Globalization: Winners and Losers and the Return of Nationalism

How the Middle Class Got Screwed
The Financial Times, the day before Christmas, released a fairly stunning analysis of globalization by John Gapper. As Glenn Reynolds at Instapundit says, read the whole thing. In summary, the piece notes that the winners of Globalization are the top 10% of income earners in the West, and the poor in China and India. The loser are the White Western middle and working class, and the sub-Saharan poor.

Gapper’s attitude seems to be, “well this is all good because rising inequality among the West is balanced out by helping Chinese and Indian peasants.” Common cause with Gideon Rachman’s view that “of course” Western leaders should favor the global (non-White) poor over their own citizens, and Tyler Cowen’s desire to build favelas for everyone outside the top 10% earners and make them eat cheap beans. Because there is not enough money for the middle and working class anymore, and besides, if people are worth anything they would be economists writing books.

What threatens the global elite party is nationalism. Which is building on the massive failure of elites to deliver even a flat level of living standards for their people in the West. One might ask the Romanovs how well elites work when they deliver declining standards and destruction. Or the Communist Party Oligarchs, conversely, on how much people will forgive when their daily lives improve.

First, the fairly stunning admission of the global transfer of wealth to elites in the West and elsewhere, and to a lesser extent Chinese and Indian peasants at the expense of the White middle and working class.

The pressures of inequality have been building in industrialised societies for two or more decades but the combination of the 2008-09 financial crisis and the inflated fortunes of the elite have reinforced them. The economic democracy of the mid-20th century is giving way to a distribution of wealth more like Edwardian or Victorian times.

“Straightforwardly, it’s about capital and labour,” says Tony Atkinson, centenary professor at the London School of Economics. “We are seeing all sorts of change that have benefited capital. That tends to equalise global wages, which means reducing them in rich countries.”

The tensions are exacerbated by inequality between generations. Postwar baby boomers enjoyed greater prosperity than their parents – steadily rising incomes, strong welfare states and defined benefit pensions.

Those born in the 1970s and 1980s have fewer benefits, face stagnating incomes in mid-career and must borrow more to buy expensive houses.

Yet the rise of China and India – two poor but populous countries – has made global inequality (measured by the disparity in individual incomes, regardless of where people live) less pronounced. The world’s Gini index of inequality fell between 2002 and 2008 – perhaps for the first time since the Industrial Revolution – and the growth of Indonesia and Brazil is pushing in the same direction.

The two groups that did worst were the very poor – those in the bottom 5 per cent, in sub-Saharan Africa and elsewhere, and the western middle classes, both in the US and western Europe and former Eastern Bloc countries. Their income rises did not match the luckier groups and, at the 75th percentile – including the US middle class – stagnated and even fell.

The forces producing the dispersion of income and wealth in western countries are hard to reverse. They are also the forces that have helped the emerging middle class of China, India or Brazil.

The accompanying graphic shows how the winners (global elites who are at least semi-hereditary) and losers (the White middle and working class) fared since before WWII.

This makes extraordinary reading. And it pretty well makes a compelling argument for economic protectionism and strong nationalism. That all production of anything that is high-margin should be done inside the nation, at prevailing wages, by people of the nation, not outside it. That fundamentally the elites have failed to look out for anyone but themselves and so are owed nothing. And that nationalism is the only cure for what ails the West.

Already, a fairly clear economic and political policy suggests itself. High tariffs and trade barriers to protect and promote domestic industry. If Apple wants to sell Iphones, it must make them here. Like the Dominican Republic, revoke birthright citizenship, retroactively, to 1929. Deport those not citizens, even including birthright citizens. Increase military production on an emergency basis to jump-start wages and consumer wealth. Stop QE aka the “make working people poor by increasing the prices of food and clothing and gasoline” program. And most of all, remove the elites by seizing their money and preventing them from accumulating any more. This latter would impact no more than a dozen people — we are talking Murdoch and Ellison and Gates level wealth in practical terms.

Yes, this implies a populist revolt. But it is better to have one now, with limits, and a clear sense of destination: net income rising at 4% a year for working people, and a secure and high trust nation. If the great mass of people are screwed over for too long, the danger becomes any flim-flam artist can create a mass cult following. The Taiping Rebellion comes to mind.

