What will Trump's victory mean?

I wrote in my last post about the possibility of Donald Trump being elected. Now that it has happened, I want to share some preliminary thoughts about what it means. Of course, much is unknown. Trump is an unpredictable character anyway, and in any case all politicians find that their freedom of action is more curtailed than either they or their electors expect.

In my book I frame much of the analysis of contemporary organizations in terms of ‘the new capitalism’, meaning the neo-liberalized, globalizing form of capitalism that has been dominant since the 1970s, especially in the US and the UK. I also (nevertheless) record scepticism about ‘epochalism’ (p.104), but with that caveat it is at least possible that we are witnessing a significant shift away from the new capitalism.

What is distinctive about Trump, as the Guardian journalist Martin Kettle wrote today, is that he is both socially and economically illiberal. That, Kettle argues, has not been true of recent US presidents: they have been illiberal in one or other meaning, or in neither, but not in both.

Trump’s social illiberalism is what made his campaign so controversial and divisive. But it is his economic illiberalism that is truly remarkable amongst, especially, Republicans. He appears to be hostile to the global free trade system that defined the new capitalism. He has promised to reverse the offshoring of US jobs, to punish US companies that relocate abroad and to impose high tariffs on, especially, Chinese imports. It seems highly likely that he will abandon the Trans-Pacific Partnership (TPP), the TTIP negotiations with the EU, and if not scrap then comprehensively re-negotiate NAFTA.

These policies, which I have described as nationalist populism, are, like many forms of nationalist populism, similar to left-wing economic programmes. Equally, Trump’s ambitions to create jobs through national infrastructure projects are akin to neo-Keynesian economics (although likely to be funded by foreign investors rather than state investment and so in that sense understandable as a form of privatization, and somewhat at odds with Trump's 'America First' rhetoric).

These are potentially profound shifts, then, but as a counter to epochal thinking, it should be recalled that other parts of his economic agenda, most notably (probably) holding down the minimum wage, cutting corporation and other taxes and financial deregulation, are part of the familiar repertoire of the political right. Moreover, Trump’s calling card that he can run the country as if it were a business and his embrace and embodiment of macho leadership also suggest continuity rather than abandonment of many aspects of new capitalism.

If aspects of Trump’s rejection of economic liberalism have a leftist tinge to them, it’s important to recognize that their nationalism means that they do not offer any general relief from the consequences of globalization. It is in fact questionable whether they can even deliver this for the people of the US. Globalization may simply be too far advanced for that to be possible: it is highly unlikely that the American rust belt will be re-industrialised. At all events, Trump’s nationalism (like Brexit) marks a retreat from the multi-lateral, global governance that offers to best hope of taming and regulating global capitalism, with climate change agreement the most likely early casualty.

Trump is also likely to reverse Obama’s ‘pivot to Asia’ policy. That is apparent in relation to the points mentioned above about TPP and tariffs against China, but also to the likelihood of his administration taking a relaxed view about Chinese sovereignty claims in the South China Sea and agnosticism on the issue of Taiwan. This links with the wider foreign policy aspect of Trump’s presidency, which appears to entail significant withdrawal from global leadership. Some of that leadership has, of course, been highly damaging and other parts of it ineffective. Nevertheless, Trump’s apparent admiration for Vladimir Putin (it’s no coincidence that the Russian Parliament applauded the result: Trump’s election, like Brexit, represent major foreign policy boosts for Russia) and lukewarm support for NATO could be highly de-stabilising for, especially, the Baltic States and the Balkans. This could have potentially devastating consequences, both for those regions and for the wider world, making anything and everything else that Trump’s presidency may mean completely trivial.

Going back to economic issues, I’ve depicted Trump’s election, like Brexit, as triumphs for nationalist populism. But they also represent a huge threat for it. Nationalist populism operates primarily as a vehicle of protest against the establishment. But when it is victorious it itself becomes the establishment and has to take responsibility for the policies it espouses. So what happens if (and, in my view, when) those policies fail? One possibility is that its supporters realise the error of their ways and return to liberalism and social democracy. Another, far more likely, outcome is that those supporters conclude that their leaders have been thwarted by the establishment or, even, that they have betrayed them. The reaction will be to turn even more harshly against perceived enemies: immigrants, liberals, democracy itself. And to seek and support even more extreme leaders. Many people around the world are scared about what Trump’s success means: the greater fear is what his failure will mean.

Sovereignty and Brexit

As a UK Referendum on EU membership gets closer, much is being made by those urging exit of the idea of national sovereignty. Indeed for some Brexiters this is the defining issue. What they mean by sovereignty seems to be that a country can make its own laws and act independently of all other countries.

