Well, this sounds like very bad news for the global financial system:
A plan to rescue the tiny European country of Cyprus, assembled overnight in Brussels, has left financial regulators, German politicians, panicked Cypriot leaders and a disgruntled Kremlin with a bailout package that has outraged virtually all the parties.
In the end, a bailout deal that was supposed to calm a financial crisis in an economically insignificant Mediterranean nation spread it wider. Word of the plan unnerved markets across Europe, raised fears of bank instability in Spain and Italy and sent pensioners into the streets of the island’s capital, Nicosia, in protest.
As markets tumbled and the Cypriot Parliament fell into turmoil, salvos of blame were hurled back and forth across the Continent.
Officials scrambled to explain what went wrong and how best to control the damage of what Philip Whyte, a senior research fellow at the Center for European Reform, called a “completely irrational decision” to make bank depositors liable for part of the bailout. The deal flopped so badly that finance ministers who came up with it shortly before dawn on Saturday were on the phone to each other Monday night talking about ways to revise it.
Now, on the one hand, you would be hard-pressed to find anyone who will defend the Cypriot deal as it was announced on Saturday -- but it's pretty easy to find critics of the proposed deal across the political spectrum. So this seems like yet another data point confirming the truly mind-boggling stupidity of European governments and regulators. It's particularly galling that they did this during a time when global capital markets are still fragile from the 2008 financial crisis.
Oh, except, wait a minute, it turns out that those markets aren't as fragile as the perception suggests. If you burrow into the McKinsey Global Institute's latest report on global asset markets, it turns out that, excepting Europe, the rest of global finance has experienced a decent recovery from the 2008 crash. According to MGI:
With the pullback in cross-border lending, foreign direct investment from the world’s multinational companies and sovereign investors has increased to roughly 40 percent of global capital flows. This may bring greater stability, since foreign direct investment has proved to be the least volatile type of capital flow, despite a drop in 2012.
Of course, this was written before the Cypriot stupidity, so now markets are really roiled, right? Well... here's Business Insider's Joe Weisenthal's take early this a.m.:
Markets are down a bit in Europe although not dramatically so yet.
US futures were flat, and Asia was actually up nicely, with Japan gaining 2%.
That seems like a thoroughly appropriate reaction. And over at the New York Times, Andrew Ross Sorkin explains why that's the rational and appropriate reaction:
While the bailout of Cyprus is a fascinating case study and raises interesting theoretical questions about moral hazard for policy wonks and talking heads, here is the reality: It is largely irrelevant to the global economy. Cyprus is tiny; its economy is smaller than Vermont’s. And the bailout is worth a paltry $13 billion, the equivalent of pocket lint for those in the bailout game.
Even the larger issue about bailing out a country by taking money from depositors — which quickly created outrage around the world — seems overblown....
[I]n truth, the smart money knows that the bailout of Cyprus says very little about future actions.
“I would assume that anyone in Spain, Portugal or elsewhere who knows about the taxation of Cypriot depositors also would know that the Cypriot banking system is a very different animal than anywhere else in the euro zone,” Erik Nielsen, chief economist at UniCredit, wrote in a note to clients.
Mr. O’Neill of Goldman also acknowledged: “I am sure it will not set a precedent.”
Cyprus is unique. Besides being tiny, its banking system looks different from those in most other countries. Much of the big money deposited in its banks is from foreign investors, including Russians who have long been suspected of money laundering. Those investors had fair warning that Cypriot banks were troubled. The issue has been simmering for six months. But those investors left their money in the bank, in part because they were gambling that the banks would be bailed out at no cost to them. If the current plan is approved, depositors will have lost that bet.
Now this is a perfectly rational analysis. What's significant is that it seems like markets are making the same calculation. When financial markets are fragile, when there's a fear of financial contagion, they don't make the rational calculation -- they freak out. That hasn't happened with Cyprus.
I know I'm at the risk of pulling a Donald Luskin here, but what's happening in Cyprus right now primarily affects Cypriots, with a small concern about regional effects. It doesn't look like it's triggering the same kind of concerns of either the Lehman collapse or the Greek sovereign debt crisis. And anytime the abject stupidity of European financial statecraft can be confined to Europe, that's a very, very good thing indeed for the global financial system.
Am I missing anything?
As longtime blog readers are aware, I'm working on a book-length project arguing that global economic governance has done a surprisingly good job of things in the post-2008 world. Not perfect, mind you, but "good enough" global governance.
Now, the interesting thing about making such a counterintuitive argument is the number of opportunities one comes across of the conventional wisdom asserting itself -- the idea that the system is crumbling, we're in a Brave New World of uncertainty, no one is in charge, yadda yadda yadda. You, my dear reader, must wonder how I react when I see such assertions. Well, pretty much like Cliff Poncier but with shorter hair:
No, seriously, I like seeing good arguments pushing against my position -- it's a way for me to see whether my argument holds up.
Which brings me to Naazneen Barma, Ely Ratner and Steve Weber's new essay in The National Interest, entitled "The Mythical Liberal Order." The title is pretty clear -- as is their argument:
Instead of a gradual trend toward global problem solving punctuated by isolated failures, we have seen over the last several years essentially the opposite: stunningly few instances of international cooperation on significant issues. Global governance is in a serious drought—palpable across the full range of crucial, mounting international challenges that include nuclear proliferation, climate change, international development and the global financial crisis.
Where exactly is the liberal world order that so many Western observers talk about? Today we have an international political landscape that is neither orderly nor liberal.
It wasn’t supposed to be this way. In the envisaged liberal world order, the “rise of the rest” should have been a boost to global governance. A rebalancing of power and influence should have made international politics more democratic and multilateral action more legitimate, while bringing additional resources to bear. Economic integration and security-community enlargement should have started to envelop key players as the system built on itself through network effects—by making the benefits of joining the order (and the costs of opposing it) just a little bit greater for each new decision. Instead, the world has no meaningful deal on climate change; no progress on a decade-old global-trade round and no inclination toward a new one; no coherent response to major security issues around North Korea, Iran and the South China Sea; and no significant coordinated effort to capitalize on what is possibly the best opportunity in a generation for liberal progress—the Arab Spring.
It’s not particularly controversial to observe that global governance has gone missing. What matters is why. The standard view is that we’re seeing an international liberal order under siege, with emerging and established powers caught in a contest for the future of the global system that is blocking progress on global governance. That mental map identifies the central challenge of American foreign policy in the twenty-first century as figuring out how the United States and its allies can best integrate rising powers like China into the prevailing order while bolstering and reinforcing its foundations.
But this narrative and mental map are wrong. The liberal order can’t be under siege in any meaningful way (or prepped to integrate rising powers) because it never attained the breadth or depth required to elicit that kind of agenda. The liberal order is today still largely an aspiration, not a description of how states actually behave or how global governance actually works. The rise of a configuration of states that six years ago we called a “World Without the West” is not so much challenging a prevailing order as it is exposing the inherent frailty of the existing framework.
I encourage you to read the whole thing. I have two reactions to it. The first is thast I wholeheartedly endorse one point that they are making. The notion that the liberal wprld order was perfectly functioning prior to 2008 is one of the biggest sources of misperception about the global political economy. As Barma, Ratner and Weber point out, this was at best a partial order even prior to 2008. This matters: a misplaced nostalgia for prior eras of global governance is one reason that so many commentators think that the system is f**ked right now. Once you realize that the post-1945 liberal order was partial, riddled with exceptions, and also prone to crisis, suddenly the present day doesn't look so bad in comparison.
Now, that said, I think Barma, Ratner and Weber get some big things wrong. This is a blog post, so I'll focus on one point in particular -- the claim that liberal ideas are faltering in today's world:
Ask yourself this: Have developing countries felt and manifested over time the increasing magnetic pull of the liberal world order? A number of vulnerable developing and post-Communist transitional countries adopted a “Washington Consensus” package of liberal economic policies—freer trade, marketization and privatization of state assets—in the 1980s and 1990s. But these adjustments mostly arrived under the shadow of coercive power. They generally placed the burden of adjustment disproportionately on the most disempowered members of society. And, with few exceptions, they left developing countries more, not less, vulnerable to global economic volatility. The structural-adjustment policies imposed in the midst of the Latin American debt crisis and the region’s subsequent “lost decade” of the 1980s bear witness to each of these shortcomings, as do the failed voucher-privatization program and consequent asset stripping and oligarchic wealth concentration experienced by Russians in the 1990s.
If these were the gains that were supposed to emerge from a liberal world order, it’s no surprise that liberalism came to have a tarnished brand in much of the developing world. The perception that economic neoliberalism fails to deliver on its trickle-down growth pledge is strong and deep. In contrast, state capitalism and resource nationalism—vulnerable to a different set of contradictions, of course—have for the moment delivered tangible gains for many emerging powers and look like promising alternative development paths. Episodic signs of pushback against some of the excesses of that model, such as anti-Chinese protests in Angola or Zambia, should not be confused with a yearning for a return to liberal prescriptions. And comparative economic performance in the wake of the global financial crisis has done nothing to burnish liberalism’s economic image, certainly not in the minds of those who saw the U.S. investment banking–led model of capital allocation as attractive, and not in the minds of those who held a vision of EU-style, social-welfare capitalism as the next evolutionary stage of liberalism.
Yes, this explains why the publics in the developing world have rejected economic globalization as an economic strategy -- oh, wait, I'm sorry, they haven't done that, nor have their governments. If anything, the commitment to a liberal economic order has held up remarkable well since 2008. As for the appeal of the "Beijing Consensus" or the "China Model," I'll outsource this refutation to Yang Yao, Scott Kennedy, and Matt Ferchen.
The fundamental disagreement between these authors and myself is revealed in this paragraph:
Global governistas will protest that the response to the global financial crisis proves that international economic cooperation is more robust than we acknowledge. In this view, multilateral financial institutions passed the stress test and prevented the world from descending into the economic chaos of beggar-thy-neighbor trade policies and retaliatory currency arbitrage and capital controls. The swift recovery of global trade and capital flows is often cited as proof of the relative success of economic cooperation. The problem with this thesis is that very real fears about how the system could collapse, including the worry that states would retreat behind a mercantilist shell, are no different from what they were a hundred years ago. It’s not especially indicative of liberal progress to be having the same conversation about global economic governance that the world was having at the end of the gold-standard era and the onset of the Great Depression. Global economic governance may have helped to prevent a repeat downward spiral into self-defeating behaviors, but surely in a world order focused on liberal progress the objectives of global economic governance should have moved on by now.
My response to this is two-fold: first, given the crisis-prone nature of global capitalism, preventing and repairing catastrophes should be a pretty timeless function of global economic governance. Second, there is no way that one can objectively compare the world order of the 1930s -- or 1940s or 1970s, for that matter -- and not conclude that massive amounts of liberal progress have not been made. The world is far more free politically and economically now than at any point in history. That suggests a surprisingly robust liberal world order.
Or, in other words, all this negative energy about global economic governance just makes my argument stronger, man.
What do you think?
Your humble blogger has returned from vacation
with a sunburn to a rude awakening from the New York Times:
The New York Times Company said on Monday that it was planning to rename The International Herald Tribune, its 125-year-old newspaper based in Paris, and would also unveil a new Web site for international audiences.
Starting this fall, under the plan, the paper will be rechristened The International New York Times, reflecting the company’s intention to focus on its core New York Times newspaper and to build its international presence.
Mark Thompson, president and chief executive of The New York Times Company, said in a statement that the company recently explored its prospects with international audiences, and noted there was “significant potential to grow the number of New York Times subscribers outside of the United States.”...
The announcement is part of the company’s larger plan to focus on its core brand and build its international presence, the spokeswoman said. On Feb. 20, the Times Company said it was exploring offers to sell The Boston Globe and its other New England media properties. Last year, the company sold its stake in Indeed.com, a jobs search engine, and the About Group, the online resource company.
