Posterity would remember 2016 as a year that marked a new phase in the history of globalisation. It might eventually be remembered as the year that produced the most formidable challenges for the global integration that the world has been experiencing for the last three decades.
The two most significant ‘black swan’ events of the year with far-reaching long-term impact were the Brexit and the election of Donald Trump as the next president of the United States. Both events were ‘shocks’ to pro-globalisation constituencies. The Brexit referendum voted for the UK’s separation from the European Union. The vote put the nearly 70-year-old European Union project that begun from the end of the World War II, in the late 1940s, and progressed through the Treaties of Rome (1957), Maastricht (1993) and Lisbon (2007) into jeopardy. As the new government in the UK negotiates its exit from the EU, efforts to balance the downside of the political verdict are visible. Britain is looking to retain as much access to the common EU market as possible, while retaining the right over controlling immigration from the EU. This policy of getting the ‘best of both worlds’ is not limited to Britain. Switzerland is also inclined to a similar arrangement. The British and Swiss attitudes reflect resistance to immigration and the fact that large parts of the Anglo-Saxon developed world are keen on economic globalisation with minimum labour absorption. This is evident from the growth of anti-immigration and racially sensitive political narratives in France and Germany.
Donald Trump’s electoral agenda was also significantly anti-immigration. While Brexit reflected the Anglo-Saxon British residents’ resentment to incoming immigrants from elsewhere in the EU, Trump focused largely on Mexican immigrants. Both the Brexit and Trump campaigns spoilt the globalisation party by successfully combining major anguishes of the host-nation populations. They attributed the loss of manufacturing jobs in the UK and the US to immigrants, and highlighted the cultural ‘downsides’ of immigration. Both agendas worked well in countries deeply divided along racist and religious lines. The success of Brexit and Trump underpins globalisation’s identification—among many—as a process that has prospered the foreigner at the expense of the native.
‘Return of the native’ is a major conclusion from the Brexit and Trump victory. This native, of course, has no connection to the downtrodden and oppressed of the colonial years. On the contrary, they are among the most privileged in their respective countries. They are upset over their superior status not commanding them the exclusivity it did earlier. Both the UK and the US have suffered from the financial crisis of 2008, since which, cheap bank finance is no more able to support comfortable lifestyles of unemployed households. Unemployment is often voluntary in the OECD countries with good social security systems. The pre-2008 lifestyle produced by cheap bank debt and state-sponsored social security was a lavish existence unlikely to return soon. Brexit and Trump political campaigns successfully mobilised those upset by the loss of the lifestyle. They also anointed immigrants and their ‘backers’—the pro-globalisation political establishments and policy elites—as the main culprits for the natives losing what they did.
There are two distinct outcomes of the Brexit and Trump victory. Immigration policies were as it is tightening in most OECD countries. From now on, immigration would be looked at by many of these recipient countries as not only an economic phenomenon influencing supply sides of domestic labour markets, but also as processes deepening cultural and social divides. This has significant ramifications for future immigrants. Labour-surplus countries like India from where people have been regularly moving to jobs in the US and the UK, the prospect of being visualised as sources of culturally destabilising labour, is not promising.
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The other significant fallout of the Brexit and the US election result is the pressure on political parties, academics, experts, media and other opinion-makers in favour of globalisation to justify themselves. Their sustained efforts to convince the electorates to reject the anti-globalisation agendas proved unsuccessful. It is important for these actors and communities to retrospect on the failures. The latter, at least partly, is due to their long ignorance of the downsides of globalisation. Obsession with the big picture and confidence in the assumption that despite some losers, relatively more winners will lead to greater national and global gains had generated complacency. The pro-globalisation policy elite were also heavily intellectually arrogant as was evident from the condescension it displayed towards the anti-globalisation, nationalist, pro-native constituencies in debates and discourses. The much clichéd truth—pride goeth before the fall—can hardly be overemphasised.
For globalisation, it is stocktaking time. The world will slowly adjust to the black swan developments in the UK and the US. Immigration attitudes and policies fashioned by these developments will become visible over time. But pro-globalisation advocates face the huge challenge of rationalising their views to many constituencies. Till they are able to do so, the politically legitimate native narrative will dominate not only sizeable parts of the Western world, but also emerging markets.