OXFORD – As the world’s financial leaders gather for the International Monetary Fund and World Bank spring meetings, many working people around the world are demanding radical change, because they sense that their voices are not being heard. Those who are supposed to represent them should not ignore this anger and frustration any longer.
According to the 2017 Edelman Trust Barometer, the public’s confidence in the status quo has collapsed worldwide, owing to widely held concerns about globalization, innovation, immigration, the erosion of social values, and corruption. At the same time, the response from elites who regard themselves as the guardians of economic growth has sometimes made matters worse. If they think they can allay public concerns simply by explaining the benefits of the current global economic system and tweaking policies to compensate those left behind, they are in for a rude awakening.
Earlier this month, the IMF, World Bank, and World Trade Organization published a joint report extolling the benefits of trade as a driver of productivity growth, competition, and consumer choice. The report’s argument in favor of free trade is not new, nor is its recommendation that “active labor-market policies” be used to cushion the blow of lost jobs and livelihoods. What is new is that repeating these claims, without also addressing people’s deeper concerns, can now do more harm than good.
Global public opinion has changed dramatically in recent years. A majority of people worldwide – and up to 72% of people in France and Italy – now believe that the system has failed them. Moreover, only 29% of people across 28 countries now trust government leaders, while three-quarters of those surveyed say they trust reformers who would upend the status quo. These findings suggest that those defending free trade have lost credibility with the people they hope to persuade.
World leaders need to recognize that today’s populist revolts are being fueled by a sense of lost dignity – a sentiment that does not factor into most policymakers’ prescription for economic growth and compensatory payments. Working-class voters have lashed out because they feel not just economically abandoned, but also socially disdained and culturally marginalized. Their vote is the only means they have left to hit back at the establishment.
To address the public’s concerns requires a three-part agenda. The first order of business should be to reach out to those who feel voiceless and unrepresented. During the US presidential campaign, Donald Trump tapped into this sentiment when he vowed to punish any company that moves jobs to China or Mexico.
As the filmmaker Michael Moore explained prior to the election, American working-class voters were desperate to hear someone promise to take on big business. The fact that it took a populist plutocrat to do it underscores the........