As a business strategy, I get that the Times is sacrificing a minor brand to boost its primary brand. But if I could be nostalgic here for a second, I will mourn the passing of the minor brand.
For me, the International Herald-Tribune was always a small luxury to buy when I was a very budget-conscious undergraduate/graduate student/postdoc/assistant professor travelling outside the United States. It's not that it was a great paper or anything -- truthfully, it was always overpriced and relatively thin in content (except for the wonderful weekend edition, which had the Sunday NYT crossword). It was, however, a very American newspaper in places that were decidedly not the United States. In the pre-Internet days of travel, it was the only place to get two-day old baseball scores. Furthermore, before the Times pushed out the Post, it was also an effective combination of two great broadsheets of American journalism.
It was also a great name -- certainly better than
The Los Angeles Angels of Anaheim The International New York Times, which is ungainly in the extreme.
I suspect the Times will do well in propagating its core brand overseas. But for my generation of travellers, hearing this news evokes a lost memory of grabbing an IHT and a baguette and sitting in a park somewhere digesting a simple lunch and news from home.
It's nostalgia, pure and simple -- but that doesn't mean I won't miss it.
Dear New York Times:
As the paper of record, your op-ed page is a natural target for snark, derision, and other forms of criticism. I'll certainly plead guilty to these venial sins. I've found flaws in more than a few of your columnist's writings on foreign affairs. Thomas Friedman, in particular, has invited a fair measure of scorn from your correspondent over the years -- though I'd note that I'm hardly the only one guilty of that sin. Let me stipulate that I have no doubt that Mr. Friedman can polish off an accessible 800 word column on foreign affairs better than 99.5% of the foreign policy community. And Friedman has locked down a certain Greatest Generation demographic, the one that emails their children with Ph.D.s in political science to say "Tom Friedman said something interesting in his column today. You should read it."
Friedman's prose style invites a certain kind of satire, which is occasionally unkind but pretty harmless. I write now, however, because in his latest column he has migrated from the merely foolish to the ill-considered and dangerous. This is his advice to incoming Secretary of State John Kerry:
[W]hat’s a secretary of state to do? I’d suggest trying something radically new: creating the conditions for diplomacy where they do not now exist by going around leaders and directly to the people. And I’d start with Iran, Israel and Palestine. We live in an age of social networks in which every leader outside of North Korea today is now forced to engage in a two-way conversation with their citizens. There’s no more just top-down. People everywhere are finding their voices and leaders are terrified. We need to turn this to our advantage to gain leverage in diplomacy.
Let’s break all the rules.
Rather than negotiating with Iran’s leaders in secret — which, so far, has produced nothing and allows the Iranian leaders to control the narrative and tell their people that they’re suffering sanctions because of U.S. intransigence — why not negotiate with the Iranian people? President Obama should put a simple offer on the table, in Farsi, for all Iranians to see: The U.S. and its allies will permit Iran to maintain a civil nuclear enrichment capability — which it claims is all it wants to meet power needs — provided it agrees to U.N. observers and restrictions that would prevent Tehran from ever assembling a nuclear bomb. We should not only make this offer public, but also say to the Iranian people over and over: “The only reason your currency is being crushed, your savings rapidly eroded by inflation, many of your college graduates unemployed and your global trade impeded and the risk of war hanging overhead, is because your leaders won’t accept a deal that would allow Iran to develop civil nuclear power but not a bomb.” Iran wants its people to think it has no partner for a civil nuclear deal. The U.S. can prove otherwise.
He goes on to talk about Israel/Palestine, but let's keep the focus on Iran. To put it kindly, there are some serious problems with Friedman's advice. In no particular order:
1) There are many possible Secretaries of State who possess the necessary charisma, drive, and rhetorical skills to resonate with the ordinary citizens of other countries. I think we can all safely agree that, capable as he might be, John Kerry is not one of those diplomats.
2) Why not "negotiate with the Iranian people?" Well, to get technical about it, they're not the ones controlling Iran's nuclear program. That's not a minor issue. For all this talk about how states are irrelevant in the 21st century, on matters of hard security not much has changed. Lest Friedman or anyone else doubt this, recall that the Iranian state has proven itself more than capable of suppressing the Iranian people over the past four years. Why Friedman thinks that the Ayatollah Khamenei would listen to ordinary Iranians on the nuclear question is beyond me.
3) Friedman seems to think that ordinary Iranians are implacably opposed to the nuclear program. I have yet to read any analysis or on-the-ground reporting (including the NYT) that suggests this to be true. Rather, the common theme is that Iranians take nationalist pride in the technological accomplishments of their national nuclear program. Furthermore, in a propaganda war between the U.S. government and their own government, the U.S. is probably gonna lose even if it possesses the better argument. For all of Friedman's loose talk about the power of social media in a digitized world, he elides the point that one of the sentiments that social media is best at magnifying is nationalism. In the case of Iran, this would mean a more recalcitrant negotiating partner.
4) In the 35 years since the Iranian Revolution, and the 10+ years since Iran's nuclear program became a point of contention, is there any evidence that U.S. public diplomacy has had any positive effect in the country of Iran? Any? So why will it work now?
5) One last point. Iran's regime has been obsessed with the belief that the United States is trying to foment a Velvet Revolution in the country. They've been willing to arrest, repress, or harrass anyone vaguely associated with such a campaign. Exactly how does Friedman think the government in Tehran would respond to the kind of public diplomacy initiative that he's suggesting?
I could go on, but you see what I'm trying to say. Friedman's "break all the rules" strategy is as transgressive as those dumb-ass Dr. Pepper commercials. Worse, he's recommending a policy that would actually be counter-productive to any hope of reaching a deal with Iran. This is the worst kind of "World is Flat" pablum, applied to nuclear diplomacy. God forbid John Kerry were to read it and follow Friedman's advice.
Sure, 99.5% of foreign policy wonks might write something less punchy, but I suspect most of them wouldn't write something so obviously wrong. Friedman clearly needs a sabbatical from the rigors of column-writing to get his head back in the game. In the interest of raising our country's foreign policy discourse, I beg you to put him on leave.
Daniel W. Drezner
With 2012 down to its last day, it's now safe to announce this year's Albies -- named in honor of noted political economist Albert O. Hirschman. The Albies are awarded to the best writing in global political economy over the past calendar year. The writing can be in a book, journal article, think tank report, blog post, whatever -- the key is that the article makes you reconsider the way the world works.
This time around the bar was rather high, as Hirschman passed away earlier this month. Still, what with the world supposedly ending this year, there was a lot of really excellent work in this area. So, in no particular order, here are the ten Albie winners:
1) Mario Draghi's September 6th press conference on ECB policy. In response to a question about whether there would be a limit to the European Central Bank's "outright monetary transactions" -- i.e. buying distressed sovereign debt in secondary markets, Draghi replied, "there is no ex ante quantitative limit to these interventions because we want this to be perceived as a fully effective backstop that removes tail risk from the euro area." And, with those words, Draghi effectively put a stop to the immediate financial crisis that was crippling the southern European economies. From a n IPE perspective, Draghi also did something surprising and interesting: he signaled that the ECB could take steps independent of what the Bundesbank wanted it to do. With this one statement, Draghi gave the eurozone area room to breathe, stabilized global financial markets, and may have well given a major assist to Barack Obama's re-election. Now that's a press conference.
2) Faisal Ahmed, "The Perils of Unearned Foreign Income: Aid, Remittances, and Government Survival." American Political Science Review, February 2012. Remittances have been the Big Thing in development circles for the past few years, particularly since these flows have been robust even in the face of the Great Recession. Ahmed's article shows that remittances are not an unalloyed good, however. Autocratic governments can use these flows as they have used foreign aid -- as a way to divert their own resources away from social programs and towards bolstering the government's coercice apparatus. Because families have thjis extra income source, their disconent against the state won't rise -- and the state will be better prepared to crack down if citizens do revolt. Remittances therefore paradoxically help authoritarian governments persist for longer. This doesn't mean that remittances are a bad thing -- but Ahmed's finding does a lovely job of mucking up some policy truisms.
3) McKinsey Global Institute, Debt and Deleveraging: Uneven Progress on the Path to Growth, January 2012. Very Serious People across the political spectrum agree that the United States desperately needs to get its debt problem under control. But as this McKinsey report demonstrates, the United States already has gotten its debt problem under control. Sure, the federal government's debt-to-GDP ratio has ballooned since the start of the Great Recession, but overall debt levels -- including households, the financial sector, and business more generally -- have shrunk quite nicely, thank you very much. Indeed, the U.S. approach of swelling government debt to absorb the slack in aggregate demand repeats the successful policies of the Scandinavian countries during their financial meltdowns in the early nineties. This -- comibined with an energy boom, the insourcing of manufacturing, and even a modicum of sane foreign economic and security policies -- augur a revival in America's economic fortunes.
4) Robert J. Gordon, "Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds," NBER Working Paper No. 18315, August 2012. The doppelgänger to the McKinsey paper, Gordon makes the somewhat speculative argument that the boom times for U.S. economic growth are over. Arguing that the productivity gains from the Information Revolution are puny compared to the Second Industrial Revolution, Gordon then sketches out a future where the rate of per capita income growth collapses to pre-Industrial levels. This provoked a lot of pushback -- see Brad Plumer's roundup and Paul Krugman's recent column. And for that reason alone, Gordon deserves an Albie -- he got people to think seriously about the sources of economic growth, a curiously neglected topic in economics.
5) Artemis Capital Management, "Volatility of an Impossible Object: Risk, Fear, and Safety in Games of Perception." September 30, 2012. To put it gently, the past few years have not been kind to the financial gurus of the world. Slowly, they've begun to acknowledge that their job isn't just to deliver the high "alpha" or the "smart beta" anymore -- it's also to recognize where there's a buildup of systemic risk and general uncertainty and hedge against it. Since perception is a big driver of asset valuation in a world of uncertainty, that makes life even trickier for financial analysts. In response, this was the year that they began to embrace post-modernism as an analytical tool. This Artemis newsletter is simply the most obvious example. After you read it, you could come away with the firm conviction that the author is either onto something truly fundamental, or he's just throwing up his hands and crying "Uncle!" Either way, some enterprising Ph.D. student is gonna produce one hell of a dissertation by analyzing the baroque literature of investment newsletters. Bill Gross would be a whole chapter unto himself.
6) Daron Acemoglu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, Crown Publishing. What explains why some countries prosper and some don't? When Mitt Romney credited the gap between Palestinians and Israelis as a matter of "culture," he stumbled into every social scientist's personal nightmare. The argument de l'année was Acemoglu and Robinson's observation about the power of political institutions to shape immediate economic incentives as well as long-term cultural patterns. Why Nations Fail is the popular capstone to a decade of Acemoglu and Robinson's research. It doesn't settle the argument by any means, but it's a powerful brief against those who argue that the sources of prosperity are either geographical or cultural.
7) Chrystia Freeland, Plutocrats, Penguin. As income and wealth inequality has increased both globally and in the United States, the political implications of this trend have slowly moved into the forefront of political debates. Freeland's Plutocrats is the perfect jumping off point for this debate. Freeland paints a complex portrait of the rich, demonstrating their worldview while avoiding both condescension and caricature. This is one of those rare books that actually improves upon the Atlantic cover story that kicked it off. The final third of the book in particular raises some profoundly troubling questions about the relationship between the uber-wealthy, the state and the rest of us.
8) David Barstow, "Vast Mexico Bribery Case Hushed Up After Top-Level Struggle," New York Times, April 21, 2012; Barstow and Alexandra Xanic von Bertrab, "The Bribery Aisle: How Wal-Mart Got It's Way in Mexico," New York Times, December 17, 2012. Social scientists often disdain journalists for not paying attention to macro trends and failing to understand statistics. These are valid concerns, but scholars also need to acknowledge when journalists actually generate data rather than merely report on it. In these two stories Barstow and his co-authors took a beacon and revealed the extent and methods of corruption in Mexico -- and the ways in which corrupt practices in one country can infect the culture of a multinational corporation. Outstanding reportage. This story gets bonus points for being an article about Mexicco but not about either immigration or narcotics.