The idea that the global mass of White middle and working class Westerners will resign themselves to favelas for the sake of Bill Gates and Mark Zuckerberg’s ability to make more billions, and the poor in China and India, is in and of itself a revolutionary provocation. One that begs for Nationalism and one that will get it. Sooner or later. Pray it is sooner.

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Conservative blogger focusing on culture, business, technology, and how they intersect.
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15 Responses to Globalization: Winners and Losers and the Return of Nationalism

  1. questioning says:

    I take exception to your characterisation of the Romanovs. Under them, economic prosperity soared, the middle class swelled, and the Empire enfranchised virtually all non-Rus ethnicities…..including TWMNBN’d who immediately began “Bolshevic-zing” and “Meneshivic-ing” from the late 1800s on along with prominent shabbots goy freemason useful idiots. Read “Two hundred years together”.

    • That’s not very accurate. The 1905 revolt was the direct consequence of the failure of the Romanovs to come to grips with the need to industrialize and nationalize. Russification was half-hearted and created only resentment. Not just Jews but Poles, Germans, Georgians, Moldovans, Ukranians, and the rest were assigned to a nationality at birth, arbitrarily, and forbidden thus from being part of the military, or the government, or sensitive industries like metallurgy or steam engine making. Thus the worst of all worlds, not allowing full assimilation, and stoking resentment on that front.

      The Land reform program was also a mess, half-hearted, leaving peasants tied to communal plots they did not own individually, and could not sell or borrow against (unlike Napoleon who gave direct and individual ownership of land to his peasants), and thus remain tied to the land save migrant workers in urban areas sending back remittances. Meanwhile nobles were in debt and selling their lands to pay off said debts, while students lived in poverty and saw little future for them as educated people blocked from advancing through aristocratic control in government and business. Russian workers were among the lowest paid in Europe (and knew it) with unions forbidden and the main problem the Romanovs faced was a continuation of Tsarism, that is concentration of pretty much EVERYTHING in the person of the Tsar, in a massive country that cried out for decentralization and power-sharing, with a major nationality problem.

      Certainly Tsar Nicholas was better than his predecessors, and most of Russian leaders to that time, but that was not good enough. Russia needed time, space, and avoidance of war at all costs to allow a pre-modern, brutalist society based on Viking/Mongol absolutist rule to adjust to the demands of industrialism. Instead they got the war in the East which predictably brought the worst of all possible leaders: Lenin and Stalin, into power.

  2. questioning says:

    The rest of your essay stands alone sportingly however. :) Good show!

  3. SMERSH says:

    Now you’re talking. Good post.

  4. cecil says:

    Racism is only racism when it is the people of the country trying to defend their ethnic interests, not when their anti-white ‘leaders’ defend theirs.

    AFRICA FOR THE AFRICANS, ASIA FOR THE ASIANS, WHITE COUNTRIES FOR EVERYBODY??

    At what point would anti-whites allow whites such as this the right to protect their ethnic interests, to not be displaced in their country and have their society destroyed– all just so they can look good for the camera. Moral grandstanding and PC prudery aside, one would not dare argue for the converse–that would be called Genocide.

    Anti-whites expect an entire race to disappear from the face of the earth without even mentioning, not even whispering about it.

    Nobody’s flooding Africa with Non-Africans and giving them free health care, affirmative action and special privileges.

    Only White Countries are doing it, only White children are affected, and only White politicians are allowing it.

  5. asdfwacds says:

    Whiskey, I have an honest questions for you: Was Hitler the good guy? Was that not a war of nationalism vs. internationalism? Germans sticking up for their own interests vs. international proto-globalist elites?

    I know there is no simple answer. But what is your basic answer?

    • Hitler was an idiot. And very, very evil. Look at the people he surrounded himself with. His only threat was the USSR. Which he allied with, and made war on France and England and the Netherlands and Denmark and Norway and Belgium and Poland. None of which could be considered threats.

      The gas chambers were filled with Jews displaying their Iron Crosses from the First World War hoping that would save them. And I fail to see how Anne Frank and her family were any threat to Adolf Hitler or Germany. Indeed Hitler’s persecution of Jews, which was organic to German Catholic culture in Bavaria and Austria, to a lesser extent the Palatinate (Rhineland) had the effect of driving out the best scientific minds like Einstein to the US or England. Leaving Germany with second raters in basic science.

