US economy

The global advance of ethno-nationalism


A couple of years back I wrote a book, The Retreat of Western Liberalism. I briefly debated whether to substitute “global” for “western” in the title given that India is world’s largest democracy (the next largest, America, has less than a quarter of India’s electorate). Either way, I regret omitting India from the book’s focus. Having been a democracy for all but 18 months of its 72 years of independence from the British empire, India is one of the world’s more established democracies — considerably more than the former Warsaw Pact countries of central and eastern Europe, for example, or indeed Spain, Portugal and Greece. What happens in India matters to liberal democracy around the world. Which is why Narendra Modi’s thumping re-election on Thursday is something that should make us all sit bolt upright. Until February, Modi’s Bharatiya Janata party looked to be in trouble. Then Pakistan-backed terrorists killed scores of Indian military personnel in Kashmir. Modi launched air strikes on the alleged terrorist camp in Pakistan, and lost an Indian plane. In spite of the questionable military value of Modi’s response, the ensuing nationalist outpouring set him up for this week’s landslide.

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There are two unsettling lessons to be drawn from his victory. First, fear of terrorism almost always serves the rightwing populist. That sense of dread is deep and susceptible to emotional manipulation. Israel’s Bibi Netanyahu can testify to that. Second fake news — and deep fake news — is becoming more widespread and effective. The BJP was devastatingly good at spreading false memes of the allegedly destroyed terrorist camp. The reality was a couple of craters in the ground. No amount of follow-up analysis proving that the images were purloined from scenes of an earthquake in Pakistan several years earlier could undo the damage. India may be among the poorest of the world’s democracies. But in terms of digital sophistication via WhatsApp, TikTok and other services, it is among the most advanced. Modi is a global pioneer. Donald Trump is a relative novice by comparison. But they learn from each other. Another pioneer is Bibi. What they have in common is a dislike for the liberal part of liberal democracy. Each are doing away with the checks and balances within reach. In Israel, Bibi is set to pass a law that would grant him retrospective immunity from criminal charges — a naked hijacking of the rule of law from which Israel will struggle to recover. In India, Modi is harassing and marginalising civil society — from human rights groups to foreign non-governmental organisations, independent media and groups representing Muslims, Christians and other religious minorities. In the US, Trump is more constrained. I doubt that would be as true were he to be re-elected. Even then, he is steadily filling America’s appeals courts with originalist judges, whose influence will long outlast the elected political classes.

Then there is the advance of populists in Europe. This week’s European Parliament elections are likely to see big leaps forward for xenophobic parties such as Nigel Farage’s Brexit party, Matteo Salvini’s Northern League, Viktor Orban’s Fidesz, Marine Le Pen’s Rassemblement National and so on. They could win between a quarter and a third of seats in the European Parliament. These are not isolated events. Yair Netanyahu — Bibi’s son — tweeted his good luck to the above populists this week. His father is a close ally of Orban. All of them admire Trump, Modi, Brazil’s Jair Bolsonaro and other populist strongmen around the world. They share tips, disseminate memes and strategic insights. Some admirers, such as Steve Bannon, call it the Populist Internationale. The rest of us have been conditioned over decades to believe that liberal democracy has deep roots, that politicians who issue threats don’t mean them, and that emotional waves drown those who caused them. All of these assumptions are being put to the test. This week the world’s two most populous democratic land masses — India and Europe — lurched towards more ethno-nationalism. The third, the US, will make its choice in 2020. Rana, is it too early to ask for your 2020 prediction?

Recommended reading

  • Talking of which, my column this week questions the premise of Joe Biden’s presidential campaign. By declaring Trump to be an aberration, Biden, in my view, is badly misreading the conditions that led to the Republican’s election in 2016. The fact that the former US vice-president would be a year older than Reagan when he retired does not help . . .
  • My colleague Amy Kazmin wrote this sobering cover story about the prospects of a second term for Prime Minister Narendra Modi and the waning light of Indian secularism. Also, our very own charismatic strongman Lionel Barber (otherwise known as the editor of the FT) wrote this perspicacious take with Amy on what to expect from a Modi second term. 
  • Finally, both The Washington Post and The New York Times have excellent pieces on how San Francisco, the capital of American social liberalism, has also become the epitome of America’s most glaring inequalities. Forget the poor. The middle classes can’t afford to live anywhere near San Francisco. It has become the ultimate billionaire’s playground. 

Rana Foroohar responds

Ed, I share your concern about all this — in fact I’m working on my own next Swamp Note about “patriotic capitalism”. It’s too early to give my 2020 predictions (just think about how many columns we both have to write between now and then!), but I’ll share an observation. I spent Thursday at a Dallas Fed sponsored conference on technological disruption and its effect on the economy. The Federal Reserve Bank presidents from Dallas, Richmond and Atlanta all told me that businesses in their areas were starting to make major shifts to their supply chains off the back of increasing nationalism. They weren’t moving production back to the US, but rather to other parts of Asia, or in some cases Latin America, and also creating redundancies should there be more sudden executive orders a la Huawei. The idea of a more regionalised world is no longer a populist’s wish — it’s becoming the default assumption for business. My feeling is that the only presidential candidate with any 360-degree sense of how to operate in that world is Elizabeth Warren, who understands the importance of local ecosystems, smart safety nets through disruption and the need for some wealth (note I say wealth, not income) redistribution. Whether she’s the Democratic candidate, or whether her policies simply inform the election debate, I think she’s casting a very long shadow at the moment, despite her low poll numbers. 

Your feedback

We’d love to hear from you. You can email the team on swampnotes@ft.com, contact Ed on edward.luce@ft.com and Rana on rana.foroohar@ft.com, and follow them on Twitter at @RanaForoohar and @EdwardGLuce



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