World Politics

My post on the end of US decline, suggesting that the US now has about the influence that would be expected, given its population, relative to other developed countries, attracted a fair bit of criticism from International Relations specialists. In particular, my suggestion that the EU and US typically bargain on relatively equal terms (as would be expected since they are about equal in size and income) was criticised by Kindred Winecoff with a reprise (see also Phil Arena). We could go on for a long while picking examples to suit one case or the other, but as it happens, I can take my best illustration directly from the news headlines appearing at the same time as my post. The World Trade Organization has completed its report on US subsidies to Boeing, following an earlier report on EU subsidies to Airbus. Although the report is not yet publicly available, both sides have received it, and are leaking/spinning like made, each claiming victory. Reading the competing claims, it seems that the WTO has found that that the US subsidies to Boeing have broken the rules (yay, Europe!), but not by nearly as much as EU subsidies to Airbus (yay, USA!).

In terms of the legal dispute, this looks like a win on points for the US side. But in geopolitical terms, it’s the other way around. Not only has Europe bent the rules more, it’s done so without suffering any real consequences, and to much greater effect than the US.

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Following up on the end of the Arab exception, I agree, pretty much with commenter Hidari, who says

For better or for worse the immediate future, politically speaking, (by which I mean, the next 30 or 40 years) belongs to the parliamentary democracies.

. Supposing that Tunisia and Egypt manage a transition to some kind of democracy, it seems inevitable that quasi-constitutional monarchies like Jordan and Morocco will respond with further liberalisation and democratisation, for fear of sharing the fate of Ben Ali and Mubarak. Add in Algeria, Iran, Iraq and Lebanon, all of which have elections of some kind, and the dominant mode in the Middle East/North Africa will have been transformed from dictatorship to (admittedly highly imperfect) democracy. The remaining autocracies (Libya, Mauritania Sudan, Syria) and the feudal monarchies of the Arabian peninsula will be seen as the barbaric relics they are, with days that are clearly numbered. Even if things go wrong for one or both of the current revolutions, the idea that these autocratic/monarchical regimes have some kind of durable basis of support is gone for good.

So, how is Fukuyama’s view of the end of history looking?

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There was another round of the more-or-less endless debate about the decline of the US not long ago, focused on the weak employment growth that has characterized the current ‘recovery’. I expect that the obvious inability of the US to exert significant influence, in either direction, over the fate of client regimes in North Africa and the Middle East will provoke some more discussion among similar lines.

As a public service, I’d like to bring an end to this tiresome debate by observing that the decline of the US from its 1945 position of global pre-eminence has already happened. The US is now a fairly typical advanced/developed country, distinguished primarily by its large population[1]. Precisely because the US is comparable to other advanced countries in many crucial respects, there is no reason to expect any further decline. [2]

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Doug Saunders has “a blog post”:http://dougsaunders.net/2011/01/china-inequality-hu-jintao-barack-obama/ about Branko Milanovic’s new book “The Haves and the Have-nots“:http://amzn.to/fpjxlu . I haven’t read the book, but, according to Saunders, it denies that there is a convergence in living standards between Western workers and the Chinese. Here’s the reasoning:

bq. “If the U.S. GDP per capita grows by 1 per cent, India’s will need to grow by 17 per cent, an almost impossible rate, and China’s by 8.6 per cent, just to keep absolute income differences from rising,” he observes. “As the saying goes, you have to run very, very fast just to stay in the same place. It is therefore not surprising that despite China’s (and India’s) remarkable success, the absolute income differences between the rich and poor countries have widened.”

bq. And they have: Even as the Chinese worker has gone from $525 per year to $5,000 in two decades, the average American worker has gone from $25,000 to $43,200 – meaning that the income gap has widened from about $25,000 to $38,000, and, he notes, “of course so has the absolute gap in welfare between the average American and the average Chinese.”

Spot the non-sequitur. Even if the dollar income gap has widened in absolute terms there’s no reason to believe that the welfare gap has similarly widened, for the simple, and obvious reason of the declining marginal utility of income. On any plausible picture, the $525 to $5,000 transition is life-changing, whereas the $25,000 to $38,000 change is merely nice (especially if enough other people get the same increase and much of the increase goes on bidding up the price of inherently scarce goods).

Saunders continues:

bq. You may think of the United States as a place of extremes of wealth and poverty, and it is. Nevertheless, at the moment, the very poorest people in America, the 5 per cent with the lowest incomes, have better lives and more purchasing power than the top 5 per cent of income earners in India and the top 10 per cent in China.

