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”.

Wednesday, February 6, 2019

Global poverty over the long-term: legitimate issues

I became somewhat peripherally involved in the debate on long-term trends in global poverty that is raging these days in the WebSphere, prompted first by some very strong claims by Steven Pinker and Bill Gates, and then by an equally strong rebuttal by Jason Hickel.

Max Roser, whose work is to be strongly commended, became somewhat of a lateral casualty in this debate because it was his graph (based essentially on the work of Martin Ravallion and the World Bank) that Pinker and Gates quoted, and that Hickel disagreed with. Joe Hassel and Max Roser have now written a detailed explanation of the data they used to create the graph and how others (and themselves) have calculated global poverty over the long-term. So, to be clear, I find Martin’s and Max’s work absolutely crucial and indispensable for the understanding of long-term trends in this and a number of other dimensions. But I disagree with the excessively political and strident tone in which this work has been promoted by Steven Pinker (and more recently by Bill Gates) and their disregard of many caveats which come with some of these numbers.

As I mentioned in my tweet, there are (in my opinion) at least four such caveats that Hickel rightly brings out explicitly. (He uses other arguments too, but I do not comment on them.)

First, Maddison and Maddison-project data which are the only game in town for both global poverty and global inequality and which I use in my work too, do tend,  like all GDP calculations, to overestimate increase in real income where there is a transition from activities that are not commodified to the same activities becoming commodified. GDP, as is well-known, is geared to measure mostly monetized activity. At the time of industrialization, as well as today during the ICT revolution, such underestimation is likely to be significant. It is odd that people today would question this—while we are going through a similar period of increased commodification and a rising share of activities that are now marketable but hitherto were not. Until Airbnb and Uber came along, your hosting friends of friends or driving them to the airport was not part of GDP. Nowadays, it is because you will be paid for such services. (The same is true for home activities that used to be performed without monetary compensation mostly by women—and which, at some point, become commercialized.)

Even more dramatic were, as Hickel points out, the changes that occurred during the Industrial Revolution. Many activities performed within households became monetized while people were often physically chased away from, or disposed of, land, water and other rights that they had enjoyed for free. I do not need to go into too many examples there—just take the enclosures, or the land dispossession of Africans. This was not solely a transfer of wealth, but seriously reduced income of those who had the right to the usus fructus of land, water or other resources. Their reduced access to the actual goods and services was not recorded in any income statistics. It is thus reasonable to think that both GDP growth rates and the decline in poverty were overestimated.

Second, income distribution data for the 19th century that we all use come almost entirely from the 2002 seminal paper by Francois Bourguignon and Christian Morrisson (B-M). There are two more recent papers, one by van Zanden, Baten, Foldvari and van Leeuwen  and one by myself that used a somewhat different methodology (that is, more diversified sources) in order to check the robustness of B-M findings. Both conclude that B-M results stand, but in both papers (van Zanden et al. and Milanovic) the number and/or reliability of these new sources are extremely limited. (I use social tables to estimate countries’ distributions in the 19th century. But the number of social tables that we have is very limited; both in terms of country and temporal coverage.)

Furthermore, Morrisson’s original distributions, while made available by the author, are unsourced. So, one cannot tell if they are right or wrong. But even if individual country distributions were right, many of them are made to represent a vast variety of countries (say, Colombia, Peru and Venezuela; or Cote d’Ivoire, Ghana, and Kenya; or “45 Asian countries”; or “37 African countries”, all have the same distributions) because B-M divide the world into 33 “regions”, simply because information from most  countries is lacking.

Fragility of such distributions has a particularly strong effect on poverty numbers. It affects inequality somewhat less because, from other (fragmentary) sources we know what are the ranges within which inequality moves. But we know that less for poverty. The bottom line is that  income distributions for the 19th century are, to put it mildly, fragile.

