Political Economy

I’ve been teaching brain-drain related issues this week. Some of the big questions there are empirical ones, and the facts are contested. But some of the normative issues are interesting, and some of them don’t just apply to poor countries. One of these issues is the apparent clash between our duties to compatriots (if we have any) and our rights of exit and expatriation. If I have a duty as a member of an institutional scheme to contribute to the well-being of the least advantaged members of my society, can I just divest myself of that duty (in one bound, as it were) by leaving the country, or, to go one step further, by renouncing my nationality? It was a puzzle that Henry Sigdwick was defeated by back in 1907 [or somewhat earlier in fact, as he died in 1900!]:

> `In 1868 it was affirmed, in an Act passed by the Congress of the United States, that ‘the right of expatriation is a natural and inherent right of all people.’ I do not know how far this would be taken to imply that a man has a moral right to leave his country whenever he finds it convenient—provided no claims except those of Patriotism retain him there. But if it was intended to imply this, I think the statement would not be accepted in Europe without important limitations: though I cannot
state any generally accepted principle from which such limitations could be clearly deduced.” Henry Sidgwick, *The Methods of Ethics*, 7th ed (1907)
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Envelope please! And the winner is … Troilus and Cressida, by William Shakespeare (probably written in 1603 or 1609 or maybe as early as 1599). Let’s review the victory conditions. [click to continue…]

For where desire, celestial, pure desire,
Hath taken root, and grows, and doth not tire,
There God a commerce states, and sheds
His secret on their heads.

Henry Vaughan, “The Star”

“And how does your commerce go, you strange guardian of the past?”

G.K. Chesterton, The Napoleon of Notting Hill

My partisanship post has blossomed into an extensive discussion of original intent, interpretation and the commerce clause. Maybe we could use a little more scholarship to go with that. (Who knows?)

Randy Barnett and Jack Balkin are big in this area, and their major papers are freely available on the web. (Here’s Balkin’s major statement, outside of his book. Here’s an old one by Barnett that makes his general framework clear. And here’s a recent response by him to Balkin on commerce.) But let me start with “Rethinking the Commerce Clause”, by Nelson and Pushaw. It’s not free online, but I want just to quote the opening: [click to continue…]

I’ve a piece in today’s Financial Times about the political fights racking the Bitcoin community.

Bitcoin, the decentralised, mainly digital currency that is neither issued nor guaranteed by central banks, has always seemed like a magic trick. … Radical libertarians have desperately wanted to believe in it … Politics disappears and a combination of technology and cryptographic proofs is conjured up in its place. Unfortunately, the magic is wearing off. Some of the technological innovations associated with bitcoin will stick around. The political project will not. … As more people have started to use bitcoin, the system has grown more unreliable.The problem is that coming up with a fix requires political agreement. Because there is no centralised authority within bitcoin, there is no one who can impose a mandate. … This free-for-all demonstrates the main problem of technological libertarianism. It does not escape politics but temporarily displaces and conceals it. … The apparent value of bitcoin depends on a suspension of disbelief. It is hard to see how the illusion can work when the magicians are punching each other out on stage.

NB one error which crept in (completely my fault) during the editing process: “protocols to make the blocks bigger so that more bitcoin are released at one time, speeding up transactions” should just read “protocols to make the blocks bigger, speeding up transactions.” NB also, more interestingly, this piece by Ben Thompson at Stratechery, which I wish I’d seen before writing my own, especially since it has a couple of lovely and apposite quotes. [click to continue…]

Tyler Cowen has a piece today responding to Kevin Drum, and arguing that one can’t easily disassociate progressivism from eugenics:

Most of all Drum is saying that the earlier history is not very illustrative of anything for today. I view it this way. Go back to Millian liberalism of the mid-19th century. Had American or for that matter British Progressivism been infused with more of this philosophy, the eugenics debacle never would have happened. … The claim is not that current Progressives are evil or racist, but rather they still don’t have nearly enough Mill in their thought, and not nearly enough emphasis on individual liberty. Their continuing choice of label seems to indicate they are not much bothered by that, or maybe not even fully aware of that. … they don’t seem to relate to the broader philosophy of individual liberty as it surfaced in the philosophy of Mill and others. That’s a big, big drawback and the longer history of Progressivism and eugenics is perhaps the simplest and most vivid way to illuminate the point. This is one reason why the commitment of the current Left to free speech just isn’t very strong. … Do we really want to identify with a general philosophy which embraced eugenics for so many decades, when so many pro-liberty and also social democratic thinkers were in opposition? I think Mill himself would say no.

