The story that Western elites have told their populations for the last 40 years has collapsed. The tale started out as a tough love mantra in the late Seventies: economic efficiency, openness to global capital, an end to union militancy. It then flourished into the most powerfully romantic idea of modern times: that globalisation would make everyone middle class, at the same time as spreading democracy and prosperity worldwide. Of course, cracks have been forming in this vision for some time, from the financial crash to Brexit and Trump. But as commentators, including on this page, have correctly pointed out, the Ukraine invasion and Covid saga have finally exploded the fable of ever-expanding freedom, openness and economic integration .
Such a moment of reckoning is to be broadly welcomed. National resilience – in particular, energy security – has been insufficiently valued. The precariousness of just-in-time supply chains has been recklessly overlooked. On one level, it’s no bad thing that “economic security” is rapidly becoming the latest political buzz-phrase. The PM’s “gung-ho” plans to build up to six new nuclear power stations is hugely encouraging (though hopefully, this time they won’t be funded by China).
Particularly for supporters of Brexit, it is tempting to think that this new story – of independence rather than interdependence – is the natural successor to the old one. It is less grandiose but in its way just as quixotic. It speaks to our natural aspirations to be sovereign and self-reliant. Talk of greater autonomy slots in neatly with a popular desire to wean the West off mass migrant labour.
But I fear that this story will not have the happy ending that many are earnestly hoping for. Most obviously, it disregards the benefits of globalisation. Before the pandemic, global poverty and inequality had been in a sustained downward spiral for the first time in 150 years. Formerly poor countries – including states ruined by communism – have thrived. Once written off as a basketcase, Africa became the world’s fastest growing continent, with its middle class tripling in size over 30 years, albeit from a very low base.
Let’s not pretend Westerners have not benefited either. Yes, industries and communities were decimated as manufacturing was exported abroad. Mass immigration has thrown up deep and unresolved tensions when it comes to identity and integration. But cheaper goods and services have delivered us unprecedented comfort. It’s not quite true that “we’re all middle class now”, but most of us are; almost 60 per cent, compared to a third in the 1970s. There is a tendency to confuse “globalisation” with free trade. They are different.
Critics of globalisation may contend that a small reduction in our living standards is a price worth paying if the reward is greater national resilience and the revitalisation of some of our more unloved communities. That may be a reasonable point of view. But there is also one big complication that it overlooks: the role of China.
Opponents of globalisation tend to see a focus on self-reliance as a way of weaning the free world off an unhealthy dependence on Beijing. But there is a serious danger that the story we tell ourselves of Western retrenchment amounts in reality to Western retreat – a development that hands much of the world on a platter to Beijing.
The Chinese Communist Party’s long game is to achieve global supremacy by stealth. It has already started a reverse takeover of the international bodies that underpin the liberal order – from the World Trade Organisation to the World Health Organisation. The risk is that, if the Western powers write off these bodies and fall back only on markets that can be deemed entirely trustworthy, China won’t just have taken over a few rotten institutions. It will have become a full-blown rival to be reckoned with. One that promises a fairer, multilateral world, free of imperialistic meddling to swathes of the developing world.
Right now, I fear we are playing into their hands. By banishing Russia so completely from the globalised system, we may be accelerating the end of dollar hegemony. We risk galvanising countries, particularly those led by dictators paranoid about Western-forced regime change, to rally around China’s plans for alternatives to the US-led global financial architecture. We are also passing up a golden chance to remedy endemic problems that are making developing countries look to Beijing – from overzealous structural adjustment programmes to the gargantuan transfers of corruptly-acquired wealth from poor countries to the West via offshore accounts (with the economic fallout driving illegal migration to richer nations).
It is also not really correct to say that globalisation is reversing – or indeed can be reversed. Even in the face of Covid and now Ukraine, it is changing rather than receding. Although global trade in goods has undoubtedly taken a hit, exchange in services, technology and research is booming.
In this context, island fairytales of self-sufficiency look analogue and fanciful. It’s all very well becoming less reliant on Russia for gas and China for cheap electronics, but what use is this if we carry on failing to protect our cutting-edge technology, from AI to quantum? Of course we can ban Huawei – but what is our response to the fact that China continues to import Western insights through perfectly legitimate means (60 per cent of the executives of fast-growth “unicorn” companies in China have international experience)? Especially if the West becomes less committed to its innovative global competitiveness.
Most importantly, what is the point of living in a bubble of material “self-sufficiency” while Beijing exports to the world malignant ideas and technologies, from lockdowns to facial recognition systems? Or as Chinese conglomerates virtually colonise entire countries as data farms in coming years?
The isolationist mindset has no good answers to these questions, but it looks set to win out nonetheless. In a bizarre twist, elites that have demonised alternative approaches that have sought a balance – from the Hungarian model of economic liberalism crossed with family-oriented social conservatism, to the Global Britain approach of controlled immigration and energetic free trade – now find themselves paying lip-service to a far more insular worldview. We will be paying the price for their myopia for years to come
