Globalization and politics in the modern West

Writing in City Journal, Christopher Caldwell describes the work of “real estate expert” Christophe Guilluy:

At the heart of Guilluy’s inquiry is globalization. Internationalizing the division of labor has brought significant economic efficiencies. But it has also brought inequalities unseen for a century, demographic upheaval, and cultural disruption. Now we face the question of what—if anything—we should do about it.

A process that Guilluy calls métropolisation has cut French society in two. In 16 dynamic urban areas (Paris, Lyon, Marseille, Aix-en-Provence, Toulouse, Lille, Bordeaux, Nice, Nantes, Strasbourg, Grenoble, Rennes, Rouen, Toulon, Douai-Lens, and Montpellier), the world’s resources have proved a profitable complement to those found in France. These urban areas are home to all the country’s educational and financial institutions, as well as almost all its corporations and the many well-paying jobs that go with them. Here, too, are the individuals—the entrepreneurs and engineers and CEOs, the fashion designers and models, the film directors and chefs and other “symbolic analysts,” as Robert Reich once called them—who shape the country’s tastes, form its opinions, and renew its prestige. Cheap labor, tariff-free consumer goods, and new markets of billions of people have made globalization a windfall for such prosperous places. But globalization has had no such galvanizing effect on the rest of France. Cities that were lively for hundreds of years—Tarbes, Agen, Albi, Béziers—are now, to use Guilluy’s word, “desertified,” haunted by the empty storefronts and blighted downtowns that Rust Belt Americans know well.

Guilluy doubts that anyplace exists in France’s new economy for working people as we’ve traditionally understood them. Paris offers the most striking case. As it has prospered, the City of Light has stratified, resembling, in this regard, London or American cities such as New York and San Francisco. It’s a place for millionaires, immigrants, tourists, and the young, with no room for the median Frenchman. Paris now drives out the people once thought of as synonymous with the city.

Yet economic opportunities for those unable to prosper in Paris are lacking elsewhere in France. Journalists and politicians assume that the stratification of France’s flourishing metropoles results from a glitch in the workings of globalization. Somehow, the rich parts of France have failed to impart their magical formula to the poor ones. Fixing the problem, at least for certain politicians and policy experts, involves coming up with a clever shortcut: perhaps, say, if Romorantin had free wireless, its citizens would soon find themselves wealthy, too. Guilluy disagrees. For him, there’s no reason to expect that Paris (and France’s other dynamic spots) will generate a new middle class or to assume that broad-based prosperity will develop elsewhere in the country (which happens to be where the majority of the population live). If he is right, we can understand why every major Western country has seen the rise of political movements taking aim at the present system.

The whole thing seems to be a pretty insightful look at the political economy of Western countries in the 21st century.

Hat tip: Ross Douthat

Pessimism and political success

In The Unwinding: An Inner History of the New America, George Packer chronicles the decline of the post-World War II American political economy in the face of globalization and neoliberalism. He tells this history through the experiences of both famous and ordinary people.

One of the individuals that Packer follows is Silicon Valley investor Peter Thiel. One anecdote describes Thiel’s interaction with Mitt Romney, who wanted Thiel’s support. Thiel told Romney, “I think the most pessimistic candidate is going to win, because if you are too optimistic it suggests you are out of touch.”

Packer continues:

In other words, it would be a mistake for Romney just to argue that Obama was incompetent, and that things would automatically be much better with a new president. Reagan might have been able to make that argument against Carter in 1980, but in 1980 only 50 percent of the people thought that their children would be worse off than they were, while in 2011 it was closer to 80 percent. It would be smarter for Romney to say that things could be much better, but getting there would be very hard and would take more than changing presidents. But it was a point that Romney couldn’t grasp. He assumed that the more optimistic candidate would always win. He assumed that things were still fundamentally working. (382)

I thought that this was worth noting in light of Thiel’s support of Donald Trump. While Trump did not fully embrace this strategy (he promised a quick recovery), his campaign was characterized by a claim that much was not “fundamentally working.”

Creative destruction means that you get both

I liked R.R. Reno’s summary of the parallel, seemingly contradictory effects of global capitalism on societies:

Because global capitalism often destroys traditional forms of social organization, it tends to make people more vulnerable, especially the poor, even when they’re less poor than they used to be. It’s foolish to imagine that ready availability of TVs in the slums of Buenos Aires makes up for the loss of the finely woven social safety net of a traditional village, however impoverished. Yes, people move there because they rightly see the modern market economy as the source for greater material well-being. But they also rightly want to be an integral part of a larger society in which their voices are heard and needs addressed.

By my reckoning, it’s this vulnerability—the danger of becoming an anonymous, throw-away person in a global economic machine—that Pope Francis wants us to see. He urges that we “eliminate the structural causes of poverty.” That’s been tried, without success. More germane to the social problem is his call for “small daily acts of solidarity.” We may not be able to win a war on poverty. But we can share our lives—and our society—with the poor.

His whole interpretation of the populism characterizing Pope Francis’ Evangelium Gaudium is interesting.

