The three German fears

I spent an extremely hectic and intellectually stimulating week in Berlin. Despite my reasonable following of German politics (nobody interested in Europe can afford to ignore German politics) I was unprepared for the extent of the malaise that appeared in almost every conversation. During that week, I gave a talk on my new book “Visions of Inequality”, had a presentation on global inequality and a panel discussion with the Confederation of German Trade Unions, and participated at the opening of a website on wealth inequality in Germany. I thus met people from different walks of life: academics, trade unionists and people close to the ruling SPD, researchers of inequality, several journalists who interviewed me, and even several politicians who gave talks at various occasions. But neither in their public talks nor in private conversations, could I fail to observe a large dose of pessimism.

What were the topics that fueled the pessimism? Here is an approximate list: inflation and dearness of energy, economic stagnation (near zero growth), the rise of the extreme right, political paralysis, loss of exports to China, decline of German car technology, high wealth inequality, imperfect assimilation of foreign-born population, inefficiency of German railways, dark streets in Berlin (saving of energy), full political dependence on the US. One could go on depending on the person I talked to, chance movements of conversation, and the daily mood.

To a foreign observer who might have disembarked into Germany not knowing much, that pessimism seems exaggerated. On the positive side of the current ledger one could list the overall wealth of the country, acceptance of more than 1 million Syrian refugees and almost as many from Ukraine, and full employment. Yet the negative tones dominate.

I think that the pessimistic mood dominates not only because of the current wars in Ukraine and in Israel/Palestine, and general uncertainty that has enveloped the world, and Europe in particular, but because of the resonance of current concerns with the events from one hundred years ago in Germany. It seemed to me that the current events played on three important German fears: runaway inflation, wrecking of democracy, and the rise of antisemitism. All three are grounded in the Weimar period, and like a person who has been once poisoned, the fear of a similar outcome is not assessed by the actual strength of the current “poison” but by past memories.

The fear of inflation that largely destroyed the credibility of the Weimar republic is well known. It has been behind extremely cautious German monetary and fiscal policies ever since the end of the World War II. The difference between the inflation of 1921-23 that attained at its peak the monthly rate of 30,000 percent, and the current single-digit annual inflation is enormous. Yet, the present inflation is driven by the rise in the prices of staples like energy and food. Its impact—however small in numbers—seems disproportionate. It affects poorer segments of the population much more than the rich.

This in turn raises, more acutely than before, the issue of wealth inequality and redistribution. Despite many years of social-democratic rule and an extensive welfare state, German wealth inequality is very high. According to SOEP household survey, 39 percent of the German population has zero (or quasi zero) net financial wealth, and almost 90 percent of the population rather negligible net financial, or non-housing, wealth (reflected in the fact that their monthly income from property is under 100 euros per person). This makes German wealth inequality (depending on the metric one uses) equal or even greater than the very high US wealth inequality.  A feeling that many large fortunes are hidden or enjoy tax shelters thanks to different European schemes and tax competition between the EU countries, adds to the feeling of unfairness.

The second fear is that of fragility of democracy. That fear too seems, on the face of numbers, vastly exaggerated. But the full establishment of the Alternativ für Deutschland as a stable parliamentary party with about 10% of the vote, and not a passing fad like the Republicans in the past, serves as a reminders of a non-negligible chance of a sharp movement to the right, or of the right’s indirect influence on the coalition governments (of whatever hue they may be). There is of course no direct denial of democratic way of government by the AfD, nor (it would seem) any likelihood of them coming to power as a dominant member of a coalition, but the inchoate fear that one detects is more like a concern of a gradual erosion of democracy along the lines of what has happened in Hungary and perhaps in Poland. Both the form and some essential features of democracy may be retained but other essential features may be gradually diluted.  

The third fear is, in a way, the most irrational but does not seem to me absent. Germany’s strong, and perhaps excessive, support for Israel in the current war in the Middle East has its obvious roots in the Shoah and the atonement for those crimes which the German public opinion and politicians have since the establishment of the Federal Republic put on a level of an almost core principle, equal to democratic governance and judiciary independence. The irony is that an excessive zeal in atonement might lead to the unquestionable acceptance of policies that lead to crimes committed against civilian populations. Germany thus faces an almost Greek-like drama: the desire to correct for past misdeeds may lead to the acceptance of current misdeeds.

