Wednesday, March 28, 2018

Rise of the Right Wing

The second decade of twenty first century is witnessing two major rises
1. The rise of the right wing across the globe and
2. The rise of Super Powers with signals of cold war 2.0.

There was a time the capitalist economies were saying that the world is flat and the world should embrace globalization.There were many economists across the globe who were great advocates of it and many researches were published explaining the advantages of the same. But, when we look at the actual implementation what we could see was that it was a newer version of colonization where the developing countries of Asia and Africa were handling the commodities/labour which is the lower chain of value addition curve and value addition was done by Europe and US with the help of technology. The idea worked successfully for West in 1980s and 1990s and it had helped to widen the economic inequality between the west and the east. However there were a few assumptions that went wrong and the developed nations are paying now for their mistake.

The major assumption was that the east will always work on commodity products like exporting of  Minerals and other natural resources and they will act as the labourers of the west in manufacturing sector with  little investment on technology/value addition. However time has proven that the assumption went wrong. The reverse engineering has helped the developing countries to do value addition. This has resulted in creation of wealth in developing nations which is large enough to acquire companies in the west which will further help the developing world to compete against the developed nations. While the twentieth Century saw the development of European Companies with the support of Technology, twenty first Century is witnessing the rise of Asian countries as super powers.

Another assumption was that it was easy to displace the entire population  of job seekers from farming to service sector. While it was somewhat successful in US where just 2% of total population is farmers and they were able to shift the 98% of the population to manufacturing and service sector what they had forgotten is that the Eastern countries can also acquire the same skill set and they are ready to work at a lower wage rate which will ultimately give them advantage when they acquire the technology. This has resulted in replacement of domestic employees in the developed nation with low cost employees from the developing nations or transfer of the manufacturing and service sector units itself to the developing countries thereby increasing the transfer of wealth. (And the poor in the west cannot go back to agriculture now as the lands were already purchased by the corporate companies)

The big picture of globalization was missed by the western population partially because of the shift in employment among the population to the service sector which has helped them to increase their wages and also because globalization has helped them to control inflation as they were able to replace the high value domestic product with low cost products from developing countries thereby ensuring sufficient amount for recreation as well as savings. Also it was acceptable for the developing countries as it created job opportunities in the developing world which had relatively less skill set. However, as time passed by, the aspirations of the developing countries has also changed and they also wanted to follow the same consumption pattern of the west. They also started to shift the work force to manufacture and service sector thereby challenging the dominance of the western world in the field. This has resulted in the replacement of high salaried Western people with low to medium salaried Asian and African labourers.

This shift got accelerated in the beginning of twenty first Century and within twenty years, the western world has realized their mistake. This has resulted in the rise of the right wing protectionist ideology in West. The victory of Trump,Macron,Putin and Brexit shows that the rise of nationalism and the feel for national identity has started to rise in the western world. The irony is that the same right wing ideology which is in rise in Asia also who are advocates of Globalization. While the nationalism has helped Narendra Modi to come to power in India, the communist government in China has also embraced the ideology in a different way by giving infinite Power to Xi JinPing which was to make China a Super Power and also the create a feeling among the population that the communist government is capable of protecting the people of China by reducing unemployment using Globalization. In other words , Left is also Right in China even though we call the party as Communist Party.

What globalization and capitalism has actually created is concentration of wealth among a small elite class of population. This relative inequality has resulted in frustration among those who were left out. The irony is that the Poor in the East believes they are poor because of the exploitation from the western world and the poor in the west believes they are poor because of the cheap labourers from the Eastern world and in both worlds the Right Wing ideology has risen from the ashes like the phoenix. But the fact is inequality exist in both East and West and relative inequality within a country is increasing day by day. This is not actually because of the concept of globalization but because of its creator - Capitalism. People who created the wealth were able to mislead the anger of poor to the factors outside the nation. Thus they tried to act like the protectors of the nation while they continue to exploit the people using the money and muscle power which they possess. And it has lead to the second point which I have mentioned in the beginning, the rise of cold war. The current trade war between the world nations in not actually to protect the nation, but to protect the capitalists of  each country who actually controls the larger businesses of those nation. The poor in US will never get benefited by creating a trade barrier with China.It will in fact create inflation in the country.However the poor believes that the policy can actually protect them. This is same for all the countries where the nationalism is on rise.

The real danger of current nationalism is they can keep the elite safe for a few more years but it cannot help to increase the equality within the country as the exploitation is actually continuing and there will be a point at which this will burst and can lead either to violence that we are seeing in many underdeveloped countries in Africa or a recession which we have seen in developed countries. Both are not good for any country. Hence the time has come for the governments to understand the real issue existing in the society and to resolve the same rather than shifting it as delay in time will only amplify the frustrations which can result in many disastrous incidents for all the countries.