Well I won’t quibble with the “more purchasing power” point, but “better lives” is really pretty dubious, since we know that by many objective measures “poor black men in the US do worse than even some poor people in India”:https://crookedtimber.org/2003/12/12/sens-development-as-freedom/.

The US response to Wikileaks has been an interesting illustration of both the limits and extent of state power in an age of transnational information flows. The problem for the US has been quite straightforward. The Internet makes it more difficult for states (even powerful ones such as the US) to control information flows across their own borders and others. It is much easier than it used to be for actors to hop jurisdictions by e.g. moving a particular Internet based service from one country to another, while still making it possible for people across many countries to access the service. This makes it much harder for the US and other actors to use the traditional tools of statecraft – their jurisdiction does not extend far enough to stop the actors who they would like to stop.

However, there is a set of tools that states _can_ use to greater effect. The Internet and other networks provide some private actors with a great deal of effective transnational power. Banks that operate across multiple jurisdictions can shape financial flows between these jurisdictions. Information companies may be able to reshape flows of information in ways that advantage or disadvantage particular actors. These private actors are often large, relatively immobile, and partially dependent on state approval for their actions. They thus provide a crucial resource for states. Even if states cannot _directly_ regulate small agile actors outside their jurisdiction, they can _indirectly_ regulate them by pressganging big private actors with cross-jurisdictional reach. A few years ago, the US found itself unable to regulate Internet gambling firms which were based in Antigua and selling their services to US customers. But the US _was_ able to tell its banks that they would suffer legal and political consequences if they allowed transactions between US customers and Antiguan gambling firms, helping to drive the latter out of existence.

This is the topic of my “least cited article evah”:http://www.henryfarrell.net/annreview.pdf (PDF), where I argue that:

bq. states are not limited to direct regulation; they can use indirect means, pressing Internet service providers (ISPs) or other actors to implement state policy. For example, states might require ISPs to block their users from having access to a particular site, or to take down sites with certain kinds of content. More generally … a small group of privileged private actors can become “points of control”–states can use them to exert control over a much broader group of other private actors. This is because the former private actors control chokepoints in the information infrastructure or in other key networks of resources. They can block or control flows of data or of other valuable resources among a wide variety of other private actors. Thus, it is not always necessary for a state to exercise direct control over all the relevant private actors in a given issue area in order to be a successful regulator.

And this is exactly what the US is doing in response to Wikileaks. I have no doubt that it was US political pressure which caused Amazon to stop hosting Wikileaks, EveryDNS to break Wikileaks.org’s domain name, eBay/Paypal to stop facilitating financial transactions, Swiss Post to freeze a Wikileaks bank account (in perhaps the first instance in recorded history of a Swiss bank taking residency requirements seriously), and Mastercard and Visa to cease relations with it. This is unlikely to affect the availability of the information that Wikileaks has already leaked. But it may plausibly affect the medium and long run viability of Wikileaks as an organization. This will be a very interesting battle to watch.

Crossposted (with very slightly different text) from “The Monkey Cage”:http://www.themonkeycage.org.

I’ve been reading Doug Saunders’s excellent _Arrival City_ this week. Full of interesting and enlightening facts about migration, about how cities work, about international development. One page, however, brought me up short, so this is a bleg aimed at economists and especially at labour-market economists. Saunders argues (pp.88-9 for those who have a copy) that increased migration of unskilled labour will be a persistent feature in Western economies “during this decade and throughout the century” because of the demographic pressures in those ageing societies. With reproduction rates falling below 2.1 and the proportion of elderly people in the population rising, immigrants can compensate for labour shortages. “… while immigration is not a mandatory solution to labour shortages, the combination of cash-starved governments and higher demographic costs will make it the least painful and most voter-friendly solution.” He then reels off a series of labour-shortage estimates (US to require 35 million extra workers by 2030, Japan 17 million by 2050, the EU 80 million be 2050, Canada 1 million short “by the end of this decade.”)
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If you aren’t reading “Glenn Greenwald”:http://www.salon.com/news/opinion/glenn_greenwald/2010/12/06/wikileaks/index.html on this, you should be. The latest turn of the screw is that “Visa have said”:http://www.bbc.co.uk/news/business-11938320 they are suspending payments. The good news is that, at least for Europe, this will take time to implement. The Wikileaks donations page is currently “here”:http://213.251.145.96/support.html

“Live at Eurointelligence.”:http://www.eurointelligence.com/index.php?id=581&tx_ttnews[tt_news]=2973&tx_ttnews[backPid]=901&cHash=484db55c3a An extract.

