Globalization Insecurity



Christopher Ebbe, Ph.D.     6-16

ABSTRACT:  The globalizing economy has wrought a number of changes in many people’s lives, including an increase in the insecurity felt by many.  The question is posed whether money or emotions are more important.

KEY WORDS:  globalization, emotions, insecurity

2016 has been a year of many people wanting to “take back government” and of severe criticism of persons in charge for not taking care of citizens’ economic woes.  In the U.S. Donald Trump and to a lesser extent Bernie Sanders have championed this desire for change (and contempt for regular politicians).  Their supporters want the government to “do something,” particularly about taxes, jobs, and income inequality.  In the U.K. 52% have just voted to leave the European Union, in order, mainly, to be able to control immigration and control their own economy.  Everyone acknowledges that globalization has had a primary role in generating this movement, but no one is addressing how to respond to globalization except through helplessly accepting it.

The dissatisfaction with government in the U.S. has been building for a number of years, as voters apparently push their representatives to “fight” for them against other sets of values and ideals rather than compromise, even when the only way to get anything done is to compromise.  (These compromises would not be perfect or satisfy everyone, but in a democracy they may accomplish all that can actually be done, and thus an attitude of compromise may be what is best for the country overall.)  This non-compromising attitude means that the people themselves (or at least the most vocal of them) may be responsible in large part for government gridlock, with no elected officials offering to compromise for fear of losing votes by being targeted by private political groups like the NRA from outside of their electoral districts for any deviation from a particular ideological line (abortion, taxes, spending, financial reform, gun control).    This problem has been growing for a number of years as these one-issue ideological wars have created sizeable groups of one-issue voters, which reduces the power of moderate voters to carry elections for moderate candidates who are more willing to compromise.  Splinter political party groups like the Tea Party threaten to defeat moderate politicians in their own party’s primaries.  Some observers attribute this chaotic mess to the loss of power of the mainstream political parties and their power to keep members in line, as unintended consequences of efforts to do away with “back room deals,” “buying elections,” and other such arm-twisting activities that smack of corruption.

This growth of commitment to single issues and idealism in general has fueled some voters’ beliefs that they have a “right” to have things their way, rather than having to compromise, and this disdain for compromise has brought Federal government activity almost to a halt.  This uncompromising (and unthinking) idealism is augmented by the internet’s capacity to allow people to find what seem like large groups of others who agree with them, and since we prefer to have others agree with us, we tend to expose ourselves only to those people who agree with us and lose sight of the larger group of citizens who do not agree with us.  This group support makes it seem like we are justified in demanding to have our way, since “everyone” around us agrees with us, even though our group may be actually relatively small.

Instead of focusing on these issues at a political level, though, it is important to understand the emotions underlying the politics.  People of all political persuasions are missing the main point of the globalization protest, which is that globalization has made many people quite insecure about their futures.  It is this insecurity that is motivating large numbers of people to demand that something be done.

From the beginning of the globalization trend, American business asserted that it must take steps to be competitive globally, by being “agile,” which was code for changing tactics and business approaches in any way needed to help businesses stay solvent.  Thus, unions came under fresh attack, companies dropped worker benefits such as health insurance, and companies cut back or redefined pension plans, since it seemed that these moves were necessary to remain globally competitive.  Many businesses sent their work overseas, where it could be done more cheaply, or even moved overseas themselves for tax purposes.  This instability encouraged mergers, and business is increasingly dominated by fewer and fewer multinational corporations.

Displaced workers were told to retrain or scramble for whatever work they could find.  People were urged to plan for retirement through their own investment (401k’s), but since they did not have the knowledge or the discipline which that takes (in contrast to having deductions taken from their checks for retirement automatically), the country’s retirement future looks more and more like a calamity.  Peoples’ work experience was thus changed, with all pretense shattered of companies being “a family” or having some feeling of responsibility for employees.  Just getting a job and working hard is no longer a guarantee of continuing to have a job, because the company could be sold or the product redefined at any time.  Regardless of whether those changes were in fact needed for global competition, the important result was that workers were on their own in a world they were not prepared to cope with, with no government sympathy or guidance.  Of course, this was consistent with America’s vaunted rugged individualism, but it shows that the world has become so complex that individualism doesn’t succeed like it used to.