The three fears displayed in the already gloomy atmosphere of the European global economic decline, unremitting immigration pressures from the South that Europe is unable to accommodate (as shown by the closing of frontiers in Nordic countries), its energy dependence, and absence of a distinct political voice, made me look at the unusually dark streets in Berlin—and indeed at well-lit and cheerful clubs and restaurants—with a somewhat greater foreboding than they deserve. 

 

 

 

 

 

There is no exit for dictators

             In an interesting paper he tweeted yesterday, Kaushik Basu discusses, using a mathematical model, an old problem: how rulers once they are in power cannot leave it even if they wish to do so, because their road to power, and in power, is littered with corpses that will all (metaphorically) ask revenge if the ruler were to step down. Furthermore, since the number of misdeeds and of rulers’ real or imagined enemies multiplies with each additional period in power, they need to resort to increasingly greater oppression to stay in power. Thus, even the originally well-meaning or tolerant rulers become, with the duration of their rule, tyrants.  Basu is aware of the millennial nature of the problem; he cites Shakespeare’s Macbeth.  He could have also cited Tacitus’ description of Tiberius’ descent into murderous suspiciousness and folly.

             Basu terms this issue “temporal inconsistency” because his assumption is that the ruler would like at one point to leave and spend the rest of his life in affluence and leisure. (I write in “his” life because all individuals listed in Basu’s paper are men, and he strangely resort to the use of “she” and “her” in the mathematical part of the paper.) This assumption of a ruler who wants to retire is unrealistic, and I will explain why below, But before I do so, I need to note that there is no inconsistency in the ruler’s or dictator’s behavior in each individual period. (Basu acknowledges this in the latter part of the paper by stating that fully rational maximizing behavior in each individual period may still lead to on overall suboptimal outcome.). Assume that the ruler plays an annual game where he wonders: am I better off if I retire now or if I commit another crime which would make my retirement next year more difficult but my rule this year safer? The answer is simple: he is better off committing another crime in the expectation that this would make his overthrow less likely. He replays that game every year and every year he reaches the same conclusion.  Thus, the ruler’s decisions are not at all irrational or even inconsistent.

            From Machiavelli’s point of the art of statecraft it would be equally wrong to fault the ruler. According to Machiavelli, the role of the ruler is to rule like the role of a baker is to bake. In order to rule he must unavoidably commit misdeeds or crimes because it is the nature of politics and human society. But he should not use unnecessary force; in other words, crimes must be acknowledged by the ruler intimately as such and their use must be kept to the minimum necessary to stay in power. And indeed most rulers do believe that they are doing just that.

            But why is the very assumption of a ruler who wants to retire generally wrong? (I know that there are some examples of rulers who have chosen the road of retirement but they are extremely rare: the reason why we speak of Sulla is precisely because he was unusual in choosing retirement and powerlessness after having committed many misdeeds.) The assumption is wrong because rulers’ objective is not a comfortable life on a yacht in the Pacific—the example Basu gives in the end of the paper—but raw power and enforcement of an ideology.

            When power as such becomes the objective, as it is among all politicians, and autocratic rulers especially, there is no amount of worldly goods that could substitute for power. Rulers cannot be cajoled (as Basu seems to believe) into leaving power. And this is not just because of the possible punishment that may await them in retirement, but because they crave, and they need, the exercise of, power. Svetlana Alliluyeva writes in her memoirs that her father lived only for politics and was interested only in politics. And indeed whoever has read memoirs of Stalin’s comrades or Stalin’s biographies could not be but struck with the emptiness –in the normal human sense—of the life that Stalin led at the peak of his power. It was the life of interminable meetings, long hours of reading, quasi solitary dinners with a few scared companions, monotonous banquets; a dry life devoid of both humanity and affluence. There is nothing you can offer to Stalin to make him leave power even if you can guarantee that he would live for the rest of his life safe in luxury.

            The same applies to ideologues. Or perhaps even more so because ideologues believe that they are on a unique mission to save their nation or the world, and obviously then being in power is a necessary condition for such a salvation. Take Hitler as the easiest and strongest example. He believed from a relatively young age that the Providence has selected him to save Germany and make it powerful again. Thinking that offering him, say in 1938 or 1942, a retirement in the Austrian Alps, or an endless Wagner festival in his beloved Linz, in exchange for stepping down is so ludicrous that can produce only derision and laughter.

