Monday, March 18, 2019

Formal and actual similarities between climate change and global inequality, and suboptimality of the nation-state

There are obvious and (to some people) surprising similarities between global climate change and global inequality. Both are obviously global problems. Neither can be solved by a single country, group or individual. In both cases, there are significant externalities and consequently coordination problems. Both issues are even formally linked (that is, not only conceptually): elasticity of carbon emissions with respect to real income is around 1. This means not only that if person’s (or country’s) income increases by 10%, emissions tend to increase at the same rate, but that the distribution of emitters mimics the distribution of income. Since in the global income distribution the top decile receives at least 50% of global income, it is also responsible for at least one-half of all emissions.

But there are also significant differences. The effects of global inequality are in part  the product of high within-country inequalities that obviously have to be dealt with at the level of nation-states. There are only two parts that are truly global. The first is that high global inequality also means high global poverty; the second is that high global inequality is due to a significant extent to high inequality between countries’ incomes which in turn fuels migration.

The issue of global poverty is an ethical issue for all those who are not poor. It is not otherwise an issue that affects the non-poor in their daily lives. Moreover since they do not share space with the global poor, they, in their daily lives, tend to ignore them.

Migration is the only concrete manifestation of global inequality that affects people in rich countries. If some of them want to reduce migration, it is in their self-interest to help growth of poor countries. But the benefits and costs of migration are unevenly distributed within rich countries’ populations. Some groups like employers, users of many services, and workers with complementary skills gain from migration while others who compete with migrants, or those who are afraid that their culture would be “diluted”,  lose. Thus the overall effect of global inequality on the lives of most people in rich countries boils down to the effect of migration.

The effect of global climate change is different in the sense that it is more remote in time and is uncertain. The winners and losers are not clear. To combat climate change requires adjustment of behavior by individuals and countries in order to forestall effects which lie in the future and whose benefits are unclear, while costs of adjustment are obvious and present. Individual adjustment, while entailing often significant monetary or convenience cost for that individual, has close to zero effect on climate change and is therefore not rational to undertake from a purely personal perspective. Change in the behavior of larger groups, induced by taxation of especially “bad” activities, can produce effects but the distribution of benefits from these adjustments is unknown. Even if the benefits were somehow equally distributed, a group that adjusted its behavior would receive a very small share of all benefits. It is a typical externality problem.

This implies that no group of people and no individual country has an incentive to do anything by itself: they have to be roped into an international framework where everyone is compelled to reduce emissions and where, in the case of success, net benefits would be, most likely, unequally distributed. (Note the similarity with social insurance schemes.) This is indeed what has happened with Kyoto and Paris accords. To complicate the matters further, however, nation-states are not really the best units to do this, although they are the only ones through which, given the current global governance structure, such policies can be conducted. This is because the man emitters who should be targeted are the rich, regardless of where they live. Thus, a much more appropriate approach would be an international (global) taxation of goods and services consumed by the rich. But for that one would need to have an international authority that would be allowed to tax citizens of different countries and to collect  revenues globally.

As I mentioned above, there is a formal equivalence between global inequality and climate change. Migration, which is the strongest “negative” (from the point of view of some)  effect of global inequality, also requires international coordination. The increased migration of Africans into Europe cannot be solved by any individual country alone. It can be “solved” or rather managed only by a joint action (distribution of quotas) involving both the emitting and receiving countries. But unlike climate change which is basically considered an overall “bad”,  migration is not an overall “bad”, but rather an overall “good”. Therefore targeting for more action countries that are likely to be the largest emitters of migrants does not make sense.

In fact, in the case of migration, we deal with a “global good” that reduces global inequality and global poverty even if it may in some cases produce negative effects. Because of these real or putative negative effects (economic and social) we need rules that would assuage some people’s fears lest these people wreck and stop the whole process of migration.  This is where the idea of “circular migration” and differentiation between job-related rights (equal for all) and civic rights (not available to migrants) comes from (in my “Global Inequality” as well as in the forthcoming “Capitalism, Alone”). In the case of climate change, we are dealing with something that is essentially a “bad”, but we have trouble making those who are generating the bulk of this “bad” pay for it and forcing them to change their behavior.

Thus in one case we try to keep what is globally good (migration) by reducing fears of those who may, locally, be affected negatively. In the case of climate change, we try to avoid something that is globally bad by using the only instrument that we have (nation-state) which is clearly suboptimal for that purpose. We are thus in both cases trying to devise what may be called “second-best” solutions, mostly because of a political limitation called the nation-state.

Friday, February 22, 2019

A reflection on two dictators

Tito and Franco could not be, in many ways, more different: they were the antipodes. One fought with the Nazis; another against them; one was a strict reactionary favoring religion; another an atheist Communist; one was excluded from the post-World War II global governance structures, almost a pariah; another fully integrated in them;  one leading a colonial war, another being lionized by anti-colonial leaders; one protecting private property, another abolishing it. I could probably go on.

