Inequality fuels globalization backlash

2007

A popular backlash is growing throughout the world's most developed economies against economic globalization, large corporations and the income inequality manifested in excessive executive pay.

A survey carried out for the Financial Times in Britain, France, Germany, Italy, Spain and the United States has revealed that deepening concern over the effects of globalization is being reflected in increasing hostility towards big business.

In none of the countries surveyed did a majority of people believe that globalization was having a positive effect, while in Britain and the US – where political support for globalization is at its strongest - fewer than one in five felt that globalization was beneficial.

This discontent is still more marked in attitudes towards those who run large companies. In all the countries surveyed except Italy, a mere five per cent per cent said they had a great deal of admiration for corporate bosses.

Britons and Americans emerged as being the most cynical of all, almost four out of 10 (38 per cent) of those in the UK saying they feel no admiration at all towards those in charge of large companies.

Much of this mistrust of big business and its bosses seems to stem from fears of growing income inequality fuelled by levels of executive pay that are almost universally viewed as unjustifiable.

More than three-quarters of people in every country except Spain said that inequality was widening while a large majority – including in the US - supported increased more taxation for highest earners.

In the UK, this sentiment was particularly marked, with eight out of 10 saying that bosses were paid too much and six out of 10 saying they ought to pay more tax.

Across Europe, this anger led almost two-thirds of respondents to call for legal caps to be set on bosses pay, something that almost a third of those in the US agreed with.

But despite such widespread fears of globalization, the principle of free trade and free competition still attracts overwhelming support among Europeans – although tempered in France, Germany and Spain by a desire for greater political involvement in managing the economy.

As the Financial Times points out, the depth of anti-globalization feeling uncovered in the survey will dismay policy-makers and corporate executives and could open the way for populist politicians to win support by anti-globalization rhetoric and promising greater regulatory control of economies.