Whether such a situation ever obtained is highly questionable; but it certainly hasn’t obtained for the UK or any other country in recent times. Like other countries the UK is bound into a web of multiple sovereignty-sharing arrangements regarding trade, defence and security via a multiplicity of bodies including the UN, the WTO, NATO and, yes, the EU. Indeed it is ironic that many Brexiters parade the idea that the UK on Brexit could ‘reclaim’ its seat on the WTO as a triumph of sovereignty (by which they mean that whilst remaining a WTO member the UK has since 1973 been represented in trade talks by the combined EU delegation). It’s an irony because the WTO has over 160 members and yet the Brexiters argue that within the 28 strong EU the UK ‘has no say’.

A similar irony is present in the Brexiters’ idea that the UK could lead a new Commonwealth trade bloc. Apart from the fact that there is no appetite in the Commonwealth for such a bloc, its 53 members are highly unlikely (for obvious historical reasons) to want to be lead by Britain! And if sovereignty is the issue, what could matter more than who can direct people in war? Yet Brexiters are quite relaxed about – and mostly in favour of – pooling sovereignty in NATO, which entails British troops being led by foreign generals.

Going back to trade, it’s notable that right-wing Brexiters have no problem with the idea that international ‘markets’ dictate what governments can do, and see no problem of sovereignty in that. Meanwhile, left-wing Brexiters point to the secretive EU-US negotiations to impose the Trans-Atlantic Trade and Investment Partnership (TTIP) on the UK, but are oblivious to the fact that even more sovereignty-violating deals are struck by ‘sovereign’ states outside of the EU, as the Trans- Pacific Partnership (TPP) shows. In parenthesis, TPP, which includes as six of its twelve members Commonwealth countries (Australia, Brunei, Canada, Malaysia, Singapore, New Zealand), also shows how superannuated is the Brexiters’ idea of a Commonwealth free trade zone. In further parenthesis, TPP is an example of the regional platform trade deals (the EU being another) which have emerged because of the failure of the WTO to enact a global deal, showing how superannuated is the Brexiters’ idea of the WTO as the arena for trade deals.

Brexiters habitually advance their sovereignty argument in terms of a claim that a large percentage of UK laws are made in the EU. The percentage given varies, sometimes being quoted as 80% but in recent months 65% has been the typical claim. The true figure is 8-14%. Then there is another, and very potent, line of Brexit sovereignty argument: that the EU interferes in the UK by imposing human rights judgments upon it. But neither the European Convention on Human Rights nor the European Court of Human Rights are EU bodies. The UK was signed up to them (and in the case of the Convention largely created it) before it ever joined the EU and would be a party to them even if it left the EU.

Then, of course, there is the issue of immigration. Surely it must be a matter of sovereignty that a country can decide who enters and leaves its borders? As regards the Brexit debate several different things have been conflated. One issue, of course pressing at this time, is that of refugees and asylum seekers. But the rules governing that are not EU rules but those of the UN’s 1951 Convention. Moreover, since the UK does not belong to the Schengen Agreement and is exempt from the EU refugee-sharing agreement, it is in any case not directly affected by the crisis. Indeed, were Brexit to occur, the only consequences for borders would be to move the UK border from France to the UK and to require a hard border between Northern Ireland and the Republic of Ireland, both of which would have devastating consequences, firstly for border control and secondly for the still fragile Northern Ireland peace process.

But Brexiters’ arguments about sovereignty and immigration are also concerned with free movement of EU citizens, not just refugees and asylum seekers. Here, they point out that the UK has no choice but to accept immigrants from the rest of the EU. And they are quite right. That is part and parcel of the single market, which the neo-liberals amongst them want. For you can’t have a single European market without free movement of people any more than you could have a single market in the UK whilst having border controls between, say, Cornwall and Devon or Lancashire and Yorkshire. Left-wing opponents of the EU should welcome this, because it means that the international mobility of capital is matched, within the EU, by labour mobility. Why should workers have to stay where they are, beholden to globally free-wheeling companies to give them jobs?

And in any case, when it comes to free movement within the EU, British people do it quite as much as anyone else, and the numbers of EU citizens living in the UK is about the same as the number of UK citizens living in the rest of the EU. In round numbers its about 2M people in both directions. Many of these British immigrants fail to learn the local language, 'take' jobs from locals, push up property prices, and put pressure on local health systems.