Like with all antipodes, there are similarities too. Both were born the same year (1892), and died within less than five years of each other; each ruled for more than three decades, unchallenged; both acquired or gave themselves military titles: one was a Generalissimo, another Marshall; both named streets and squares after them (Tito even cities); both came to power through bloody civil wars; both proceeded to mass executions of their opponents (although the degree of guilt and involvement in atrocities and genocide among Tito’s opponents was of an entirely different order of magnitude than among Franco’s); both started economic reforms in the 1960s; both were born Catholic; and both were buried in memorial complexes (although Franco’s is much more grandiose).

What they have in common too is that very little of what they did or built remains standing. And it is precisely what I would like to highlight. How little has remained of what the European strongmen of the first half of the 20th century tried to create. History has not been kind to them (as they were not kind to their contemporaries). Lenin and Stalin’s edifice is all gone: the social system has returned to capitalism, and the country has crumbled and been divvied up. The same is true for Tito. Kemal Ataturk’s foundations are on a daily basis dismantled by Erdogan. Of Mussolini’s Italy there remain only imperial-looking buildings and bridges: no corporatism, no imperial glory, no monarchy. And obviously, Hitler’s Germany ended up in ruins, both literally and figuratively. The Federal Republic (as well as the GDR) were built on the direct contradiction of all that the Nazi stood for. We should be glad that history has been so unkind to the 20th century's European dictators.

But looking at Tito and Franco I was also keen to look at what still remains of the two’s “work”. And it seems to me that the verdict there is in Franco’s favor (though I will explain later why it might be so). Reading on the one hand Spanish newspapers and on the other hand, Serbian (and less frequently Croatian), I notice a much greater frequency with which Franco, compared to Tito, is mentioned. And this is not only because of the current moves to exhumate, and bury elsewhere, his remains. He is mentioned by those who criticize the post-Francoist constitution, and by those who notice that the current monarchy was “blessed” or installed by him.  

For Tito the situation is different. Not only has the edifice he created disappeared and been broken into pieces (although along the borders he designed or at least approved), and the political and economic system he favored disbanded, but there is no one in the successor states of Yugoslavia that can be considered  to be his “heir” or to have been put in a position of power by him, even indirectly so.

While the political heritage of Franco is more apparent, this may not be so on the level of popular memories or perceptions. Francoist “logistics”, names of streets etc. are, I think, completely expunged in Spain, but Tito’s remain in parts of Yugoslavia (in a few places in Slovenia, Croatia, and Macedonia; only in Serbia is he completely “erased” from history although his tomb is there). In people’s memories however Tito’s period, for most of those who lived then, or who learned about it from their parents, remains linked with economic prosperity, ethnic peace and conviviality, and an important international role. While the economic prosperity is significantly greater in some former republics now, it is not so in others; ethnic peace has been replaced with either permanent conflicts or at least tensions—almost no single border of the former republics is free of dispute; and a significant international role has been replaced by its very opposite: insignificance. But this is not the case with Franco because today’s Spain is much richer, freer, and internationally influential than the Spain he left.

So, while the “people’s memory” may be kinder to Tito than to Franco, the fact that politically everything that was associated with Tito has disappeared means that if we measure how much, politically, remains of the two, the balance is in Franco’s favor. But that does not mean necessarily that Franco was a better statesman. I think the main difference comes from the “material” with which they built their states. Franco built on the foundation of a nation, that although regionally and ethnically diverse, existed within more or less the same borders, for some seven centuries before he came to power. Moreover, a nation that was a major world power. Tito’s “material” were peoples who, for most of the previous five or so, centuries were under foreign rule or tutelage. The foundation on which Tito built existed but for a couple of decades before he came to power—and moreover exploded to pieces and genocidal killing in the World War II. So one built with stones, another with sand.

Tito’s task, as well as the task of every Eastern or Central European leader who tried to rule a multi-ethnic country, was to build a state edifice using a crumbling “material”—or to paraphrase Bolivar, to try to harvest the sea. (“J’ai labouré la mer”). This is why politically or socially nothing remains of Tito’s times. And why such a state of affairs will never return.

Friday, February 15, 2019

Poverty of vision of “liberal interventionists”

Should you write reviews of bad books? Obviously not if the book is so bad that you never finished it. Not even if you finished it because it is often not worthwhile doing. But sometimes, as in this case, I think it is worth to review a (generally) bad book because it represents, in a distilled form, the wrong opinions of a significant group of researchers or politicians. Jean-Pierre Cabestan’s book “Demain la Chine: démocratie ou dictature? represents such a case.

Cabestan is a well-known French scholar of China and Taiwan (teaching at the Baptist University in Hong Kong) and in his most recent book he endeavors to answer the question whether China will evolve towards a liberal democracy, remain where it is now (politically), or become a nationalist dictatorship. Before I tell you what Cabestan’s answer is, let me situate Cabestan politically.

