A popular theory for Donald Trump's success emphasizes the economic anxiety of less-educated whites, who have struggled badly over the past few decades.
Hit hard by factory closings and jobs moving abroad to China and other places, the story goes, blue-collar voters are channeling their anger at immigrants, who have out-competed them for what jobs remain. Trump, with his remarks about Mexicans being rapists, has ridden this discontent to the top of the polls.
The data suggest there's some kind of connection. According to polls, whites with a high school degree or less disproportionately favor Trump. These are the same people who have seen their economic opportunities decline the most in recent years. This group also disproportionately favors tough restrictions on immigration.
But just because there appears to be a connection doesn't mean there is one. Has globalization pushed working-class voters to the right? Nobody has proven that globalization has in fact pushed working-class voters to the right or made them more extreme, at least not in the United States, where the right kind of data aren’t being collected. But unique records from Germany have allowed economists to show how free trade changes people's political opinions.
A new study released this week showed that in Germany, the economic frustrations of trade nudged many people into becoming right-wing extremists over the past two decades — throwing their support behind the country’s neo-Nazi parties. Written by economists Christian Dippel, of the University of California at Los Angeles, Stephan Heblich, of the University of Bristol, and Robert Gold of the Kiel Institute for the World Economy, the paper was released by the National Bureau of Economic Research.
Germany’s far-right politicians, it should be noted, are not garden-variety nationalists. German intelligence keeps tabs on these people, who frequently use racist and anti-Semitic language. They say things like: "Europe is the continent of white people and it should remain that way." Many believe in a global Jewish conspiracy. They are much more radical than, say, Marine Le Pen's National Front party in France.
Still, these far-right parties have consistently earned a percentage point or two of the German national vote. And the economists found that they have been particularly popular with people who have been negatively impacted by trade.
How they measured the radicalizing power of trade
The economists took two different approaches to measure the connection between globalization and right-wing extremism.
First, using German data on elections, employment, and commerce, they showed that places where trade caused the most pain also had the largest increases in support for far-right parties. Over the past 20 years, Germany's exports and imports have both skyrocketed, first thanks to the fall of the Iron Curtain, then due to China's rise as a major manufacturer.
The researchers looked individually at Germany’s 408 local districts, which are roughly equivalent to counties in the United States. Each of these places was affected by increasing trade in different ways. Areas that specialized in high-end cars, for instance, saw a happy boost from expanded exports. Areas that specialized in, say, textiles, were stomped on by cheap Chinese and Eastern European imports.
This map shows changes in imports (bad!) compared to exports (good!). The dark blue regions are places where imports increased a lot more than exports. These are the places where trade made things worse, where people lost jobs and factories were shuttered.
These also happen to be the places where far-right parties made the most gains, on average. This is true after controlling for demographics in each county, the size of the manufacturing sector, and what part of the country the county was in.
The researchers argue that this relationship is more than just a correlation. To prove that trade caused far-right radicalization, they look only at changes to the German economy inflicted by external forces — say, a sudden increase in Chinese manufacturing capacity.
(Also, to get around the problem of German reunification, which happened in 1990, the researchers split up the analysis into two time periods. From 1987 to 1998, they looked only at West Germany. From 1998 to 2009, they looked at both regions.)
This evidence from patterns of trade and voting records is convincing, but there is one major hole. The turmoil from trade caused certain counties to become friendlier to extremist parties — but was it because the people living there became radicalized? Or did all the moderate voters flee those places, leaving behind only the crusty xenophobes?
So, to follow up, the researchers used a special German survey that has been interviewing some of the same people every year since the 1980s. This is a massively expensive project — the United States doesn’t have anything quite like it — and it allowed the researchers to actually observe people changing their minds.
Workers whose industries were hurt by trade were more likely to say they would start voting for one of the extreme right parties. Even workers whose own industries were unaffected by trade were more likely to support a neo-Nazi political party if they lived in a region hurt by trade.
In part, this is because trade affects more than just the people who lose their jobs when the shoe factory closes. Those assembly line workers need to find new jobs, and they put pressure on people in similar occupations, say, at the garment factory or the tweezer factory.
What this means for the U.S.
All in all, the power of trade to radicalize people was rather small, measured in changes of a fraction of a percent.
This makes makes sense, because, again, Germany’s far-right parties are way out there. It takes a lot of economic suffering to cause someone to start voting with these neo-Nazis.
Christian Dippel, one of the authors of the study, says it’s also important to look at the context in each country. The neo-Nazi parties happen to be the voice of anti-globalization in Germany. But in Spain, for instance, these views are the trademark of Podemos, a far-left party “known for its rants against globalization and the tyranny of markets,” according to Foreign Affairs.
The larger lesson, Dippel says, is that globalization creates a class of angry voters who will reward whoever can tap into their frustrations. These are usually extremist parties, because the mainstream tends to recognize the overall benefits of trade. “When the mainstream parties are all, in a loose sense, pro-globalization, there’s room for fringe groups to latch onto this anti-globalization sentiment and profit from it,” he says.
But is there an analogy between the far-right radicals in Germany and the wider group of disaffected working class Americans who, say, support Donald Trump or the tea party? Certainly leaders on the left also capitalize on anti-trade sentiment, but they usually use less harsh rhetoric or seldom attack immigration.
David Autor, a labor economist at MIT, has been working to address the question of whether the same dynamics are at play in the United States. But it’s a tough one, he says.
“What [Dippel and his colleagues] are doing is totally sensible, and I think the results are plausible as well — that these trade shocks lead to activity on the extreme right, that they bring about ultranationalism,” Autor says.
“We actually started on this hypothesis years ago for the U.S. to see if it could help to explain the rise of angry white non-college males," he said. "But so far, we just don’t have the right kind of data.”
Autor has shown that in America, recent trends in trade have hurt low-wage workers the most. With his co-authors David Dorn, Gordon Hanson and Jae Song, he published a widely cited 2014 paper measuring the negative impacts of manufacturing imports from China, America’s largest trading partner. Most of those ill effects — such as unemployment and lower earnings — were borne by the workers with the lowest wages.
The higher-paid (and probably higher-skilled) workers were able to find new jobs when their companies went bust. Often, they found jobs outside the manufacturing industry. (An accountant, for instance, can work anywhere.) But the lower-paid workers were trapped, doomed to fight over the ever-dwindling supply of stateside manufacturing jobs.
China, of course, has been in Trump’s crosshairs. He accuses the country of being a “currency manipulator,” which may have once been true, but not anymore. He has threatened to impose a 25 percent tax on Chinese imports to punish China.
But Trump has attracted the most attention for his disparaging remarks about immigrants — which is something of puzzle. While it’s true that non-college workers are increasingly competing with immigrants for the same construction or manufacturing jobs, Autor points out that there’s little evidence that immigrants are responsible for the woes of the working class.
“There's an amazing discrepancy between the data and the perception that I still find very hard to reconcile,” he says. “The data do not strongly support the view that immigration has had big effects [on non-college workers], but I don’t think that’s how people perceive it.”
“Immigration always seems to be the most tangible evidence of the impingement of others on your economic turf,” Autor adds.
Dippel says that conflating these ideas could be a political strategy. He makes a distinction between three different kinds of globalization — there's the worldwide movement of capital, goods and people.
“In Germany, these three things get bundled up in these far-right platforms in a way that’s very difficult to unpack,” he says. “It could be that you’re bundling these ideas together for a reason. It could be that you’re bundling together what’s really happening with an idea that’s more tangible, that you could sell more easily to angry voters.”