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‘Prime Minister Boris Johnson, and the hardcore Brexiteers within his inner circle’

Nostalgic nationalism extends far beyond the UK. As a result of an unfettered globalization process and disruptive technological change, a growing share of people – particularly older people – feel that they cannot keep up with the world around them.

You argue that the logic of Brexit was shaped by nostalgia for a past that never existed and the loss of a distinct English identity. Now that the United Kingdom is out of the European Union, will the false promise of Brexit be exposed? Or will UK leaders manage to sustain a sufficient base of emotion-driven support, as US President Donald Trump has, despite pursuing policies that run counter to many of his voters’ interests?

Prime Minister Boris Johnson, and the hardcore Brexiteers within his inner circle, continue to leverage history to exaggerate the UK’s true power, deluding citizens into believing that restoring a modern version of the British Empire is within reach. Johnson will probably manage to sustain this fantasy for quite some time, especially if Trump is reelected and provides a trade lifeline to the UK.

But, like all emotions, nostalgia tends to dissipate over time. Before long, the British will no longer be able to ignore reality: a glorious past cannot exist in an ordinary present. That lesson will be taught partly by how difficult it will be for the UK fully to substitute the deep social, political, and economic ties with the European continent that it is losing – a process that will take at least several years. In fact, the UK may never reach any semblance of equivalence on this front.

Challenges to the UK’s own political integrity will reinforce this realization. Scotland and, to some extent, Wales are increasingly considering secession. They harbor far more nostalgia for the EU than they do for the British Empire.

The final threat to Johnson’s support base emerges from within the ranks of the Brexiteers. A silent majority of Leave voters dream of an inward-looking Little England rather than the outward-looking Global Britain Johnson proposes.

Addressing inequality, you have written, requires that we “restore meritocracy to a system that now perpetuates undeserved privileges.” For example, while private donations to top universities should be welcome, legacy admissions of applicants who lack the academic credentials should be banned. But would-be legacy admissions are still likely to possess far more social and cultural capital – powerful family and friends, the “right” accent and manners, and so on – than those from poorer, less educated, or more provincial households. So they would still have an undeserved economic advantage. Is this unavoidable, or are there steps governments could take to level the playing field further?

Unfortunately, establishing a fully meritocratic system is possible only in theory. Even the most egalitarian society will always have to tolerate some degree of socioeconomic injustice. Democratic governments should invest in ensuring that all people – not just those who are able to pay to attend elite schools – can access high-quality education. But even the best public education will never completely offset the disparities arising from family backgrounds. Kids whose parents know how to navigate the system will always have an advantage.

That said, it is important not to demonize those kids, or dismiss all of their achievements as the result of undeserved privileges. It is tolerable to see a kid from a rich family being admitted to a top university, not because of a generous donation, but because the parents fostered and cultivated their child’s talents.

And if it is not tolerable, what is the alternative? A process of socioeconomic purification at birth would be reminiscent of that pursued by communist regimes, whose aspiration to create a society of equals ended in misery, poverty, and death.

In virtually every economy, small and medium-size enterprises (SMEs) account for the lion’s share of employment. Yet the overwhelming majority of these firms do not function at the technological frontier. Last year, you wrote that, because “[a] sustainable technological transformation requires widely shared benefits,” helping these firms is “just as important as enabling the innovators to thrive.” What measures do you propose?

The debate about the Fourth Industrial Revolution is highly biased. Most of the predictions about the future of work are based on surveys in which large global corporations – which represent a tiny fraction of employers – are significantly overrepresented. As a result, public debate on the topic is also biased.

This skewed approach induces policymakers to set educational and employment priorities that serve the interests of the minority on the technological frontier, ignoring the needs of the overwhelming majority – the laggards that are still operating within the framework of the Third Industrial Revolution. For these laggards, technologies like artificial intelligence, robotics, and virtual reality are not priorities.

What can governments do? For starters, they should begin surveying smaller firms, in order to gain a clearer picture of where those firms stand on the technological spectrum. This is particularly crucial in the West, where the gap between technological leaders and laggards is widening fast.

