Amid all the turmoil in global financial markets and political upheaval in the U.K. in the wake of Thursday’s “Brexit” vote to leave the European Union, at least one big lesson for the U.S. is already clear: There are a lot of people who have not enjoyed the fruits of globalization; whose incomes are stagnating; and who feel threatened by technology, trade, and immigration. They are angry. And they vote.
Proponents of technological progress, globalization, and immigration have long known that what’s good for society as a whole is not good for everyone. But they have talked more about compensating the losers than they have acted.
Donald Trump gets this. “Come November, the American people will have the chance to re-declare their independence,” he said Friday from one of his golf properties in Scotland. “Americans will have a chance to vote for trade, immigration and foreign policies that put our citizens first. They will have the chance to reject today’s rule by the global elite.”
The onus is now on those elites, on the leaders of U.S. companies, on academic and think-tank scholars, on internationally aware politicians (including, especially, Hillary Clinton)–all those who fear that Brexit portends a turning point in the post-World War II and post-Berlin Wall world order–to come up with something more than a modest expansion of Trade Adjustment Assistance. If ever there were a time for bold proposals, it’s now.
It’s worth listening to MIT economist David Autor, who has documented the concentration of economic harm done to communities in the U.S. most vulnerable to competition from China and the political consequences of that: “trade boosterism has actually in some ways been the enemy of trade policy and a mature conversation that recognizes that these costs are real, that we should recognize the benefits of trade and recognize that certain individuals are going to be worst off, and then develop policy that helps mitigate those adverse impacts. That’s much more effective, more palatable in the long run than simply saying, ‘It’s good for you, shut up, don’t complain, everyone benefits.’ That’s not true.“
And that’s from a guy who remains a free-trader.
I don’t want a generation of Chinese, Indian, Mexican, and South African youths to grow up thinking that my country decided that the only way we could prosper was to keep them poor so we built walls and turned inward. But I also don’t want a generation of U.S. children to grow up thinking that people like me and my family got most of the prosperity produced by globalization and technology and that they got nothing. Their angst needs more than lip service–and not only because they are mad as hell and aren’t going to take it anymore.