bq. The reaction to the news that Irish taxpayers are to be squeezed while foreign bondholders escape scot-free has been one of outraged disbelief and anger. At the start of last week, it was possible to make the argument that ‘burning the bondholders’ was irresponsible, since it would inevitably lead to contagion, and the spread of the crisis to Iberia. That argument has at this stage lost all validity, since contagion has happened anyway. Besides, the correct response to the possibility of contagion was never to engage in make-believe, but to extend taxpayer protection to other Eurozone members as required. Swapping debt for equity in a coordinated fashion across Europe would show ordinary people that Europe is on their side; but like the PLO of old, the European Union never misses an opportunity to miss an opportunity. It could have provided a means of kick-starting a new post-crisis growth strategy based on investment in the infrastructures we will need in the future; instead it has transformed itself into a mechanism for forcing pro-cyclical adjustment onto countries that are already sinking. It could have led the way in reining in an out-of-control financial sector; instead it now embodies the discredited principle that banks must never, ever, default on their creditors, no matter how insolvent they may be.

My small addition to the piles of verbiage on the newest Wikileaks revelations is to suggest that Saki’s classic short story “Tobermory”:http://www.sff.net/people/doylemacdonald/l_tober.htm tells you most of what you need to know. Tobermory – the story of a cat that learns to talk, is really about how a small group of people deal with the collapse of the polite fictions through which they paper over individual self-interest and mutual dislike. No-one guards what they say in front of a cat, leading to consternation when Tobermory suddenly learns the English language.

“What do you think of human intelligence?” asked Mavis Pellington lamely.

“Of whose intelligence in particular?” asked Tobermory coldly.

“Oh, well, mine for instance,” said Mavis with a feeble laugh.

“You put me in an embarrassing position,” said Tobermory, whose tone and attitude certainly did not suggest a shred of embarrassment. “When your inclusion in this house-party was suggested Sir Wilfrid protested that you were the most brainless woman of his acquaintance, and that there was a wide distinction between hospitality and the care of the feeble-minded. Lady Blemley replied that your lack of brain-power was the precise quality which had earned you your invitation, as you were the only person she could think of who might be idiotic enough to buy their old car. You know, the one they call ‘The Envy of Sisyphus,’ because it goes quite nicely up-hill if you push it.”

Lady Blemley’s protestations would have had greater effect if she had not casually suggested to Mavis only that morning that the car in question would be just the thing for her down at her Devonshire home.

Diplomacy, even more than early twentieth century English house-parties, requires hypocrisy. Both diplomats and leaders pretend respect and even affection for regimes that they dislike and leaders whom they despise. When a source can definitively give the lie to these public remonstrations, it is obviously likely to lead to considerable friction (not necessarily because the target did not know he, she or it was detested – but because _public expression_ of this detestation becomes an insult that cannot easily be discounted or ignored. If a number of prominent states had been hit by these revelations, there might be sufficient collective incentive to sweep the embarrassing bits under the Axminster. But that’s not the case here. I imagine that there are some very interesting conversations happening in State (a few blocks from my regular office) right about now.

Angela Merkel’s recent denunciation of German multiculturalism marks another step in the tightening of ties between the market-liberal right and ethnic-national tribalism, evident in other European countries and in the US (most obviously with the rise of the Tea Party). In part at least, this is a result of weakness. The positive appeal of market liberalism has declined a fair bit since the triumphalist decades of the 1980s and 1990s, and the global financial crisis exposed the failure of its theoretical basis. But there are obvious problems for social democrats in responding to this development. I’ve been thinking about this for a while, and have come to the view that it’s better to put up some half-thought ideas for discussion (and maybe debunking) than to wait for a perfect formulation.

The left needs to offer a transformational vision of a better society if it is to motivate the kind of enthusiasm needed to overcome a rightwing politics of tribalism and (often misperceived) self-interest. The 19th/20th century vision of socialism and class solidarity provides a model and a starting point, but that model is no longer adequate, and the political movements it gave rise to are in disarray. We need, a world view that extends the solidarity of social democracy to the whole of humanity [1].

The institutions of social democracy have been developed primarily at the level of the nation-state and the popular appeal of social democracy rests on notions of solidarity which arise most naturally in a relatively homogeneous society. Most of the last few decades have been spent defending the social democratic welfare state against attacks which were largely justified by claims about the need to respond to (market liberal) globalisation. That defence has been surprisingly successful, even when market liberalism seemed to have won conclusive intellectual and political victories. It’s natural to continue that defensive stance in response to the current push for “austerity”, and to organise that defence at a national level, while seeking to refurbish and to some extent rationalise the national welfare state.