      Compare/contrast Hitler with Bismarck. Bismarck was first and foremost a German nationalist, and kept Russia and Austria friendly as he did Britain, leaving only France an enemy and one isolated. Bismarck kept the Balkans away as a source of Austrian and Russian conflict. Unfortunately he leveled German civil society with his KulturKampf so that there was no one left to stop the Kaiser’s insane rivalry with England and Russia, and discarding of the Three Emperors League.

      And what exactly did Hitler offer Germany? Gotterdammerung. When all was lost, Hitler ordered his minions to destroy everything inside Germany. For what? Had he escaped to the mountains in Bavaria, he might have held out for another year and accomplished even more destruction of Germany. For what I might ask?

      Hitler’s dream of Lebensraum was bankrupt from the start. Germany ALREADY had a falling population and a slave empire was a guarantee of decline like the American South and Islamic states. Or the late Roman Empire. Hitler fundamentally was anti-Modern. That is, he rejected the modern demands of industrialization, and the power that mass technology gives: honest, non-corrupt, non-ideological bureaucrats, promotion of free and well paid labor (slave empires reject this), merit advancement in public and private life, a state that does the essentials: defense/national security, roads, post office, telecoms, etc. well and does not entangle itself in private life. Hitler’s dream was to recreate the late Roman Empire, with himself as Caligula or Nero, take your pick. A more bankrupt dream could not be imagined.

      And that is why he ultimately lost. He wanted something that was incompatible with true power. And all the prowess of the Wehrmacht and Luftwaffe was not enough to counteract his debased society that led to stupidity squared. The effort of the Holocaust was about that of another Army Group AT LEAST; and the late development of the StG 44 and ME jet fighter was due to the idiot politics of the Third Reich — Hitler had to decide everything and no leader is that smart.

  6. PIKDHA says:

    Nice to have you back. You write extremely well. I wish I could write half as clearly. I do not agree with everything you write, but everything you write makes me consider why I agree or disagree. I have lived outside the U.S.A since 1994, in the Middle East and Africa. I have learned more about my country and my culture since living outside it, than I did living inside it. My politics are to the right of Ann Coulter. I think the term white culture carries too much emotional baggage and it is misleading. Skin color is irrelevant. Culture is everything. I prefer the term Northern European or Anglosphere. And the single most defining feature of that culture…..competency. The ability to get things done with the minimum amount of effort and cost and the maximum amount of efficiency and effectiveness. The second most defining characteristic is lethality. We kill people more competently than any other culture currently existing. Two parts of the world have had that ability shoved down their throats daily for over 10 years.

    I have watched two things happen that I think are a very bad symptom for the U.S. and probably the Anglosphere as well. The declining competency of the government and the increasing competency of our military. Our state department is essentially useless as an organ of foreign policy. Our military, with their can do mind set, has continually stepped up to replace the state department and get things done. I do not think that is a good sign, incompetent government and competent military. That is how a military coup happens. I would bet that most military coups started with the best of intentions, and in the face of overwhelming corruption and failure of the civilian government.

    I am afraid that when the first defining characteristic is made irrelevant, the second one will come to the fore and it will not be focused on external actors, but internally. The worst war that the U.S was involved in was our civil war. Imagine that focused culture wide and how vulnerable that would make us to outside actors. I think bad times are coming and I do not think any place in the world will be left untouched. I think that greed and arrogance and contempt for the common man by our leaders is leading to a precipice and I do not know what will happen when we all go over that edge.

    • When it comes to violence in the street, your skin color is your uniform. The late Lee Rigby found that out when he was brutally beheaded by two guys from Nigeria, who though born in London and speaking with a semi-Cockney accent had no trouble at all cutting his head off because he was White and wearing a British Army t shirt.

      Religion **CAN** mitigate for a while, against race and nationality, but only with an external enemy to be victimized. Example: the Janissaries against the Europeans, with the Ottomans having a multi-racial, multi-national society based on raiding its non-Muslim neighbors; or the Soviet Union with the religion of Communism. But absent external enemies to raid and distribute goodies, fights break out between racial and national groups over who gets what. Which is basically what did in the Ottomans in WWI.