            Basu’s concluding sentence that giving rulers an escape route through  luxurious retirement might make many “Individuals with no interest in power and tyranny…strive to become tyrants for no other reason but to get that castle in the Pacific Island” although said probably in jest and with the intend to provide a paradox, is simply wrong. Rulers do not want to go to the Pacific islands.

            Dictators often evolve during their rule, moving more toward the power-hungry tyrants and ideologues than they were in the beginning of their reign, even regardless of the amount of crimes they might have committed. Here Putin comes to mind. He came to power by giving the impression to be ready to do the oligarchs’ bidding, to be hard-working and meticulous, pro-western, and in love of comfort and affluence. Gradually however he evolved: first, by dropping the oligarchs who brought him to power, and then by changing ideologically to see himself as a savior of Russia. If that is supposed to be his role, he obviously has no choice but to stay in power because everybody else, in his view, would drive the country to ruin.

            We thus come to the conclusion that there is absolutely nothing that can be offered to dictators to leave power;  thinking that there is something shows a misunderstanding of what motivates people in politics. It also shows a naivete of other economists (not Basu as he explicitly rejects it) who hold that all human activities are driven by the search for material profit and comfort.

            Basu’s suggestion that there should be globally-enforced term-limits is not only impossible to implement but shows a misunderstanding of politics. Regarding the practical impossibility of its implementation one need only mention that such a rule would never pass through any international organization, but that even if that were to happen, there would be many ways to avoid observing the rule while formally adhering to it. Putin, at first, side-stepped the issue of term limits by taking the position of prime minister while effectively still remaining in charge; Havel got rid of term limits because he argued that being president of Czechoslovakia was different than being president of the Czech republic. Djukanovic, the Montenegrin leader, ruled for more than three decades by switching between the positions of president and prime minister. Erdogan did the same by changing the system from parliamentary to presidential. There is, in effect, no way technically to implement the notion of a global term-limit even if somehow, miraculously, the world were to come to believe in them.

            And more importantly there is nothing that can be offered to dictators to make them step down. They have to continue to rule until they either die peacefully in their beds and after death became either vilified or celebrated (or at times, both), or until they are overthrown, or meet an assassin’s bullet. Once on the top, there is no exit. They have become prisoners like many others they have thrown in jail. 

On general futility of political discussions with people

             Over the years I have had political and ideological discussions with at least three groups of people and have concluded that these discussions are, almost entirely, futile in making people either see things differently, or acknowledge that others may see things differently, or -God forbid-- change their opinions however slightly. That of course opens the question how people come to hold certain political and ideological positions—since at some level they must be influenced by views of others: their parents, family, and even random interlocuters. I do not have a good explanation for that. I think that reading, watching, listening and thinking does lead people to form and then to change opinions but I am very sceptical that direct discussion does it. The former methods are indirect: one reads an author and finds him convincing; but if one has a discussion with somebody acknowledging that that person has produced valid arguments appears to diminish him compared to the other person, and one’s intellectual vanity does not wish to accept that. Hence, I think, discussions almost never lead toward some genuinely-felt greater similarity of opinions. They just leave the participants where they were before. Or worse, lead them further apart.

For the participants who are more passionate or involved in the discussion, such an outcome is more frustrating. They therefore dispense a much greater amount of intellectual, mental and ultimately physical energy in trying to convince the other side—without success. They thus spend hours reviewing the arguments made, look for possibly better ways they should have presented their case, explore the weaknesses of the opponents as if any of that would make any difference. They waste their time and energy.

The three groups of people with whom I had chance (or misfortune) to have discussions and found impossible to move even a millimeter away from their held beliefs were Stalinists, nationalists and liberals. But their way to discuss things was different from each other. They were all equally unyielding in their views, but adopted somewhat different tactics.

