January 10, 2017    7 minute read

De-integration: A Cultural Phenomenon

Culture Shock    January 10, 2017    7 minute read

De-integration: A Cultural Phenomenon

 

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“There is no global anthem. No global currency. No certificate of global citizenship. We pledge allegiance to one flag and that flag is the American flag.”

These were the words spoken by America’s President-elect Donald Trump to an ecstatic crowd at the first victory rally held in Cincinnati, Ohio. Trump’s statement is representative of the rising ideological struggle between globalism and nationalism which dominated the geopolitical scene of 2016.

Trump is not unique in his approach: numerous European politicians have been resorting to such nativist demagoguery for years now. Netherlands’s Party for Freedom, the National Front of France and the United Kingdom Independence Party, to name a few, all campaign for anti-EU and anti-immigration policies.

Rising Tides

Such rhetoric stands as a direct rebuke to those ‘transnationals’, as described by the late Samuel Huntington, who “have little need for national loyalty, view national boundaries as obstacles that thankfully are vanishing, and see national governments as residues from the past whose only useful function now is to facilitate the elite’s global operations.”

It is undeniable that there is a rising tide of isolationism and nationalism currently sweeping throughout the western hemisphere, undermining the current establishment and the previous neoliberal world order. The first and primary victim was the cross-border integration that has been the centrepiece around which all of the policies and institutions of the last 30 years have been built.

It is not only political but also economic integration that is seemingly coming under fire. Back in 2004, Hungary’s right-wing opposition party Jobbik was one of the few parties in Hungary to oppose the country’s entrance into the EU, opting for protectionism over the more open economic policies which had been favoured by most of the developed world at the time. In 2006, the party had to enter an alliance to secure 2.2% of the national vote.

Today, Jobbik is Hungary’s third most popular party with 23 out of the 199 MPs currently in parliament. In the meantime, its views on economic policy have not changed much. In Austria, Norbert Hofer, whom many had envisioned as the first far-right president in Europe before his defeat by Alexander Van der Bellen, stood for the favouring of Austrians in the country’s job market.

Most recently, French presidential candidate Marine Le Pen had commented on Ford’s choice to shift its investment from Mexico to the US by claiming that:

“Protectionism works, when it is led by determination, and when a country can exercise its economic independence.”

Le Pen is a top candidate in France’s presidential elections next spring.

Source: HSBC

(Data Source: HSBC)

A Very British Example

The most prominent example, however, is Britain’s shoddy upcoming departure from the European Union and the single market. Brexit puts the UK in a precarious situation given that it is not seeking complete economic de-integration but rather a dampened version of the single market, through some form of reintegration. If unable to negotiate a trade deal with the European Union, not many options remain for the UK.

The trade deal between Canada and the EU, known as the Comprehensive Economic and Trade Agreement (CETA), is often cited as an exemplary promise of what the future holds for Britain. David Davis, Britain’s minister for Brexit, claimed that it is “a perfect starting point for our discussions with the commission.”

The UK is in no position to enter such prolonged and uncertain negotiations considering the two-year time limit imposed upon negotiations by Article 50’s invocation. The total costs that such an iterative back-and-forth process would impose on the country and its producers would be unacceptable to its citizens.

Even other alternatives, such as falling back on the “WTO Option” carry a miasma of difficulties and complexities that will take a lot of time and effort to be dealt with. The former far-right UKIP leader Nigel Farage, a leading proponent for Brexit, had been right in stating that some pro-Brexit promises had been “mildly irresponsible.”

The Long Road Ahead

Brexit may prove to be the perfect economic experiment in testing how far a country can delve into protectionism in today’s world. Seeing as all serious proposals for the single market’s replacement all involve a relatively high degree of economic integration, the answer is poised to be ‘not much’. The difficulties associated with prolonged negotiations are overwhelming.

The aforementioned deal between Canada and the EU, which will allow about 98.6% of goods to be traded free of duty between the two, took over seven years to negotiate. Such trade agreements require the approval of all European member states. In a perfect example of the inefficiency and tediousness of negotiations within the EU, Belgium was the last member state to sign the treaty due to the fact that Wallonia, one of its six regions, vetoed it on the grounds that it threatened its farming industry. Only after each member state signed the treaty was it finally sent to the European Parliament for review and approval. As of yet, both its timing and whether or not the 1600-page agreement will come into force remains unknown.

Culture Over Economics

Nonetheless, Eurosceptic parties’ popularity is on the rise as they take advantage of the public’s discontent with current establishment figures. If one were to consider Europe’s sluggish economy, its muted growth, issues relating to climate change, the ever-widening gap between the rich and the poor, or even rising national debt levels, such negativity would seem justified.

Surprisingly, these tend not to be the main reasons as to why people choose to support such parties. A study from July 2016 on the reasoning behind Brexit conducted by two academics at the London School of Economics found that, with all else equal, “a 10% increase in the migrant share of the population is associated with a 3.3% increase in the vote for Leave.” On the other hand, it says, current unemployment “does not seem to explain the vote to leave.”

Another study conducted in 2012 found that “compositional concerns are 2-5 times more important” than “concerns over wages and taxes” in explaining variations in Europeans’ individual attitudes towards immigration policy. The idea that populist support stems from a fear of change which stands to alter the worldview of previously predominant sectors of the population is referred to as the ‘cultural backlash theory’. It is, as a paper published by the Harvard Kennedy School suggests, the predominant explanation of the rise of populism. However, economic factors also influence, albeit often to a lesser degree, aversion towards integration.

Conclusion

It would be a mistake to identify concern for national borders, identity and cultural norms with blatant xenophobia, but it is important to understand that people’s resentment towards migrants and globalism is not primarily driven by economic factors. Populist politicians’ affinity towards rationalising their stringent immigration policies with the use of economic facts and reasoning does not seem to hold ground with mainstream economic theory, nor with the public.

It is undeniable that the potential cultural impact of globalisation on particular sectors of Europe’s population had been wildly underestimated or even completely ignored by previous governments. Those who wish to one day witness a world in which goods, services and people are allowed to move without hindrance, safe from abuse of state power, must first address these issues.

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