Global and regional trade pacts have also been a target of this year’s populism.  So far decisions about trade seem to have been made on the basis of the single goal of maximizing total national wealth over the long run.  Free trade may do this, but it also has the implication of (1) short run trouble for certain workers, whose functions disappear (through automation, etc.) or whose jobs are moved overseas and (2) less income for certain groups of people, because their function is permanently done more cheaply overseas.  So even though total national wealth may be greater, the distribution of that wealth is not the same as before.  And, the long-term net effect of globalization (each nation producing what it can do most cheaply) is to even out the total wealth among all nations, so if there is no increase in total wealth (economic growth, like from exploiting a new invention or power source), then this evening out of per citizen total wealth will result in the nations that are currently the most wealthy being poorer in the end and the nations that are currently poorer being richer.  The assumption that globalization will lead to more trade and therefore more income is contingent on continued growth, and if this is incorrect, then the U.S. ends up a loser.  

Restricted trade (like from tariffs) protects some aspects of a country’s economy but will most likely leave that country worse off in total wealth than it would have been with more trade (unless it has a resource that exists nowhere else, so that it can set a high price on that resource).  The U.S., then, as a currently rich country, has a troubled future if there is very slow growth, as more and more jobs go overseas and free trade brings more and more imported goods to the country (since they can be made more cheaply overseas because of lower current worker costs there).  This will lead to more cuts in wages and less money spent by consumers overall, and a lower standard of living overall.  This lower standard of living seems inevitable for the short run, until wages fall so low that our workers are paid no more than overseas workers, though if world economic growth were to be large enough, the decrease might not be unendurable.  Workers, of course, don’t want to endure it at all, and economists’ predictions regarding economic growth seem even less reliable than the science behind global warming.  (There is another factor regarding U.S. total wealth, which is that the U.S. may have run out of avenues for growth, with no more frontier to exploit and no new and cheaper energy source being discovered.  Just working harder or having more entrepreneurs doesn’t equal growth unless greater total value is produced, rather than just moving the same value around among the same parties.  Neither is growth generated by business as usual or simply by increased trade unless a country has certain resource or labor advantages, and the U.S. is short on these advantages now, except perhaps for research and development.  This, however, is the subject of another essay.)

There have been drop-in-the-bucket programs to retrain workers who lose their jobs to globalization, but many workers don’t have the skills or the heart to start over, particularly if it requires moving, and there do not seem to be many of these “other jobs” anyway, given the current low unemployment rate.

Psychologically this whole globalization trend has meant much greater insecurity in general for the majority of the population, which is the motivation for the current populist movement (with the fringe and one-issue groups tagging along and making the movement seem bigger).  The American assumption that people should manage their own feelings, repressing them as needed “to get the job done,” has justified this blindness to the importance of feelings.

The attitudes of those making globalization and trade decisions reveal a false assumption of our culture—that money is more important than feelings.  When things are going well, we can tolerate this false assumption, because it is never overtly challenged or exposed, but when things aren’t going well, people feel more insecure and anxious, and this shows in voting or even in violence.  Citizens have assumed for so long that the U.S. is the “best” country and that their economic positions would improve ad infinitum, that this downturn is causing them to wonder about America’s supposed “might,” which is why Trump’s appeal to “make America great again” resonates with many voters (and why Clinton’s “we are already great” does not). 

It seems unmanly for Americans (including women) to admit to being insecure, so we are demanding higher incomes right now as a solution rather than seeking to change our expectations and our lives so that we feel more adequately secure without the higher incomes.  Since higher incomes are not in the offing for us for quite a while, this could turn even uglier, as people blame someone else (anyone else, such as immigrants and rigged systems) for their pain.  It is unfortunate that Americans still believe that a leader can readily change things, but Mr. Trump can no more increase incomes than any other President, which is very little.  Unless our economy produces more value in total product, there will be no greater incomes for anyone below the investor class.

This assumption that people must “handle their emotions” on their own puts citizens in the same situation of the frog (or lobster) placed in a pot of cold water that is being gradually heated to boiling.  They don’t notice the gradual change until it is too late.  Society operates in much the same way.  Every new method of improving anything requires dealing with more complexity, dealing with more interdependence, and/or tolerating more unpleasant emotions (such as the greater insecurity of greater complexity that one is not in control of), but the incremental requirements are usually small, so every time we are “forced” to change we think that we can handle it and that the proposed benefit is worth the effort.  These emotional requirements add up, though, over time, until all of a sudden, the total picture seems undesirable, and we react with surprise and anger.