9) FT Reporters, "Chinese Infighting: Secrets of a succession war," Financial Times, March 4, 2012/John Garnault, "Rotting From Within," Foreign Policy, April 16, 2012/David Barboza, "Billions in Hidden Riches for Family of Chinese Leader," New York Times, October 25, 2012 and "Family of Chinese Regulator Profits in Insurance Firm's Rise," December 30, 2012/Bloomberg News, "Heirs of Mao's Comrades Rise as New Capitalist Nobility," December 26, 2012. As China underwent its own leadership transition, the lack of a free press in that country did not prevent some crackerjack reporting on the corruption issues that plague the People's Republic. From the FT's harrowing story of how Bo Xilai used torture to amass his fortune to Garnault's examination of how corruption has ensnared the Chinese military to Barboza's and Bloomberg's explications of how political connections lead to wealth in China, western reporters did an outstanding job in 2012 of demonstrating the inner working's of China's political economy. If your newspaper or magazine gets blocked by the Great Firewall after a story, that should be taken as a sign of respect.
10) Matt Ferchen, "Whose China Model is it anyway? The contentious search for consensus." Review of International Political Economy, April 2012. This was a curious year for China-watching. On the one hand, the trend was for analysts to shift from bullish to bearish. On the other hand, some Chinese and a lot of Americans are now feeling pretty confident about the superiority of the Chinese system. But what exactly is the China Model? Ferchen does an excellent job dissecting what we're talking about when we're talking about the Beijing Consensus. He further dives into the internal Chinese debate on the existing model, revealing serious qualms about the stats quo. Ferchen shows that one of the interesting things about the "Beijing Consensus" is not its content per se, but how policymakers and pundits on both sides of the Pacific deploy the term.
Honorable Mentions: Lauren Greenfield's The Queen of Versailles; Angus Burgin, The Great Persuasion: Reinventing Free Markets since the Depression, Harvard University Press; Christopher Hayes' Twilight of the Elites; Annie Lowrey, "Dire Poverty Falls Despite Global Slump," New York Times; Peyer Doyle's letter of resignation to the IMF, June 16, 2012; and -- just under the wire - the automated Thomas Friedman Op-ed Generator.
So, to sum up: two books, to peer-reviewd journal articles, two investment reports, a passle of journalism, one draft paper, and one press conference. And yet I still feel like I nonly scratched the surface.
May 2013 be as rich a year for global political economy as this past one!!
It's now December, which means it's time to start garnering nominations for the 4th annual Albies, so named to honor of the great political economist Albert O. Hirschman.
To reiterate the criteria for what merits an Albie nomination:
I'm talking about any book, journal article, magazine piece, op-ed, or blog post published in the [last] calendar year that made you rethink how the world works in such a way that you will never be able "unthink" the argument.
This year was certainly not a boring one for the actual global political economy, which means it's a good year to write about it. So, please submit your ideas to me. And remember, this is the only year-end Top 10 list that neither Time nor the Atlantic has yet to comandeer. Here are links to my 2009, 2010, and 2011 lists for reference.
The winners will be announced, as is now tradition, on December 31st. In the meantime, readers are strongly encouraged to submit their nominations (with links if possible) in the comments.
Earlier this week Shadow Government's Phil Levy threw some cold water on my pre-election optimism that foreign economic policy would take the lead in 2013, attributing it to my being in Paris when I wrote it. Phil has a lot more hands-on experience in these matters than I do, so it's worth reading his post in full. To sum up here, however:
If, on a 10-point scale, the first term free trade challenges were a 'degree of difficulty' 2, then this term's challenges are an 8 or a 9.... it may be useful to distinguish between President Obama's political cost/benefit of negotiating a trade agreement and of concluding one....
Trade agreements take time. If the president is to get anything completed, he needs to start right away.
How to respond? Well, first, I have a confession -- I did have a lovely time in Paris.
That said, now that I'm back in the austere bleakness that is November in New England, I'll stand by my prediction. This is for a few reasons. First, to push back on Phil a bit, I wouldn't characterize Obama's free trade challenges in the first term so easily. As someone who was pretty critical of the president on trade matters, I would nevertheless acknowledge that he was facing gale-force winds on this topic during his first term. In retrospect, if I had told Phil that the global economy would face the worst economic crisis since the Great Depression and yet the United States would not resort to rank protectionism, I think he'd be moderately pleased. Now, this wasn't entirely due to Obama, but still, I think he could have made things a lot worse... but didn't.
To be fair, I think Phil's point was intended to be a bit narrower -- namely, that it was easy for Obama to push ratification of Budh-negotiated FTAs but hard to negotiate his own. But surely, one of the reasons that Democrats were not particularly keen on those FTAs is because Bush negotiated them, yes? If a Democratic president claims ownership of an FTA, I'd bet he's gonna get more party support in Congress. Also, a side note: I'm dubious that traditional Democratic Party objections would block either the TPP or a Europe deal.
Finally, in his post, Phil actually lays out the logic of why I think these deals will go forward:
The problem is that U.S. trading partners will not be infinitely patient in awaiting the conclusion of the deals under discussion. From a broader foreign policy perspective, the TPP is absolutely central to the administration's pivot to Asia. Europeans are eagerly backing the idea of an FTA as one of the few positive signals they might send to investors amidst the still-looming euro zone crisis. There will be serious foreign policy consequences if the president fools us thrice on support for trade.
Phil is right -- and it's precisely this reason that makes me think that Obama will make more forwrd progress on this in his second term. For most of the postwar era, the United States could act as a veto player. If it didn't get what it wanted in the GATT/WTO or some regional agreement, well, progress was halted. One way the world has changed is that even if the United States calls a time-out, the rest of the world won't. That kind of logic can compel even reluctant traders into agreeing to deals once they recognize that the status quo is even worse -- a logic that Lloyd Gruber spelled out in his excellent, underrated book Ruling the World.
Now I'm not quite Nate Silver-like in my confidence about the next term, but I do hereby offer a challenge to Phil: I'm willing to bet that at least two out of the following four things will happen during Obama's second term:
1) A Trans-Pacific Partnership that is ratified by Congress;
2) Bilateral investment treaties with India and China;
3) A transatlantic integration agreement;
4) A new services deal within the auspices of the WTO.
If Obama comes up short, I hereby offer to treat Phil to an expensive dinner at a DC restaurant of his choosing, because clearly Washington remains dysfunctional. If I'm right, however, Phil has to buy me dinner in New York, that most globalized of American cities.
The Financial Times' Alan Beattie is in a grumpy mood about the 2012 campaign, which leads to a wonderfully cranky column about the appalling campaign rhetoric on the global economy:
Hypocrisy and exaggeration may be an inevitable part of any election campaign, but the discussions on international economics and trade have had experts in the field longing for next Tuesday’s vote to be over.
Herds of peaceably grazing policy wonks have been left shaking their heads in dismay as the marauding presidential campaigns have rampaged through their turf, leaving a trail of wrong-headed assumptions, non sequiturs and outright falsehoods strewn behind them....
Unfortunately, a realistic debate would involve admitting that some of the biggest international economic threats to the US are outside any administration’s influence, and thus destroy an implicit pact to maintain the myth of presidential omnipotence....
And, most likely, we’ll be back here again in four years’ time, with the challenger accusing the incumbent of selling out to China and letting jobs be shipped overseas and the incumbent, by accepting the premise of the attack, ensuring another debate about the global economy that takes place at an oblique angle to reality.
I'm moderately more optimistic than Beattie on what will happen next year on the foreign economic policy front regardless of who wins on Tuesday, but he's not wrong about the ridiculously stupid four-year political cycle.
Unfortunately, if foreign economic policy wonks were honest with ourselves, we'd have to acknowledge that the truth would not really be a big political winner, unless you think the following speech would really bring out the undecideds:
I strongly favor inking more trade and investment agreements on behalf of the United States. Yes, it's likely true that greater globalization is one of the lesser drivers for increased inequality in the United States. Oh, and no trade deal is going to be a jobs bonanza -- the sectors that trade extensively are becoming so productive that they don't lead to a lot of direct job creation. Will some jobs be lost from these deals? Probably a few, but not a lot. But on average, greater globalization will boost our productivity a bit, which will in turn cause the economy to grow just a bit faster, which will indirectly create some jobs. Goods will be cheaper, which benefits consumers. Oh, and by the way, there are some decent security benefits that come with signing trade agreements.
Finally, the rest of the world is going to keep signing free trade agreeements and bilateral invesment treaties whether we play this game or not. So we can choose to stand pat and have our firms and consumers lose out on the benefits of additional gains from globalization, or we can actually, you know, lead or something. Your call. Greater integration with the rest of the globe is no economic panacea, but the one thing we're pretty sure about is that most of the policy alternatives stink on ice.
Here's a challenge to foreign economic policy wonks -- can the above message be sexed up at all without overpromising? In other words, what would be the best possible campaign rhetoric about foreign economic policy that would have the benefit of also being true?
I suspect that most of today's foreign policy post-mortems about last night's town hall debate will focus on the Libya question, in which, according to Taegan Goddard, "Obama acted like a president in the exchange while Romney was much less. It was Romney's Gerald Ford moment." He's not the only one to make this assessment. I'm not sure I would go that far, but Romney did manage to convert a pretty strong initial response to the question into a bad, bad moment for him.
But let's be honest: regardless of whether you think Romney exaggerated in his description of Obama's Libya response or Obama exaggerated in his rejoinder, those were not the biggest foreign policy whoppers told during this debate. Not by a long shot.
If we're going to engage in real-keeping, then let's acknowledge that both candidates fudged, exaggerated, or flat-out lied on just about everything pertaining to foreign economic policy during last night's debate. It was a truly bipartisan fib-fest. I could go through the debate transcript line by line, but let's just hit the highlights. At varous points, one or both of the candidates tried to convince undecided voters of the following:
1) Energy independence is the cure for what ails the U.S. economy;
2) The U.S. loses from trade with China, and tougher trade enforcement will fix that;
3) Free trade with Latin America will create millions and millions of jobs;
4) The only reason China is doing well comparatively is that it's keeping its currency undervalued; and finally
5) Illegal immigration is threatening the American economy.
Let's inject a little reality here, shall we? Repeat after me:
1) Because most energy sources are traded in global markets, energy independence has zero effect on the economy (though there might be a few security dividends).
3) Perfect trade enforcement would have only a marginal impact on employment;
5) Illegal immigration into the United States "has been in reverse for several years."
If the foreign policy debate next week has as much mendacity as this one on the global economy, your humble blogger will be passed out in a drunken stupor by 9:30 PM.
In the last few weeks, Fareed Zakaria and Niall Ferguson have found themselves at the centers of controversy. As someone who has written a thing or two about public intellectuals, I confess to finding it all very fascinating. What's striking to me is the vehemence on all sides. Brad DeLong is an excitable sort, but calling for Harvard to fire Niall Ferguson for tendentious matters unrelated to his scholarly work seems... a bit much. Last week the Washington Post ran a story falsely accusing Zakaria of another act of plagiarism... without independently checking to see if the charge had any validity.
On the other hand, the defenses that have been mounted also seem a bit over the top. Tunku Varadarajan defended Zakaria in Newsweek with an essay that bordered on the sycophantic, all the while accusing Zakaria's accusers of simple envy:
What one has seen in the past few days can only be described as a hideous manifestation of envy—Fareed Envy. Henry Kissinger’s aphorism about academia (where the “politics are so vicious precisely because the stakes are so small”) applies with delicious tartness to journalism, where media reporters of the kind who hounded Zakaria occupy the lowest rung and exult at the prospect of pulling people down. Zakaria, by contrast, is insanely successful by the standards of his profession: he has a TV show to which few people of any prominence would refuse an invitation, plus columns at Time, CNN.com, and The Washington Post. He also writes academic-lite books that presidents clutch as they clamber aboard planes, and gives speeches at—it is said—$75,000 a pop. He is as much a brand as he is a journalist: he has “inc.” in his veins.
