How should Europe manage the rise of nationalism?

The United Kingdom’s recent general election provided a clear example of how the question of national identity is reshaping Europe’s political landscape. The Scottish National Party, embodying a left-wing version of identity politics, wiped out Labour in Scotland, allowing the Conservatives to gain an absolute majority in Parliament. The government of Prime Minister David Cameron – who has focused on British identity, rather than the UK’s common destiny with Europe – will undoubtedly hold a referendum on the UK’s continued membership in the European Union, with unpredictable consequences.

For decades, political debate in Europe focused largely on economic institutions and policies. Conservatives argued for a private sector-driven economy, unfettered markets, low taxes, reduced government spending, and limited public goods. Liberals and social democrats supported a private-ownership economy, markets, European integration, and increased trade, tempered by substantially redistributive taxes and transfers, a strong social safety net, and some public ownership in areas such as infrastructure and finance.

In this bi-polar system, the parties differed on the nuances of economic policy, but broadly agreed on democratic values, the European project, and the need to adapt to and manage globalization, rather than reject it wholesale. But, with the growing success of appeals to identity and renewed ethnic or religious nationalism, that is changing. Are the ghosts of the early and mid-twentieth century returning?

The question is particularly relevant for Europe, but it also has global significance. In the Middle East, for example, identity politics is manifesting itself in its most sinister form: a chaotic and violent clash between Sunni and Shia Muslims, exemplified by the rise of the Islamic State.

Loyalty to a perceived identity can have innocuous and enriching components, such as, say, the promotion of a regional language. The problem with identity politics is that it places the “in” group at odds with the perceived “other” – an approach that can easily foster chauvinism, invidious discrimination, and open antagonism.

One major reason for the resurgence of identity politics in Europe is globalization, which has limited the capacity of countries or peoples to control their economies. Indeed, the global economy has become so interconnected, and world markets so powerful, that there appears to be little scope for national policies to disrupt hyper-mobile capital flows.

While globalization has helped to boost overall prosperity, it has been most beneficial for those who form the new global elite. Meanwhile, many people in Europe face greater economic insecurity, owing to new technologies or competition from lower-cost workers elsewhere. Unless they can upgrade their knowledge and skills – and, in some cases, move to a new industry or location – they face constrained economic opportunities. These disadvantaged groups are particularly large in the countries that were hit hardest by the recent global financial crisis and now struggle with high unemployment.

But even people who are relatively prosperous are frustrated by some features of globalization. They may oppose the use of their taxes to “subsidize” poorer people who do not share their identity, such as immigrants, French-speaking Belgians, southern Italians, or Greeks.

When it comes to trade protectionism, European integration, and economic globalization, those on the far right and the far left often share the same views. In France, for example, many supporters of the National Front voted communist 30 years ago. And, indeed, the National Front’s economic program is rather similar to that of the Left Front (an electoral bloc comprising the French Communist Party and the Left Party).

Of course, when it comes to immigration and human rights, the internationalist ideological tradition of socialism prevents extreme nationalist and racist discourse on the far left. But, given that these parties are competing with the far right for the same disenchanted voters, their humanism on these issues has become a severe political handicap, which may explain why the extreme right has lately been more successful electorally.

Meanwhile, the rise of identity-driven political movements presents a huge challenge for Europe’s traditional political parties. Mainstream conservatives, widely perceived as being in thrall to the economic interests of the wealthy, must find ways to appear populist – but without sounding too much like their far-right competitors on immigration and human rights. Cameron has succeeded in this delicate balancing act – and has been rewarded by voters. Mainstream Republicans in the United States, pressured by the more extreme forces within their party, face a similar challenge.

For center-left parties, the task is even more daunting. They must offer voters a realistic economic program that is market-friendly and open to international trade, while promising tangible benefits to the poorer 60-70% of the population who are understandably frustrated with their lack of economic progress. If a left party’s economic policy is perceived as a weak copy of the right’s agenda, the poorest segments of the population will gravitate to chauvinist forces and their false promises of protection from the consequences of globalization.

The upcoming elections in Spain, Turkey, Denmark, and Portugal – not to mention next year’s US presidential election – will present their own versions of these challenges. The left, in particular, will have to defend the principles of equality and democracy, while finding ways to manage irreversible globalization, including through international cooperation. The great paradox is that if the rise of identity politics continues, governments will be even less able to address the problems that are fueling it.

This article is published in collaboration with Project Syndicate. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Kemal Derviş, former Minister of Economic Affairs of Turkey and former Administrator for the United Nations Development Program (UNDP), is a vice president of the Brookings Institution.

Image: Flags of European Union member states fly in front of the European Parliament building in Strasbourg. REUTERS/Vincent Kessler