Stalinists whom I had the “privilege” to discuss chronologically the first introduced me to the type of discussion tactic that were used by the other two groups too. To any strong argument from the interlocutor they would produce either a denial (such and such event never occurred; there is no evidence; it was somebody else’s propaganda etc.), or they would accept that the uncomfortable fact occurred, but will justify it by an even greater perfidy of the other side. As I mentioned, I would see exactly the same arguments used by nationalists and liberals too. One advantage that Stalinists had compared to the other two groups (and that is the advantage of which I became aware much later on) is that they respected the knowledge of communist history. So, if you attacked them, they would produce the denial and petrify arguments, but would respect your knowledge. They might even ask you about the fact they did not know. Communism thus functioned entirely like a religion. Christians have been at each other throats since the religion was founded: but the knowledge of finer theological or historical points was respected by the different sects even when they disagreed on almost everything else.

Political discussions with nationalists can, I think, best be described as throwing pebbles against an immense rock. You can throw as many pebbles as you wish, the rock will not be hurt nor moved. Like Stalinists they use denial and perfidy of others commonly, but perfidy of others now spreads to everybody under the sun except their favored nationality. In that sense, perfidy was much more widespread than for Stalinists since perfidy included n-1 national groups in the world. Moreover, if you bring two opposite nationalists together, since they both believe that n-1 groups are all equally at fault, the conclusion is that it suffices to have only two of them to prove that the entire world is evil. Thus one quickly establishes the conclusion that in nationalists’ worldview it is ultimately the human nature that is evil since no nation can be exempt from it and the individual characteristics do not matter as they are determined by one’s ethnicity or race.

The third immovable group are liberals. They tend to be more sophisticated and more knowledgeable but this does not make them more intellectually honest. Actually, one could say the reverse because they handle sophistry with exquisite skills.  Gree rhetorician Aelius Aristide’s comment from 1,900 years ago regarding Cynics applies to them: “They deceive like flatterers, handle insults like superior men, combining the two most opposite and repugnant vices: vileness and insolence.” They also use denial and perfidy of others as arguments, but they find them “served alone” to be too crude. That’s where sophistry kicks in. To any incontrovertible uncomfortable fact they do not produce just a denial, but shift the discussion on  secondary or tertiary matters of marginal relevance to the topic discussed. That produces huge frustration in the interlocutor. It is akin to playing a soccer game which one is winning 3-0,  but the other side refuses to acknowledge the defeat arguing that what really counts is the number of shots on goal, or free kicks or any other marginal statistics which is in their favor.  All attempts to drive the discussion back to the original topic, and to the argument to which they have no valid counterpoint fail in the face of this intransigent tactic which consistently shifts the realm of the discussion elsewhere. Since liberals are more sophisticated than the other two groups they also use “rope-a-dope” tactic where, faced with uncomfortable truth, they do not reply to the argument but just shrug it off as irrelevant: “everyone knows that things are like that”. This again has a very negative effect on the interlocutor as it seems to present him as a very naïve person who takes the ideological stance of liberals seriously. In reality, they say, even if not loudly and clearly, flexibility is all: we may do things one way one day, and entirely differently the next day, but ideologically we shall always claim to be unswervingly loyal to our beliefs.

I have not had much occasion to discuss issues with true conservatives (who may not be vulgar nationalists) nor with the new generation of woke liberals, so I cannot tell how their tactics may differ from the ones that I mentioned.

I have thus come to the conclusion that if one believes in a certain point of view and yet has a limited amount of mental energy, it is entirely wasteful to use it in trying to convince others in direct discussions. It is much more effective to write and read and listen than to have Socratic or any other dialogues. They, I think, lead nowhere.

 

Why is the Serbia-Kosovo situation globally serious?

 

I learned about the newest dispute between Serbia and Kosovo in a New York café when I overheard a very animated conversation between a lady who seemed to blame Serbia for World War I (and perhaps World War III?) and the well-dressed maitre d’ who  was so excited that he kept on stammering that Kosovo is an integral part of Serbia, not recognized by most UN members.

But, leaving aside WW1, why is the current situation, and I do not mean in the next week but in the next years as well, extremely serious? It is, after all, not only a very local squabble but a squabble about the territory half the size of Luxembourg, with the population (around 70,000) less than those living in a few buildings along the Hudson river, and even from Serbia’s own perspective entirely marginal as it involves about 1% of all Serbs. Why should the world order depend on this? Because, as often in history, it is small conflicts that are being fought for big stakes. Because small nations like to draw into their conflicts big powers so to achieve their own (small) objectives while big countries see such conflicts as tests of their power. 

