I have written in past weeks about the ways in which the current U.S. administration is investing in societal division as a political strategy.
Aluminum and steel tariffs are a prime example, for tariffs unleash a zero-sum dynamic both within U.S. society and between the U.S. and its global partners. This stands in contrast to the sort of positive-sum process potentially generated by investment in job training and apprenticeships. This will be the subject of next week’s post.
But first, I want to consider a prior point about deep divisions in contemporary society and the paths by which capitalist democracies can – and should not — navigate these tensions. Recent analyses of divisions in capitalist democracies emphasize the tension between those who’ve gained most and those who’ve been hurt by the advance of globalization.
There is substantial evidence for this cleavage in the U.S. as well as in the UK, where characteristics of those supporting a British exit from the European Union — who tend to be older, less educated and more opposed to immigration and multiculturalism than those who voted to remain in the EU — overlap in significant ways with supporters of the current occupant of the White House.
The “country name first” response to globalization (as in “America first” or “Britain first”), while politically expedient, is both socially divisive and ultimately damaging to national prosperity. Exit from the EU has taken the UK down such a path, and the contradictions of Brexit become more evident over time as the British government struggles to control the damage.
British Prime Minister Theresa May gave a major policy speech last week outlining Britain’s conception of its future economic relationship with the European Union. What the speech ironically revealed is that British exit – much like the implementation of tariffs in the U.S. – is a narrow political project that can only bring damage to the national economy and the country’s place in the world.
In her speech, Theresa May valiantly endeavored to reconcile a “people’s exit” with a prosperous and globally engaged future for the UK. Unfortunately, the speech revealed all too starkly that these ends are entirely irreconcilable.
May began her speech with a nod to populism: the entire project is about the British people, not the “privileged few.” The implication, of course, is that European integration is an elite project whose benefits accrue to a narrow element of society.
There are elements of truth to this claim. The tragedy is that British policy makers, rather than tackling issues of inequality, have pursued a path of division and destruction in exit from the EU. Without doubt, the country will be considerably worse off following exit, and of course poorer, more vulnerable segments of the population will bear the costs of reduced economic opportunity and sharply reduced fiscal resources.
The same is unquestionably true in the U.S., where an “America first” policy course can only redound to the detriment of the very people those who hew this path cynically claim to defend.
What also became evident in Theresa May’s “Mansion House” speech is the deep contradiction between the UK’s struggle to extricate itself from the EU with minimal economic damage and the objective of a post-exit UK that is “modern, open, outward-looking, tolerant . . .”
May advances proposals that commit the UK to essentially identical regulations to the EU in order to minimize barriers between the British and EU markets – while maintaining the fiction that the UK will nonetheless be sovereign in devising its own regulatory environment.
At one point that should embarrass the politicians responsible for Brexit, the Prime Minister notes that “businesses who export to the EU tell us that it is strongly in their interest to have a single set of regulatory standards that mean they can sell into the UK and EU markets.” This statement of a reality well understood by proponents of integration unwittingly gives the lie to longstanding propaganda that “barmy Brussels bureaucrats” are responsible for excessive EU regulation imposed on UK markets.
The unfolding process of British exit from the EU illuminates the folly of a hollow strategy of “taking back control” in a globalized world more clearly each day. The folly and danger of “America First” grows equally more apparent.