That defensive struggle is necessary, but I don’t think social democracy can endure indefinitely in this defensive/managerialist mode. As I said a while ago we need to mobilise a positive alternative to the fear, anger and tribalism on offer from the right. That means setting out goals that are far more ambitious than the incremental changes debated in day-to-day electoral politics. The goals that seem to me to offer the most hope – a world free of nuclear weapons and extreme poverty, an end to the acceptance of war as an instrument of national policy, action to stabilise the global climate – all involve going beyond national governments and concepts of national interest. And, so I believe, does any plausible program to renew and extend social democracy.

The need for global action on issues like nuclear disarmament and climate change is obvious enough. The argument about social democracy is less obvious. In a world where national borders no longer act as an effective barrier to migration, it is harder to justify social welfare systems in terms of solidarity with people like ourselves (since the population is more diverse) or in terms of mutual insurance or past contributions, at least as regards recent arrivals. Particularly where migrant groups are concentrated at the bottom of the income distribution and are therefore net beneficiaries from the welfare state, including health and education systems as well as social insurance. Less obviously perhaps, internationally mobile workers are unlikely to be happy about paying taxes for welfare systems from which they may not benefit. Within the framework of national social welfare systems, the alternatives are to cut back the system for everyone, to discriminate against recent arrivals, or to tighten restrictions on migration.

The alternative is to extend the welfare state beyond national boundaries. This has already happened in a very modest (and often grudging) way with various agreements between national governments, and somewhat more systematically under EU rules which require national governments to treat all EU citizens equally with respect to some social services.

As between very rich and very poor countries, the benefits of this all go one way. People from poor countries gain from access to social services in rich countries, but not vice versa. But we can turn this argument around to say that the achievements of social democracy in the developed world can’t be secure as long as so much of the world is in extreme poverty. As Jeffrey Sachs has argued (and I’ve argued further), ending extreme poverty is entirely feasible, given an effort comparable to that the developed world has put into fighting pointless wars.

The ultimate goal ought to be one in which, everyone, no matter where they happen to be born has access to the basic requirements for a decent life. That doesn’t entail a world government (at least in the sense in which we typically understand the word “government” today) but it does entail a break with ideas based on nation-states as the ultimate focus of sovereignty. One relatively minor, but important step towards this would come with a “contract and converge” approach to CO2 emissions, which would ultimately imply equal entitlements to emissions per person in all countries [2].

All of this seems utopian in (at least) two senses. First, it seems very hard to sell politically. In part this reflects the long-standing distinction between a maximalist statement of long-term goals and a ‘fighting platform’ for a particular election. Part of my argument is that it’s the lack of long-term vision beyond the preservation of past gains that is sapping enthusiasm for social democracy.

But even after making the obvious adjustments to electoral reality, it’s far from obvious how to fashion a platform based on these ideas that is going to attract majority support in the short term. The power of nationalism and tribalism is strong, and the counter-appeal of global idealism goes only so far. On the other hand, it seems as if there is enough support for greens and leftish social democrats to form the basis of a significant minority that would support such ideas. Given a reaction against rightwing austerity politics, this group could form part of a majority coalition with mainstream social democrats.

More importantly, tribalism and monoculturalist nationalism belong to the past (as do essentialist versions of multiculturalism, in which people are defined by birth into some particular culture). The possibility of sustaining, in any country[3] a majority group (or even a dominant minority) that can be defined homogeneously in terms of race, religion, sexual politics and world-view (all at once) is slipping away fast. Part of the rage of the Tea Party is the fact that its adherents at once recognise this and are unwilling to concede the existence of an America that is not overwhelmingly white, Christian and traditionalist in terms of sexual mores and broader social attitudes. So, the more that social democracy and acceptance of social diversity are seen as two sides of the same coin, the better the long term prospects for social democrats.

The deeper question is whether such a program is feasible at all. Traditional views of international politics take the nation-state as an immutable atomic constituent of the system that can’t be wished out of existence by idealistic political movements. But the reality is that the sovereignty of nation-states has been eroded in all sorts of ways over the years since 1945. That’s most obvious in Europe, but all countries are bound up in a web of international arrangements that are increasingly hard to break out of. Big and powerful states like the US, Russia and China still act intermittently on the assumption that the rules don’t apply to them, but such displays (US and Russian military adventures, China’s attempted blackmail over rare earths) typically have high costs and few benefits. The real question is whether (as was assumed unquestioningly in the years leading up the global financial crisis) such constraints work inevitably in the interests of financialised market liberalism or whether they can be turned in more socially productive directions. I don’t know the answer, but I do think that the attempt to do this represents the best hope for a social democratic future.