In a very bizarre approach for an academic Cabestan often writes of “nous” and “notres” (us and ours) values, opinions etc. One is rather puzzled throughout the book who these “us” could be. One guesses that it could be the “liberal intelligentsia”, but the answer comes explicitly only at the end of the book in a section entitled “What should democracies do?”. There we learn that “us” is Western democracies because Cabestan ends the book with a sort of a manual on how “Western liberal democracies” (called also "civilized countries", p. 270) should deal with China. (Among a number of bizarre prescriptions is to never use the term “friendship” in joint communiques with China.) One thus wonders if the book might have been commissioned by the Quay d’Orsay or another organization to guide policy with respect to China rather than representing a genuine academic text.

Ideologically, Cabestan is fully aligned with the trend of thought that was dominant in the 1990s and the early 2000s and which regards the attainment of liberal democracy as the ultimate telos of all societies, the West as the agent that  would ensure that all countries do get to their rightful destination, and “liberal interventionism”, political or military (as the case may be) as the tool to achieve it. Cabestan displays, like many adherents of this view, a remarkable blindness to the fact that what they self-servingly consider to be only an interference in other countries’ affairs in order to help them democratize, may often appear to the others as a naked stab for domination. In his last chapter, Cabestan indeed comes very close to suggesting that West’s policies should aim at dismemberment of China under the guise of giving full democratic rights to different “oppressed minorities”. He does not stop to realize that if such is the objective of Western “democratizing” policies, they are very unlikely to appeal to the Chinese liberal middle class that Cabestan views as the key constituency that would bring democracy about. He similarly fails even to mention a number of debacles and setbacks that such approach has suffered in the past twenty years (Iraq, reversed democracies in Russia and Turkey, end to the Arab Spring, Libyan chaos) much less to acknowledge its implicit cultural arrogance.

Cabestan chastises China for being a “revisionist power” for, among other reasons, asking and getting the increase in its voting rights at the IMF from 2.3% to 6.4%. But he does not note that China’s current voting rights are about one-third of those of the United States, and thus may still be regarded as an understatement given that China is the second (or the first, in terms of purchasing power) economy in the world, the second largest exporter, and the most populous country. It is more than obvious that China will, like any other nation, desire that its current world ”weight” in international organizations (be it IMF or WTO) be reflective of her today’s position, and not of her 1945 status.

So, what is Cabestan’s judgment on China's democratization? After passing in review, often repetitively, the positions of various groups (the Party-State, private sector entrepreneurs, the intellectual elite, the counter-elite, and the like), he concludes that the Party is currently so strong that it can easily fend off any challenge to its authority, or power, whether it comes from an economic downturn, social dissatisfaction or international tensions. But—interestingly--while he entirely dismisses prospects for democratization in the next 20-30 years, Cabestan is equally strongly convinced that, eventually, China will become democratic. The reader is left in a quandary. If Cabestan was unable to identify a single circumstance or a long-term trend that  would lead to democratization, how and why is democratization going to happen? In the long-run Cabestan thinks, everything is possible (we do not know why) and so by some deus ex machina trick China will turn democratic. Utter pessimism for the short- to medium-run is thus matched by an equally utter optimism as to the long run! But that eventual long-run will be also somebody’s short-run, 20 or 30 years hence. So why would not Cabestan today’s diagnosis apply then too?

I am totally unconvinced that all societies have to evolve to the telos of liberal democracy, but leaving this aside I am also unconvinced by Cabestan’s belief in CCP’s stability. A more astute observer might have avoided to speak of the Party-state as it were a single individual with determined and clear objectives. When we view the Party-state in such a light, it is indeed strong enough to fight all possible challengers. But paying perhaps more attention to Eastern Europe and the USSR would have convinced Cabestan that the Party often contains within itself different ideologies and  also different personalities who in order to come to power might espouse the ideologies that, otherwise, they would never support. Cabestan might have noticed that towards the end of the Communist regimes in Eastern Europe and the USSR, the CPs contained a large segment of social-democrats, but also pragmatists, nationalists and sheer opportunists. Thus rejecting the role of potential personality conflicts (as that between Bo Xilai and Xi Jinping) as driven by individual interests  and not by ideology is wrong: personal conflicts often find in “ideologization” their justification and a way to conceal the raw ambition that frequently underlies them.

Does the book have any redeeming features? It does. Cabestan is, in my opinion, right to see corruption as an inherent feature of political capitalism, and the present anti-corruption campaign as a way to arrest the internal decay of the Party which threatens  its survival. He is probably right in his emphasis on mutual interdependence of political and economic elites, and thus on the lack of interest of the new, private-sector elite in promoting democratic change. He is probably right also in pointing out to the ambivalence of Confucianism when it comes to giving an explicit endorsement to non-hierarchical societies, individualization, and equal (nominal) right of every individual to participate in political life.

If the book were more analytical and less partisan, and better sourced (the number of references to both Chinese and foreign authors is limited and vague) and less repetitive, more thoughtful and less of a parti-pris, it would be worth reading—on its own merits. As it is, it is mostly worth reading to see the limits or rather poverty of vision shared by “liberal interventionists”.