October 19, 2017
Ari Afilalo, Dennis Patterson

By Jeanne Leong

Research by two Rutgers Law School professors traces the economic and cultural roots of populist and nationalist movements in the United States and Europe, including the United Kingdom’s “Brexit” vote to withdraw from the European Union, the rise of the extreme-right parties in France and Germany, and the election of Donald Trump as president of the United States.

Ari Afilalo and Dennis Patterson suggest that throughout the Western world, and especially in the United States, people are angry that they haven’t benefited from globalization.

In the United States and other Western countries, Afilalo and Patterson say there has emerged what they call a “chronically excluded class” that has lost the economic security that it enjoyed in the 20th century. Afilalo and Patterson say the “chronically excluded” have reached the boiling point, and they’re angry because there are currently no opportunities to regain economic security.

“People have a right to be angry because they have not benefited from globalization in a way that the top tier of society has,” says Patterson, the Board of Governors Professor of Law at Rutgers Law School’s Camden location.

Afilalo and Patterson say the U.S. government is failing to provide its people with social and economic security because it uses obsolete policy tools from the 20th century. They cite the federal government’s policies after World War II, when the government delivered economic security by relying and legislating around a base of corporate employers providing a massive supply of stable careers in manufacturing, services, and other jobs.

“It used to be that you go to work for a corporation and you were a loyal employee for your whole life, you got a pension and you were good. That paradigm is gone and it’s not coming back,” says Patterson. He says part-time work, platform economy, and moving from one job to another will replace the old workplace model. Patterson says the federal government should be working on a plan to create security for people in that environment.

According to Afilalo and Patterson, the Western nation-state is in crisis because manufacturing and retail jobs were traded away to emerging economies. They also point to other changes, such as automation and the platform "gig" economy eroding the career-based model of work, the skills gap between the new type of jobs created in large quantities and the declining middle-class workforce, and the fact that more than 90 percent of new entrants in the global middle class come from Asia and other emerging markets.

Afilalo says half of the world is now middle class. “If I am in Indonesia, I’m happy to become a member of the middle class. I get my basic goods that I did not have before. If I am the same person in Appalachia, then I am going down,” says Afilalo. “They are going from manufacturing to the retail services industry, which is being devastated with the advent of technology.”

Afilalo’s and Patterson’s findings are a part of a decade-long research project on the role of a nation-state as the provider of economic security and opportunity in globalized markets.

They say the U.S. government needs to revamp the way economic policy is structured. They want a government that enables economic opportunity for the chronically excluded and provides social protection that is not dependent on a career-type, long-term job. Examples include a portable social account that would be a vehicle to enable business in the gig economy, and public-private partnerships to create jobs programs that train and link the chronically excluded to the skilled job openings that abound in the United States.

Patterson and Afilalo say that some reforms to the trade system are necessary, but that a return to protectionism would harm U.S. interest. “If President Trump has his way, the economy will be far worse off than it is now,” says Patterson. “Protectionism has never resulted in economic growth.”

The results of their research will be included in a book by the Rutgers–Camden scholars that’s scheduled for release in the fall of 2018.

Patterson is teaching a course on contracts this semester. In the spring, he’s teaching a seminar with former Rutgers Law School Dean Ray Solomon on the changing nature of work and regulation, which will cover globalization.

Afilalo teaches a contracts course this semester, and will teach a globalization-heavy course in international trade and business transactions in the spring that covers the international trade system, international financial and investment rules, and the private law of cross-border transactions.

For students interested in international law, Patterson suggests that they study economics and political theory, and to travel widely. Patterson spent the last eight years living in Italy while he was on leave from Rutgers Law School and learned more about Europe and the European Union. Afilao recommends that students learn one foreign language. “Spanish and French are obvious candidates,” says Afilalo, “But I also think that to the extent practicable a student should strive to speak any language used in the Arab or Asian markets; that would give her or him a great comparative advantage.”

Rutgers Law Media Contacts:
Mike Sepanic (Camden); Elizabeth Moore (Newark)

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