Nationalism Will Go Bankrupt

the supposed rebellion of “common people” against elites has not been much in evidence. Billionaires have taken over US politics under President Donald Trump; unelected professors run the “populist” Italian government; and all over the world, taxes have been slashed on the ever-rising incomes of financiers, technologists, and corporate managers.

.. Meanwhile, ordinary workers have resigned themselves to the reality that high-quality housing, education, and even health care are hopelessly beyond their reach.

.. What, then, explains the sudden dominance of nationalism? There is not much positively patriotic about the new nationalism in Italy, Britain, or even the US. Instead, the upsurge of national feeling seems largely a xenophobic phenomenon, as famously defined by the Czech-American sociologist Karl Deutsch: “A nation is a group of people linked together by a common error about their ancestry and a common dislike of their neighbors.”

  • .. Hard times –
  • low wages,
  • inequality,
  • regional deprivation, and
  • post-crisis austerity

– provoke a hunt for scapegoats, and foreigners are always a tempting target.

.. There is nothing patriotic about Trump’s belligerence against Mexican immigrants and Canadian imports, or the nativist policies of the new Italian government, or Theresa May’s most famous statement after becoming UK Prime Minister: “If you believe you are a citizen of the world, you are a citizen of nowhere. You don’t understand what citizenship means.”

.. The xenophobic effort to blame economic hardship on foreigners is doomed to failure.

.. Consider the post-crisis effort to divert popular anger about the  onto “greedy bankers.” This ultimately failed, in part because bankers have huge resources to defend themselves, which foreigners generally do not.

.. banker-bashing failed to assuage public anger mainly because attacking finance did nothing to boost wages, diminish inequality, or reverse social neglect. The same will be true of the current attacks on foreign influence, whether through immigration or trade.

.. European issues have nothing to do with the genuine political grievances that motivated a large part of the “Leave” vote. Instead, the Brexit negotiations will now dominate and distract British politics for many years, or even decades. And Britain’s nationalist confrontation with the rest of Europe will offer politicians of all parties endless excuses for failing to improve everyday life.

..  scapegoating foreign influences, whether through trade or immigration, will do nothing to lift living standards or address the sources of political discontent.

.. Successive Italian governments since the financial crisis have gradually laid the foundations for pension, labor market, and banking reforms. These changes have created the conditions for economic recovery .. but they have been politically unpopular and are now being denounced as symbols of elitist foreign oppression.

.. If the new government abandons all three reform projects, Italians can also abandon hope of economic recovery, perhaps for another decade.

.. Trump thinks his measures against imports from China, Germany, and Canada will hurt these trading partners and create American jobs. This might have been true when the US economy was suffering weak growth and deflation. But in a world of strong demand and rising inflation, German and Chinese exporters will find new markets for their products, whereas US manufacturers will struggle to replace foreign suppliers.

.. tariffs will act as a tax on American consumers, through higher prices, and on American workers, businesses, and homeowners, through rising interest rates.