Third, Hickel questions the use of $PPP 1.90 absolute poverty line. There is a huge debate on this, and I will not enter into it—but it suffices to look at the critiques made by Thomas Pogge and Sanjay Reddy (regarding the underestimation of the price level faced by the poor), large degree of arbitrariness with which the poverty line of, at first $PPP1, and now $PPP 1.90, was drawn (see e.g. Angus Deaton here), or more recently the methodological questioning of the World Bank approach by Bob Allen (here). Hickel simply mentions these issues. They are real and they should not be ignored.

Fourth, Hickel makes a more philosophical point that economists (unlike say, anthropologists or historians) are less well-equipped to deal with: human costs of the Industrial Revolution, from England to the forced labor (and probably ten million dead) in the Congo and Java, to Bengal famine (more than 10 million dead) to Soviet collectivization (more than 5 million dead) and China’s Great Leap Forward (about 20 million dead). The dead enter our calculations only to the extent that their deaths affect the estimated life expectancy. (And in the B-M paper there is an attempt to calculate global inequality over the past two centuries taking into account also changes in life expectancy). But, otherwise, so far as poverty calculations are concerned, the deaths have the perverse effect of reducing the population and increasing per capita income since the marginal output of those who die as forced laborers or from famine is zero or close to zero. Jason is right to bring up this point.

The effect of this last point is ambiguous though. While it would—were we somehow  able to account for it—increase the costs of industrialization and make the gains, compared to the pre-industrialization era, less, it would on the other hand improve the relative  position of the present with respect to the era of industrialization—simply because such massive famines do not occur today, or occur less frequently (e.g. North Korea, and before that in Ethiopia).

To conclude. In my opinion, Jason Hickel had brought up several valid issues that most economists acknowledge as well (and have actually frequently written about). However, others, once a graph is created, tend to use the results less scrupulously or carefully in order to make political points. This is why bringing these issues to the fore is valuable and should be encouraged—and not shot down.

Friday, February 1, 2019

Marxism as religion: a personal recollection

A couple of days ago, I was writing a part of my forthcoming book (with the provisional, and not very clever, title “Globalization and inequality”) dealing with war. You have to have a section on war in today’s books because all of your stories about convergence, divergence, global middle class, r>g and the like can be totally swept away by war, and especially by a world war.

I then remembered a small episode in my life, from much earlier times when the threat of nuclear war really loomed large in everyday life. Like many of my peers,  I have been strongly influenced by the Cold War. We lived, until the late 1960s-early 1970s constantly in its shadow. I was in elementary school when the Cuban missile crisis happened and I still remember the feeling of dread that took over everybody. For sure, Yugoslavia, where I lived then, was a non-aligned, although Communist, country and we did not expect that the first volley of missiles would hit us. It was even unclear who might shoot at Yugoslavia. But the fear of the abyss was nevertheless palpable.

Around that time, we also studied elementary Marxism with its teleological succession of socio-economic formations: primitive Communism, slave-owning society, feudalism, capitalism, socialism and then, the blossoming of all, Communism. We learned that every society had to go through these stages and  that the ultimate and inevitable final stage of all human societies was Communism. Then, living in the shadow of a nuclear cataclysm, I combined what  I had just learned about the ineluctable advance of humanity with the threat of war. If all of mankind had to reach Communism, I thought, then we cannot have a nuclear holocaust  now since it would destroy the mankind before it had acceded  to Communism. Thus I decided that Marxism provides a very effective rebuttal to any possibility of a nuclear war. My fears receded. For, I thought, if there is a war, the scientific study of where the mankind is  going would be proven incorrect. And, on that soothing note, I went to bed, sure that no world war would break out.

Now, almost half-a-century later, as I was writing about the war, I realized how Marxism in that case really fulfilled the essential functions of a religion. It is often said that Marxism, with its succession of social stages and with the beliefs it engenders in people, is a secular religion. But in this case it was more  than that: it dispelled the fears of death, like any “serious” religion would.

Now when I see the clouds of a nuclear war appearing again, and no longer believe in Marxist schemata nor in the ineluctable future of the mankind, nor in religion, there is nothing, I thought, to make me forget the fear of war.