The election of Donald Trump is a result of pressures that have built up for several decades and which are now bursting into the open. De-industrialisation, migration, job insecurity and wage stagnation, which once were causes of bitterness and alienation, are now the basis of outright rebellion across the industrial, working class heartlands of the West.
The pressures that are now breaking the surface have not broken leftwards in favour of the centre-left or radical left. On the contrary, working people are deserting left wing parties in droves. Instead, they have broken rightwards in favour of populist, nationalist and far-right parties.
In this post I want to suggest that there are three fundamental reasons for this.
First, that the power of capital has gone global, but the power of labour has not. This has resulted in a one-sided, unbalanced globalisation.
Second, that a liberal consensus has formed out of this which says that progress is to be achieved by freer movement of capital and labour across national boundaries, and that opposition to either is regressive and parochial.
I want to explore the argument that unmanaged free movement of either capital or labour is counter to the interests of labour, because globalisation is taking place in the context of an unbalanced relationship of power between the two.
Third, that both the centre-left and the radical left have, in differing ways, bought into this liberal consensus, placing themselves at odds with the interests of working people in the process.
As a result, there is presently little standing in the way of the nationalist wave that is now rising across the Western world.
In the UK, the Brexit referendum was won from the right. The US has elected an America First nationalist as president. In France, Marine Le Pen has every chance of winning the first round of next year’s election, and perhaps even the presidency itself. Even in Germany, the one rock of stability in the EU, a new, breakthrough populist right party is on the rise.
As with many of the initial posts on this blog, the following is intended as an exercise in theory and not as a definitive set of conclusions. It does, however, lean heavily towards the view that it will prove necessary to break with the liberal consensus on globalisation, specifically with regard to the issues of trade and migration.
It used to be the case that workers could moderate the power of capital through collective bargaining. Today, though, if a company deems labour costs in one country to be too high then it can set up in a cheaper labour market or lower tax jurisdiction.
Manufacturing has moved en masse to countries such as China and Mexico. The rapid growth of communications technology has seen services, too, move to countries such as India.
There is no global equivalent of the trade union movement with the power to ensure that there is a levelling up and not a levelling down of wages and labour conditions. Nor is it clear how one can exist in the near future: why would workers in China or India act collectively to defend the wages of far more highly paid workers in the West, and in the process deny job opportunities for themselves?
On the other hand, the power of capital to play one labour market off against another grows with each free trade agreement that comes into force and which takes down tariffs and clears the way for freer movement of goods and services.
One response to this process is to say that globalisation is unstoppable and that advanced nations should adapt to it by climbing the value chain. In other words, Western countries should invest in education, skills, infrastructure and innovation in order to gain competitive advantage in the higher value markets of tomorrow - even as the lower value markets of today become crowded with the entry of emerging economy nations.
The problem with this line of thinking is that investment is itself a product of competitiveness. As countries such as China and India grow wealthy through undercutting Western nations, so their ability to close the education and technology gap on the West through investment becomes progressively greater. Ultimately you cannot invest your way out of a crisis of competitiveness.
Common among most on the left is an elemental belief in the virtue of immigration as a social freedom. (For some on the left, the freedom of movement is an inalienable right and the existence of any border controls at all is ideologically intolerable.)
The problem with this is that where there is free movement of labour between greatly disparate labour markets, an incentive is created for workers in a lower cost labour market to migrate to a higher cost market. This can create an oversupply of labour in the higher cost market, in turn leading to greater competition between workers for jobs (including among the self-employed) and downward pressure on wages and conditions.
So what starts off as a social freedom for labour becomes subverted, by the competitive rigour of global capitalism, into a process counter to the interests of labour.
The theoretical proposition here is that the free movement of labour is a corollary of the free movement of capital. That is to say, just as the cost of labour can be driven down by companies moving more freely across national boundaries, so the cost of labour can also be driven down by workers moving more freely across national boundaries.
Beyond the purely economic, there are two broader implications of the free movement of labour which need to be borne in mind.
Firstly, when the level of immigration cannot be predicted or managed, the resourcing of public services becomes more challenging. (Even if you accept the premise that the greater demands on public services are offset by greater tax revenues from migrant workers, and indeed by the employment of migrant workers in the public sector, the logistics of unmanaged population change remain an issue.)
Secondly, unmanaged migration between socially disparate countries can lead to segregation and an absence of common frames of reference. Most seriously, we are currently witnessing an accelerating breakdown of understanding between Muslim communities and the wider population. This question is a complex one that is beyond the scope of this post, but is nevertheless worth flagging up.
Both trade and migration are intrinsic positives if all else is equal: trade promotes higher living standards through economic progress, while migration is a social freedom.
However, both take place in today’s world in the context of an unbalanced relationship of power between capital and labour.
This imbalance is based on the great disparities that exist between labour markets: these disparities lead capital to move to lower cost labour markets, and labour to move to higher cost labour markets. In both cases this can result in downward pressure on the cost of labour, to the benefit of capital.
By contrast, there are no global trade unions to provide a counterweight to the free movement of capital, and no mechanisms other than national borders to control the supply of labour.
In other words, the power of capital can operate at a transnational level but the power of labour cannot.
In this context, the greater the freedom of movement of either capital or labour, the greater the imbalance of power between the two, because freer movement of either leads to a greater intensity of competition between workers from disparate labour markets.
