The rise of the extreme right
2016 will be remembered in history as the year that took much and gave little. In the span of one year, we lost Severus Snape (Alan Rickman), Princess Leia (Carrie Fisher), and thankfully the “Hotline Bling” memes. However, 2016 was also a year of great global, political and economic tectonic shifts. The year started off with a lot of chatter of a potential British exit from the European Union (EU). The prospect of the Leave campaign winning was being laughed off. It was even given a cute name: Brexit. However, as winter turned to spring and the vote drew closer and closer, the extreme right wing of the Conservative Party and the Eurosceptic UK Independence Party (UKIP), led by the bullish Nigel Farage, began to sharpen their rhetoric. Once the 10-day campaign began, so too did the mudslinging. Soon, lies became facts and when Boris Johnson, a member of David Cameron’s Conservative Party, vocally joined the Leave campaign, the prospect of a Leave win was within sight. On June 23, the UK shocked the world by voting to leave the EU. However, there were clear demographic differences. People living in small towns and villages, which had relied on factory jobs that had been shipped abroad, overwhelmingly voted to leave, while Londoners and other city dwellers voted to remain. People over 50, all of which had reaped the benefits of the EU for most of their lives, overwhelmingly voted to leave, while younger citizens voted to remain.
The Brexit vote was only a glimpse of what was to come. With the end of the US election primaries, Hillary Clinton, the Democratic Party’s nominee, and Donald Trump, the Republican Party’s Nominee, squared off in a messy and long election. It appeared that every time “The Donald” opened his mouth, something, racist, sexist, or absurd would come out. The pundits had written him off, he was eaten alive on every late-night television show, and the Republicans were jumping ship and panicking. However, even as he made outrageous comments, he still stuck to the message that the political elite, which had shipped their jobs to other countries, betrayed the hard-working American people and only a Washington outsider such as himself could free them. With his focus on the economy, his outsider appeal, and with a little help from a conveniently timed FBI investigation of Hillary Clinton’s email server, “The Donald” thoroughly bulldozed the Democratic Party.
With Donald Trump’s victory and the Leave campaign’s win, a lot of fuel has been added to nationalist parties around the world that have been ignored for a long time. Marine Le Pen, leader of France’s Front National (FN) party, is riding a wave of populism that could see a founding member of the EU
elect a Eurosceptic government. Thus, the biggest free trade zone in the world, covering 29 countries, may begin to see its slow demise. However, with these politicians promising to make their countries great again and bring back jobs, the threat of protectionist trade policies and trade wars looms large. Bringing production back to these countries could potentially make goods so expensive that consumer spending will decrease, thus affecting overall economic activity. To keep costs low, manufacturers may simply automate tasks and use advanced robotics to replace manual laborers, so not only will workers in the Global South be out of work, but there will be a minimal increase in employment in the Global North.
Not only would protectionist companies not bring back the jobs that have been “taken” by the Global South, they may also deal crushing blows to a weak global economy by crippling growth. By shielding a country’s economy to outside competition, governments aim to keep jobs and money in their own countries. However, with a lack of competition, domestic companies see no incentive to improve their current offerings and may rest on their laurels. Thus, domestic companies will not invest into the local economy, which will result in the accumulation of wealth in the hands of a few. Furthermore, a lack of competition will lead to increased prices for consumers. Company health may also suffer due to companies seeing no need to find efficiencies. Protectionism not only erects walls that are impenetrable from the outside; it is also harder for goods to leave the country because of retaliatory measures by trading partners. Thus, protectionist policies limit a company’s growth by decreasing a company’s access to international markets. Per the Organization for Economic Co-operation and Development (OECD), the implementation of protectionist policies results in a drop of 66 cents in gross domestic product (GDP) for every dollar of increased protections. On a global scale, the OECD estimates that world exports drop by $2.16 USD and world income drops by $0.73 USD for every $1 USD increase in tariffs. Lastly, the OECD estimates that trade liberalization would increase incomes by 1.3% in developing and 0.76% in developed countries.
With the current political climate in the world today, it is easy to get caught up in the propaganda, lies, and political banter. This is especially true for emotionally and politically charged topics, such as the economy and trade. However, it is important to step back and verify all the facts. Our world is becoming more and more intertwined and to try to go against this trend would be undoing decades of hard work for shortsighted gains with long-term damage.
By Hussein El-Khechen
Please note that opinions expressed are the author’s own. They do not necessarily reflect the views and values of The Blank Page.