Obviously, a lot of what I’ve written above is only partly thought through, and at least some of it is doubtless wrong. However, I’m not really interested in dealing with snarky nitpicking and general derailment, so I will exercise a fair bit of discretion in deleting comments I regard as unhelpful. Over at my blog I’ve opened up a “sandpit” thread where I will direct snark and lengthy off-topic monologues and back-and-forth disputes between commenters.

Finally, a few links to things I’ve found useful (not necessarily because I agreed), from John Keane and Policy Network.

fn1. This certainly isn’t a new claim – Ulrich Beck has been arguing for a similar, cosmopolitan and social democratic, position for some time. But it certainly needs a lot of working out and discussion, and blogging provides me with an avenue to try out ideas like this.

fn2. Although I don’t believe the process is as conscious as this, the ferocious rightwing resistance to the reality of climate change ultimately reflects an intuition that some global action of this kind is the only possible response.

fn3. The big potential exceptions are China and perhaps Japan, although it seems obvious that maintaining current restrictions on immigration will be very costly for Japan.

It has become commonplace for self-styled leftist erstwhile advocates of the Iraq War to whine that their critics have been unkind to them. Can’t those critics accept, they wheedle, that there were reasons on both sides and that the crimes against humanity of the Saddam regime supported at least a prima facie case for intervention? During an earlier phase of discussion, when those advocates were still unapologetic, but whilst the slaughter was well underway, we were treated to numerous disquisitions on moral responsibility: yes there is slaughter, but _we_ are not responsible, it is Al Qaida/the Sunni “insurgents”/Al-Sadr/Iran ….

Well “the latest Wikileaks disclosures”:http://www.guardian.co.uk/world/2010/oct/22/iraq-war-logs-military-leaks ought to shut them up for good (it won’t, of course). “Our” side has both committed war crimes directly and has acquiesced, enabled, and covered up for the commission of such crimes by others. The incidents are not isolated episodes: rather we have systematic policy. The US government has a duty to investigate and to bring those of its own officials and military responsible to justice. Of course, this won’t happen and the Pentagon will pursue the whistle-blowers instead. So it goes.

A few days ago, Germany made the final payment on the reparations imposed in the Treaty of Versailles, bringing to an end the formal consequences of the Great War that began in 1914 and continued, in one form or another, throughout the 20th century.[1] Many of the new states that emerged from the war (the USSR, Yugoslavia, Czechoslovakia) have now disappeared, though the consequences of the breakup of the Ottoman Empire and the secret Sykes-Picot Agreement are very much still with us. I don’t really have the basis for a post on this, but I thought this event deserved some kind of acknowledgement anyway.

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It’s always somewhat embarrassing to agree with Thomas Friedman. So when he switches from trumpeting the US as the new hyperpower to the end of hyperpower argument I was making all along,, it struck me that it might be time to reconsider whether I need to change my own views. But, that would be excessively contrarian.

As an aside, looking back at Friedman’s 2004 piece, the Gulliver trope is lifted straight from Josef Joffe who I linked in my earlier post. But then Joffe lifted it himself, apparently from this piece by Daniel Bourmaud in 1998.

A central lesson of this experience (of course, not one that Friedman or Joffe is ever likely to learn) is that the whole idea of a military hyperpower is a nonsense. The idea that military force can be used for any positive purpose (that is, other than as a defensive response to the use of military force by others) persists despite a lack of any significant supporting evidence. The US crusade in Iraq has cost, or will cost $3 trillion (not to mention the lives of thousands of American, and hundreds of thousands of Iraqis). That’s more than the US would spend on official development assistance for the whole world in 100 years at current rates (and the lion’s share of ODA goes to supporting military/geopolitical goals – the poorest countries get less than $10 billion a year between them). Things have gone pretty badly in Iraq, but even supposing that the ultimate outcome had been a stable and prosperous democracy, it’s clear that the benefit-cost ratio would be very low. You get a similar answer if you look at the whole period since Macarthur pushed on to the Yalu river back in 1950. And by comparison with other countries that have tried to use military power to pursue foreign policy goals, the US has done much better (or rather, much less badly) than anyone else .

Ken Coates, a very significant figure in the history of the British left, has died. The Guardian has an obituary.