Hat tip: Peter Leithart

Strangling entrepreneurs

Walter Russell Mead linked to this Matt Yglesias column about the difficulty of renting out a condo in DC due to the huge amount of regulations, which also affects urban residents of more modest means who would want to start a business.

Key quote from Yglesias (quoted by Mead):

Red tape, long lines, inconvenient office hours, and other logistical hassles probably won’t stop tomorrow’s super-genius from launching the next great billion-dollar company. But it’s a large and needless deterrent to the formation of the humble workaday firms that for many people are a path to autonomy and prosperity.

Key quote from Mead:

Heavy regulation plus bad governance hurts the poor and prevents jobs from being created in big blue cities where so many immigrants and minorities live. Those are exactly the people who most need the freedom to start businesses, and those are the businesses our existing blue model cities do so much to crush.

Christ, Christendom, and liberty

Doug Wilson has been writing on and off about his idea of “mere Christendom,” which I think is the title of a forthcoming book. In a recent post, he argued that the two strains of conservatism: the Burkean (respect for good tradition) and libertarian (desire for a limited government). He writes that both of them flourish only when the Bible is the only standard:

If you take God’s law as absolute, you will not take it upon yourself to act coercively without warrant from Him. This will result in an enormous amount of economic liberty. If you restrict only those transactions that you have biblical warrant for restricting, then the result will be far more freedom than we currently have. This is why accusations that a “mere Christendom” would result in “oppression” are so risible. Are you joking me? In our current system, a contractor on a building site can’t scratch his rear end without talking to the building inspector about it first. Tell me more about this free society you are so anxious to preserve. Are we dropping bombs in the Middle East to protect our right to be groped in a TSA line? Being lectured on our potential “oppressions” from today’s statists is like being lectured on public hygiene by Typhoid Mary. I can never make it through even one lecture without fidgeting in my seat. And they never seem to allow time for Q&A.

Not just political division: the economic component of our national problems

The midterm elections were almost two months ago, but that’s not going to stop me from posting this roundup of perceptive comments about them.

My friend Rick posted an article about evangelical turnout and shared some thoughts about the role of Christians in elections:

Christians voted in large measure because we are a nation that houses many Christians. When Christians are unmotivated, their voting turnout is mediocre and Liberals start to think we are a Middle-Left country. Liberals are guilty of overreading elections and proceed hard left, like in 2006 and 2008. When Christians are motivated and vote, we are reminded that we are a Middle-Right country, like 2000, 2004, and now in 2010. It’s true that a 30% voting block will hold a lot of sway over elections that are determined by 5 points or less. President Obama knew this and worked hard for the Evangelical vote in 2008. He was realistic and knew that if he could just flip even 5% of the Evangelical vote, it could lead to victories in some battleground states.

My friend Joel compares the elections of 2008 and 2010 in a way that makes a lot of sense to me:

The voters rejected the Republicans as hypocrites and took out their vengeance for bad economic times on them. What they did not do, by and large, was endorse the Democratic agenda of a large welfare state, unlimited abortion and other radical notions. Many GOP voters probably stayed home in 2008 out of anger or disgust.The Democrats, however, interpreted the results as a sweeping wave that affirmed their agenda and was ushering in a new Rooseveltian or Great Society vision of the country. As George Will wrote, all they were in 2008 was “not George Bush.” The Democrats assumptions of generational and demographic realignment were wrong.

Christopher Beam explores the back-and-forth swings between parties in Slate, and thinks that the prophecies of triumph for one party don’t make sense any more:

But the last few years should put predictions of permanent anything to rest. The key data point: Voters appear to have voted Democrats out for the same reasons they voted Republicans out before. And those reasons don’t appear to be going away. Foremost is the bad economy. (As we constantly reiterate but never seem to process, the economy is the No. 1 factor in electoral outcomes.) Voters didn’t examine Bush’s economic policies and dismiss them, only to examine Obama’s economic policies and dismiss them. They’re just responding to hard times. As long as times stay hard, voters will punish incumbents. The economy may recover in the short term, but the need to address the long-term national debt means that future presidents and Congresses will have to make much more difficult decisions than the current leaders—and will probably be punished for it.

Have we entered a new era of seesaw government, constantly switching back and forth between parties? It seems likely: The speed of the media makes voters impatient about how quickly politicians can get things done. The spike in partisanship—just look at filibuster usage over time—makes it harder for the party in power to pass legislation. Voters are therefore more likely than ever to dismiss a president as ineffectual and a Congress as “do-nothing”—even if they’ve done quite a bit.

What would that mean for how the parties behave? Two things, both bad. It means the party in power will be less ambitious, since it knows the opposition will misrepresent any accomplishments and a fickle public will punish them for it. (Exhibit A: Harry Reid saying he’s open to trimming back parts of health care reform.) And it means the minority party will resist cooperation so as to take advantage of voters’ discontent with the majority. (Exhibit B: John Boehner’s speech Tuesday night, in which he declined to name concrete goals.)

