated from their jobs each year. A more generous unemployment insurance program and expanded tax credits would help displaced workers adjust, the authors argue, while preserving the large gains resulting from trade expansion. [Note: contains copyrighted material].

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Europe Needs to Take Heed and Reform in Wake of Italy, Austria Outcomes

Europe Needs to Take Heed and Reform in Wake of Italy, Austria Outcomes. Brookings Institution. Theodore Pelagidis. December 6, 2016

The “no vote” victory rejecting Italy’s constitutional referendum is widely interpreted as a clear win for anti-globalization populist forces in Europe. Even the defeat of Austria’s anti-immigrant populist Norbert Hofer last Sunday in the presidential elections, with just a 53-47 percentage, is seen in the same vein, as the extreme-right candidate’s loss was slim. Forces from the political edges are gaining ground in the post-truth era and many pundits think the path of global integration has stalled. The author sees it differently. The schism of societies currently underway, even in the prosperous western democracies, is more of a globalization victory than a defeat. [Note: contains copyrighted material].

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