The Political Left and Right Are Being Upended by Globalization Politics

By Nouriel Roubini

Nouriel Roubini

A new political alignment erases the old left and right paradigms of labor versus capital, workers versus business, taxes and regulation versus free enterprise.

Across the West, establishment parties of the right and the left are being disrupted — if not destroyed from the inside. Within such parties, the losers from globalization are finding champions of anti-globalization that are challenging the formal mainstream orthodoxy. Thus, the traditional distinction between center-right and center-left is breaking down.

Traditional establishment parties were controlled by forces that, overall, benefited from globalization: business interests, urban and cosmopolitan elites, skilled workers, and white-collar and blue-collar workers protected by unions. Both right-wing and left-wing parties included significant minorities of workers who were losers in the globalization race but were voting for establishment parties either because they were socially and religiously conservative (ideological voters on the right) or because center-left parties were supporters of unions, workers rights and social welfare systems partially protecting the losers.

For a while, financial democratization (easy access to credit) and the buildup of excessive household leverage was the fig leaf that contained the gap between stagnating incomes and consumer ambitions of the losers.

Read full article as published in The World Post.

Nouriel Roubini is a Professor of Economics and International Business and the Robert Stansky Research Faculty Fellow.