Zakaria himself responded to the Post's bogus second charge of plagiarism in a somewhat curious manner. Here's what he told them:
Zakaria, in an interview Monday, defended the practice of not attributing quotes in a popular book. “As I write explicitly [in the book], this is not an academic work where everything has to be acknowledged and footnoted,” he said. The book contains “hundreds” of comments and quotes that aren’t attributed because doing so, in context, would “interrupt the flow for the reader,” he said.
He compared his technique to other popular non-fiction authors. “Please look at other books in this genre and you will notice that I'm following standard practice,” he said.
“I should not be judged by a standard that's not applied to everyone else,” he added. “People are piling on with every grudge or vendetta. The charge is totally bogus.”
Ferguson responded to his critics in a similar fashion:
The other day, a British friend asked me if there was anything about the United States I disliked. I was happily on vacation and couldn’t think of anything. But now I remember. I really can’t stand America’s liberal bloggers....
My critics have three things in common. First, they wholly fail to respond to the central arguments of the piece. Second, they claim to be engaged in “fact checking,” whereas in nearly all cases they are merely offering alternative (often silly or skewed) interpretations of the facts. Third, they adopt a tone of outrage that would be appropriate only if I had argued that, say, women’s bodies can somehow prevent pregnancies in case of “legitimate rape.”
Their approach is highly effective, and I must remember it if I ever decide to organize an intellectual witch hunt. What makes it so irksome is that it simultaneously dodges the central thesis of my piece and at the same time seeks to brand me as a liar.
I'd feel more sympathy towards Ferguson if his term "liberal blogosphere" obfuscates the fact that a Nobel Prize-winning economist is rebutting Ferguson on his use of facts, and then Ferguson didn't compound his economic errors in a Bloomberg interview.
So what the hell is going on?
I think there are three interlocking things going on that explain why everyone feels so cranky. The first, as I alluded to in my Zakaria post, is that the economics of superstars has now reached the world of public intellectuals. There's been a lot of talk about "brands" recently, and it gets at how the rewards for intellectual output have expanded at the upper strata:
Not that long ago, getting a column in Time would have been the pinnacle of a journalist’s career. But expectations and opportunities have grown in the last few years. Many writers now market themselves as separate brands, and their journalism works largely as a promotion for more lucrative endeavors like writing books and public speaking.
Replace "journalist" with "intellectual" and that paragraph still works. Credentialed thinkers like Zakaria and Ferguson, once they've reached the top, become brands that can multiply their earning potential far more than was the case fifty years ago. The ways in which the Internet concentrates attention on a Few Big Things means that if you are good and lucky enough to become one of those Big Things, money will rain down on your door. Over at Esquire, Stephen Marche proffered this explanation for what he would call Ferguson's intellectual devolution:
The real issue isn't the substance of Ferguson's argument, though, which is shallow and basically exploded by this point in time. It isn't even the question of how such garbage managed to be written and published. It is, rather, why did Ferguson write it? The answer is simple but has profound implications for American intellectual life generally: public speaking.
Ferguson's critics have simply misunderstood for whom Ferguson was writing that piece. They imagine that he is working as a professor or as a journalist, and that his standards slipped below those of academia or the media. Neither is right. Look at his speaking agent's Web site. The fee: 50 to 75 grand per appearance. That number means that the entire economics of Ferguson's writing career, and many other writing careers, has been permanently altered. Nonfiction writers can and do make vastly more, and more easily, than they could ever make any other way, including by writing bestselling books or being a Harvard professor. Articles and ideas are only as good as the fees you can get for talking about them. They are merely billboards for the messengers.
That number means that Ferguson doesn't have to please his publishers; he doesn't have to please his editors; he sure as hell doesn't have to please scholars. He has to please corporations and high-net-worth individuals, the people who can pay 50 to 75K to hear him talk. That incredibly sloppy article was a way of communicating to them: I am one of you. I can give a great rousing talk about Obama's failures at any event you want to have me at.
Now, railing at the One Percent aside (*cough* Esquire's target demograpic *cough*) Marche is really onto something here. I've heard from a few sources that Ferguson resigned his professorship at Harvard Business School (but not Harvard University) because he calculated that if he gave four or five extra talks a year, he could earn his HBS salary without all the tedious teaching obligations.
Zakaria and Ferguson got to where they are by dint of their own efforts, but the thing about the superstar phenomenon is that there's also an element of caprice involved. The gap between Zakaria and Ferguson, and their replacement-level deep thinkers is pretty narrow; the gap in the financial and intellectual rewards is pretty vast.
So I suspect that there is a bit of jealousy in some of the criticisms being leveled. These guys earn many multiples of the median intellectual income -- and I guarantee you that the median intellectual doesn't think that either Ferguson or Zakaria is many times smarter. That's gonna stir up some petty and not-so-petty resentments.
The top tier of public intellectuals are doing well in this world, and the best are pretty savvy at marketing their ideas across multiple platforms in a Web 2.0 world. But the same dynamics that push these people to the top also increase their vulnerability to intellectual criticism -- and this is the second thing that's going on here. As I noted a few years ago:
The most useful function of bloggers is when they engage in the quality control of other public intellectuals. [Richard] Posner believed public intellectuals were in decline because there was no market discipline for poor quality. Even if public intellectuals royally screw up, he argued, the mass public is sufficiently disinterested and disengaged for it not to matter. Bloggers are changing this dynamic, however. If Michael Ignatieff, Paul Krugman or William Kristol pen substandard essays, blogs have and will provide a wide spectrum of critical feedback.
One can clearly add Niall Ferguson and Fareed Zakaria to this list. Furthermore, the very act of trying to market ideas across platforms -- and the constant drive to generate new content -- leaves these intellectuals vulnerable to criticism. They can get sloppy, like Zakaria, and commit a near-fatal error. They can be tendentious in their use of facts, like Ferguson, and suffer reputational damage. Or, they can simple debase themselves to the point where Evgeny Morozov goes medieval on them.
For high-flying intellectuals, this kind of public criticism clearly wounds. What the superstar phenomenon gives, it can also threaten to take away (though, to be honest, scandals and bad writing don't seem to actually take away rewards all that often). But in the mind of top-tier public intellectuals, effort and intellect drive their accomplishments, not fortuna. They see online criticism and interpret it as jealousy, pettiness and ideological score-settling. A lot of the time that's exactly what it is -- but the online intellectual ecosystem is also pretty good at fact-checking and substantive criticism. Publc intellectuals don't see that these kinds of criticisms are the flip-side of the very phenomenon that is enriching them in the first place. They also don't realize that in a Web 2.0 world, mere bloggers can fact-check them and scorn them for a lack of citation.
Which leads to the last thing that I think is going on: this superstar phenomenon is invading one of the last spheres of life where money is not necessarily the Most Important Thing. Getting a Ph.D. means being socialized into a world where an academic job is considered more respectable than becoming a consultant that earns gazillions more in money. The currency in the academic economy is intellectual respect. Even if public criticism doesn't affect their real-world income, it does affect their intellectual standing. Even if Zakaria has left the academy, and Ferguson can "transcend" it, they were socialized into this value system, and they clearly care what their peers think.
Zakaria's argument that general nonfiction shouldn't be held to the standards of academic discourse rankles academics who know that he should know better -- the first instinct of any person with graduate training is to read the literature and cite, cite, cite. As my friend Delia Lloyd put it: "I find him culpable because Zakaria comes from the world of academia.... Plagiarism may not be a major moral failing... in the university setting in which Zakaria was trained and credentialed, it’s pretty much one of the worst crimes you can commit."
As for Ferguson, Timothy Burke blogs about what it is exactly about Ferguson's career arc that nettles him:
Ferguson would feel more like he was still within the bounds if he either investigated his own distaste for Obama in more reflective, philosophical and recursive ways or if he was willing to lay out a generalized, prescriptive theory of political leadership that didn’t fitfully move the goalposts on intensely granular or particular issues every few seconds. Why? Because I think scholarship requires some measure of self-aware and reflective movement between what you know and what you believe, and the relationship between your own movements and those of your professional peers... A scholar has to believe on some level that things are known or understood only after being investigated, tested, read, interpreted, that there’s something unseemly about robbing the graves and morgues for cast-off “facts” in order to assemble them into a shambling, monstrous conclusion built from a hackish blueprint. Being an intellectual takes some form of thoughtfulness, some respect for evidence and truth, something that goes beyond hollow, sleazy rhetoric that plays dumb every time it gets caught out truncating quotes or doctoring charts. Being an expert means you guide an audience through what is known and said about a subject with some respect for the totality of that knowing and saying before favoring your own interpretation.
Public intellectuals who have PhDs do not want to lose their standing as scholars. Sure, they can gin up psychological defenses against the hidebound ivory tower, but criticism like the one quoted above will leave a permanent mark. They'll have their riches, but they won't have what they were trained to crave more than anything -- respect.
In the end, what I think is going on is that, contra Russell Jacoby, top-tier public intellectals have acquired greater power than they used to possess. What they resist on occasion is the responsibility that comes with that power.
So that's what I think is going on. What do you think?
P.S. I think one of the best compliments I've ever received is that Justin Fox independently and simultaneously arrived at very similar intellectual destination on this topic.
TO: My Foreign Policy bosses
FROM: Daniel W. Drezner
RE: How Foreign Policy Can Conquer the World
Comrades August Members of the Foreign Policy Community:
Since Foreign Policy revamped its web presence in early 2009, everything has gone according to the Master Plan. You have ensured that this site is one every foreign policy cognoscenti's "must click" list. You have won National Magazine Award after National Magazine Award. With the Sex Issue, you came out with an issue that generated enough buzz to light up Tina Brown's jealousy furnace for years to come.
But where can you go from here? After reading Edith Zimmerman's bemusing description of Cosmopolitan's global empire in the New York Times Magazine, I'm wondering if there's a way to leverage their model. From Zimmerman's story:
Cosmo has a cheerful, girlfriendy tone (“When Your Period Makes You Cra-a-zy”) and a much racier reputation than its newsstand competitors (“Eeek! You’ll Die When You Read What These ‘Normal’ Guys Wanted Once Their Pants Hit the Floor”). Its covers rarely fail to feature at least one bold, all-caps rendering of the word “sex.” The August issue, for instance, offered “52 Sex Tips” and “When Your Vagina Acts Weird After Sex.” A sampling of 2012 headlines includes “50 Sex Tips,” “50 Kinky Sex Moves,” “99 Sex Questions” and “His Best Sex Ever.”
The repetition can be a little numbing, but it may help explain how Cosmo, which is the best-selling monthly magazine in the United States, has morphed into such a global juggernaut. (“If all the Cosmo readers from around the world came together,” read a recent piece in Cosmo South Africa, “this group would form the 16th-largest country in the world.”) Through those 64 editions, the magazine now spreads wild sex stories to 100 million teens and young women (making it closer to the 12th-largest country, actually) in more than 100 nations — including quite a few where any discussion of sex is taboo. And plenty of others where reading a glossy magazine still carries cachet. (“Many girls consider a hard copy of Cosmo to be an important accessory,” says Maya Akisheva, the editor of Cosmo Kazakhstan.) As the brand proudly points out, in 2011 alone, these readers spent $1.4 billion on shoes, $400 million on cars, $2.5 billion on beauty products and $1.5 billion on fragrance and bought 24 million pairs of jeans.
