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Understanding the Conservative Split Over Globalization

Globalization and its impact on America divides the political right. What do I mean by globalization? One definition might be to identify it with decreasing costs to capital and labor mobility. Mobility across, but also within, national borders. A related definition, but one with a different accent, is that globalization is the process of incorporating new regions of the world into a unified market system. The phenomenon is extensive, meaning the scope of the global market increases with globalization, as well as intensive, meaning that social and economic relations are reordered within those territories as a result of their integration into market society,

Reservations about this process have long existed on the American right, largely focusing on costs to free trade and opposition to immigration. Nonetheless, for the most part, the American right promoted, or at least tolerated, the post-World War II international economic system, and the global economic system it implied.

The candidacies of Ross Perot and Patrick Buchanan evidenced the fraying edges of the conservative consensus. Frayed edges turned to disintegration with the election of Donald Trump. To be sure, there remain numerous free trade, pro-immigration proponents on the American right. Nonetheless, the practical post-WW II policy consensus has broken; significant threads of American conservatives now trumpet skepticism toward globalization. Nonetheless, there is no unified conservative criticism of globalization. Different criticisms imply different policy prescriptions, many of which are mutually exclusive. I’ve begun a rough taxonomy into which to sort the different views. I expect I’ve ignored some views, and my statement of others could be refined. But it’s helpful to see where the differences lie, and where there are some commonalities.

We can start with one criticism of globalization that unites some libertarians and some conservatives. The criticism advances the view that “free trade agreements” and international economic organizations are not really intended to promote free trade, but often are little more than rent-seeking deals between governments intended to benefit well-connected businesses in the respective nations. This view distinguishes between being pro-market and pro-capital. While “crony capitalism” is the term today that identifies using government power to benefit capital owners, competitive markets take economic profit (profits beyond the income needed as a return on entrepreneurship) and socializes it to the public through the price system. Capital owners in principle have no affinity for the free market system; it is a prisoners’ dilemma for them in which the benefits of production spillover to the public rather than remain profit for capital owners. Modern trade agreements, in this view, leave capital owners better off and leave workers worse off. This view can share affinities with some left-wing criticisms of globalization.

This view, however, needs to be distinguished from idiosyncratic national implications of decreasing costs to factor mobility. As implied by the Samuelson-Stolper theorem and its variants, decreasing costs of capital and labor mobility have nation-specific effects of increasing returns to (relatively) abundant factors in a nation and decreasing returns to (relatively) scarce factors in a nation.

In the United States and most Western nations, capital is abundant (relative to labor) and labor is scarce (relative to capital). Therefore lower costs to factor mobility would increase the return to capital and decrease the returns to labor. This is consistent with what we see with changes in returns to capital and labor in the United States over the last several decades: capital owners seem better off than ever while workers struggle.

To people in advanced industrial nations, the effects of this process can appear identical to globalization qua crony capitalism: capital wins while labor loses. The difference, however, is what happens in other nations, nations in which labor is the relatively abundant factor while capital is the relatively scarce factor. The prediction for these countries is that labor wins relative to capital in these countries. This distinguishes this view from outcomes of crony capitalism, in which capital wins uniformly.

The criticism of globalization inherent in this view stems from the understanding that while the size of the global economic pie gets larger, there can be significant distributional tension between owners of the same factors of production in different countries. Specifically, workers in advanced industrial nations will suffer relatively while workers is lesser developed nations will benefit relatively.

As a result of these distributional issues, workers in advanced industrial countries would seek politically to mitigate the adverse consequences of globalization. Given that the process increases the overall size of the pie, some American conservatives would let the process work itself out, endorsing it as a form of the type of creative destruction the market system generates as it creates new wealth.

A related view among conservatives agrees with the main point above, but looks on the intra-American distributional impact with less equanimity. They want the bigger economic pie but would like to slow down the pace of change in order to mute adverse consequences on workers and communities supported by globally less-competitive markets. They support social insurance systems, trade barriers and trade deals to slow the impact of globalized markets, retraining for workers and etc. These are redistributive policies, but policies calculated to ease the impact on American workers of the domestic disruption caused by the long-run economically beneficial transition to globally competitive markets.

A fourth view among American conservatives takes a less sanguine view of the disruptive effect of globalization. There may be significant economic gains in this view, but the very process which intensifies the subjection of people to an impersonal global market imposes too heavy a social and personal cost on people to be tolerated without significant constraints.

The cost of the market system in this view is the loss of solidarity among people. Different commentators emphasize different aspects of these social costs. One lines emphasizes the idea that the commodification of labor destroys ties of solidarity between people in local communities. There is a direct version of this view, that the market, and the anonymity between producer and consumer, necessarily leads us to treat other people as means rather than as ends in themselves. Some also add that the market creates a semiotic environment that changes how we think of people whom we do see in daily life. Social life becomes depersonalized and exchange oriented as a result. Isolation and anomie results. Others draw attention to the spatial size of the global market: unlike pre-modern markets, the argument goes, the sheer size of today’s globalized economy makes producers and consumers strangers to one another. Only price serves as intermediary between one person and other. This prevents the ability to tailor economic transactions to serve the needs of specific individuals, as could be done in the face to face transactions in local markets. This change also then undermines the possibility of sustaining real communities, even at the local level: local production is production for consumers who could be thousands of miles away. The intimate relational component of the local market is lost in the modern market system in this view.

A fifth conservative viewpoint values community as well, but focuses on the nation as the community of significance rather than intimate, local communities. Here, too, conservative critics of globalization can grant that the increasing integration of global markets can promote overall economic gains. Nonetheless, they argue the loss to the national community is too high. Globalization understood as the increasingly free movement of capital and labor means national borders must be increasingly porous to both capital and labor. Because labor is a commodity in the market system, free trade necessarily includes immigration, international movement of the commodity that is labor. One set of conservatives holding this view argue that freer movement of capital and labor across national borders threaten national culture and national identity. It laments the homogenization process that occurs as a result of globalization. A related view (and they aren’t mutually exclusive) emphasizes political-legal threats to globalization: the diminishment of national sovereignty and the constraints placed on national policies and national policy discretion by the needs of a truly globalized market system.

These are only broad summaries of some of the main views I’ve noticed. There are numerous permutations within each of the viewpoints, and viewpoints that I’ve undoubtedly neglected to mention. Nonetheless there is significant variation of opinions amongst conservatives with concerns about globalization. Some conservatives simply seek to mitigate the harmful consequences of globalization without derailing globalization itself and the deep integration of the U.S. in the global market system. There are less accommodating views among conservatives today, a real anti-globalist thread in American conservatism. Some of this is not new – economic nationalism has been a part of the Republican coalition since its beginning. But economic nationalism has become far more electorally significant as a result of President Trump’s victory.

In turn, the criticisms of economic nationalists are very different from conservative criticisms of the modern market. Indeed, there is hardly less anonymity in national markets than there are in international markets. Whether national community matters or local community matters in the creation of solidarity is an important difference.

But even the conservatives who lament the impersonalism of the modern global market system are not really anti-market conservatives. What they criticize is an autonomous, anonymous market system of global proportion. Still, while not technically anti-market in orientation, the difference between an integrated global market, or even an integrated national market, and the personalized local market is so dramatic, that proponents of the different views share very little middle ground.

The disagreements between the many views are significant and deep. To the extent that globalization becomes a defining issue for the different camps of conservatives, it’s difficult to see the continuation of the American conservative coalition as constituted in the late 1950s and 1960s.

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