Moreover, with the support of business associations, governments should implement training programs for SMEs, aimed at expanding awareness of emerging technologies. And when innovation suddenly disrupts an industry – a relatively rare occurrence – policymakers should introduce some form of light regulation to buy time for small entrepreneurs to adapt and react, thereby staving off massive employment losses and preventing a populist backlash.

You acknowledge that, in resisting your proposal to make public pensions partly conditional on community work, pensioners might argue that they “already provide unpaid services such as child care within the home.” This is a legitimate concern, especially for working mothers: in the US, for example, grandparents look after one in five preschool-age children of employed women. How could your proposed community-work system account for such realities?

In reality, most pensioners enjoy a leisurely retirement, thanks to a great intergenerational injustice: their pension benefits massively exceed their contributions, and younger workers cover the difference. In this sense, my proposal to make public pensions conditional on some community work is an effort to restore some social justice.

As I argue in my commentary, governments should start by surveying pensioners, in order to identify their preferences and competencies. The focus should be on roles in education, social services, and health care that would otherwise be filled by public-sector employees. Pension spending would thus be at least partly offset by reduced public-sector wage costs.

Of course, childcare within the home qualifies as giving back to the community, especially in countries where family policies are weak. So that could be a basis for some kind of exemption. But these activities would have to be documented, and when the grandchildren grow up, the pensioners would transition to outside community work.
By the Way…

You recently tweeted that the time has come for European Commission President Ursula von der Leyen to address the issue of tax havens within the EU through corporate tax harmonization. What are the biggest barriers to progress on this front?

Last March, a European Parliament committee identified seven EU member states – including Ireland, Luxembourg, and the Netherlands – that function as tax havens, effectively stealing tax revenues and jobs from their European partners. A major barrier to progress in addressing such behavior was the UK, which relentlessly resisted market regulation. As such, Brexit offers a golden opportunity to improve tax harmonization. Von der Leyen must not miss it.

Beyond the UK, what are the biggest nostalgia-fueled risks facing the world today, and how can they be countered or mitigated?

Nostalgic nationalism extends far beyond the UK. As a result of an unfettered globalization process and disruptive technological change, a growing share of people – particularly older people – feel that they cannot keep up with the world around them. So they long for a remembered past, when less porous national borders and more predictable social and economic developments made individuals feel more in control of their fate.

Jingoistic leaders who are taking advantage of this longing to advance counter-productive policies – which often infringe on individual freedoms to the benefit of a few economic or political insiders – include Trump, China’s Xi Jinping, Russia’s Vladimir Putin, Turkey’s Recep Tayyip Erdoğan, and far-right leaders across Europe. In fact, Brexit might just be the beginning of a wave of nostalgia-driven nationalism – one that will define our era.

What do young people need most that their governments should be, but are not, providing?

Younger generations, particularly in less dynamic economies, need their governments to give them hope for the future. This means providing high-quality education, removing administrative barriers for start-ups, eliminating labor-market dualism (that is, the sharp division between “good” and “bad” jobs), adopting credible environmental-protection policies, and using public money to fund family-friendly policies, rather than bloated pension systems.

If governments fail to fulfill these imperatives, young people will move abroad in search of better opportunities, condemning their home countries to economic and demographic stagnation.

Does the recent loss of the anti-migrant League party in a regional election – which party leader Matteo Salvini had hoped would bolster his effort to trigger the collapse of Italy’s government – give you hope for the country’s political future?

Unfortunately, the League continues to lead the polls, and thus remains a real threat to Italy’s stability. Yet Salvini’s recent defeat has probably provided enough of a boost to Prime Minister Giuseppe Conte’s government to enable it to survive until the 2023 elections. In this sense, it may have bought enough time for the League bubble to burst.

But the current government must use this time wisely, adopting smart fiscal policies and implementing structural reforms to boost a stagnant economy. Salvini will remain in the shadows, awaiting the ideal moment to re-emerge. Conte must not give him such a moment.

Published Date: Wednesday, February 12th, 2020 | 06:06 PM

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