The key point here is that emotions are not just an inconvenience.  As human beings, our emotions and needs are the source of all motivation.  The cognitive processes within us (our abstract thinking, the workings of our cerebral cortex) do not tell us what is good for us or bad for us.  They are used to determine how to reach the goals that our emotions/needs have identified for us.  We can, on the other hand, use our thinking to refine our goals, so that our emotions/needs are satisfied and we also avoid associated problems.  For example, emotions/needs may tell us to eat or use alcohol/drugs when upset.  Free rein for this impulse can result in significant weight gain or family/legal problems if the person is in a period of prolonged upset (like not moving to get a job when one’s factory has closed and there are no other jobs around where one lives).  If our cognitive processes are sufficiently flexible and empathically aware (of our own inner workings), we can “figure things out” so that we overcome our fear of moving and go ahead and move and get another job, or we adjust our self-image so that we are satisfied with being a person out of work.  We feel better about ourselves, and our feelings no longer tell us to eat or use substances.  It remains true, however, that our cognitive processes do not determine our goals.  That comes initially from our emotions/needs.  Right now many people are wanting to reduce their insecurity.

People who are struggling with economic survival are more willing to sacrifice their emotions for the sake of income, while those better off have the luxury of putting a somewhat higher priority on their emotions, if those emotions become prominent.  People in the U.S. thus are more willing than people in Bangladesh to assert that “something should be done” about their insecurity and their inability to maintain their lifestyles due to income stagnation and job loss.

As a psychologist I would urge persons at all levels in our society to consciously put a higher value or priority on emotions, rather than ignore them or believe that everyone can manage any level of stress and insecurity if they would just do so.  This might result in lower income levels (from the costs to businesses of not paring everything down for the sake of the bottom line) in this country, but it would also result in better feeling among citizens (because it feels more like other people care).  This adjustment would require a slightly different self-image—i.e., that the U.S. is not almighty and can’t have everything it wants, but there might be some benefit for the rest of the world in that!  This country was peopled mainly with people who wanted more for themselves, but the time may have come to think about priorities and accept that people in any society have some responsibility for each other.  This is not a call for embracing having less but one suggesting that we consciously choose an insecurity level that is comfortable and then accept the economic result.  The rich are doing well and are not particularly insecure.  Those who are more comfortable with insecurity (or simply feel less insecure with instability) can continue to take risks that may have economic payoff, but the bottom line is that these groups must give up some of their income to the middle and lower classes, or there will eventually be a political upheaval that will force that to happen. 

This change would go down easiest if it is not done simply to avoid revolution but is consistent with a new identification with the whole of society—that we are all in the same boat, rather than “devil take the hindmost.”  Working people are by and large willing to be loyal to employers that they feel treat them fairly and take care of them to some degree, and the rich and entrepreneurs must come to accept that they have their wealth only because of the work of the workers.

Another aspect of recognizing and better managing our emotions is being aware of our desire to have our own way and dominate others—make others conform to our beliefs and preferences.  We think that if we could do this, then we would feel secure and have the lives that we want.  It would be simple to do this if you lived alone and did everything for yourself, but what you want is for others to make your life better by agreeing with you (being clones of you), and you are doing this because you can’t make a good life for yourself alone.  You need others in order to do this.  It would be nice if you could be king and be able to simply tell others what to do, but you are not king.  This means that those who believe they should be able to have their own way about things in society do not really prefer or believe in democracy, because if all of the people rule, then all of the people have the same right to have things their way, and this is obviously impossible, given that we all have at least slightly different views on what is best.  For democracy to “work,” then, the people (in our case, our representatives) must figure out how the maximum number of people can be satisfied with how things are.  This means compromise.  If you’re not willing to do it, and you insist on fighting to get others to do it your way, then you don’t really believe in democracy. 

Efforts to satisfy the greatest number of citizens is not best served by 51 percent majorities, either, since as we can see in our own country, slim majorities do not give a stable result.  Since we have set up a system of two opposing and fairly equal political powers, the one that gets the slim majority will just as likely lose next time when the other group gets 51 percent.  Compromises must be fundamental enough to withstand those swings of power.

The three key stumbling blocks, then, to dealing with globalization are (1) accepting that globalization will lead to a somewhat lower standard of living for richer countries like the U.S., until incomes across the globe are more equal, (2) accepting that rejecting or restricting participation in globalization would also mean a somewhat lower standard of living for the currently richer countries (unless new sources of knowledge or resources are discovered that can be exploited), and (3) accepting that we must acknowledge and manage our own feelings of disappointment and anger at not getting everything we want.  These all run contrary to “the American dream” and will require unusually good leadership and a fair amount of time to accomplish!