In short, the sovereignty argument of the Brexiters is completely flawed, but actually it is worse than flawed. The globalization of economics and markets has created a political vacuum in terms of the democratic political regulation of capital, and it is that which has created the real crisis of sovereignty. The solution – and let's be clear, it's the only solution – is democratic transnational governance structures. And the only such structure in the world today, imperfect as it surely is, is the EU.

Trading places

This week, the Indian Prime Minister visited the UK just a couple of weeks after the Chinese President did the same. Both were sumptuously hosted, but the main events were trade deals. In between the two visits, though much less reported, the UK-Brazil Joint Economic and Trade Committee (JETCO) met in London.

This in itself tells us something about the global world economy. Whilst of the BRICs Russia’s relations with the UK remain frosty, for complex political reasons, the other three countries in this admittedly artificial bloc are being actively wooed by the Britain and many other countries.

This gives, in part at least, the lie to the repeated claim by those who want Britain to exit it that EU membership precludes the signing of trade deals. In part, because it is of course true that the UK cannot negotiate deals with third parties that would give EU single market access. But that should be good news for Eurosceptics since, were it possible, it would also be possible for any member state to do the same and thereby commit the UK to trade deals it had had no input into.

And these deals also reveal something else. They are predicated in large part upon UK membership of the EU. The Chinese President – in a highly unusual intervention – made it clear during his visit that his country saw trade relations with the UK in terms of the EU, and urged against Brexit. The Indian PM was entirely unambiguous in saying that he saw the UK as India’s “entry point into the EU”.

The Brexiters’ idea that outside the EU there would be a queue of countries lining up to sign preferential trade deals is quite clearly nonsense, as the US have made clear. And any notion that the Commonwealth would be the locus of a new trade bloc is equally preposterous. Australia and Canada have made that clear and the fact that India’s visit to the UK came after visiting 28 other countries speaks volumes. This isn't any longer the world of Imperial Preference.

What did interest both China’s and India’s leaders was something quite different to trading with the UK post-Brexit. Both were concerned about the restrictions put upon visas to visit, work and study in the UK. All these – like the Brexit debate – have got caught up in the British panic about immigration, which is doing real damage, both economic and cultural, to the UK. International students are increasingly turning their backs on British universities as a result. But Brexit also matters to British universities, and this week they came out and said that it would be a catastrophe.

The over-arching debate in all this is not simply about Brexit, it’s about a realistic understanding of what the world is, and the UK’s place within it. These recent events underscore, like it or not, the realpolitik of that place. And it certainly isn't where Brexiters think it to be.

Shaping the EU debate?

In a previous post, I mentioned my article on The Conversation website, which tried to clarify what different Brexit options would mean. It has received over 16,000 hits – apparently an unusually high number – and although I certainly can’t claim that it has shaped the debate, the points raised are beginning to be more widely discussed. Thus last the British Prime Minister spelled out that the ‘Norway model’ would not be viable for the UK.  And this week the Policy Network published a pamphlet insisting, exactly as I had in my article, that the Brexit options be differentiated.

This isn’t an arcane issue, it is the central flaw in the Brexit case. If they champion Norway (or Switzerland) as models then they can’t leverage their main populist argument of reducing immigration, because if the UK remains in the single market, even if not in the EU, then free movement of people still obtains. So, then, they have to argue for a free trade agreement model. But that position is fraught with difficulties. There is no way of knowing what the terms of such a deal would be, nor its timeframes. Moreover, it would mean exiting (and having to try to re-negotiate over unknown timeframes) the EU deals with third-party countries, and from a much weaker position since the UK market is so much smaller than that of the EU.

The US have said this week that they would not be interested in a free trade deal with the UK, and that is very significant since the same thing would likely be true of many other countries. The issue is a simple one: trade deals are increasingly between platforms and blocs rather than individual countries. China, too, is urging the UK to stay in, as is German Chancellor Angela Merkel.

Meanwhile, it’s beginning to be recognized that trade and economics are not the only problems for the Brexit cause. The notion that ‘taking control of our borders’ is unproblematic is also starting to be debated. Of the many issues around that (including moving the border from Calais to the UK, and the position of Brits living in the EU), this week the position of Ireland has been raised. A full Brexit would mean creating a hard border between Northern Ireland and the Republic of Ireland, bringing with it serious problems for the still fragile peace process in Ulster.

Of course none of this makes a dent in the determination of hardcore opponents of British membership. Nothing could or will. What matters is what floating voters make of it all. At the moment, opinion is 54-46 in favour of staying in, but it is reckoned that the ‘hard’ vote for both in and out is 25%. There is much to play for still, especially as most of the ‘soft vote’ are not yet engaged with the still embryonic campaign. There is still plenty of time to reshape the debate. Watch this space as the story unfolds.