Foreign Policy For The Middle Classes: New Industrial Policy In Times Of Geoeconomic Shifts
Sandra Rath
21. December 2024
Author: Janina OrliÄ
At the Progressive Governance Summit 2024, we debated and strategised on how to make an impactful contribution to shaping a comprehensive concept of progressive security. In this session, the panellists focused on industrial policy as a means of grappling the challenges in the industrial heartlands within the context of recent geoeconomic shifts.
On 21 and 22 June, shortly after the European elections, Das Progressive Zentrum, together with its 25+ international partner organisations gathered 500+ leading intellectuals, activists and policymakers in the State Representation of Baden-WÞrttemberg in Berlin to discuss progressive security and the challenges progressives currently face in order to address the central sentiment of our time: uncertainty. In this context, Brencia Berry, Political Director of the US Democratic National Committee, Franziska Brantner, Parliamentary State Secretary in the German Federal Ministry for Economic Affairs and Climate Action, Holger Mann, Social Democrat Member of the German Parliament and Tim Ryan, former Democratic US Congressman for Ohio, chaired by Claire Ainsley, Director of the Project on Centre-Left Renewal of the Progressive Policy Institute, discussed how residents of the industrial heartlands in the US and Germany should be part of the conversation around national green transition policies and what can be done to lessen their economic concerns. This panel discussion was organised as part of the Transatlantic Dialogue of the Industrial Heartlands project.
At the heart of the rise of right-wing nationalism in Europe and North America lies the failure of political leaders to grapple effectively with the decline of traditional industrial heartlands and its consequences. People in these regions often feel left behind, economically and culturally displaced, suspicious of globalisation and trade, and mistrustful of democratic institutions. Against the background of geoeconomic shifts, policymakers have responded. A new era of industrial policy (e.g. the Inflation Reduction Act or the EUâs Green Industrial Plan) seeks to improve peopleâs living situation and working conditions in the industrial heartlands while transforming carbon industries and reducing dependence on authoritarian regimes, most notably China.
Opinion Polling
Session chair Claire Ainsley set the scene with the results of our new transatlantic opinion polling by Das Progressive Zentrum, the Progressive Policy Institute and Georgetown University. The survey results highlighted that respondents are deeply concerned about the cost of living and the overall economic climate, which emerged as the primary issues on both sides of the Atlantic. Building on these findings, the panel delved into ways to bolster economic security and protection for the middle classâthose most affected by inflation and rising costs. The discussion explored strategies to counter populist rhetoric while developing progressive opportunities for middle-class advancement. Additionally, the panel examined how a new industrial policy could support workers through investments that address foreign policy, trade, and climate challenges in both Europe and the United States.
Main takeaways from the discussion
I. Creating a positive narrative by communicating successful policies and future benefits of the green transition for citizens in the industrial heartlands
Brencia Berry shared how she believes progressives have failed to communicate their successes and service to the people of formerly industrialised regions.
âIt’s our job to tell these storiesâ, she said and appealed to progressives in the US, that accomplishments in industrial policy, namely the Inflation Reduction Act (IRA), must be better communicated to citizens while emphasising that these regions do matter to politicians. Franziska Brantner agreed by pointing out that Trump, for example, is using the issue of inflation to his advantage, even though his actual policies would increase inflation. She emphasised that progressives in both countries need to find a good answer to this and present their own policies in a better light. Holger Mann supported this by offering an East German perspective and recounted his thriving hometown of Leipzig â the concerns of the people, for example regarding rising costs for housing, must be taken seriously, and a real perspective must be offered as a credible solution. Tim Ryan added that it is only possible to reach the working class with this positive message and to take their concerns seriously if the history of the former industrial sites and their past traumas is acknowledged at the same time.
II. New industrial policy: A fair global trade arena, the importance of union support and security in the green transition
Next to impactful communication, the panellists emphasised that a new industrial policy needs to include concrete measures to relieve the working class. One of those being a fair new global trade arena which fosters sustainability and climate protection while protecting domestic workers, said Franziska Brantner, citing a relatively new progressive trade agreement from New Zealand with, the Agreement on Climate Change, Trade, and Sustainability (ACCTS). The ACCTS is one of the first trade agreements to explicitly link trade with climate protection by eliminating tariffs on environmental goods, prohibiting harmful fossil fuel subsidies, and promoting sustainable practices like eco-labelling. Another important lever for achieving a new, sustainable industrial policy that benefits the middle class is cooperation with labour unions, stressed Brencia Berry. Not only do they serve as messengers of political measures to the working population, they also enable workers’ voices to be amplified and heard, ensuring that economic policies have a beneficial impact on them.
To regain the trust of the middle class in transformation and reindustrialisation, Tim Ryan stressed that it is not necessary to spend more money, but to spend it better. To him, the Democratic Party has to become a party of reform that is accessible to all sections of the population, including the working classes, through approachability and concrete policies. While Franziska Brantner agreed that money must be spent better and more efficiently, citing again the Inflation Reduction Act in the US, she and Holger Mann shared their experience that the green transition, reform and change are generally not well received by the population in Germany. Rather, Franziska Brantner argued that the right approach consists of ensuring and communicating that the security of citizens is guaranteed during the green transition, for example, through the geoeconomic independence in the energy market through renewables.
In their final pledges, all panellists reiterated that the key to ensuring public safety during transitions lies in unity â not just within nations, but also in foreign policy. By collaborating, countries can learn from one another, drive innovation, ensure fair wages, and reduce prices. The panel underlined the critical importance of transatlantic cooperation, while also highlighting the need for security and support for workers in the Global South.
âWe will not be secure in this world, if we do not manage to make that a joint project.â â Franziska Brantner
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