So the existence of this imbalance turns both trade and migration from intrinsic positives into contradictory phenomena, each containing a tension between the interests of capital and labour: trade can raise living standards for all through economic development, but can lead to a race to the bottom between labour markets; migration is a social freedom but can lead to an oversupply of labour.
If this is the case then the question is, what to do with the contradiction? Where is the point of intervention?
If the root cause of the contradiction is disparity between labour markets, then the long term solution is a levelling up of labour markets -- in terms of wages, working conditions, social welfare, economic development and so on -- so that competitive pressures are less able to operate between them.
Since there is no prospect of this taking place any time soon, it is necessary in the interim to find a way of managing the contradiction, in order to produce a more favourable balance of power between capital and labour.
It looks like a laissez faire approach to trade and migration can produce effects counter to the interests of labour. Conversely, though, a more restrictive approach on trade could obstruct economic progress, while greater controls on immigration would curtail the social freedom to migrate.
This being the case, it suggests that there is an optimum point of tension to be found within the contradiction, with sufficient regulation of trade and migration to reduce the extent to which either leads to downward pressure on the cost of labour, while minimizing any reduction of the positive aspects of both.
Although capital enjoys great advantages from globalisation, it is far from all-powerful. Trade agreements have rules and restrictions. Many tariffs still exist. Much regulation of capital remains in place at the national and regional levels.
All of these levers can be utilised to achieve a greater regulation of trade, so long as the regulations are applied by a sufficiently powerful trading bloc.
The UK, for example, is not in a strong enough position on its own to start imposing tariffs on global trading partners. The US, on the other hand, is in a much stronger position, but ultimately even it would struggle to stand alone against world markets.
A North Atlantic ‘fair trade’ area including the US, UK and others would, however, be in a strong position to manage its trading relationships on its own terms: free trade where appropriate both between member states and with the rest of the world, but with tariffs imposed where necessary to prevent a race to the bottom with cheaper labour markets.
Such a policy need not be opposed to the interests of workers in emerging economies. Rather than a breakneck industrial revolution taking place in those countries, with countryside emptied out into cities -- often into sweatshop conditions -- a more interventionist trade policy in the West could enable a more managed pace of change in the emerging economies.
When it comes to immigration, the free movement of labour could be replaced by some kind of system of work permits. The number of permits issued could be set on a sector by sector basis in order to prevent an oversupply of labour and to help ensure a predictable level of demand for public services.
A policy of managed migration could include a plan to promote social solidarity across ethnic groups and reduce the risk of segregation. This could include greater public consultation on immigration, and a pathway to citizenship for long term residents.
Taken together, an approach along these lines could create the flexibility needed to find the optimum point of tension between the freedom to trade and migrate, and the necessary regulation of both.
In the longer term, the extent to which there is a global levelling up between labour markets -- or a development of some kind of credible global labour movement -- is the extent to which such restrictions would become unnecessary.
To return to the idea of a liberal consensus: this is the idea that the movement of goods, services and people across national boundaries is a positive thing because it leads to greater economic growth, greater intellectual and cultural interchange, and greater empathy between peoples.
While this sounds fine in the abstract, in today’s context it is rendered a contradictory proposition because the power of capital has globalised while the power of labour has not.
The approaches of different parts of both the left and right to this liberal consensus are diverse and instructive.
The centre-left are generally supportive of the free movement of labour and regard free trade as axiomatic, while the radical left are ideologically committed to the free movement of labour but more ready to oppose trade deals which lead to a race to the bottom between labour markets.
Meanwhile, the centre-right find it easier to oppose immigration but harder to oppose free trade, while the populist right find it easier to oppose both.
If, as I have suggested, a laissez-faire approach to both trade and migration in today’s context is counter to the interests of labour, then this would explain why parties of the populist right are making progress at the expense of all others: by process of elimination, they are the only ones who are calling for greater regulation of both trade and migration.
This in turns suggests a reason for the hollowing out of the left as an electoral force.
As things stand, the centre-left has no answer to either of these two principal challenges of globalisation and so has seen its electoral base soften and drain away.
Meanwhile, the radical left is incapable of picking up the pieces, in part at least because it will not address immigration as a contradictory phenomenon and cannot therefore offer an answer to the concerns of many of those who might otherwise be attracted by its scepticism towards free trade.
In short, this analysis suggests that the left has placed itself in opposition to working people by committing itself, in part or in full, to the liberal consensus on globalisation.
In this post I have set out a view that trade and migration should be regarded as contradictory phenomena, that there are policy positions that flow from this, and that both the centre-left and the radical left are failing to rise to the challenge of globalisation because both have bought into the liberal consensus surrounding it.
The consequence of this is that there has been, almost by default, a series of successes for the populist right and far-right, and these have coalesced into the rise of a new wave of nationalism across much of the Western world.
As we have seen in the US in particular, this nationalist wave has no obvious upper limit.
The argument that I want to develop in the following posts is that this is actually part of a broader pattern: the inability of the left to acknowledge or manage contradictory phenomena - and that only by rediscovering the art of the dialectical method can the left hope to break out of its present impasse.
Such an approach has the potential to deliver better focussed and more responsive policy positions, more effective tactical and strategic tools, and leaner and more adaptive forms of organisation.
By contrast, what we are currently seeing in increasingly stark terms are the consequences of business as usual both for the centre-left and the radical left.