Now, sure, this formula is ripe for satire... but the recipe for successful globalization is undeniable!! Sure, FP did its Sex Issue, but that also generated a fair amount of critical feedback. I think the better tactic is to copy Cosmo's style without its... er... substance. Let's face it, what grabs the attention of readers are Cosmo's headlines. And what grabs the attention of foteign policy cognoscenti is... war. Never mind that war and other forms of violence are on the wane -- war is happening, war is now, war is hot, war is what people want to talk about even if they're not doing much of it.
Scanning Cosmo's website, here are ten headlines that with juuuuuust a bit of tweaking clearly beg for Foreign Policy articles:
75 Ways to Fight an A-maz-ing War
Make it a War Your People Will Never Forget
David Petraeus is Our New Cover Boy!!
30 Things to Do to a Prostrate Adversary
"That's Our Land" and Other LOL Lines that can Start a Hot War
How to Make Your Citizens Beg for More War
When is it Time to Break
Upwith Your Current Military Strategy?
Diplomacy? Ewww!!! Would You Try this War Prevention Method?
How to Wow Your Enemy Every Single Time
Could Your Ally Be Cheating On You? Take the FP QUIZ!!
Now, like Cosmopolitan, Foreign Policy would likely have to tailor its content by country and/or region. I mean, "Nine MREs that Will Make Your Soldiers Go 'Mmmmm!'" would obviously need to be custom-edited to take into account dietary customs in other countries. And this strategy might be hard to market in places like Switzerland, Costa Rica, and so forth. Still, where Cosmopolitan has blazed the trail... Foreign Policy can and should napalm it all to hell... before The Atlantic gets to it first.
Call me, and I can get David Petraeus' makeup artist on speed-dial in no time.
I read Chris Hayes' Twilight of the Elites last month and will suggest that you read it too -- it's an engaging read that addresses the question of whether a meritocratic elite can really stay meritocratic over extended periods of time. Hayes thinks the answer is no, and puts together a decent brief for that case. It's a good book in no small part because Hayes acknowledges his inner conflict -- as disgusted as he is with Enron, Lehman, Katrina, Penn State, Iraq and other elite catastrophes, he has peered into the maw of the populists who rail against these elites, and they give him a slight shudder as well.
I bring this up because David Brooks pushes back against Hayes' argument in his New York Times column today. One key section:
The corruption that has now crept into the world of finance and the other professions is not endemic to meritocracy but to the specific culture of our meritocracy. The problem is that today’s meritocratic elites cannot admit to themselves that they are elites.
Everybody thinks they are countercultural rebels, insurgents against the true establishment, which is always somewhere else. This attitude prevails in the Ivy League, in the corporate boardrooms and even at television studios where hosts from Harvard, Stanford and Brown rail against the establishment.
As a result, today’s elite lacks the self-conscious leadership ethos that the racist, sexist and anti-Semitic old boys’ network did possess. If you went to Groton a century ago, you knew you were privileged. You were taught how morally precarious privilege was and how much responsibility it entailed. You were housed in a spartan 6-foot-by-9-foot cubicle to prepare you for the rigors of leadership.
The best of the WASP elites had a stewardship mentality, that they were temporary caretakers of institutions that would span generations. They cruelly ostracized people who did not live up to their codes of gentlemanly conduct and scrupulosity. They were insular and struggled with intimacy, but they did believe in restraint, reticence and service.
Kevin Drum pushes back hard, and correctly in my view, against this argument:
Hayes does a good job of describing all the pathologies of today's meritocratic aristocracy, but his book never seriously addresses all the pathologies of past aristocracies, meritocratic or otherwise. You're left thinking that cheating and corruption and nepotism are somehow unique to the 21st century West. But not only is none of that stuff unique, it's not clear that it's even any worse than it used to be....
Brooks, if anything, is worse on this score. He's careful to admit the problem with the elites of the 19th century, but even so he idealizes them. Sure, the best of the old WASP elites were good people in a noblesse oblige sort of way, but the best of any set of elites are good people. Today's meritocracy is loaded with fine, upstanding citizens. The problem is that they're a minority. But the upstanding folks were a minority back in the days of the WASP aristocracy too.
I'd make one further point, which is that, likely since the start of the Industrial Revolution, elites have felt like insurgents. George Kennan, for example, is as much of a paragon of the Eastern Establishment as you can get -- but he always thought of himself as an outsider.
Most of the obituaries for the public intellectual suffer from the cognitive bias that comes with comparing the annals of history to the present day. Over time, lesser intellectual lights tend to fade from view - only the canon remains. When one looks back at only the great thinkers, it is natural to presume that all of the writers from a bygone era are great. Even when looking at the intellectual giants of the past, current public commentary is more likely to gloss over past intellectual errors and instead focus on their greatest moments. Francis Fukuyama's The End of History and the Last Man might look wrong in retrospect, but it is not more wrong than Daniel Bell's The End of Ideology. Intellectuals like Sontag or Friedman occupy their exalted status in the present only because they survived the crucible of history. As Posner acknowledges, "One of the chief sources of cultural pessimism is the tendency to compare the best of the past with the average of the present, because the passage of time filters out the worst of the past." It is riskier to assess the legacies of current public intellectuals - their ability to misstep or err remains.
It's always useful to remember that the first thirty centuries of human history was one long slog of poverty, misery and violence. By and large, things have gotten much better. This isn't to excuse the errors of today's elites -- but context matters.
On this Independence Day, it's worth considering whether there really is anything to this notion of "American exceptionalism." Realists, for example, like to argue that the rigors of the international system render differences in domestic institutions meaningless. Liberals genuinely believe that democracies do foreign policy differently. But has the United States practiced a particularly distinctive set of foreign or domestic policies since its independence?
Given that it was signed on this day 236 years ago, perhaps it's worth perusing the Declaration of Independence to see if there was anything particularly unique about it. Some of the better-known passages were not actually all that new. The whole "life, liberty and the pursuit of happiness" was a mild modification of an old John Locke passage, for example. Better-written, perhaps, but not uniquely American.
Looking through the list of greivances against the British crown, there is one particularly striking and unusual dimension to the Declaration of Independence. Boiled down, a healthy fraction of the colonists' compliaint are targeted at British mercantilism. In essence, the American authors of the Declaration were not too keen on being violently or economically cut off from commerce with the rest of the world. Consider this list of King George III's offenses:
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands....
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
He has affected to render the Military independent of and superior to the Civil power....
[C]utting off our Trade with all parts of the world....
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
It was the American desire to allow future Americans to migrate to these shores, and to truck, barter, and exchange with everyone else, that stands out this year when I read the Declaration of Independence. Which is something to think about when one major party candidate for president demagogues immigration and the other one demagogues trade.
Yesterday your humble blogger gave a talk about the state of the 2012 presidential race to a group of
really rich people international institutional investors. At the end of the talk, the convener asked for a show of hands about who they thought would (not should) win the race, and an overwhelming majority said Obama. In talking to the organizers, I learned that this was the sentiment of other groups of overseas bankers that had met earlier in the month. Indeed, there was apparent surprise at the suggestion that Mitt Romney could actually win.
Why did this sentiment exist? I don't think it had much to do with ideology -- we're talking about the global one percenters here. Based on my conversations, I think it was based on a few stylized facts:
1) The U.S. economy is outperforming almost every other developed economy in the world;
2) They assume that in times of uncertainty, Americans will prefer the devil they know rather than the devil they don't;
3) President Obama's foreign policies seem pretty competent;
4) Mitt Romney's policy proposals either seemed really super-vague (this will be an American Century) or, when specific (designating China as a currency manipulator) made him seem like an out-of-date clown.
So, consider the following a Global Public Service Announcement from the hard-working staff at this blog:
Dear Rest of the World,
Hey there. I understand that the overwhelming lot of you believe Barack Obama will be elected to a second term. I can sorta see that, as that is the current prediction from recent polls, some of our prognosticators and prediction markets. If you look closely, however, none of these predictions are very strong. Or, to put it as plainly as possible: there is still about a 50/50 chance that Mitt Romney will be sworn in as president in January 2013.
I can hear your derisive snorts from across the oceans. Ridiculous! Surely Americans would reject such ludicrous ideas as a trade war with China. Surely Americans understand that their economy has done pretty well in comparison to the rest of the world. Surely Americans can see that many long-term trends are pretty positive.
Valid questions. To which I must respond: The overwhelming majority of Americans do not give a flying f**k about the rest of the world.
Really, they dont. Take a look at these poll numbers about priorities for the 2012 presidential campaign, and try to find anything to do with international relations. There ain't much. It's almost all about the domestic economy.
See, most Americans don't compare the U.S. to other major economies -- they compare the U.S. now to, say, the U.S. of 2005. And things don't look so hot based on that comparison. As for the notion of a trade war with China, go read how Americans feel about absolute vs. relative gains with China -- they'll superficially welcome a trade war, when they bother to even think about it. Which they don't.
As for foreign policy or counterterrorism, yes, you could argue that the Obama administration has been pretty competent. But, again: Americans. Don't. Care. If anything, the foreign policy competency removes the issue from the campaign, and just concentrates the minds of everyone on the state of the domestic economy.
The fundamental fact of this election is that the American economy is pretty sluggish, voters blame the incumbent when that happens, and the incumbent happens to be Barack Obama. Indeed, it is only because Obama is seen as pretty likable -- and that voters do still tend to blame George W. Bush for the current situation -- that this race is even remotely close.
I'm not saying Mitt Romney is gonna win. If the economy picks up over the summer, Obama should win pretty handily. However, you, the smart money, should think about it this way: what are the chances that between now and November, none of the following will happen: another Euro-implosion, a rapid deflating of the China bubble, or a war in the Middle East? If you're confident that these events are not in the cards, bet on Obama. If any of them happen, all bets are off.
Will it matter to you? Think of it this way: compare and contrast who Mitt Romney would pick as the next Fed chairman versus Barack Obama. And plan accordingly.
Enjoy the summer! All the best,
Daniel W. Drezner
Am I missing anything?
It's mid-December, which means it's time to start garnering nominations for the 2011 Albies, in honor of the great political economist Albert O. Hirschman.
To reiterate the criteria for what merits an Albie nomination:
I'm talking about any book, journal article, magazine piece, op-ed, or blog post published in the calendar year that made you rethink how the world works in such a way that you will never be able "unthink" the argument.
I know that this was a super-boring year for those interested in the global political economy, so it's going to be tough to find good material. Still, please try -- this is, I believe, the only year-end Top 10 list that neither Time nor The Atlantic has comandeered. Here's a link to my 2010 list for reference.
The winners will be announced on December 31st. In the meantime, readers are strongly encouraged to submit their nominations (with links if possible) in the comments.
Bill Keller has moved on from the esteemed position of New York Times executive editor to the very vulnerable position of New York Times Op-ed Columnist Ripe for Mockery.
Alas, it's hard to mock Keller's column today for two reasons. First, Keller bothered to do some actual reporting, traveling to India to interview supporters of Anna Hazere to get their opinion on Occupy Wall Street. Since the Times itself has suggested that overseas protest movements might inspire similar action in the advanced industrialized economies, this seems appropriate. It certainly seems more appropriate than comparing the Occupy movements to the Arab Spring.
The second reason is what Keller got from his interview with Anna Hazare associate Kiran Bedi:
“When we started the movement, it was like Occupy,” Bedi told me. “But we went beyond Occupy.”
For starters, while Occupy Wall Street is consensus-oriented and resolutely leaderless, Hazare is very much the center of attention. There was an anticorruption movement before Hazare, but it was fractious and weak until he supplied a core of moral authority. When he announces his intention to starve himself, he parks himself on an elevated platform in a public place, thousands gather, scores of others announce solidarity hunger strikes, and TV cameras congregate, hanging on his every word. Hazare and his entourage can seem self-important and high-handed, but he is a reminder that leadership matters.
