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Wednesday, December 7, 2016

Dr. Warren Coats - Globalization and Nationalism: Good and/or Bad?

Dr. Warren Coats has written a new article on his blog in which he thoughtfully considers the meaning of the US election results and and how the US might try to move forward to create a more "win-win" future for more people (at home and abroad). This is one of the best and most thoughtful articles I have seen on this topic anywhere. 


Dr. Coats clearly is trying to think through how to address the legitimate concerns of many who voted for Donald Trump without abandoning the parts of our present system which have worked pretty well for many. These are important issues and not easy to think through objectively, but he gives it his best effort here. Below are some excerpts from his new article.

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"Globalization is under attack and nationalism is on the rise. The evidence includes the election of Donald Trump. But what is this globalization these people are so opposed?"

. . . . .

"What about the rise of nationalism in relation to globalism? I believe strongly in the economic benefits of the freest possible global trade, but it would be a mistake to overlook or ignore the concerns of those who oppose it. In this note I attempt to restate the case for freer trade in terms that should appeal to economic nationalists who wish American trade (and other) policies to reflect the interests of Americans first (before taking into account the benefits to the rest of the world). I also reflect on the international rules of trade from the perspective of the sovereignty concerns of nationalists, or what economist Larry Summers calls “responsible nationalism.” Voters deserve responsible nationalism not reflex globalism.

I was forced to think more carefully about the case for freer trade by the opposition to globalization expressed by many of Trump’s supporters. But I quickly discovered that my friend Michael Lind has been there before (see above) as has the brilliant social psychologist Jonathan Haidt who noted that: “those who dismiss anti-immigrant sentiment as mere racism have missed several important aspects of moral psychology related to the general human need to live in a stable and coherent moral order.” Jonathan Haidt: “When and why Nationalism Beats Globalism”, The American Interest, July 2016
Haidt’s closing words succinctly summarize our challenge: “The great question for Western nations after 2016 may be this: How do we reap the gains of global cooperation in trade, culture, education, human rights, and environmental protection while respecting—rather than diluting or crushing—the world’s many local, national, and other “parochial” identities, each with its own traditions and moral order? In what kind of world can globalists and nationalists live together in peace?”
. . . . 
"In listening to the views of many Trump supporters I concluded that their anger and demand for big change derives from feelings that their government—especially the federal government—is not serving their legitimate interests and in fact is interfering with them without commensurate benefits. “The reason Mr. Trump won, [Mr. Bannon] says, ‘is not all that complicated. The data was overwhelming: This is a change election. People weren’t happy with the direction of the country. So all you had to do was to give people permission to vote for Donald Trump as an agent of change, and make sure he articulated that message.’” steve-bannon-on-politics-as-war-WSJ
So what are the Trump supporters mad about? What do they want to change? To the extent that they are concerned about the same things I am, it is that too much of our individual sovereignty has been taken by an overweening government, which has become a big brother who attempts to make our decisions for us for our own welfare. Our personal choices have increasingly been taken away from us and with them our opportunities. The “elites” have arranged the rules for there own benefit. It is no longer a fair game.
The weaknesses of current arrangements at the national level that seem to anger Trump supporters largely concern: a) regulatory capture of an over extended regulatory state, b) inadequate provision of a level playing field and c) an inefficient and poorly designed safety net for the losers in the competitive game."
. . . . .
"So there are plenty of things for Trump supporters to be angry about and to want to change. But now that we have him, what changes should we push for? . . . ."
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My added comments: This article also illustrates very well why we should not expect major monetary system changes any time soon (absent some kind of crisis which creates a sense of urgency for change). Right now, the entire world is trying to assess what the meaning of the recent US elections is and how things will go forward. 
It's too early to answer those questions and all we can do is continue to monitor events and see what actually happens. As we have hopefully learned by now, what actually happens can be quite different than what many people predict will happen and what actually happens is what matters, not the predictions.

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