Correlation of crisis: the ascendancy of nationalism and repercussions in a globalised world

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Marine Le Pen, leader of the National Front and 2017 presidential candidate

The alignment of both an economic crash and a developing migrant crisis has seemingly set the global stage for a return to the allure of nationalism accompanied by a protectionist rhetoric. President Trump’s slogan of ‘Make America Great Again’ was evidently a sentiment which resonated with many, whilst the rising prominence of nationalist European parties indicates a patriotic jingoism holds considerable electoral viability. It has been speculated that France is ‘on the brink of political revolution’, with Marine Le Pen, leader of national conservative party ‘the National Front’, achieving 26% of popular opinion ahead of the April 2017 elections; the highest ranking in the race with 60% of bets placed on her victory. Whilst Austria ultimately elected the liberal Van der Bellen in 2016, the initial May victory of far right ‘Freedom Party of Austria’ candidate Norbert Hofer should not be disregarded. More recently, the influence of Orthodox Zionist party ‘The Jewish Home’ has been seen in Israeli legislation, with Netanyahu’s reliance upon the Jewish Home Party in coalition placing pressure which has translated into recent legislation allowing for retroactive legalisation of Jewish building on the West Bank, potentially threatening progression for peace between Israel and Palestine. Indeed, the UK’s decision to leave the EU, whilst far from unanimously popular has illustrated a broader demand for focus on a national interest at the expense of any ‘damaging’ or ‘unnecessary’ international commitments and communities. A context of a world entangled within economic interconnectedness and globalisation networks means a shift to a norm of protectionism and domestic prioritisation could be potentially seismic.

Economic Nationalism and Protectionism

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Protectionist measures 2008-13 (Global Trade Alert)

Nationalism in history appears to be a largely reactionary force. Arguably the first example of a ‘modern’ global financial crash was the South Sea Bubble of 1720; a scheme to convert the British national debt into equity shares of one ‘South Sea Company’, stocks crashed rapidly, leaving many British investors impoverished and triggering an economic depression. This event aggravated debate regarding the impact of Indian textile imports on British jobs, leading to parliamentary resolution to inhibit Indian imports in response to considerable public protest and calls for economic protectionism. Further parallels can certainly be drawn between the 2008 financial crash and the Great Depression of the 1930s. The Wall Street Crash saw the introduction of legislation such as the Smoot-Hawley Tariff Act 1930, increasing tariffs for over 20 000 imported goods in the US, flying in the face of commitments made at the League of Nations World Economic Conference 1927 where a consensus was reached that ‘the time has come to put an end to tariffs, and to move in the opposite direction.’ Economic protectionism has long been seen as the solution to economic failure, entrenching the economic nationalism which appears to follow economic crises. The World Bank has reported that 17/20 countries at the G20 meeting 2009 (where commitment to not employ protectionist measures was agreed) have since imposed restrictions on trade. Thus trends towards an institutional and legislative nationalism appear inevitably aligned with economic fluctuation. Emphasis on domestic control can be seen as antithetical to the development of globalising structures; indeed, even in the instances referred to in this article, institutions of global economic organisation appear ultimately futile in the development of policy consensus in response to economic challenges, with presiding members of such associations appearing far too ready to reverse on commitments, undermining any success which may appear attainable in a context of cooperation.

Relationship between Nationalism and Exclusionary Attitudes

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Apartheid era segregation sign

Perhaps a more damaging facet of rising nationalism is the impact on social attitudes towards minority groups or ‘outsiders’. A national community does not have to constitute ethnic or religious uniformity however, elements within nationalist movements in the past and present appear to incite an ‘us versus them’ complex which threatens damaging consequences for cohesion within multi-faith and multi-cultural societies. The propensity to find someone to blame can certainly be linked to elements of nationalism; within Nazi Germany, the systemic genocide of minorities was ‘justified’ by the state through propaganda campaigns painting such groups as fundamentally opposed and actively seeking conflict with traditional German principles. The brand of Afrikaner nationalism present under the apartheid era strongly influenced the National Party, implementing government mandated segregation between black and white people within South Africa. Heightened tensions have been evident regarding the current migrant crisis enveloping Germany, with rising crime rates and inadequate infrastructure exasperating many German citizens, unable to see the tangible value of Merkel’s initially open approach to refugees. UKIP’s brand of nationalism, albeit tame compared with certain European counterparts, has exploited insecurities surrounding immigration, promising a hard-line approach to ensure Britain is able to ‘take back control of our borders’. The promotion of values of isolationism could thus be seen to inherently undermine the outward focus of globalisation, further pointing to the antithetical nature of nationalism and globalisation.

Declining Relevance of Globalisation?

Global market integration has covered an extensive period, intensifying in recent decades with more recognisable associations and institutions holding global authority in such capacity. Division of labour has led to an expanded inclusion of more diverse specialisations, precipitating the merging of economies across traditional borders. Smith’s seminal work ‘the Wealth of Nations’ points to elements of globalising trends in the discovery of the Americas, enabling European traders to establish links between the two continents. Conversely, O’Rourke and Williamson argue the root of the globalisation process lies in the nineteenth century where drops in transport costs allowed for a convergence between European and Asian markets. Regardless of origin, it appears evident that globalisation has been accelerated in an age of technology and the enhanced communication this facilitates; desire to prevent future conflict (League of Nations 1920, World Bank 1944, United Nations 1945)  and strengthen global ties has contributed to the creation of global institutions, collections and agreements. Arguably however, such developments are declining in relevance; According to the Peterson Institute for International Economics, world trade has stagnated since 2008 due to declining liberalisation and micro protection measures. Foreign Direct Investment has fallen from $1.9 trillion in 2007 to $1.2 trillion in 2014.  Furthermore, the introduction of tariffs, export taxes, quotas, import restrictions have all contributed to a lessening liberalisation of trade and apparent consensus of domestic protectionism.

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‘Visual Comment’ by Ingram Pinn of the Financial Times

This could be said to coincide nicely with rising nationalist figures; Trump has abandoned the Trans-Pacific Partnership Deal whilst protectionist economic policy aligns with the economic nationalism explored earlier. Social dimensions to nationalism could further consolidate this shifting global dynamic, entrenching a commitment to individual states or communities as opposed to the outward focus supposedly engendered within globalisation. This is not to make a judgement as to the validity of globalisation (indeed many such endeavours have proven greatly damaging ) however, it is important to recognise the link between nationalism and globalisation’s apparent decline; a world so heavily dependent upon a shared economy is inevitably going to be impacted by the rising popularity of this facet of political persuasion. However, the longevity (or lack of) nationalist sentiment as seen in the close link between nationalism and crisis could make such a warning premature, likely to even out in line with return to economic and social stability.

What do you think?

References:

http://www.st-andrews.ac.uk/CDMA/papers/wp1110.pdf 

https://piie.com/blogs/trade-investment-policy-watch/why-has-trade-stopped-growing-not-much-liberalization-and-lots

http://www.nber.org/papers/w7632

http://www.economist.com/blogs/freeexchange/2013/09/economic-history-

http://www.newstatesman.com/business/2008/10/economic-nationalism-state

https://www.nytimes.com/interactive/2016/world/europe/europe-far-right-political-parties-listy.html?_r=0

Smith, A. (1776), An Inquiry into the Nature and Causes of the Wealth of Nations, W. Strahan and T. Cadell, London.

Stiglitz, J. (2002) Globalization and its discontents, W. W. Norton & Company

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3 thoughts on “Correlation of crisis: the ascendancy of nationalism and repercussions in a globalised world

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