First things first: Want to point your attention to a remarkable speech by Justin Welby, the Archbishop of Canterbury. Addressing the Trade Unions Congress conference in Manchester recently, Archibishop Welby made the religious case for economic justice, arguing that that the “bible is political from one end to the other.” Where his remarks truly caught my attention, though, was when he drew a connection between economic inequality and political instability and the rise of extremism.
A former oil executive, the Archbishop of Canterbury is probably best known globally for officiating last May’s royal wedding of Prince Harry and Meghan Markle. But it’s last week’s speech that is making political waves in his UK, where it has drawn criticism from lawmakers for being too political. In truth, his economic critique was not all that unusual, especially in front of a labor union audience. What gave the speech its power was that Archbishop Welby ground his reasoning in religious text, repeating several times the verse from the book of Amos, “Let justice flow down like waters, and righteousness like an ever-flowing stream.”
Where this should particularly interest us is when he tied the struggles of the working class to a rise in extremism.
“And let us not delude ourselves into thinking that the gig economy is the only reincarnation of oppression of the vulnerable in employment.”
“Pensions are just one example of the profit motive leading to the weakest being given the most risk and the strongest the most protection. In these areas, and in employment rights, and in many others, we see that where inequality and profound injustice seem entrenched, insurmountable, it leads to instability in our society: divisions between peoples, and vulnerability to the populism that stirs hatred between different ethnicities and religious groups, the rise of ancient demons of racism, antisemitism, Islamophobia and xenophobia. And the rise of extremism.”
The Archbishop explicitly did not let anyone off the hook for the current state of mutual acrimony and division:
“On both left and right we have too often in recent times seen language which has been insensitive to the very real vulnerabilities of those who are too often talked about, but much less often talked with. I know that all people of goodwill in this hall share that sense of concern and will do all they can to build that society and that politics of mutual respect, understanding and friendship. “
It’s not just Brexit. The rise of far-right, anti-immigration nationalist parties has become the norm in Europe, where they are finishing with an average of 16 percent in the most recent national elections in 22 countries, the highest result they’ve achieved in 30 years. In the last several weeks, Sweden gave a populist party with white-nationalist roots 17 percent of the vote, followed quickly by the European Parliament’s vote to censure Hungarian Prime Minister Viktor Orban’s nationalist government as “systemic threat to the rule of law.” Nationalist parties also hold significant parliamentary or executive positions in Austria, the Czech Republic, France, Germany, Italy, the Netherlands, and Poland.
Linking “the rise of ancient demons of racism, antisemitism, Islamophobia and xenophobia” to economic inequality runs counter to the common assumption that anti-immigration sentiment is fueling the rise of European nationalism. The data does not back this up. Amid a historic migration into Europe, The Economist found that “there is no correlation between recent flows of refugees and increasing resentment of foreigners.” In other words, in western and southern European countries with a greater percentage of non-Western ancestry, sentiment toward migrants is better than in northern and eastern European countries with more homogenous populations.
The answer may lie in globalization, according to a new working paper from Italo Colantone and Piero Stanig from Bocconi University in Milan. They found a correlation between areas where the manufacturing base was damaged because of inexpensive imports from Asia and an increase in nationalism in 15 European countries between 1988 and 2007. Breaking the data down by industrial regions across 76 legislative districts, the link was clear: The stronger the effect from trade, the better nationalist, far-right parties did in elections. Other researchers found a similar correlation in the United States where centrist candidates had a harder time against more polarizing politicians both on the left and on the right.
“Exploiting the exogenous component of rising trade with China and classifying legislator ideologies by their congressional voting record, we find strong evidence that congressional districts exposed to larger increases in import competition disproportionately removed moderate representatives from office in the 2000s. Trade-exposed districts initially in Republican hands become substantially more likely to elect a conservative Republican, while trade-exposed districts initially in Democratic hands become more likely to elect either a liberal Democrat or a conservative Republican.”
Make no mistake: I am a globalist. I believe that frictionless trade provides a better standard of living and greater economic opportunity for most people, but not everyone, and that leads to what we can do as business leaders. It’s important to mitigate the negative effects of globalization where possible, such as retraining programs, but we need to do more than alleviate the pain. We need to celebrate the benefits. Unfortunately, it’s easier to tell the story of an unemployed factory worker than it is to show a consumer how much more a bag of groceries would have cost with tariffs. In other words, selling the benefits of globalization is a difficult proposition made even more difficult with how easy it is to show its costs, but that’s what we have to do.
It is possible. My experience in helping the Mexican government during the passage of NAFTA in ’90s taught me that a focused communications campaign can empower free trade’s supporters. This task might become easier if the multi-front trade war results in higher consumer prices, job losses, and bad press, but we can’t rely on negative consequences alone. To spread the gospel of globalization, we need to stop waiting for someone to do it for us and start preaching the good news ourselves.
Posted originally on Jack Martin’s LinkedIn here.