The Fear of Population Replacement
October 25, 2019
East European populations are (again) in the process of understanding the insights of their son, Karl Polanyi. After writing The Great Transformation and explaining why market utopia leads to the need to regain a “protective cover” against systems of “crude fictions,” in 1945 Polanyi also argued that the introduction of a free market would lead to crazy nationalism in Eastern Europe:
“If the Atlantic Charter really committed us to restore free markets where they have disappeared, we might thereby be opening the door to the reintroduction of a crazy nationalism into regions from which it has disappeared.” (Polanyi, “Universal Capitalism or Regional Planning”)
Chris Hann, in his most recent book Repatriating Polanyi, also claims that the deeper causes of the rise of nationalism in Europe are the institutions of a “global neoliberal order.” In this short paper I argue that demographic changes in a global neoliberal era have pushed humankind – and within Europe, East European and (as a test case), very importantly, Hungarian societies – to look for some protection against a global market utopia. These societies reject capital’s interest in replacing missing or outgoing domestic populations with migrants uprooted from regions outside of neighboring countries.
Global level factors
The neoliberal era beginning in the late 1980s has witnessed a number of very important changes in global demographic processes which can make migration a far more controversial issue than in previous periods.
- During the period of globalization, migration has been increasing more rapidly than population, while fertility has been continuously declining, causing serious aging of the population. In the meantime, the improvement in the mortality rate has slowed down a bit as compared to previous periods.
- Behind the growth in migration is the key role played by the increased mobility of capital, which disembedded and uprooted large segments of societies globally. The resultant economic restructuring and loss of stable jobs have made everyday work and family life far less stable and increased a sense of insecurity.
- The debates on migration (based on historically inherited discursive patterns of controlling versus promoting migration) have become fiercer due to increasing welfare benefits and labor competition. This is related to the following interlinked factors: continuous aging of the global population due to declining fertility; the observable decline of the labor force participation rate in active age groups; a minor convergence of wages in which the privileged groups of the West experienced little or no wage increase; and the overall stagnation of redistribution levels since the mid-1990s, as explained by Böröcz in a 2016 paper on “Global Inequality in Redistribution.”
European level factors
The historically low fertility of Europe compared to the global average, and the continued above-average aging while losing some of the mortality advantages of the continent, point towards the increased importance of demographic factors in explaining why all of Europe has become so anxious about migration. It is related to the paradoxical migration versus welfare competition in a neoliberal era. The mobility of capital has been very high (the net flow of Foreign Direct Investment has been above global levels). Europe’s complexly embedded socialist economies were dismantled for the sake of this mobility, which in itself led to massive loss of jobs and massive population mobility in an open, but unequally developed space. We also see that Europe as a privileged region in terms of per capita economic well-being has been experiencing a decline of global significance while continuing to have high - and above global - levels of migration.
Regional and local level factors
If we compare long-term employment we can see that from an all-time high - well above global levels - in the 1980s in East European countries, labor force participation rates fell well below European and even global levels in the 1990s and 2000s, before climbing back in the 2010s. Thus, there were two lost decades, which had a major impact on these societies.
This period of shock economics meant massive disembeddedness and uprooting. As Hann argues, this meant that radical macro-level changes went blatantly against the norms and everyday practices of people in the transition to “market society.” Concerning immigration, the key feature is that the whole region, including Hungary, sends large flows of people to the West but only receives migrants from the immediate region; further links are rare and relatively weak. According to the United Nations, in 2015 more than 25 million people who were born in the smaller states of Eastern Europe did not live in their country of birth; meanwhile, the total number of immigrants, mainly from the immediate region, just exceeded 10 million, indicating large-scale population losses.
The consequences of the unequal exchange with Western countries (capital moves in and labor moves out) - loss of labor and skills; an increasing mismatch between labor demand and labor supply; and loss of social and tax payments, especially within the overall process of ageing - are serious from the point of view of the nation-state and its social welfare system. It may be possible to argue that, as opposed to the global - and to some extent even European - tendency toward stable population growth there is a threat that some countries in Eastern Europe will be unable to function from a demographic point of view without huge tensions in their already truncated social welfare systems. This can explain why some East European populations are so open to fears of a population exchange.
We can argue that the interest of business and capital is clearly in a “fictitious exchange of migrant labor.” In a neoliberal framework they are happy to take labor out and offer the sending regions the opportunity of “importing” equally abstract labor. This is rejected by the local communities and some nationalist governments as being a catastrophic option in the midst of demographic fragility. Paradoxically, and in some ways tragically, this panic is especially effective when the issue is the recent refugee crisis caused by the tensions and wars of the last 30 years of neoliberalism. But there can be no national or nationalist answer for such tensions and contradictions. Only a global double movement can formulate an answer which might show a way out of the current tension, instead of the mechanical, authoritarian defense of the national or local “demographic body.” The move out of the neoliberal order might be the only way to assure the dignity of migrants and non-migrants throughout the world simultaneously.
Attila Melegh, Founding Director at Karl Polanyi Center of Corvinus University of Budapest, Hungary <melegh@demografi a.hu>
