Why do we build walls? This one graph explains…

Everyone seems to be building walls these days. The trend is epitomised in the demagoguery of American politics, but it would be a mistake to think that rising nationalism is an exclusively American trend. Europe is refusing migrants, Japan is rebuilding its military, Britain wants to leave the EU. People want walls, not bridges.

wall

It all seems so foolish. Why do we vote for Trump? Why do we hate refugees? Why do we build militaries and fight integration?

There are a lot of ways to answer these questions. You can gain insights from sociology, history, psychology, anthropology, or biology. One tool to help make sense of the choices people make is political economy, a lens which attempts to understand the world by looking at how people make choices based on our desire for power and money.

What can political economy tell us about why people want to build walls?

Let’s start with context. The world has gotten incredibly richer over the last 35 years. Most of this have to do with all the advances in transportation and communication technology that we now call globalisation. In 1990, the average person made just over $4,000 per year. Today that has risen to over $10,000!

With all this prosperity, why do people worry about Muslim immigrants and Chinese goods?

Screen Shot 2016-03-15 at 8.42.46 AMThe answer lies in the fact that all the benefits of economic growth haven’t been evenly spread. But this isn’t the usual “rich get richer poor get poorer” story. Branko Milanovic’s research helps explain. You can imagine that he lined up everybody in the world from poorest to richest, then asked them all how much more they were making compared to 1988.

The data don’t show any simple trend. Over the last three decades, there have been winners and losers from the globalisation-fueled economic growth. As is expected, the very richest have gotten richer, while the very poorest have stayed poor. Mark Zuckerberg got richer and Malawians stayed poor.

In the middle, however, things are different. The big hill shows where people in China, India, Nigeria, and Indonesia got up to a 75% raise. At the same time, people in the Americans, Canadians, and Europeans (75-85th percentile) got stuck, the best of them landing a 10% increase in income. Tyler Cowen calls this “The Great Stagnation” arguing that the US failed to grow because it hasn’t delivered any growth-creating inventions while developing countries got rich by playing copycat.

With this context, it is suddenly easy to understand why these people are angry, why they want to build walls. The forces of globalisation that doubled the size of the world economy left them behind. They look at either the 1% or the developing world and say: “That’s not fair!”Screen Shot 2016-03-15 at 8.42.46 AM

To the world, these are privileged polluters, but they see themselves as the losers and victims. Before you label them stupid or crazy, remember that their response to the world around them is in many ways rational. That doesn’t make their choices morally justifiable, but it whispers, “If in their position, you might start to think the same way”. It builds empathy.

It is easy to label Trump-supporters and European refugee-haters barbaric. It is much harder to embrace their fellow broken humanity and work toward a better solution.

I see two ways to do this:

The first is to broaden people’s views. Just like this post helped your understand another person’s perspective, we can help people see how globalisation has lifted billions out of poverty. Political economy assumes rational self-interest, but I’m yet to be convinced. With perspective, people may be willing to let others win a bit.

The second is to start making things grow again. Building walls like patents, borders, and tariffs through policy have an important place. However, investing in research, innovation, and human capital can also spur the growth that has sputtered off. We can build better things than walls.

 

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2 thoughts on “Why do we build walls? This one graph explains…

  1. Wow, Jacob, I am so impressed at your ability to take a humongous complicated world issue and squeeze into a little complicated blog post. I appreciate the new insight I now have into how economic growth has been unevenly spread in the last few decades and how that may be affecting people’s desires to build walls.

    Like

    1. Thanks!
      I’m glad you learned from it– though I will have to qualify (see my response to Kjelle on facebook) that taking just this one lens can be a gross simplification. A more honest (but less catchy) title for this post might have been “Here’s one of the reasons that might be contributing toward the general tendency among some people to try to build walls”

      Like

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