The globalization debate is just beginning

The decisive victory of Emmanuel Macron for president of France over Marine Le Pen is being widely hailed as a victory of good over evil, and an affirmation of open migration flows and globalization. Certainly, the defeat of the odious National Front should be considered good news, but the global conflict over trade and immigration has barely begun.
On both sides of the Atlantic, there are now two distinct, utterly hostile, opposing views about globalization and multiculturalism. The world-wise policies of the former investment banker Macron play well in the Paris “bubble” — and its doppelgangers in New York, San Francisco, Tokyo and London — but not so much in the struggling industrial and rural hinterlands.

The trade dilemma

For much of the past half-century, the capitalist powers, led by the United States, favored free trade, even with terms often vastly unbalanced. Now President Donald Trump has undermined this orthodoxy. But anti-globalism transcends conservatism. Besides the National Front, which won over a third of the vote, doubling its support from 2002, the other rising political force in the country, far-left socialist Jean-Luc Melenchon, is at least as hostile to free trade. Much the same can be said of the ascendant Bernie Sanders wing of the Democratic Party.
Globalists argue that the free trade regime, primarily promoted by the United States, has been a boon to the world economy. Certainly, the last half-century has seen enormous progress in some countries, most notably in East Asia, and led to a general decline in global poverty. It has also produced lower prices for consumers in America and elsewhere.
Yet, there has been a price to pay, perhaps not in Newport Beach or Beverly Hills, but definitely in areas such as Lille, France, or Rust Belt Ohio, where workers and communities suffered for free trade “principles.” The trade deficit with China alone, notes the labor backer Economic Policy Institute, has cost the country some 3.4 million jobs between 2001 and 2015.

Immigration splits

Immigration presents, if anything, a more divisive issue. A clear majority of Europeans, notes a recent Chatham House survey, oppose further immigration from Muslim-majority countries. Concerns over migration, a London School of Economic report found, fueled Brexit even more than trade and economics. Nor is this just a reaction of the old. Le Pen did far better among the young, winning some 44 percent of all 18- to 24-year-old voters.
On this side of the Atlantic, most Americans favor less immigration and, according to a recent Pew Research Center study, also want tougher border controls and increased deportations of the undocumented. Most, including Republicans, may not identify with the less temperate sentiments of Trumpians, but 60 percent, according to a March Gallup poll, are worried about illegal immigration and oppose the more adamant expressions of progressive dogma, such as sanctuary cities. According to a February Harvard-Harris Poll survey, some 80 percent of Americans oppose the notion of sanctuary cities.

Coming next: The great recalibration?

Donald Trump and Emmanuel Macron could not be more different in tone and approach, but to succeed they will need to navigate the challenges of globalization in a way that meets the needs of their electorates. Trends and technologies may cross borders easily, but electorates retain their interests and identities. Rather than cling to a narrow perspective, perhaps both men can find a way to keep the trading system, and some limited immigration, without disrupting too many lives and the economy.
Macron, today’s poster child for the globalists, is targeting London’s financial sector to bring back some high-end jobs to Paris, and could morph into an almost Trumpian protectionist, with the European Union serving as the preferred zone. For his part, Trump seems less likely than once believed to suppress trade, but he seems determined to make “deals” to turn the terms more in the favor of U.S. workers.

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The two newly elected leaders will confront some who embrace open borders and others who want to close the country off to newcomers. Neither approach makes sense, given the cultural and economic anxiety of many citizens, as well as the important contributions made by immigrants, particularly in the United States. Immigrants are critical to our lagging entrepreneurial sector, as laid out by the Kauffman Foundation. They also have played an oversized role in technology and other industries. Overall, 40 percent of all Fortune 500 companies were founded by an immigrant or their offspring. Some industries, including tourism and agriculture, could face major crises unless Trump finds a way to allow workers to come in as legal guest workers, rather than undocumented immigrants.
This will require something in short supply today: a reasoned approach. The fulminating xenophobia of a Le Pen or Steve Bannon may be repugnant, but equally unreasonable and out of touch are the trade dogmas of the Davos group or open borders notions now embraced by many on the left.
Finding a way toward some sort of great recalibration, a middle ground between extremes, may be difficult in these polarized times, but it may be the only way to address critical issues without making the future far worse than the recent past.


Joel Kotkin is the R.C. Hobbs Presidential Fellow in Urban Futures at Chapman University in Orange and executive director of the Houston-based Center for Opportunity Urbanism (www.opportunityurbanism.org).