Jeremy Adelman (c) Global History Lab
Nov. 13th, 2016 02:23 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
babusyatanyaA number of you, especially from outside the United States, have written to ask for my thoughts about the recent elections in the US. That's fair; in a "normal" classroom I would talk about current events in historical perspective. We can learn from the past to inform the present and future.
On a personal note, the outcome of the elections on November 9th was a surprise -- a shock, actually. Like many, including legions of pollsters, I expected Hillary Clinton to win. As someone committed to furthering the cause of global understanding and cooperation, I worried about what a Donald Trump victory would portend, and let my hopefulness shape my judgement.
Now I am worried. I am worried, specifically that American leaders will turn their backs on an important, unheralded, legacy of global leadership in cooperation. True: that legacy is deeply mixed and ambiguous. American leaders have often behaved badly, horridly, sometimes out of spite, sometimes out of rage, most often out of ignorance. But looking back on seven decades after the Second World War (or the Great Patriotic War, if you are reading this in Russia), for much of the time the US helped the cooperative cause in dealing with common problems.
If there is a issue where I have been disappointed in American global leadership of late, it has been the effort to reduce climate change. I became more hopeful after the Paris agreement a year ago. That, I am afraid, is now a lost cause. The prospect of man-made extinction of ice caps and glaciers and the spread of deserts and floods makes me sick to my stomach.
[...]
What can global history teach us? In the weeks and months ahead, there will be a lot of debate about the meaning of November 9. What does it look like in historical perspective? One lesson is that there is no way to exhume the past. Trump’s plan to get old assembly lines moving again to make America great again is a pipedream. Here’s why.
In the aftermath of the Second World War, American leaders laid the multilateral foundations of what we now call globalization. Diplomats, economists, and philosophers charted a grand bargain for the world, a global new deal. It rested on two pillars.
The first concerned cooperation in the world economy. To prevent a backslide into the protectionist, inward-looking policies that crushed global trade in the 1930s and led to war in Europe and Asia, global re-builders hitched national economies to norms, rules, and principles of open trade. The result was a boom. From 1950 to 1973, world per capita incomes grew by 3 per cent per year – powered by a trade explosion of 8 per cent per year. Cooperation triumphed; interdependence brought prosperity.
The second pillar concerned national policies. To cope with the dislocations of interdependence, governments created safety nets and programs at home to manage the risks and to shelter the cast-aways. From welfare to workplace, from capital controls to expanded education, national policies buffered market perils and adapted families to commercial and technological changes. What is more, these programs extended to the dislocated who left home altogether, like those who departed Puerto Rico for the United States, Italy for Canada, Algeria for France, Cambodia for Australia.
This was the global new deal that buoyed a post-war liberal order. It opened borders while protecting societies from the hazards of integration across borders.
It was unsustainable. At the dawn of Washington-led re-build in 1945, the United States economy was larger than all of Europe, Japan, and the USSR combined. It is easy to lead when you dominate. But those conditions dissolved because the model of integration was so successful. Japan, Germany, and eventually China, South Korea and Brazil scrambled for their market shares. Suddenly, Ford had to compete on home turf with Toyota. Global trade boomed even more; from 1980 to 2011, world trade grew by an astonishing 8.2 percent – twice as fast as world output. China leaped from a meager 0.89 per cent of world export shares in 1980 to 10 per cent in 2011, muscling past the United States.
Then, global competition ravaged national welfare states. Domestic safety nets got torn up in a fever to make economies more nimble, more adaptive to global realities. Deregulators, privatizers, and a free market orthodoxy took hold, shredding the pacts that once eased the effects of globalization. Trade unions, once keys to the consent behind the global new deal, got crushed. So, as supply chains outsourced automobile parts production to Indonesia and t-shirt making to Bangladesh, dependence across societies produced greater inequality within societies.
The world became more integrated while becoming more unequal.
Factories closed; New York went bankrupt; in the winter of 1978-79, the lights went out in Britain and people shivered in the dark; Ford’s global market shares began to nosedive. Even Hollywood got into the gloom business with Sally Fields as Norma Rae in a dying mill town, and Jennifer Beals as the hard-luck steelworker whose way out of the rust belt was as an exotic dancer in Flashdance.
In the malaise, competitive integration got two, improbable, lifelines. One came in the form of credit. Moneylending took off. After 1973, the global financial industry soared; within a decade, financial markets had grown 400%. The value of daily trading on the New York Stock Exchange grew from $10 million in 1970 to over $1 billion by 2005. Now, it was not just commodities that sutured the world into one market, but capital. An alarming amount of financial interdependence, however, took the form of debt – both household and governmental. Total credit market debt (public and private) in the United States doubled from 1970 to 1998. Then it soared and never looked back. According to McKinsey, the global stock of debt to GDP rose even more after the crisis of 2008. Last year, it ballooned to $152 trillion – over 225 per cent of world output.