      Heck, there were not many, but there were Harlem Nazis. And Elijah Muhammed urged Blacks to act in solidarity with the Japanese and sabotage war production. Because of racism and Jim Crow and the legacy of Slavery (at the time, only 80 years gone).

      There is a difference between say, a nation comprised of Englishmen, Scots, Irish, Germans, Italians, Poles, Hungarians and other Europeans in a mostly Anglo-oriented culture (classic “Old America”) and a nation comprised of random people just dropped in and given an ideology. Not even the Soviet Union could stand together in the end as the Cold War ended. Collapsing quite rapidly. And its people were mostly White; though deeply divided on religion: Muslim/Orthodox/Catholic.

  7. Abelard Lindsey says:

    If Apple wants to sell Iphones, it must make them here.

    Sure the’ll do this, in a fully automated factory that does not require human labor, aside from the automation engineers and technicians that build and start it up, that is.

  8. Heinz Hommler says:

    Interesting that countries that lowered Gini coeff. or had lowest increases cluster together:
    – Central Europe (Poland and Holland, Czechia and Germany incl. Austria)
    – Kangoorus and Merino Sheeps
    What’s wrong with these guys and ladies?

  9. Kenneth H says:

    I favor free trade and globalization, but am skeptical of its ability to deliver the promised benefits when coupled with an explicitly inflationary monetary policy (1%-2% inflation — even if one believes that’s all it is — is still inflation, and I refer the reader to the Law of Exponents for the inevitable outcome).

    I am also skeptical that the people peddling globalization in the teeth of inflationary monetary policy don’t know that.

  10. Dana says:

    Off topic but Here is a link to an old (2007-NYT)article concerning men and women. From Mangan’s cite.

    “Citing recent DNA research, Dr. Baumeister explained that today’s human population is descended from twice as many women as men. Maybe 80 percent of women reproduced, whereas only 40 percent of men did.”

    I was shocked to see the number, readers here might be aware of it but to me it certainly brought home the truth that women simply give in to the conquerer but the men get their heads chopped off.
    So women sniff the winds of change and presto they are on the other side.

    From the article:
    “For women throughout history (and prehistory), the odds of reproducing have been pretty good. Later in this talk we will ponder things like, why was it so rare for a hundred women to get together and build a ship and sail off to explore unknown regions, whereas men have fairly regularly done such things? But taking chances like that would be stupid, from the perspective of a biological organism seeking to reproduce. They might drown or be killed by savages or catch a disease. For women, the optimal thing to do is go along with the crowd, be nice, play it safe. The odds are good that men will come along and offer sex and you’ll be able to have babies. All that matters is choosing the best offer. We’re descended from women who played it safe.

    For men, the outlook was radically different. If you go along with the crowd and play it safe, the odds are you won’t have children. Most men who ever lived did not have descendants who are alive today. Their lines were dead ends. Hence it was necessary to take chances, try new things, be creative, explore other possibilities.”

    http://tierneylab.blogs.nytimes.com/2007/08/20/is-there-anything-good-about-men-and-other-tricky-questions/

    Post scriptum: ‘Dana’ used to mean ‘Man from Denmark’ but now after sixty some years of living with the name I realize it has been changed to mean ‘Irish earth goddess.’

  11. Dana says:

    Here is another one.
    One aspect that is rarely mentioned concerning the American middle class impoverishment is trusts.
    If there are 20 people making two billion a year on Wall street and paying 15% cap gains and nothing else, what are they doing with that money in the end? I think there are 1400 billionaires in the world, about 425 in the US.
    It used to be the very wealthy put the money in trusts but the trust expired after about 100 years due to the Rule Against Perpetuities.
    Now in our hyper competitive age, individual states pass laws to basically attract trust money for their banks to manage and take their 1% a year. These trusts can last thousands of years or forever or I guess as long as that political jurisdiction is viable. This is new, in the last ten or so years.
    So a hedge fund guy can get a ten billion fortune, set up a trust that lasts forever and that money will never go back to the economy and will always be in his family.
    It creates a sort of an American peerage, Lords of the Trusts…forever.

    http://online.wsj.com/article/0,,SB110851293877655929,00.html

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