Walter Russell Mead had some good pre-election commentary here and offers his take on the Obama presidency thus far here.  From the first:

The presidential elections of 2004 and 2008 were both fought out over the same issue.  Think of America as a car: the Democrats offered a competent and smooth ride to Boston.  Under the accident-prone George W. Bush, the Republicans offered a bumpy ride towards Dallas.  In 2004 and 2008 Democrats attacked Republicans for crashing the car; Republicans attacked Democrats for wanting to take it in the wrong direction.  In 2004, the Democratic argument did not convince.  In 2008, with the economy melting down, it did.  Barack Obama ran as a competent, smooth driver who would make the ride so pleasant and easy that the country wouldn’t much care where he was going. Republicans keep driving off the road, the new President argued, because the roads to Dallas are bad.  Without a vigilant government to invest in infrastructure, superintend the road builders, subsidize ethanol, enforce speed limits and require safety belts, the road to Dallas is a series of disasters waiting to happen.  The road to Boston, on the other hand, has been built by intelligent, credentialed technocrats.  The tolls may be high, the renewable fuel has some problems, and the 35 mile an hour speed limit can be a little irksome, but the road is safe and the ride is smooth.

2010 is shaping up to be a terrible year for Democrats for two reasons: more people are aware of just where the administration wants to take the car, and the ride has turned out much bumpier than advertised.  Competent, professional, cool and cerebral doesn’t seem to be creating many jobs.  If the ride is going to be bumpy and crash prone and we are going to end up in the ditch whichever way we head, voters appear to have concluded that we might as well face Dallas while spinning our wheels….

The real problem for both parties is that the old roads and the old destinations don’t make that much sense anymore.  A global economic upheaval is changing the rules before our eyes.  This can play to America’s greatest strengths: our cultural dispositions favoring flexibility, innovation and hard work.  But we will have to reinvent some of our core institutions to do this, drastically reducing the size and cost of our government, legal, health and educational systems even as we find ways to make them much more productive than ever before.  The old progressive elite of Democrats’ dreams can’t lead us into the promised land — but while Republicans know this much, they haven’t figured out what comes next.

In this uncomfortable, in-between time, voters are turning restlessly from one party to the other.  Right now, unless President Obama starts pulling some rabbits out of his hat (a possibility I do not discount), we are on course for two failed presidencies in a row.  The cycle of voter disenchantment is speeding up; the electorate gave Bush six years before tuning him out.  President Obama risks losing the country’s ear after only two.

In the second, he writes:

The American economy is passing through a painful transition; there is no simple path to rising wages, rising house prices and declining budget deficits from where we now stand.  The core strategies that have guided both political parties and the mainstream establishment since the fall of the Soviet Union are not working very well.  Globalization seems to be making too many Americans less well off and the international environment is becoming more contentious and unstable, not less.  Neither neo-conservatism, liberal internationalism, neo-liberalism nor the Third Way worked as advertised.  The ideas and the policies of American intellectuals left and right seem largely inadequate and even irrelevant to both our foreign and domestic problems.  President Obama is not the cause of this systemic crisis in the American Project, but the public judges him by how well he copes with it.

I’ve been saving these for a while, but I never got around to actually publishing it because there was something more that I wanted to say.  I think that there are two major reasons that we find ourselves with a political system that’s become a meat grinder for whatever party occupies the seats of power.  We see this as both of our major parties come into office, think that they have a mandate (see Joel and Rick’s comments above), and then wind up turning off the electorate pretty quickly.

I tried to detail the most obvious reason here, the political-cultural divide about what kind of country we want to be and the resulting political culture of ultra-politicization and denunciation.  One party’s victory is also an impetus for the other side to organize and pounce on the other side’s failings.

But I think that there is a second component that prevents either party from convincing the electorate of its competence: the fact that the American economy is no longer at the center of the world economy, as it was from the time after World War II until about 1970.  This means that neither party’s economic philosophy can result in the same golden prosperity of the postwar period.  Democrats think that the cooperation of big labor, big business, and big government (what Walter Russell Mead calls the “blue model”) can get us back there; think of how many times you hear Democratic politicians say it was Republican deregulation that destroyed our prosperity.  Republicans think that it’s all about reducing suffocating  government regulations and lowering taxes, and of course Reagan is their hero.  But with all of deregulation and tax cuts since 1981 we still have a lot of economic anxiety.  I’d say that this is because the postwar period was unique and with the global economy we aren’t going to be at the center of the world economy again in the foreseeable future.

It’s possible that this economic component is hidden by the high stakes of the culture war discourse.  After all, both sides promise a return to prosperity if we follow their formulas, and these formulas are bound up with the moral visions of both sides of the cultural divide.  Republicans trumpet individual responsibility and economic freedom as the foundations of prosperity, while the Democrats call for a state empowered to protect the vulnerable and blunt the less pleasant outcomes of capitalism.  Also, it’s possible that if we did return to a more permanent prosperity, we wouldn’t even agree that it was prosperity because of the divide in how to measure that.

There’s much more that I could write, but fortunately Walter Russell Mead has written the article that I would like to have written, but would only have been possible for me to write if I had way more knowledge and economic understanding.  Mead seems to be writing some really good stuff these days about the current political situation, and I imagine that I will be passing on more of his observations.