It’s hard for me to read a defense of “Millian liberalism in the mid-nineteenth century” and not think about the response of Millian liberalism and associated forms of thought in political economy to the Irish famine in which a million or so people died, and a million emigrated. [click to continue…]

Thomas Piketty’s *Capital in the 21st Century* tells us a great deal about the evolution of inequality in wealth and income over a long period and how that distribution is likely to evolve unless we intervene. What Piketty does not do is to tell us why inequality is bad or why people care about inequality, although we can glean some knowledge of his personal beliefs here and there. In what follows I draw on some aspects of Rousseauvian moral psychology to suggest that the reasons people care about inequality matter enormously and that because some people value inequality for its own sake, it will be harder (even harder than Piketty thinks) to steer our societies away from the whirlpool of inequality. [click to continue…]

The real challenge is getting employers to take a more assertive and, though we dare not say so aloud, paternalistic role when it comes to non-elite employees.

Williamson is advocating that we transmute the public safety net (some portion of it) into a federally-subsidized archipelago of regimes of private power, a web of patronage relations, bonding employees to employers. Company towns are proposed as a model, but this time around their creation would be back-stopped by the central government. [click to continue…]

Over at the Monkey Cage, our very own Henry Farrell [sets out how Peter Mair’s brilliant *Ruling the Void*](http://www.washingtonpost.com/blogs/monkey-cage/wp/2015/09/14/this-book-explains-why-jeremy-corbyn-now-leads-labour-its-author-died-in-2011/) helps explain Corbyn’s recent triumph. A shout-out too for my friend [Martin O’Neill’s treatment of Corbyn’s victory at Al Jazeera](http://america.aljazeera.com/opinions/2015/9/the-unexpected-rise-of-jeremy-corbyn.html).

The New York Times:

Brian Canlis, a co-owner of his family-named restaurant, is also a client. He said he was fond of Mr. Price, but was more discomfited by his actions. Mr. Canlis is already worried about how to deal with Seattle’s new minimum wage, which rose to $11 an hour in April and is scheduled to reach $15 an hour for small businesses within five years. The pay raise at Gravity, Mr. Canlis told Mr. Price, “makes it harder for the rest of us.” Mr. Price winced. “It pains me to hear Brian Canlis say that,” he said later. “The last thing I would ever want to do is make a client feel uncomfortable.” But any plan that has the potential, as Mr. Price has put it, to “set the world on fire,” is bound to make some people squirm. Leah Brajcich, who oversees sales at Gravity, fielded complaints from several customers who accused her boss of communist or socialist sympathies that would drive up their own employees’ wages and others who felt it was a public relations stunt.

The Wealth of Nations

We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of reproach to a master among his neighbours and equals.

There’s been a lot of back and forth about economic reasoning and the EU. This article by Kevin O’Rourke, takes a different perspective, one that is well worth reading, exploring the consequences of economists’ handwaving over utility for the technocratic politics that we face today. I’ve seen other efforts to make this kind of case, but they haven’t been nearly as clear or accessible.

On June 10^th the Washington Post’s editorial page chastised Congress for “making free trade difficult”. Champions of Trade Promotion Authority and the Trans-Pacific Partnership (TPP) continue to label all skeptics as “opponents of free trade.” Many skeptics actually favor free trade, but the Trans-Pacific Partnership appears to be less about “free trade” and more about domestic regulatory harmonization. The post-WWII trade regime has been very successful in its aims of reducing tariffs and barriers to trade, expanding global market access, and integrating new players into the global trade regime. The spectacular economic rise of countries such as China, India, and Brazil is testament to the value of the trade route to lift millions out of poverty.

The House may vote on Trade Promotion (“Fast Track”) Authority (TPA) as early as Friday, June 12^th. The Senate has already voted in favor of TPA and Obama has been working hard to get skeptical House Democrats on board to support it. If the House grants Obama TPA, it ties its hands to an “up or down” vote on TPP with no possibility for amendment. There is much at stake and citizens and representatives need to know who is drafting it, what it means for US democracy and sovereignty, and the effects it will have on public health. [click to continue…]

I’ve been looking again at a [two-year-old discussion on immigration policy between Jonathan Portes and Martin Wolf](http://www.niesr.ac.uk/blog/economic-objectives-immigration-policy-dialogue-martin-wolf#.VSeNLhcu2Lt), and particularly on Wolf’s take on the reasons that ought to inform policy. As far as I can tell, Wolf’s position is a kind of national-weighted consequentialism. Immigration policy is to be viewed as an aspect of economic policy, and the relevant considerations are simply whether a policy is beneficial to existing members of society, with no weight to be given to the interests of immigrants. Portes raises the interesting objection that, once we factor time into our national felicific calculus, then the well-being of future members who have yet to be naturalized ought to count, but this is a mere wrinkle in the argument. Wolf’s view is that

> countries are like clubs. They can decide who members are. Once you are a member, you matter to the club. If you are not a member, you don’t.