To understand why the crisis is serious, we have to look at its four actors. They are (in the order of discussion here), Kosovo, Russia, NATO and Serbia.

Albin Kurti, the PM of Kosovo is, without much doubt, the most capable politician in the Balkans. He is helped in this by his anti-colonial ideology (as he believes, with some good reasons, that Kosovo should have never have been part of Serbia; it became part of Serbia in 1913) and very good political skills. Kurti’s short-run objective is to solve the “Serbian problem” in Kosovo by expelling the Serb minority. He sees the Serbs there as people who would never accept Albanian sovereignty (and he is right in that), and he notes that the expulsion of the Serbian minority from Croatia made Croatia much more politically stable (and he is right in that too). In order to achieve his objective he needs to constantly terrorize the Serbian minority, make them feel unsafe and ultimately incentivize them to leave. Since the Russian invasion of Ukraine he has (again rightly) realized that if he manages to provoke a war, he will become a new Zelensky and will have a full support of NATO. (His long-term objective is, I think, the unification of Kosovo and Albania but for now we can leave that out of discussion).

The second actor is Russia. Before the war in Ukraine, Russia had an interest to maintain tensions in Kosovo, but not to encourage a war. Things have changed since: Russia has a clear interest to create as many conflicts in the world as possible, not only to weaken the West, but to “globalize” its war with Ukraine so that a final settlement, when it comes, would be akin to the renegotiation of the global order that was introduced, or imposed, after the end of the Cold War. Moreover, for Russia, the NATO-Serbia war would be as comfortable as for the West is the Ukraine-Russia war. They would send war materiel to Serbia (if they can spare any) but will not have to bear any human cost.

So for now have two actors in favor of the war.

But we have one actor against the war. That actor is, perhaps unexpectedly, NATO. NATO does not need another conflict in Europe, on an entirely peripheral matter of no importance to the United States, while it is focused on the global-order changing de facto war with Russia.  NATO and the  EU were so angry with Kurti’s destabilization tactics that he has employed since February 2022 that they recently moved to the mildly pro-Serbian positions simply in order to keep things quiet and the conflict from escalating.

The fourth actor is Serbia and it has now an incentive to go to war. The reason is as follows. President Vučić ‘s policies have for more than a decade been driven by the objective of obtaining in Kosovo a territorially-based Association of Serbian Municipalities to which several pre-Kurti Kosovo governments, with EU inducement, have agreed. Vučić would then have been able to claim domestically two victories: to have given to the Serbs in Kosovo a quasi autonomous government while not having recognized Kosovo’s independence. Quire a feat. That strategy failed when Kurti refused to accept Western demands to do what the previous Kosovo governments have agreed, and introduced his tactic of daily harassment.  

If Vučić  cannot get a key part of his program and at the same time has to deal with Kurti-induced harassment of the Serbian minority, thus exposing his own impotence, his entire policy has failed. Would then a war help?

There, we have to take into account that such a war that would start with Serbian forces moving into Kosovo to protect the population in four municipalities and would immediately pit Serbian forces against NATO. But it will not be a cake-walk for NATO. NATO won the 1999 war by bombing civilian targets and threatening to carpet-bomb Belgrade with Ahtisaari and Chernomyrdin on the same side of the table showing to Milošević that Belgrade would be a table rase. There would be no Chernomyrdin now. The war would also put NATO in a very awkward position of either sending ground forces to Kosovo which is not logistically easy (and is wasteful in light of possible wars with Russia or China) or bombing Serbia as in 1999. The world would be then treated to daily images of civilian targets being destroyed in Ukraine and Serbia by  two rival super powers. Other than for propaganda reasons (that the West with its powerful propaganda machinery can more or less control), the war would require significant NATO forces that would either have to expel the Serbian minority from Kosovo or fight against them in an environment which would obviously be hostile.

But it is precisely such a calculation of difficulties of NATO invasion of the Serbian enclaves in Kosovo which might embolden Vučić to go for war. He might recall  that Milošević’s popularity reached its peak precisely during NATO bombing of Serbia, that his personal power was then untrammeled by any parliamentary or social restraint, and that he managed to eventually extract a fairly good agreement (that was never observed by NATO). And Vučić might hope that the “winds of freedom” of which he eloquently spoke at the recent UN General Assembly assembly might, miraculously, like in the First World War, turn things in his favor.