The second was fossil fuels. The need to move vehicles, spread factories, and cool homes, the scramble for market shares and middle-class betterment meant more combustion of coal, gas, and oil. Liberalizing world trade and industrializing Asia released 4 billion metric tons of carbon into the atmosphere in 1970; the figure is now 10 billion. Fully half the fossil fuel-induced CO2 emissions worldwide since 1750 have taken place since 1985.
I say "improbable" because back in the 1970s and 1980s, most of us thought that energy and debt were chokeholds on the world economy. In fact, they turned out to be saviours. There's a lesson in this: don't get too attached to your theories of what is going on. You could be wrong. To me, it's a mild cause for some optimism in our global present.
In any case, credit and carbon became the new legitimating conditions for global integration. If expanding public services and protections once softened market risks before the 1970s, they got replaced by the privacy of combustion and monthly credit card bills thereafter.
That order is now exhausted. The bill for addiction to fossil fuels is turning up in the form of climate change. As Washington pivoted to Asia, swaths of the unprotected precariat pivoted to part-time jobs at Walmart to cover the interest on their Visa cards. In the aftermath of the financial crisis of 2008, millions of industrial workers lost their jobs. And now: not since 1930 has the global trading order been more menaced. No one is coming to the rescue. David Cameron botched the Brexit campaign. Hillary Clinton stumbled through questions about the misunderstood Trans-Pacific Partnership and cringed whenever NAFTA came up. Little Wallonia (in Belgium) threatened a trade deal between Canada and Europe. If those two can’t pull it off, who can? In the vacuum, wall-builders and treaty-shredders promise to revive the zombie of American grandeur with more carbon, more credit, and a mercantilist crusade.
In 1929, the embittered English poet, Robert Graves, published a farewell memoir to his country called Good-Bye To All That. Scarred and traumatized at the Battle of the Somme, Graves offered his epitaph to a world brought down by the myopia of elites. Unable to see forward, British rulers yearned to restore a by-gone age, to make Britain great again, only to destroy the flower of their youth. No sooner did Good-Bye hit the bookstands than governments responded to a financial crisis by throwing up trade barriers, turning currencies into weapons, and then deporting, and later exterminating, foreigners.
Do we really have to repeat history in order to learn from it?
Jeremy Adelman
On a personal note, the outcome of the elections on November 9th was a surprise -- a shock, actually. Like many, including legions of pollsters, I expected Hillary Clinton to win. As someone committed to furthering the cause of global understanding and cooperation, I worried about what a Donald Trump victory would portend, and let my hopefulness shape my judgement.
Now I am worried. I am worried, specifically that American leaders will turn their backs on an important, unheralded, legacy of global leadership in cooperation. True: that legacy is deeply mixed and ambiguous. American leaders have often behaved badly, horridly, sometimes out of spite, sometimes out of rage, most often out of ignorance. But looking back on seven decades after the Second World War (or the Great Patriotic War, if you are reading this in Russia), for much of the time the US helped the cooperative cause in dealing with common problems.
If there is a issue where I have been disappointed in American global leadership of late, it has been the effort to reduce climate change. I became more hopeful after the Paris agreement a year ago. That, I am afraid, is now a lost cause. The prospect of man-made extinction of ice caps and glaciers and the spread of deserts and floods makes me sick to my stomach.
[...]
What can global history teach us? In the weeks and months ahead, there will be a lot of debate about the meaning of November 9. What does it look like in historical perspective? One lesson is that there is no way to exhume the past. Trump’s plan to get old assembly lines moving again to make America great again is a pipedream. Here’s why.
In the aftermath of the Second World War, American leaders laid the multilateral foundations of what we now call globalization. Diplomats, economists, and philosophers charted a grand bargain for the world, a global new deal. It rested on two pillars.
The first concerned cooperation in the world economy. To prevent a backslide into the protectionist, inward-looking policies that crushed global trade in the 1930s and led to war in Europe and Asia, global re-builders hitched national economies to norms, rules, and principles of open trade. The result was a boom. From 1950 to 1973, world per capita incomes grew by 3 per cent per year – powered by a trade explosion of 8 per cent per year. Cooperation triumphed; interdependence brought prosperity.
The second pillar concerned national policies. To cope with the dislocations of interdependence, governments created safety nets and programs at home to manage the risks and to shelter the cast-aways. From welfare to workplace, from capital controls to expanded education, national policies buffered market perils and adapted families to commercial and technological changes. What is more, these programs extended to the dislocated who left home altogether, like those who departed Puerto Rico for the United States, Italy for Canada, Algeria for France, Cambodia for Australia.