Second, the Occupiers are a composite of idealistic causes, many of them vague. “End the Fed,” some placards demand. “End War.” “Get the money out of politics.” Much of the Occupy movement resides at the dreamy level of John Lennon lyrics. “Imagine no possessions. ...”
Hazare, in contrast, is always very explicit about his objectives: fire this corrupt minister, repeal that law bought by a special interest, open public access to official records.
His current mission is the creation of a kind of national anticorruption czar, a powerful independent ombudsman. The measure is advancing, and Team Anna hovers over the Parliament at every step, paying close attention to detail, to make sure nobody pulls the teeth out of it. Instead of a placard, Bedi has a PowerPoint presentation.
Occupy Wall Street is scornful of both parties and generally disdainful of electoral politics. Team Anna (yes, they call themselves that) likewise avoids aligning itself with any party or candidate, but it uses Indian democracy shrewdly, to target obstructionists. Recently Hazare turned a special election for a vacant parliamentary seat into a referendum, urging followers to vote against any party that refused to endorse his anticorruption bill. Hazare has also called for an amendment to the election laws to require that voters always be offered the option of “None of the Above.” When it prevails, parties would have to come up with better candidates.
“What really changes them,” Bedi said of recalcitrant politicians, “is the threat of losing an election.”....
“Occupy has been, to my mind, an engaging movement, and it’s driving home the message, to the banks, to the Wall Street circles,” Bedi said. “That’s exactly the way Anna did it. But we had a destination. I’m not aware these people — what is their destination? It’s occupy for what?” (enmphasis added)
Damn, that sounds familiar.
There's one other big difference that's buried in Keller's column, however. He notes that, "One poll found 87 percent public support for Hazare’s 12-day August fast." While the Occupy movement is certainly more popular than the Tea Party movement, I haven't seen a single U.S. poll demonstrating that breadth of public support.
Am I missing anything?
Mary Carmichael has a fascinating story in the Boston Globe on how many American universities, which were so keen to create ocerseas satellite campuses, are now retrenching. The disturbing part of the story is the "monkey see, monkey do" nature of the international expansions of the past decade:
Over the last decade, universities spurred by dreams of global cachet - and, sometimes, by foreign governments eager to underwrite them - built or rented whole campuses and offered Western-style education abroad. But now some schools are running out of cash as they struggle to attract enough students and develop a viable business model....
From 2006 to 2009, the roster of international branch campuses grew by 43 percent, according to the Observatory on Borderless Higher Education, a British research firm. Qatar drew an all-star list, including Cornell, Georgetown, Northwestern, and Carnegie Mellon. By 2009, the United Arab Emirates had 40 international branches.
Middle-ranking colleges felt pressure to compete, even though some could not get foreign governments to pay their bills. The University of Nevada, Las Vegas, went to Singapore. City University of Seattle went to Switzerland. Troy, a public university in Alabama, founded 14 global branches.
“Some American campuses went into it wanting to make money,’’ said Phillip Altbach, director of the Boston College Center for International Higher Education. “But many of them got into it for prestige, planting the flag overseas, a presidential feeling that they needed to be doing adventurous things.’’
Not everyone shared that vision. Harvard, for instance, has not founded any international branch campuses recently. Neither did MIT nor Tufts University.
“Every time I looked at one of these deals I said, ‘No, I don’t think so,’ ’’ said Lawrence Bacow, who has been a high-ranking administrator at all three schools. “Philosophically, I think there’s an important role for higher ed to play in the developing world, but it’s not to create knockoffs of what we do here.’’
1) Go, Jumbos!! In your face, rest of higher education outside of the Boston area!!!
2) The logic of expanding overseas because of "prestige, planting the flag overseas, a presidential feeling that they needed to be doing adventurous things" is a depressing data point about the ways in which the academy can be slaves to
intellectual and business trends.
3) To be fair, I'm not sure this story tells the whole, er, story. There's no mention of the how the 2008 financial crisis and Great Recession might have affected the viability of these expansion plans. There's also nothing on the spread of distance learning. Fletcher's Global Masters of Arts Program, for example, combines a few intensive weeks of on-location education with a lot of online interaction. So although the tenor of this story is about the retrenchment of American universities, there are compensating trends that are still pushing American universities into the global marketplace.
4) Carmichael notes that one reason for retrenchment has been the difficulty of maintaining the quality of academic standards abroad. This is encouraging yet still modestly surprising. Why hasn't an American university gone the "f**k it, let's become a diploma mill" route as a way of making money? Why hasn't any university done this?
I suspect this might be one powerful virtue of the university degree functioning as a credential, but I'm curious to hear thoughts about this in the comments.
5) I'm thinking that Suffolk University's PR people can't be pleased with this kicker to the story:
At the end of last semester, Suffolk finally abandoned Dakar. It did not, however, abandon its students. Almost all have transferred to Boston under a special deal that charges them $10,000 in tuition, the same they paid when attending the Dakar branch and about one-third what their classmates pay. Suffolk foots the rest.
The students are adapting, though it is not easy. They dread winter and think the city’s buildings all look the same: impersonal. Some of their classmates have asked well-meaning but ignorant questions. Did they grow up living in trees? Isn’t Africa a great country? (emphasis added)
Anne-Marie Slaughter has responded to my musings about her new foreign policy frontier with a potent combination of vigor and logic, topped off with just a dollop of guile. I am happy to see that we share some vital zones of agreement -- namely, continued hegemony for the Boston Red Sox.
About lesser issues like the contours of world politics, we have some respectful disagreements. This is a fun debate, to have, so let's dive right in!
To summarize the gist of Slaughter's latest post: she argues that realists think of the world through a states-only, security-first, billiard-ball approach:
[T]he whole point of realism, as every first year IR student knows, is that structural realism (the school that holds as its bible Kenneth Waltz's Man, the State, and War) says that international relations analysts can treat the world as if it were composed only of states pursuing their power-based interests.
In constrast, Slaughter advocates a "modern/liberal-social" because such an approach will:
[factor in] all the important social actors, from tribes to democracy activists, focus on the relationship between those social actors and their governments, then assess interests relative to other governments that are themselves enmeshed in domestic and transnational social networks.
Slaughter asserts that the second perspective is the superior approach despite its greater complexity, because it permits a greater focus on the "social and developmental issues" that Slaughter believes will the the primary drivers of world politics over the next decade. As evidence for her more enlightened perspective, Slaughter compares her Twitter stream with my Twitter stream and concludes:
Going through these tweets actually offered an even more succinct contrast between how Dan and I think about foreign policy. Dan asked last week, addressed to all "IR tweeps": "Is there a better international relations song than Tears for Fears 'Everybody Wants to Rule the World?'" He got some great responses, but for me, his choice says it all about how, his protests notwithstanding, he sees the world. (Many a truth is spoken in jest.) By contrast (and again, with much less humor!), I tweeted a link on Monday to a in the Financial Times by the Israeli novelist Etgar Keret on the J14 protests and quoted the following passage: "In our current reality, the political cannot be separated from the social." The new foreign policy frontier is deeply social, as messy and unsatisfactory as that may be.
Slaughter's historiography of realism is a touch problematic, but also a bit of a distraction, so I'll leave it to others to address that question. Instead, let's start with the Twitter evidence.
Slaughter is clearly a huge fan of microblogging (despite its negative externalities) and its social networking capabilities. As an earlier adopter of these technologies, I'm a fan too. I do think there's a danger of reading too much into this kind of data, however. If I really didn't care about the kind of social and economic issues that Slaughter embraces... well, I wouldn't be following her. Like any curious IR scholar, however, I do follow her. Just because I don't tweet/re-tweet about these things all that much doesn't mean I don't read/blog/write about them in other venues. Slaughter assumes that I manage my Twitter feed the same way she does, as a natural extension of her research interests. Trust me when I say that I value Twitter somewhat differently.
This might be a trivial issue, but it gets at a point I hinted at in my last post: there's a difference between what's visible and what's significant in world politics. Twitter is highly visible, for example, but I think it's significance might be exaggerated -- or, rather, online networks merely replicate offline power structures. The threat of coercion is often invisible -- but it's effects can be quite significant.
Slaughter's more substantive point is her contrast between old-school realpolitik and new-school modern social-liberal foreign policy approach. On this distincton, let me start by observing that another important modern strategy in world politics is the notion of issue-framing. If they're good, policy entrepreneurs will be able to take their issue and frame it in a manner most favorable to their preferred policy solution. When their policy problem is pushed to the front of the queue, they are therefore likely to win the argument.
I bring this up by noting that I don't accept Slaughter's framing of our dispute. She posits that only by adopting her international relations worldview is it possible to recognize the social and developmental issues that are bubbling under the surface in world politics. Because realists primarily care about guns, bomb, and interstate security, they ostensibly will miss these problems.
Now, I know a lot of realists, and I can kinda sorta understand how Slaughter arrived at this caricatured version of realism. Nevertheless, Slaughter conflates subject matter with how one models the dynamics of the subject matter. In his last memoir, even über-classical-realist Henry Kissinger acknowledged the importance of human rights issues in modern diplomacy and staecraft. I certainly agree that the economic, social and developmental issues that are near and dear to Slaughter's heart are matters of import for world politics -- indeed, this is a theme I've written and
rambled spoken about for quite some time. I suspect most realist IPE scholars believe these issues are important... or they wouldn't be studying IPE in the first place.
Just because I agree with the importance of these issue areas, however, does not mean that I agree with Slaughter's implicit model of how these issues get addressed. Anne-Marie places great faith in the ability of transnational, networked, non-state actors to bend the policy agenda to their preferred sets of solutions. I think that these groups can try to voice their demands for particular policy problems to be addressed. I think, at the national level, that social movements can force even recalcitrant politicians to alter their policy agenda (see: Party, Tea). Where Slaughter's optimism runs into my skepticism is the ability of these movements to a) go transnational; and b) supply rather than demand global solutions. I'm skeptical about the viability of transnational interests to effectively pressure multiple governments to adopt a common policy solution, and I'm super-skeptical that these groups can supply broad-based solutions independently of national governments.
There's a "two-step" approach to world politics with which Slaughter is intimately familiar: it posits that interest groups and social movements can influence national policy preferences, but that outcomes in world politics are driven by the distribution of power and preferences among national governments. In her embrace of a new foreign policy frontier, Slaughter embraces the first step and mostly rejects the second.
That second step is really important, however, as most social movements are keenly aware. Indeed, most of the protests that Slaughter keeps identifying on Twitter are not about solving problems on their own, but demanding that governments address or ameliorate their needs.
Slaughter can and will point to Very Important Initiatives like the Gates Foundation or the Summit Against Violent Extremism as examples of supplying such solutions. These can matter at particular points in particular places, but I'll need to see some powerful evidence before I think that these transnational groups are as potent as, say, nationalism as political force in the world. All of the social movements and all of the online networks can agitate for policy solutions, but they're not going to be able to alter fierce distributional conflicts that exist when trying to address many of the topline issues in world politics show no signs of abating. The kind of non-state actors that Slaughter embraces have not been shy in engaging issues like climate change, Israel/Palestine or macroeconomic imbalances -- but I haven't seen any appreciable change in global public policies as a result.
Now, it's possible that Slaughter will eventually be proven right. That's the cool thing about studying international relations, we keep adding new data with every passing day. So, here's my challenge to Anne-Marie -- name three significant issue areas in which these kinds of networked actors will significantly alter the status quo (and I look forward to Slaughter falsifying me to within an inch of my life.). Because I can think of far too many issues -- including those listed above -- on which their impact will be negligible.
One final point: I agree with Slaughter that the issues she cares about are important, and attention must be paid to them. That said, the realist in me is not quite ready to claim that the old security-focused approach to foreign policy is truly outdated. Yes, traditional wars are much rarer than they used to be. That said, we're just one unsteady power transition away in North Korea, China or Pakistan for traditional concerns about militarized great power combat to return to the main stage of foreign policy practitioners. I really hope Anne-Marie is correct about these new issues being the important ones -- because that means the horrors of great power war continue to stay a distant memory.
