Can economic globalisation continue, despite the populist push-back against social globalisation?

If countries could manage migration more effectively, that would persuade their electorates to give greater support for globalisation more generally

Consumers still want cheap iPhones made in China, even if they resent other global consequences like immigration

Does the populist revolt now sweeping across the developed world mean that globalisation will be reversed? Donald Trump was elected on the back of nationalist populism. Theresa May will get her big majority in part because of her rejection of the globalist agenda of Tony Blair and David Cameron. Beyond the developed world populism has been harnessed by elected populist leaders such as Vladimir Putin and Recep Tayyip Erdoğan. One sentence of May’s caught the force behind the revolt with brutal clarity: “If you believe you are a citizen of the world, you’re a citizen of nowhere”.

The forces behind the rise in populism have been brilliantly analysed by David Goodhart in his book The Road to Somewhere, published in March. In it he describes how greater economic openness in the West has not benefited all of its citizens. The effect is that there is a now a new divide between the mobile people who feel they can achieve their own identity as global citizens – the people from Anywhere – and those who feel marginalised and identify with their roots – the people from Somewhere.

There are two sides to the revolt. In part it is a political and social movement, an assertion of identity, a desire “to have our country back”. But it is also an economic movement, a push against some aspects of a more global economy. Of course they are interlinked. But looking at the economics, nearly everyone wants the benefits of globalisation, such as an iPhone made in China, even if they resent immigration from Mexico or Continental Europe.

That leads to a huge question: can economic globalisation continue, despite the populist push-back against social globalisation?

This is the theme of a new book by Stephen D King, Grave New World – The End of Globalisation, the Return of History. He is senior economic adviser to HSBC, and Independent readers may remember that for many years he was the Monday economic columnist for the paper.

Until recently most people in the West, whatever their views as to its benefits or costs, believed that globalisation was inevitable. Kofi Annan, former UN Secretary-General, famously put it this way: “It has been said that arguing against globalisation is like arguing against the laws of gravity.”

But now globalisation is stuck. Take a simple measure. For the past three or four years international trade has no longer been rising as a proportion of global GDP. In fact it has fallen back a little. We also know what happened to the last great burst of globalisation at the end of the 19^th century. Anyone with a sense of history can pick up many uncomfortable parallels with the world of 1914 and today, including the rise of Germany then compared with the rise of China now.

King argues that if the US retreats from its overall support for globalisation, the progress of the past half-century is threatened.

“Successful globalisation,” he writes, “cannot be just a market-driven process. It must also involve cross-border sponsorship of both ideas and institutions that underwrite or obligations and responsibilities to each other … In the absence of firm US leadership – and persistently weak economic activity in the developed world – is there any future in Western-style globalisation? It is tempting to suggest not…”

He argues that people and organisations in the West have to defend globalisation by pointing to the inconsistencies in the arguments of those who attack it. For example, those who oppose the World Trade Organisation have to explain why the old world in which small countries could not challenge import restrictions by big ones (he quotes Ecuador tackling the US over a ban on imports of shrimps) was somehow better than the present one.

But he ends by saying that if the views of those who favour insularity and protectionism prevail, “it really will be a Grave New World”.

Too gloomy? Well I suppose the key questions are first, whether globalisation can sustain its present plateau, or whether we face a gradual slide into greater trade restrictions, or worse, tit-for-tat import controls; and second, whether once the present tensions and pressures are accommodated, globalisation can resume its upward path.

Part of the problem is that memories of the pre-globalisation world fade. How many people in the UK remember that until 1979 you were restricted on amount of foreign currency you could have when you went on a foreign holiday? It was called exchange control. Or that there was an import levy on a foreign car – though come to think of it, there still is if you bring in one from America?

Most of our new freedoms we take for granted: the ability to buy foreign goods, or to move money to friends or family abroad. There is understandably huge resentment towards companies that use such freedoms to avoid paying tax in the countries in which they do much of their business, but that is really a flaw in tax law rather than in globalisation itself. There is of course concern when companies shift production – jobs – abroad to countries where there is cheaper labour, but anyone who opposed that has to answer the question: do we really want to be a cheap labour economy? Where competition seems unfair, for example when a foreign company receives government subsidies, there are measures that can be taken to tackle this. As for foreign takeovers, no one seem to mind too much if foreign investors buy office buildings in the City of London, though we do deeply resent it when they muck up our chocolate bars.

There is however one aspect of globalisation that does cause the greatest tension, and that is the movement of people. The movement of goods, services, and money are all in some measure accepted. But people? No. All countries to some extent restrict migration and the question is surely how to order migration to the benefit of the largest number of people. Maybe it is too crude a way of putting it, but if countries could manage migration more effectively, that would persuade their electorates to give greater support for globalisation more generally. Otherwise I’m afraid we might move towards a graver new world economy.