This was the global new deal that buoyed a post-war liberal order. It opened borders while protecting societies from the hazards of integration across borders.
It was unsustainable. At the dawn of Washington-led re-build in 1945, the United States economy was larger than all of Europe, Japan, and the USSR combined. It is easy to lead when you dominate. But those conditions dissolved because the model of integration was so successful. Japan, Germany, and eventually China, South Korea and Brazil scrambled for their market shares. Suddenly, Ford had to compete on home turf with Toyota. Global trade boomed even more; from 1980 to 2011, world trade grew by an astonishing 8.2 percent – twice as fast as world output. China leaped from a meager 0.89 per cent of world export shares in 1980 to 10 per cent in 2011, muscling past the United States.
Then, global competition ravaged national welfare states. Domestic safety nets got torn up in a fever to make economies more nimble, more adaptive to global realities. Deregulators, privatizers, and a free market orthodoxy took hold, shredding the pacts that once eased the effects of globalization. Trade unions, once keys to the consent behind the global new deal, got crushed. So, as supply chains outsourced automobile parts production to Indonesia and t-shirt making to Bangladesh, dependence across societies produced greater inequality within societies.
The world became more integrated while becoming more unequal.
Factories closed; New York went bankrupt; in the winter of 1978-79, the lights went out in Britain and people shivered in the dark; Ford’s global market shares began to nosedive. Even Hollywood got into the gloom business with Sally Fields as Norma Rae in a dying mill town, and Jennifer Beals as the hard-luck steelworker whose way out of the rust belt was as an exotic dancer in Flashdance.
In the malaise, competitive integration got two, improbable, lifelines. One came in the form of credit. Moneylending took off. After 1973, the global financial industry soared; within a decade, financial markets had grown 400%. The value of daily trading on the New York Stock Exchange grew from $10 million in 1970 to over $1 billion by 2005. Now, it was not just commodities that sutured the world into one market, but capital. An alarming amount of financial interdependence, however, took the form of debt – both household and governmental. Total credit market debt (public and private) in the United States doubled from 1970 to 1998. Then it soared and never looked back. According to McKinsey, the global stock of debt to GDP rose even more after the crisis of 2008. Last year, it ballooned to $152 trillion – over 225 per cent of world output.
The second was fossil fuels. The need to move vehicles, spread factories, and cool homes, the scramble for market shares and middle-class betterment meant more combustion of coal, gas, and oil. Liberalizing world trade and industrializing Asia released 4 billion metric tons of carbon into the atmosphere in 1970; the figure is now 10 billion. Fully half the fossil fuel-induced CO2 emissions worldwide since 1750 have taken place since 1985.
I say "improbable" because back in the 1970s and 1980s, most of us thought that energy and debt were chokeholds on the world economy. In fact, they turned out to be saviours. There's a lesson in this: don't get too attached to your theories of what is going on. You could be wrong. To me, it's a mild cause for some optimism in our global present.
In any case, credit and carbon became the new legitimating conditions for global integration. If expanding public services and protections once softened market risks before the 1970s, they got replaced by the privacy of combustion and monthly credit card bills thereafter.
That order is now exhausted. The bill for addiction to fossil fuels is turning up in the form of climate change. As Washington pivoted to Asia, swaths of the unprotected precariat pivoted to part-time jobs at Walmart to cover the interest on their Visa cards. In the aftermath of the financial crisis of 2008, millions of industrial workers lost their jobs. And now: not since 1930 has the global trading order been more menaced. No one is coming to the rescue. David Cameron botched the Brexit campaign. Hillary Clinton stumbled through questions about the misunderstood Trans-Pacific Partnership and cringed whenever NAFTA came up. Little Wallonia (in Belgium) threatened a trade deal between Canada and Europe. If those two can’t pull it off, who can? In the vacuum, wall-builders and treaty-shredders promise to revive the zombie of American grandeur with more carbon, more credit, and a mercantilist crusade.
In 1929, the embittered English poet, Robert Graves, published a farewell memoir to his country called Good-Bye To All That. Scarred and traumatized at the Battle of the Somme, Graves offered his epitaph to a world brought down by the myopia of elites. Unable to see forward, British rulers yearned to restore a by-gone age, to make Britain great again, only to destroy the flower of their youth. No sooner did Good-Bye hit the bookstands than governments responded to a financial crisis by throwing up trade barriers, turning currencies into weapons, and then deporting, and later exterminating, foreigners.
Do we really have to repeat history in order to learn from it?
Jeremy Adelman
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Date: 2016-11-14 09:34 am (UTC)no subject
Date: 2016-11-14 06:47 pm (UTC)