[Note to readers: Because Dan was upgraded to business class on his trip to Beijing, he was exposed to a serious viral infection in the food called metaphoricus overloadus, known more commonly as Friedman's Disease. Rest assured, it is far from fatal -- it usually passes after 24 hours of no travel. As near as we can determine, all the facts in the blog post below are accurate. While suffering from Friedman's Disease, however, side effects do include rapid-fire, over-the-top metaphors. Remember: You've been warned!! --ed.]
To truly understand the phenomenon that is China, you need to fly into Beijing's airport and then try to get into the city. That's it; that's all you need. Just that adventure alone will tell you all you need to know about the contradictions of the Middle Kingdom.
First you enter a glittering, modern airport, with helpful signs in Mandarin and English. It's sheer scale and modernity telegraphs the ways in which China has already entered modernity. The monorail from my terminal to baggage claim was a pointed reminder of how much the United States lags behind in infrastructure investment in recent years.
And yet, there's the traffic. Summer in Beijing is a confusing miasma of traffic and smog and traffic. As my compatriot and I clambered into our taxi at Beijing's immaculately clean and modern airport, we knew that the ride to the hotel could take anywhere from 30 to 90 minutes depending on the traffic. Just as we Americans don't know when exactly China will catch up, the Chinese are not sure how long it will take to get there.
We might like to think that driving in a New York City taxi is as exciting as a carnival ride, but that's nothing compared with a taxi ride on a Beijing superhighway. In New York, there's always that sense that, in the end, the taxi driver won't risk an actual collision. On the road to Beijing, however, I witnessed at least two last-minute swerves and road rage that would have made Los Angelenos blush. Using an accent that an old-style New York cabbie would have admired in its sheer swarthiness, my cabbie kept honking for at least two minutes after a car viciously cut him off.
It's a fantastical engineering problem, getting so many cars and motorcycles and trucks and buses to merge and move in the same direction. And that's when it hit me like a thunderbolt -- China itself is like this superhighway. It's massive in size, 10 lanes easy. It's filled with an array of vehicles determined to get ahead. The problem is that when you combine all the vehicles together, the real possibility of a two-week-long traffic jam in which everyone wants to go somewhere but nobody gets anywhere is clearly a possibility. Predicting China's future is like predicting the traffic: You know there will be some stop-and-go, but you just don't know how much of it there will be.
When we got to the hotel, I paid my cabbie and he signaled that I owed him four more yuan. I was suffering from ATM disease, so I took out a single U.S. dollar bill and a 100-yuan note, looked at him, and said, "You choose." He paused, and then took the yuan note and made the necessary change. Clearly, all of us participating in this hyperaccelerated, globalized economy are going to have to make the necessary change soon enough.
Your humble blogger has, in the past, live-blogged or live-tweeted the State
of the Union address. After reading the National
Journal's draft of the speech, I've decided
the mindless applause will convert a decent 30-minute speech into an
interminable 75-minute talkathonso I'm gonna watch Mystery Men instead to
Looking over the draft, however, I see that the Obama administration has really taken this competitiveness theme to heart. More than any State of the Union I've seen before, President Obama raises the examples of other countries doing things better than the United States as an impetus for the U.S. to do more. Consider:
The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there's an internet connection.
Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They're investing in research and new technologies. Just recently, China became home to the world's largest private solar research facility, and the world's fastest computer....
Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we'd beat them to the moon. The science wasn't there yet. NASA didn't even exist. But after investing in better research and education, we didn't just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.
This is our generation's Sputnik moment....
The quality of our math and science education lags behind many other nations. America has fallen to 9th in the proportion of young people with a college degree. And so the question is whether all of us - as citizens, and as parents - are willing to do what's necessary to give every child a chance to succeed....
Our infrastructure used to be the best - but our lead has slipped. South Korean homes now have greater internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our nation's infrastructure, they gave us a "D."
We have to do better.
I'm curious to see how this will play out. On the one hand, the administration is obviously using this kind of "we're falling behind other countries!" shtick as a way to build public support for investments in education and infrastructure. In the same speech he talks about falling behind South Korea, for example, he embraces the Korea-U.S. Free Trade Agreement.
At the same time, I have two big concerns with this approach. First, there's the risk of rhetorical blowback, in which everyone freaks out and reacts in a hysterical manner.
Second, and more important, the percentage of the speech devoted to microeconomic "competitiveness" issues vastly exceeds the amount devoted to long-term macroeconomic policy. If the federal government really wants to create a better climate for innovation, it needs to send a credible signal that steps are being taken to deal with long-term budgetary problems. That section of the speech was, er, less solid.
[What about the foreign policy sections?!--ed. Meh. Nothing bad --
just nothing of substance either. One could argue that the biggest foreign
policy innovation of the SOTU is the administration's decision to use
globalization as the political crowbar to pry infrastructure
investments from Congress.]
Feel free to comment away on what you would like to see in the speech.
Fifteen years ago Samuel Huntington coined the term "Davos Man" to describe the kind of globalized elite that jetted off from global conference to global conference. His point was that Davos man was an exceedingly rare bird, and that nationalism, religion, language and culture were still the most potent forces binding groups together in the world.
It's in this context that I read Chrystia Freeland's new cover story in The Atlantic. It's well worth the read, but like Kevin Drum, I'm not sure that the phenomenon Freeland is identifying is all that new.
Furthermore, I'm not entirely convinced they're as powerful as Freeland or Drum or Felix Salmon suggests. As Freeland pointed out, they fought a lot of the Obama administration's first-half policies tooth and nail -- and they actually lost a fair amount of the time. Indeed, nary a year ago some pundits were declaring the death of Davos man.
That said, there are three trends that are worth further consideration. First, as Freeland observes, the rich are now work much harder than they did a century ago. Second, more and more of the rich are coming from outside the OECD economies.
Third, the rich have attracted a lot of intellectual capital into their web. Indeed, the call for an economist code of ethics is based in no small part on the ways in which successful economists score moneymaking gigs as they move up the career ladder.
Again, I'm not sure if Freeland is right. I am sure that it's an interesting argument however. So, in the interest of further research your humble middle-class blogger is headed off tonight to investigate the beliefs and activities of the super-rich from much closer than normal.
This is a roundabout way of saying that blogging will be intermittent this week because I'm off to Dubai for a few days for a conference involving a lot of Really Rich People.
How rich? Well, let's put it this way -- I've already received an e-mail from my hotel in Dubai explaining that, "a Lifestyle Manager will be at your entire disposal" for my stay.
I'll post my thoughts on the entire surreal experience when I can.
In the meantime, talk amongst yourselves about the "global plutocracy." Is it a big deal? Is it an overblown phenomenon during an economic downturn? Did they all have superior Chinese mothers?
If David Brooks is announcing his Sydney Awards for the year, then it's time to start garnering nominations for the 2010 Albies, in honor of the great political economist Albert O. Hirschman.
To repeat and update the description from last year's nominations announcement:
I'm talking about any book, journal article, magazine piece, op-ed, or blog post published in the
20092010 calendar year that made you rethink how the world works in such a way that you will never be able "unthink" the argument.
The winners will be announced on December 31st. In the meantime, readers are strongly encouraged to submit their nominations (with links if possible) in the comments.
The opening and closing of today's Tom Friedman's column:
For me, the most frightening news in The Times on Sunday was not about North Korea's stepping up its nuclear program, but an article about how American kids are stepping up their use of digital devices...
We need better parents ready to hold their kids to higher standards of academic achievement. We need better students who come to school ready to learn, not to text. And to support all of this, we need an all-society effort -- from the White House to the classroom to the living room -- to nurture a culture of achievement and excellence.
If you want to know who's doing the parenting part right, start with immigrants, who know that learning is the way up. Last week, the 32 winners of Rhodes Scholarships for 2011 were announced -- America's top college grads. Here are half the names on that list: Mark Jia, Aakash Shah, Zujaja Tauqeer, Tracy Yang, William Zeng, Daniel Lage, Ye Jin Kang, Baltazar Zavala, Esther Uduehi, Prerna Nadathur, Priya Sury, Anna Alekeyeva, Fatima Sabar, Renugan Raidoo, Jennifer Lai, Varun Sivaram.
Do you see a pattern?
OMG, I do see a pattern!! It's the the funky foreign name game! Hey, I can play that game too -- in fact, let's take a look at the first paragraph of that Sunday Times story, shall we?
On the eve of a pivotal academic year in Vishal Singh's life, he faces a stark choice on his bedroom desk: book or computer?
Guess what? He chooses the computer.
I understand what Friedman is trying to say here about American education, but mixing in the "kids are texting too much these days and it's rotting their brains" lament is as distracting a hook as... er... texting itself. Does Friedman seriously believe that the young people in South Korea, Vietnam, and China are abstaining from this technology?
Sorry, Tom, but the North Korea nucleas reactor story scares me far more. [So what do you think of the DPRK's latest provocations? Huh, smart guy?!--ed. I hope to post something on this later today.]
Apparently, rants about the World Cup generate a lot of traffic to this blog. With that in mind, one of the things that fascinates me about the World Cup is the orgy of self-examination it produces about when or whether Americans truly embrace
futbol football soccer?
From what I can ascertain, there are two clear camps. The enthusiast camp, epitomized by this Daniel Gross essay, suggests that it's just so hard to be a soccer fan in the United States:
Being a soccer fan at World Cup time in America is a little like being Jewish in December in a small town in the Midwest. You sense that something big is going on around you, but you're not really a part of it. And the thing you're celebrating and enjoying is either ignored or misunderstood by your friends, peers, and neighbors. It can be a lonely time.
Jonathan Chait's rejoinder to Gross' essay best epitomizes the rejectionist school of thought. Part of it is a genuine disdain for soccer, a game with lots of flopping and 0-0 ties and is ripe for Simpsons parodies. I suspect that another component is hostility to the trendiness of the game among DC media elites and intellectuals. My local sports radiop station has had a contest to name these people, and come up with "nilrods."
My hunch, however, is that neither of these descriptions fit the American attitude towards World Cup soccer. I've seen elevated but not overwhelming interest in the World Cup. Any honest assessment of soccer would have to acknowledge that the game can be boring for long stretches, punctuated by some moments of genuine excitement and athleticism -- not unlike baseball.
The fact is, there are plenty of sports in the United States that occasionally capture the intermittent attention of the casual sports fan, but won't "break through" the sports zeitgeist until and unless the United States fields a successful national team. This is how it tends to work with the Olympic team sports, and it's how it will work with the World Cup. If the United States can advance far in this tournament, Americans will become more interested; if not, they'll switch back to baseball and the NFL draft.
In this approach, the casual sports fan is using a strategy of "rational ignorance" -- i.e., not caring until the team is sufficiently successful. This is the kind of thing that political scientists tend to understand, but sports and politics junkies reject as somehow not representing true fandom. But it is how most people think about most things in life most of the time.
Dan Kitwood/Getty Images
That said, here are three pieces of good news to suggest that the global economic recovery is a bit more resilient than the headlines might suggest:
The Conference Board, based in New York, said Tuesday that its Consumer Confidence Index rose to 63.3 points, up from a revised 57.7 reading in April. Economists surveyed by Thomson Reuters had expected 59.
The increase was bolstered by consumers’ outlook over the next six months, one component of the index, which soared to 85.3 from 77.4, the highest seen since it reached 89.2 in August 2007, before the economy entered in a recession.
The other component of the index, which measures how shoppers feel now about the economy, rose to 30.2 from 28.2.
The index — which measures how consumers feel about business conditions, the job market and the next six months — has been recovering fitfully since hitting an all-time low of 25.3 in February 2009.