I hope that Wolf doesn’t mean what he says. The disanology between clubs and countries is pretty stark, since countries are compulsory associations which most people don’t have a choice about, whereas clubs are not. Moreover, most people think that countries do not have an unlimited discretion to decide on who their members are, that Nazi laws to remove citizenship from Jews were unjust, that policies that are blatantly discriminatory on racial or gender lines have no moral standing, whatever the insider electors think. We also, I hope, think that laws that condemn generations of minority permanent residents to non-membership — until recently a feature of German citizenship law — are unjust. So at best Wolf must mean that countries have a discretion to admit as members outsiders with no other moral claim to admission or membership.

The interesting question, then, when we have got the discretionary membership issue out of the way is what could justify national-weighted consequentialism? Whilst there might be all kinds of deontological reasons for states to favour insiders over outsiders (the global justice literature is about little else), in my experience, economists don’t think in those terms. Rather, they think of themselves as being consequentialists all the way down, and of rights, powers, permissions etc as being ultimately justified by outcomes. If I’m right that this is the picture, then the claim would have to be that a global system of nationally-weighted consequentialisms, perhaps by assigning the promotion of individual interests to particular states, gives rise to the best consequences overall. That’s an empirical claim, but one that is very very unlikely to be true since it locks so many people away from opportunities they would otherwise have to be productive and makes the world a poorer place as a result. So I’m still puzzled. What do *economists* think justifies national-weighted consequentialism?

I was rereading David Graeber’s Debt over the weekend. The intervening two years, since our book event, have not caused it to be the case that Graeber doesn’t owe Henry an apology, after all. But the life of the mind goes on. We do not freeze intellectual accounts due to outstanding personal debts. That is to say, the free market of ideas is baseline communist, in Graeber’s sense. If I have a bright idea, I do not expect to be paid back, by those who receive it, in the form of two half-insights – or 100 comments, each containing but a grote’s worth of thought; none of that. (I expect intellectual credit, of course.)

My bright idea for the day is that I have no idea what the difference is between reciprocity and baseline communism. [click to continue…]

At a meeting on refugee rights the other night, one of the other activists asked me if I am a Marxist. “No,” I replied, “though I used to be.” I think the last time it was a vaguely accurate description of me was probably sometime in the late 1980s or early 1990s. It is hard to be sure. Not that I mind being called one, or think that being one is something to be ashamed of. In fact, I felt slightly sorry to disappoint my interlocutor. But things are what they are. So despite there being an irritating buzzing noise somewhere on the interwebs telling the world that I am a “Western Marxist”, I’m afraid I have to disclaim the title.

Nearly six years ago, I wrote the following as a suggestion for how to explain Marx to people (students) who were coming to him cold:

> Suppose I were lecturing about Karl Marx: I’d do the same thing. I’d probably start by discussing some of the ideas in the Manifesto about the revolutionary nature of the bourgeoisie, about their transformation of technology, social relations, and their creation of a global economy. Then I’d say something about Marx’s belief that, despite the appearance of freedom and equality, we live in a society where some people end up living off the toil of other people. How some people have little choice but to spend their whole lives working for the benefit of others, and how this compulsion stops them from living truly truly human lives. And then I’d talk about Marx’s belief that a capitalist society would eventually be replaced by a classless society run by all for the benefit of all. Naturally, I’d say something about the difficulties of that idea. I don’t think I’d go on about Pol Pot or Stalin, I don’t think I’d recycle the odd bon mot by Paul Samuelson, I don’t think I’d dismiss Hegel out of hand, and I don’t think I’d contrast modes of production with Weberian modes of domination (unless I was confident, as I wouldn’t be, that my audience already had some sense of those concepts).

Thinking about the matter again, I think I’d stick to those themes. Of course, then there’s the question of which texts would best illustrate those themes. It seems that some people believe those themes are best illustrated by looking at Marx’s early writings and that to do so would necessarily involve a distortion of Marx’s career bu concentrating on early texts. I don’t see it myself. When Corey Robin, Alex Gourevitch and I were thinking about freedom and the workplace, a central text for us was the chapter on the buying and selling of labour power, from volume 1 of *Capital*, you know, the one about “the exclusive realm of Freedom, Equality, Property and Bentham.” Thinking about human nature, work under capitalism, and its contrast with truly human work, I’d be sure to look at “The Results of the Immediate Process of Production” (included as an appendix to the Penguin edition of volume one of *Capital*). And central to explaining the importance of Marx *to students of contemporary political philosophy* would be the *Critique of the Gotha Programme*. Of course the themes you’d focus on and the texts you use are inevitably shaped by what you’re trying to achieve, the audience you’re addressing and similar matters. A comprehensive survey of Marx’s work, such as the two-year-long course Jerry Cohen ran in the mid 1980s at UCL (and which I was lucky enough to attend) would have a very different content to a taster course aimed at newbies.