Regional Inequality Looms as Pressing Threat to Democracy
Now is the time to rise to a new political, economic, and social challenge, one rooted in growing regional inequalities that threaten democracy and the broader international order.
On his recent European trip, President Joe Biden successfully rounded up support from the traditional allies of the United States and pointed them at a common objective. Together, they could demonstrate that democracies can outperform authoritarian regimes in delivering both economic prosperity and political freedoms. Although Biden sought to face down the meddling coming from Russia, his main emphasis was on what he believes to be a far more significant adversary. The president urged members of the G-7 summit, NATO and the European Union to focus on strategic competition with China for global political and economic high ground. Also, he encouraged them to counter China’s efforts to replace the open, rules-based, economic and trade regime organized by the United States and its allies with a closed model of authoritarian state-backed trade and development.
It is important to rebuild the democratic alliance to continue to assert U.S. values abroad and protect democracy from geopolitical adversaries on the global stage. The most significant and immediate threat to democracy emanates from neither China nor Russia, but from within America’s borders. U.S. failure to diminish geographic economic disparities and opportunity gaps—particularly those between thriving global city-regions and struggling communities in industrial heartland regions—poses the most imminent challenge to the stability of political order on both sides of the Atlantic Ocean.
These older industrial communities often yield outsized influence on political outcomes in democratic countries. They are, by extension, the geopolitically significant places where many residents feel ignored or, even worse, looked down upon and patronized. This, coupled with economic anxiety, concern about losing one’s place in a changing world and perceptions that these communities are in decline, leads proud residents of industrial regions to embrace messages of nativism, nationalism, isolationism and economic nostalgia that are peddled by right-wing populist leaders. These populist movements encourage anti-democratic behaviors—distrust of institutions and the press, breakdown in support for the civil rights of others—nurturing the fierce political polarization that is undermining Western democracies.
“High-income democracies are right to wish to protect their core values. But the principal threat to these comes not from China, but from closer to home,” according to economist Martin Wolf. “It is the failure to ensure widely-shared prosperity and defend democratic norms.” By neglecting to attend to growing income and opportunity disparities among various communities Wolf argues “it has, alas, been our elites, not China’s, that have caused this damage.”
These anti-elite and anti-democratic populist sentiments will not change until their root causes are addressed. There is good evidence demonstrating that when older industrial communities continue to decline, residents are receptive to the polarizing messages of populists and nativists. At the same time, accumulating evidence suggests that when older industrial communities secure new economic footing, anxiety and fear among their inhabitants give way to optimism and hope for the future.
These regional-political dynamics are well understood in the United Kingdom. It is here where questions of how best to reach people who reside in struggling cities and towns and what to do to help “level-up” those communities as compared to more prosperous areas are the focus of heated discussion and debate. In an otherwise polarized political landscape, “leveling up” may be one of the few issues on which a large majority of the public agrees. A major new UK study illustrates this point. Public attitudes concerning different forms of inequality show a rare point of agreement among the British public on the need to tackle regional inequalities.
Similarly, in the United States the unabated fervor of a national minority, one that is concentrated in manufacturing communities still in decline, along with economically dormant small towns and rural areas, keeps the flame and threat of “Trumpism” alive. In the United States, as well as among the democratic allies of the United States, a sizable majority rate the greatest threat to democracy as linked to income inequality. This dwarfs the number of people who see China as the chief menace. The concern over widening economic disparities between U.S. coastal cities and a left-behind industrial heartland was growing even before the pandemic. Seizing the moment of the coronavirus economic crisis and eager to drive a more equitable economic recovery (and at the same time compete economically with China) recently enabled a rare passage of bipartisan legislation—the Endless Frontier Act, which includes support for Heartland Innovation Centers to stimulate economic growth in non-coastal regions.
In contrast to the history of the United States, which has never had a strong, durable national commitment to focus on the economies of struggling regions, most European countries, supported by the EU, have prioritized regions undergoing structural economic transition. While there have been some occasional efforts in the UK, these have been largely ineffective and successive governments have preferred a laissez faire hands-off approach. Perhaps the most robust and effective efforts have been made by the German government, which has had multiple decades worked to overcome regional divides and to smooth the economic transition in regions historically reliant on heavy industry. This effort, in part, emanates from a commitment embedded in the German constitution, which obliges the federal government to equip the governments of federal states with the financial means to ensure uniform living conditions throughout the country. This may explain much about Germany’s relative economic success in supporting structural economic adjustment in older industrial regions like the Ruhrgebiet and former East Germany. But the perceived top-down “we know what is best for you” approach, particularly as applied to redevelopment of the former GDR, still appears to foster alienation and even greater support for populist, nationalist parties like the AfD.
France is also facing an uncertain contest between the views and values of “urban” elites and residents of what is known as “La France Profonde,” rural and previously thriving industrial heartland regions. The country’s “yellow vest” protests that began in late 2018 included strong support from France’s older industrial zones as well as rural hinterlands. It is in this part of the country where many citizens believed that a proposed fuel tax hike was an unacceptable economic hardship. These regions are also where the far-right National Rally and Marine Le Pen found majorities in the 2017 presidential election, which Emmanuel Macron won. This area remains a base of support and Le Pen is looking to build on that support in the presidential election contest later this year.
The importance of helping once-thriving industrial communities and regions develop and animate a new, bright future was the focus of a recent transatlantic symposium, Revitalizing Industrial Regions in Europe and North America: An Urgent Item for the Transatlantic Agenda. Over one hundred federal, state, local leaders, practitioners and academic experts from eight Western nations convened to discuss during the symposium the causal link between deindustrialization, the rise of right-wing populist movements, and how policymakers can help reverse these worrisome trends by transforming industrial regions and creating new opportunities for their residents.
We learned that to be effective in aiding still struggling communities, policymakers must first view the world through the eyes of the residents: hollowed-out communities, the loss of local schools, health care facilities and sports leagues, degraded Main and High streets, lost cultural facilities, pubs and bars, union halls, local papers, family-owned shops and restaurants. At issue is the loss of identity and of institutions that construct and reinforce that identity—all attributes of civic pride that were built when these local economies were strong.
A first step on the path to new hope and optimism in these communities will come when leaders understand these issues and then provide the resources to begin mending the tears in the economic and social fabric of the communities. If done well, then this can create a community of trust among the region’s residents, local leaders and their national counterparts. Trust is essential since it will nurture support and acceptance of additional investments that can move their economies forward in more substantive ways—investments in people, infrastructures, skills and innovation.
At the symposium, we also learned that for the most part plans for effectively transforming these regional heartland economies have to come from within. Change cannot be done “to” or perceived to be coming “from” others. This has been the standard template in the past: well-meaning West Germans teaching their fellow eastern Germans how to grow their economy; the EU instructing Central Europeans that they must “go green”, or in the UK perceived to be bossing Britains on how to run their country; coastal progressives in the United States offering “solutions” for people and places in the Heartland. All these well-intentioned efforts have the unintended consequence of triggering negativity, resentment, reminding industrial community residents of their loss of control.
Solutions for the future have to come from local leaders and residents in the affected regions. Here, the recent past is the best guide. From Milwaukee, Wisconsin to Sheffield, England and Windsor, Ontario to Germany’s Ruhr Valley, effective transformational strategies enabling industrial regions to find new footing in a globalized, technology-laced knowledge economy have come from within.