Cities vs. the Countryside and the Future of the International Order

In recent elections around the world there has been a trend toward populism and protectionism. But most of the support for candidates representing these viewpoints has come from rural communities. Stefan Steinicke looks at what this could mean for the future of global politics.

Recent elections and referendums in the UK, the US, and France have shown a rise in political polarisation between cities and the countryside. The reason is quite simple: cities and their inhabitants are the main beneficiaries of globalisation. Because of structural changes to the global economy and accelerating urbanisation, city economies are set to profit even more going forward. As a result, domestic political polarisation between globalists and nationalists, a cleavage that tends to align with the divide between cities and countries, is likely to remain high. This polarisation has serious consequences for the existing liberal international order. Many countries that staunchly defended this open and cooperative order are now withdrawing from the international stage. Cities must emerge as new defenders of the old order to uphold liberal values and to protect their political and economic interests.

The Growing Political Polarisation and its Economic Causes

In the Brexit referendum, London and most of the other major cities in the UK voted overwhelmingly in favour of remaining within the EU. In the US presidential election, Donald Trump won largely because of support from the countryside while Hillary Clinton took the cities by wide margins – even in states where Donald Trump won (e.g. Texas). And finally, in the French presidential election, Emmanuel Macron won in Paris and other big cities while Marine Le Pen’s voters were predominantly from rural areas.

The Brexit camp, Donald Trump, and Marine Le Pen share some views about domestic and international politics. First, they are all sceptical about the benefits of the current global trade system – the foundation of globalisation – for their respective economies. Second, they warn against migration. In their eyes, migrants steal the jobs of their fellow countrymen and women. Third, as a result of the first two positions, they challenge the legitimacy and usefulness of the institutions and mechanisms underpinning the current international political order. Instead, they favour closing their economies and societies by building literal walls or getting rid of supranational forms of organisation. By doing so, the argument goes, they help to protect their citizens from ‘evil’ outside forces, to which they attribute the current economic malaise.

On the other side, the ‘remain’ camp in the UK argued for continued integration with the EU (the world’s largest single market) and all its free-trade benefits. Hillary Clinton emphatically campaigned in favour of minority groups and immigrants. Emmanuel Macron offered a political vision of deeper and stronger European integration in order to improve the position of the EU (and thus France) in the global economy and international affairs.

Why are cities so clearly in favour of these latter approaches while the countryside votes in favour of the former? A simple but quite concerning answer is that cities, to a large degree, stand to profit more from globalisation and the principles of openness and cooperation that characterise the international order. Company headquarters, banks, government agencies, the world’s most prominent universities, start-ups, media outlets, etc. tend to reside in urban settings. Hence, cities offer economic and growth opportunity. As the global economy has shifted from a physical to service-based economy, the countryside has experienced depopulation as those who can afford it move in ever larger numbers to the cities – a vicious circle that only increases the existing political cleavage between cities and the countryside.

What are the implications of this growing gap? In domestic politics, we will have to get used to a more fragmented political system. Since the industrial revolution, Western societies have been divided into left and right, communists and republicans, social democrats and Christian democrats. Nowadays a second divide is emerging: It is globalists versus anti-globalists, internationalists vs. nationalists.

Two Accelerators of the Growing Divide between Cities and the Countryside: The Structural Change to the Global Economy and Accelerating Urbanisation

  1. The global economy is in the midst of transforming from the industrial to the digital age. Since the global financial crisis of 2008, global trade of goods has declined. Trans-national digital transactions, however, grew 45-fold between 2005 and 2014. Not surprisingly, the world’s top five most valuable companies are now all in the digital realm (Apple, Alphabet, Microsoft, Amazon, and Facebook). Other internet-based companies in the service economy such as Airbnb and Uber mainly see people in urban areas, not those in the countryside, as their customers. New technological innovations have resulted in the large-scale loss of manufacturing jobs. In the US alone, 6.5 million people lost their jobs as a result of automation.
  2. We live in the age of the city. The scale and speed of global urbanisation is unprecedented. Already, 50 percent of the world’s population lives in cities. Cities are responsible for 80 percent of global GDP growth. 42 cities are among the world’s 100 largest economies (nation-states, cities, corporations) measured in economic output. Tokyo is in 14th place, ahead of countries like Saudi Arabia and Canada. New York follows in 19th place with a larger economy than that of Iran,

There are three main reasons for the growing economic importance of cities. First, within the next few decades an additional two billion people will move to cities. The largest share of global migrants moves to cities, too. Second, more people in the cities mean more potential customers for ever-more digital services. As more potential consumers live in the city, more people will offer their services on a gig basis in urban areas. Third, climate-smart transformations of existing cities via digital innovation and green infrastructure will be necessary to accomplish the Paris Climate Agreement target to limit global temperature increase to 1.5°C. Cities consume about 65 percent of the world’s energy demand and produce 70 percent of global greenhouse gas emissions. Innovations in the green economy are likely to happen in the city, which will generate new jobs and growth. Ultimately these two trends will have significant consequences for global affairs.

Implications for the Future of International Order

The international order is crumbling. The US, which has been its most important guarantor, seems no longer willing to uphold the liberal order of the last 70 years. The Trump administration’s scepticism of the World Trade Organization (WTO) and the primacy of international law is disquieting. In the UK and France, two other permanent members of the UN Security Council, parts of the political class and the population are looking inward as well. The Brexit vote and the unprecedented success in the French presidential election campaign of both Le Pen’s Front National and Mélonchon’s La France Insoumise – both decidedly anti-globalist – are reminders of growing nationalist tendencies.

But cities are stepping in – at least in those areas where they are most affected. Three issues where cities will be at the frontline of international politics are the fight against climate change, solving the migration crisis, and upholding global trade. Right after the Trump administration’s decision to withdraw from the Paris Agreement, US cities stepped up to underline their commitment to implement the Paris roadmap. Cities also overwhelmingly embrace migration as they compete for the most talented, educated, and innovative people. In a knowledge-based economy, cities are open to the world, as their companies’ innovation capacity rests on the in-flow of a diverse set of people. Cities cannot easily shut their doors to the global trade patterns that help them prosper.

While nations argue over abstract immigration quotas or climate targets, mayors have to cope with the impact of migrants, refugees, and climate change on their cities. The implication of this urban imperative is obvious. Whenever city governments feel directly affected by global affairs, they will act on their own – even if they come into conflict with their respective national governments. And as cities become more connected, they will put their collective political weight into global governance discussions. Their next step is the development of a new voice in global governance: The Global Parliament of Mayors.

 

Stefan Steinicke is a Berlin-based policy analyst. Follow him on Twitter at @s_steinicke

The opinions expressed in this blog contribution are entirely those of the author and do not represent the positions of the Dahrendorf Forum or its hosts Hertie School of Governance and London School of Economics and Political Science or its funder Stiftung Mercator.