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The Great Disruption

Understanding the Populist Forces Behind Trump, Brexit, and LePen

Anil Hira

The Great Disruption: Understanding the Populist Forces Behind Trump, Brexit, and LePen aims to put the shocking events of 2016–17 into a long-term, historical perspective. The seemingly disparate and separately discussed election of Donald Trump, Brexit vote, success of Marine LePen’s National Front Party, and the wider spread of populism have an overlooked commonality: They all start with a similar core constituency of disaffected older blue collar workers. Using a data-driven analysis, author Anil Hira shows that racism and xenophobia are linked to economic populism—xenophobia becoming widespread under conditions of economic stress. Hira shows further that since economic stress is felt very deeply, conventional solutions are inadequate. There is a perception among the affected group that politicians can not offer "normal" solutions and thus turn to populism. The Great Disruption traces long-term and largely un-linked shifts in the economy from globalization to automation to uncover the deeper sources of populist outbreaks. This book demonstrates that racial and immigrant attitudes have not changed, rather any backlash is a scapegoating effect of economic loss and dislocation. Populism not only misdiagnoses the situation but also misses the wider long-term threats of climate change, demographic shifts, and the rise of China. Recognizing the transformational nature of such threats depends on the maturation of the Millennial generation and its willingness to evolve towards a more global style of governance, in the process rejecting the shallow promises of populism.

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Chapter 6. Underlying Force Number 2: The Collapse of Manufacturing From Globalization, Financialization, and Automation

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UNDERLYING FORCE NUMBER 2

The Collapse of Manufacturing From Globalization, Financialization, and Automation

Behind Growing Inequality: Declines in Manufacturing Employment

The first source of inequality is clear from the demographic profile of the Trump, Brexit, and LePen supporters that we discussed earlier—blue collar workers. To uncover why, we need to first dissect what has happened in manufacturing.

The first thing we should note is how much production has shifted from the West to East Asia, and China in particular. The graph below shows the percentage of world merchandise exports by source country.

Notice how much the U.S., UK and France all decline significantly over the decades. Korea, and China’s phenomenal growth is even more stark.

I also took a closer look at trade patterns specifically for the U.S. using the IMF’s Direction of Trade Statistics database that goes back to 1960 and analyzing the data. The largest partners for the U.S. are the European Union, Canada, Mexico, and China, but the patterns have changed considerably over time. Whereas from 1950–2000, the EU took about 1/3 of all exports, it dropped to about 1/5 (18%) in 2017. In terms of imports, roughly the same proportionate drop happened in 1980. Over the same period, Canada remained at about 1/5 of all exports to the U.S., but steadily declined in terms ← 87 | 88 → of imports from the US from a high of 28%...

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