The first quarter of 2010 saw a substantial decrease in industry demands for temporary new import barriers under potentially WTO-legal "trade remedy" policies - antidumping, safeguards, and countervailing duty (anti-subsidy) policies. The first quarter 2010 resulted in a 20% decrease in newly initiated investigations in which domestic industries request the imposition of such new import restrictions compared to the number during the same time period in 2009. This follows the fourth quarter 2009 which also resulted in a 20% decrease relative to the same time period in 2008....
The first quarter 2010 also exhibited a substantial decline in the imposition of the new trade barriers that can come at the conclusion of the investigations that were initiated earlier. When compared to the same period in 2009, the first quarter of 2010 resulted in a 51.1% decrease in the number of new import-restricting measures imposed. It is also a substantial reduction from the number of new import restrictions imposed in the previous quarter - i.e., the fourth quarter of 2009.
3) There's no indication that panic over European sovereign debt is causing a credit crunch across financial markets. Indeed, according to the Financial Times' Chris Giles, most economists are pretty upbeat about the direction of the real economy:
[T]hrough this tense period, most economists have remained confident in the world economic recovery. Greece, Spain, Portugal, Ireland and Italy are simply not big enough to derail the global economy.
Jim O’Neill of Goldman Sachs says the policy crisis in the eurozone is unlikely to be a source of global financial market contagion. “Nearly 70 per cent of the eurozone economy is made up of three countries – France, Germany and Italy – and unless the sovereign debt crisis derails their economies, it is tough to see how the eurozone could weaken sufficiently,” he says.
Julian Callow of Barclays Capital agrees: “The real economy still has substantial momentum and pent-up demand at the global level, provided that the current derisking in the financial markets does not become extended and feed back into a fall in business and consumer confidence.”
So far that has not happened to any great extent, a result that is more encouraging than in the aftermath of the bankruptcy of Lehman Brothers. And forecasts for the global economy, although uneven, are still rising....
[A] rapid yet fragile global recovery is a big improvement on the sense of doom that surrounded the outlook a year ago. The European sovereign debt crisis cannot be dismissed as an irrelevance to the recovery but it appears so far to be a nasty financial aftershock rather than a new economic earthquake.
True, a Second Korean War or, say, a zombie outbreak could dash these nascent hopes for a strong recovery. That said, I'll take these positive trends over the factors that are supposed to cause me fret and worry.
Last night the Miss USA pageant crowned Rima Fakih the winner. This is interesting for three reasons: A) Fakih is an Arab-American; B) Fakih's performance in the pageant was a bit underwhelming; and C) Fakih's victory has triggered a big blog controversy.
In a moment that was replayed during the broadcast, Fakih nearly fell while finishing her walk in her gown because of the length of its train. But she made it without a spill and went on to win....
During the interview portion, Fakih was asked whether she thought birth control should be paid for by health insurance, and she said she believed it should because it's costly.
"I believe that birth control is just like every other medication even though it's a," Fakih said.
This prompted Michelle Malkin to argue that the politically correct fix was in:
Between the NYTimes, MSNBC, Jon Stewart, and the late night talkers, we wouldn’t hear the end of it....
Fakih’s cheerleaders are too busy tooting the identity politics horn to care what comes out of her mouth.
Daniel Pipes goes further -- he thinks this is part of a disturbing macrotrend in Western society:
[Fakih's victory] prompts me to recall some prior instances of Muslim women winning beauty contests in Western countries.
Juliette Boubaaya, 19, was Mlle Picardie in 2009.
Nora Ali was America's Junior Miss in 2007.
Hammasa Kohistani, 19, was Miss England in 2006.
Sarah Mendly, 23, was Miss Nottingham in 2005.
They are all attractive, but this surprising frequency of Muslims winning beauty pageants makes me suspect an odd form of affirmative action.
Clearly, this is the kind of all-consuming, must-respond debate that your humble blogger has no choice but to work through.
In the interest of being useful to college juniors no doubt pondering a good topic for a senior IR thesis, let's propose three topics that could come from this kerfuffle:
1) Has political correctness gotten to beauty pageants? This is Pipes' and Malkin's thesis. Malkin at least has an empirical toehold in observing that right-wing contestants might be treated differently than left-wing ones. Fakih is no former Miss South Carolina -- but if the AP story picked up the contrast between her performance and her victory, well, that justifies some further inquiry.
Pipes' assertion, however, is just horses**t. He manages to dredge up the names of five Arab/Muslim women in the span of five years to suggest affirmative action. Let's be ultraconservative and assume that there are a combined 100 pageants a year in the countries of concern to Pipes. That means that out of 500 possible contest winners, a whopping 1% of them are Arab and/or Muslim in countries far lower than the percentage of Arab/Muslim populations living in these countries. That's nothing close to resembling affirmative action.
2) How do Arab Muslim beauty pageant contestants define their identity? Liberty Pundit interprets the issue this way: "She’s in America. She’s doing what beautiful American girls do. She’s acting Western." Is this assertion true? I would anticipate that in-depth interviews of the contestants would be required -- as well as a control sample of non-Muslim contestants to ensure a sufficiently divergent set of cases.
3) Is what's good for the pageant good for the winner? Jonathan Turley notes the recent injection of politics into the pageant interviews:
As with the Prejean controversy, it continues to amaze me that people inject politics (and frankly substance) in this beauty contest. Usually it is an effort to elevate the competition but at times it is an effort to paint the contestants in a darker light.
Actually, if it's intentional, the injection of politics is pretty clever gambit by the pageant owner, Donald Trump. After all, political controversy catches the attention of people who otherwise would
watch beauty pageants as a guilty pleasure but deny it at a Senate confirmation hearing not watch bueaty pageants. The Miss America beauty pageant, for example, has suffered declining ratings for years. If politics livens up the buzz factor for these things, the organizers would be fools not to ask third rail questions on issues like immigration.
Of course, what's good for the pageant might be bad for the winner. In theory, Miss USA, like other celebrities, should be able to use their star power to promote their own charities and causes. However, as I noted here, political controversy is guaranteed to tarnish their luster and reduce their ability to appeal across the political spectrum. Miss USA winner has some charitable alliances -- but political controversies can harm the star power of the winner.
I look forward to reading the papers that answer these questions.
It's Patriots' Day here in Massachusetts, and in honor of that holiday, here's a Financial Times story by Joshua Chaffin that reports on a phenomenon that occurs, oh, maybe once a decade or so: the European Union admitting that the U.S. regulatory model is superior on a particular issue.
In this case, the issue is the prolonged grounding of European flights in response to The Volcano That
Cannot Shall Not Be Named:
European officials on Monday acknowledged weaknesses in the computer models that guided their decision to ground thousands of flights during the past week following a volcanic eruption in Iceland.
Many of the flights would have gone ahead under US aviation standards, they said, and urged that these be considered in the future.
The admission is likely to provide ammunition for critics who believe that authorities have shown excessive caution in the wake of the eruption. The airline industry, in particular, has argued that the no-fly zone over much of Europe should be eased.
It is estimated that airspace closures are costing airlines $200m a day in lost revenue....
In the US, air carriers are left with the responsibility to determine whether or not it is safe to fly – a system that [EU director-general for mobility and transport Matthias] Ruete said Europeans should consider adopting in the future. “The American model is not a model of less safety. You just need to look at the statistics to see that,” he said....
I'd just add that the politics of this are highly unusual. Ordinarily, it's quite easy to point to the direct costs of less stringent regulation, and more difficult to point to the indirect gains. In this case, however, it appears that even Europeans have recognized that maybe they were a bit too risk-averse.
Jeff J Mitchell/Getty Images
Some in the policy blogosphere believe that the American Political Science Review does little more than publish abstruse, small findings of no consequence to anyone other than fellow political scientists. And, truth be told, a lot of political scientists think this to be the case as well.
The APSR has had a pretty decent month contradicting that belief, however. The February 2010 issue of the journal already touched on issues related to Rusia's counterinsurgency tactics in Chechnya.
A different article has now cropped up in a front-page story in the New York Times by Julia Preston on immigration. Preston reports that more immigrants are employed in white collar professions than previously thought. Why is this politically significant? Preston goes to the APSR for an answer:
The data belie a common perception in the nation’s hard-fought debate over immigration — articulated by lawmakers, pundits and advocates on all sides of the issue — that the surge in immigration in the last two decades has overwhelmed the United States with low-wage foreign laborers.
Over all, the analysis showed, the 25 million immigrants who live in the country’s largest metropolitan areas (about two-thirds of all immigrants in the country) are nearly evenly distributed across the job and income spectrum....
The findings are significant because Americans’ views of immigration are based largely on the work immigrants do, new research shows.
“Americans, whether they are rich or poor, are much more in favor of high-skilled immigrants,” said Jens Hainmueller, a political scientist at M.I.T. and co-author of a survey of attitudes toward immigration with Michael J. Hiscox, professor of government at Harvard. The survey of 1,600 adults, which examined the reasons for anti-immigration sentiment in the United States, was published in February in American Political Science Review, a peer-reviewed journal.
Americans are inclined to welcome upper-tier immigrants — like Ms. Kollman-Moore — believing they contribute to economic growth without burdening public services, the study found. More than 60 percent of Americans are opposed to allowing more low-skilled foreign laborers, regarding them as more likely to be a drag on the economy.
You can access the Hainmueller and Hiscox article by clicking here. Their argument:
Past research has emphasized two critical economic concerns that appear to generate anti-immigrant sentiment among native citizens: concerns about labor market competition and concerns about the fiscal burden on public services. We provide direct tests of both models of attitude formation using an original survey experiment embedded in a nationwide U.S. survey. The labor market competition model predicts that natives will be most opposed to immigrants who have skill levels similar to their own. We find instead that both low-skilled and highly skilled natives strongly prefer highly skilled immigrants over low-skilled immigrants, and this preference is not decreasing in natives' skill levels. The fiscal burden model anticipates that rich natives oppose low-skilled immigration more than poor natives, and that this gap is larger in states with greater fiscal exposure (in terms of immigrant access to public services). We find instead that rich and poor natives are equally opposed to low-skilled immigration in general. In states with high fiscal exposure, poor (rich) natives are more (less) opposed to low-skilled immigration than they are elsewhere. This indicates that concerns among poor natives about constraints on welfare benefits as a result of immigration are more relevant than concerns among the rich about increased taxes. Overall the results suggest that economic self-interest, at least as currently theorized, does not explain voter attitudes toward immigration. The results are consistent with alternative arguments emphasizing noneconomic concerns associated with ethnocentrism or sociotropic considerations about how the local economy as a whole may be affected by immigration.
To unpack that abstract a bit: Hainmueller and Hiscox are arguing that material self-interest does not explain attitudes about immigration. The findings suggest one of two possibilities: simple prejudice, or concerns that low-skilled immigration negatively affect overall U.S. welfare.
I confess I have some skin in the game on this question, as I've argued that American attitudes towards immigration would be affected by implicit realpolitik calculations of national interest.
Still, this is the second time in less than a month that a quant study in the most recent issue of the APSR has yielded salient findings about a matter directly affecting public policy.
Later today I promise to mock the Obama administration's National Export Initiative to within an inch of its life; on a Friday morning, however, FP readers deserve a dose of whimsy.
With pitchers and catchers due to report later this month, I bring you the greatest nexus between sports, world politics, and Web 2.0 technologies yet discovered: Ichiro Suzuki as a both a precision-guided munition and a weapon of mass destruction.
Hat tip: ESPN's Rob Neyer.
America could use a truly Whiggish book right about now. More than a year into the Great Recession, it has become much harder to believe in the idea of inexorable progress. The moment is ripe for a counterintuitive, optimistic perspective that shows, despite appearances to the contrary, that the world is getting better and better every day, in every way. Gregg Easterbrook tries hard to satiate our inner optimist with “Sonic Boom.”
You'll have to read the rest of the review to gauge how well Easterbrook did at this task. Here's a small hint, however -- I'd really like to read a persuasive book that advances this argument, because I think it can be done.
Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University.