The Global Midwest

Richard Longworth is senior fellow at The Chicago Council on Global Affairs and the author of Caught in the Middle: America’s Heartland in the Age of Globalism, on the impact of globalization on the American Midwest. He also is a distinguished visiting scholar at DePaul University, an adjunct professor of international relations at Northwestern University, and a mentor at the Harris School at the University of Chicago. Longworth joined the Council in 2003 as executive director of Global Chicago after a career in journalism. For 20 years, Longworth was a foreign correspondent for the Chicago Tribune and United Press International, and was the Tribune’s chief European correspondent. 

Based on your research, can you briefly summarize the impact of globalization and increased international trade on the Midwest?

The impact on the Midwest itself has been pretty dire. Now you can’t blame globalization solely for this, but the fact is that globalization has exposed the Midwest to competition from China and other relatively low wage countries in precisely the industries that have been the basis of the Midwestern economy—that is, large scale and heavy manufacturing, particularly in autos and auto parts supply, and, etc. Many Midwestern communities, both large cities like Detroit and many smaller factory towns like Rockford, existed to serve companies that were leaders in this type of manufacturing.

These communities have relied on these industries and companies for their identity. That has all changed.

The economy has been declining for some 30 or 40 years, and historically much of the Midwest met this decline with denial, believing that the good old days were going to come back. Globalization has made these trends permanent, and I do believe from my conversations in the Midwest that this denial has ended. Midwesterners know what’s going on, but this new reality has been met with shock, anger, resentment, confusion, and, belatedly, a willingness to recognize that this region must reinvent itself in order to survive economically.

What are the prevailing attitudes of Midwesterners on this impact? Do Midwesterners have an accurate picture of globalization and its impact on their region?

Interestingly, we can detail this precisely:  Monmouth College, which is small college in Monmouth, Illinois, has begun a program called the Global Midwest Studies. Monmouth did a poll in the spring of 2011 on Midwesterners’ attitudes towards globalization. On the question of whether Midwesterners have gained or lost in the globalized economy, 64% of respondents said that Midwesterners have lost in the globalized economy, while 20% said Midwesterners have gained. On the impact on manufacturing in the Midwest, 72% of the respondents said it’s harmed manufacturing, and only 16% said it helped.

On agriculture in the Midwest, an area where we export all sorts of products, you would think the response would be more positive. Instead, it’s about a draw: 30% said that globalization hurt Midwestern agriculture, 31% said it had helped, and the other 39% had no opinion. This has tracked similarly with polls done across the country, where, generally speaking, globalization has a bad reputation. But Midwestern statistics are sharper and more negative.

Now, you ask whether Midwesterners have an accurate picture of globalization and its impact on their region. I think that is probably two questions. Globalization is a massive, immensely complex phenomenon. Almost no one totally comprehends it, but Midwesterners, I think, certainly have an accurate picture of the impact on their region because they live with it every day.

I think Midwesterners, when they start to think about it, realize that globalization truly is drawing hundreds of million of persons around the globe out of poverty and raising them to some level of economic decency. Midwesterners are good people, and they celebrate that trend. But they also sense that much of this positive movement elsewhere is being done on the backs of Midwestern workers and they cannot be expected to see that as a fair deal.

How do you see these attitudes mapping into politics at the state and local level here in the Midwest?

It’s a big political issue. Any politician has to take these attitudes into account.

Approximately 60-65% of the people are opposed to the way the economy is going. If government is going to retain support for open trade and open markets, it has to answer these concerns. Other countries that have traditionally done more trading than the U.S. typically have a stronger safety net because they realize that open markets can cause dislocation. We have never had that strong safety net because trade has traditionally been a smaller part of our economy. Now it is growing and the pain is there. This pain is expressed in the polls, and government has to answer to it.

I think Tea Party activism and other protests on the right and left are product of the decline in many regions and cities in the Midwest. It’s a result of the inequalities and the divisiveness of the American economy today. People, whose lives have been uprooted by global forces, look to their governments for solutions and they’re not seeing any.

Lecturers by government officials and academics about the glories of free trade and free markets fall pretty harshly on people who are seeing these markets at work. So far there’s been no huge protectionist upsurge in the Midwest. This surprises me, but it’s not there. There are no huge demands for protectionism, although that Monmouth poll indicates the potential is there. Eventually, if people are left with nothing but their vote, they will withdraw from an economic system they see as unfair. And if government isn’t worried about this, it ought to be.

My feeling is that the body politic, generally, is doing virtually nothing to prepare Midwesterners for increased globalization. Too many state governments have declared war on workers just when they are down. The Midwest needs more and better education, more and better infrastructure, and more venture capital. Instead, most Midwestern states are cutting spending in these areas, especially in education, and that is just plain suicidal.

Are there any specific actions Midwesterners can take to prepare for increased globalization?

Yes. Educators from K-12 through universities have to realize we are in a new era. Kids with only a high school diploma—let alone the dropouts—will be virtually unemployable. More emphasis has to be placed on community colleges, which are really on the front line. Big research universities have to start working together, leveraging their formidable brainpower to produce the industries of the future. A regional Midwestern venture capital fund, or fund of funds, can help make up for the shocking lack of venture capital in these regions.

States like Illinois, Wisconsin, and Indiana have to stop warring with each other and cooperate to make Midwest a true region, not a grab bag of balkanized, incompetent states. Sure, once upon a time maybe Illinois did complete with Wisconsin or Iowa or Ohio, but that day is gone. Today the real competition is 10,000 miles, and it’s eating our lunch.

I would like to see some real Midwestern cooperation across the region.  The Midwest should market itself as a region around the world, set up a real powerhouse marketing operation that would draw foreign capital to this region. We need a Midwestern caucus in congress to press the region’s needs, and we really do need a truly high-speed rail network to tie this region together. I think mostly, like all Midwesterners, we have to realize that the old industries that kept us alive are gone, and then invent the new ones that are appropriate to the 21 century. We’ve still got steel. We’ve got autos. We’ve got other firms in manufacturing, and we have to keep them because they are productive, but they do produce fewer and fewer jobs every year. Like farming, they are important to our economy, but less so to our overall society.

What is the most important idea or recommendation that you would like to impress upon policy makers regarding the impact of globalization and international trade on the Midwest?

We have to look at where we are. Globalization is recreating the nature of our society. It is, after all, driven mainly by the great global corporations, many of which are the same corporations that powered the Midwestern economy in the industrial age.

Now these corporations have gone global. They have gone to a new universe where Midwesterners, our workers and government, cannot follow. For many of these corporations, most of their workers and most of their customers are outside the United States. Their headquarters may still be here, at least for a while, but they are global corporations now, not American corporations. Asking these corporations to behave like American firms, or show some sort of American patriotism, is no longer realistic.

These corporations do retain the financial power here to drive critical agenda, or at least prevent government action, such as higher local taxation or limits on their outsourcing. You see this taking place now with the growth of the super PACs and their impact on the Republican primaries. We are looking to the traditional leaders in the federal government to halt the decline, and this too is not going to happen. We are on our own to reinvent our region and our communities.

We need to turn a deaf ear to corporations begging for tax breaks and use the money instead to invest in new ideas, new industries, and the education that will produce them.

Feature photo:  cc/Page Dooley