Monday, April 24, 2017

Marine Le Pen, Donald Trump and the Emergence of New Right-Wing Movements [feedly]

Marine Le Pen, Donald Trump and the Emergence of New Right-Wing Movements

http://www.globalpolicyjournal.com/blog/24/04/2017/marine-le-pen-donald-trump-and-emergence-new-right-wing-movements

Marcus Rolle and Alexandra Boutri - 24th April 2017

Brexit, the rise of Donald Trump and the emergence of a new right-wing radicalism in both Europe and the United States signify fundamental developments in the political and ideological landscape of Western societies, while at the same time, there is a resurgence of extreme nationalism and authoritarian politics virtually all around the world. For an understanding and explanation of some of these disturbing developments and the alternatives available, we spoke to political economist C.J. Polychroniou, editor of a forthcoming book consisting of interviews with Noam Chomsky, titled Optimism Over Despair: On Capitalism, Empire, and Social Change (Haymarket Books, 2017).

Marcus Rolle and Alexandra Boutri: Today's political landscape in many advanced capitalist societies is marked by the rise of a new right-wing populism centered around anti-immigrant sentiment, xenophobia and extreme nationalism fueled mainly by the antiglobalization rhetoric of authoritarian political leaders. We'd like to start by asking you to put in context the contradictions of global capitalism and the emergence of what has come to be known as the "alt-right."

C.J. Polychroniou: For quite some time now, there have been clear and strong indications across the entire political and socioeconomic spectrum in advanced Western societies that the contradictions of capitalist globalization and the neoliberal policies associated with them have reached an explosive level, as they have unleashed powerful forces with the capacity to produce highly destructive outcomes not only for growth, equality and prosperity, justice and social peace, but concomitant consequences for democracy,  universal rights and the environment itself. Indeed, not long after the collapse of the former Soviet Union and its "communist" satellites in Eastern Europe -- a development which led to such unbounded enthusiasm among supporters of global neoliberal capitalism that they embarked on an  audacious but highly dubious course of (pseudo) intellectual theorization to pronounce the "end of history" -- it became quite obvious to astute observers that the forces unleashed by capitalism's inner dynamism and the dominant capitalist states, with the US imperial state at the helm, were more attuned to the brutalities of societal regression, economic exploitation, war and violence than to the subtleties of socioeconomic progress, geopolitical stability and environmental sustainability.

To be sure, we now live in a world of unparalleled economic inequality coupled with massive economic insecurity and dangerously high levels of unemployment (especially among the youth), all while the depletion of  natural resources has reached highly alarming rates and climate change threatens the future of civilization as we know it. All these developments are interconnected as they are fuelled by globalization's imminent contradictions, but ultimately sustained by actual government policies and measures that cater almost exclusively to the needs of the wealthy and the concerns of the corporate and financial world. In the meantime, authoritarianism is reestablishing a foothold in many Western nations just as the social state is being reduced to the bare bone under the pretext of fiscal discipline.

Yet, despite poll results showing rising support for socialism in the US, especially among millennials, growing discontent with the current economic order has thus far resulted not in a new socialist era but in the rise of ultranationalist leaders like Donald Trump who deploy rhetoric shrouded in racism and anti-immigration sentiment.

In France, Marine Le Pen is playing on similar strains of xenophobia and ultranationalism, arguing that "division is no longer between left and right ... but between patriots and believers in globalization."

What is called the "alt-right" is in some ways a new phenomenon in the sense that, unlike conservatives and neoconservatives, the new right-wing radicalism belongs expressly in the "antiglobalization" camp. But the "alt-right's" grievance is not with capitalism itself. Instead its adherents blame economic globalization and immigration for their woes. The strengthening of this right-wing antiglobalization movement was behind Brexit and Trump's presidential victory and can explain the resurgence of authoritarian, xenophobic political leaders in countries like France, Austria, Hungary, Italy and Germany, to name just a few.

In a way, then, the sudden rise of the new right-wing radicalism is due to the fact that it has adopted part of the "antiglobalization" posture of the left and a good deal of the old left's radical political discourse, such as the struggle of "people vs. elites." In some cases, extreme right-wing leaders in Europe, such as Marine Le Pen in France, promise to strengthen the welfare state, impose capital controls to avoid speculation, nationalize banks and provide employment opportunities through keeping production at home. Marine Le Pen's economic vision for France seeks to counter "unregulated globalization" and is based on a particular version of old-fashioned state capitalism, which globalization appears to have made obsolete.

Is the formation of an "illiberal state" also part of the "alt-right's" vision for the future of Western society?

The term "illiberal state" is associated with the ideology and policies of Viktor Orbán in Hungary. Since coming to power, Orbán has operated on a political platform that combines social and nationalist populism with anti-European Union rhetoric. He has infringed on the freedom of the press, made inroads into the judiciary system and openly advocates an "illiberal" democracy as a means to counteract the impact of globalization. More recently, he has sought to shut down Central European University, which was founded by George Soros in 1991 as part of the billionaire's "Open Society" project.

The extent to which the rise of "alt-right" leaders in Western Europe can lead to similar outcomes as in the case of Viktor Orbán in Hungary is a rather shaky proposition. Eastern European countries do not have the system of checks and balances of established democracies. Moreover, millions of Hungarians do not embrace Orbán's authoritarian tendencies, and oppose him every step of the way, as millions of Turks opposed Erdoğan's quest to be granted expansive powers via a highly controversial referendum (51.4 percent voted for it, making Erdoğan officially Turkey's new sultan). Likewise, Donald Trump may be an autocrat, but he cannot just run roughshod over the whole country. The tendency to call Trump a fascist (even though he has authoritarian leanings) and to define the US as a totalitarian state does a great disservice to political analysis and, by extension, to our imaginative capacity for realistic and sustainable alternatives.

In popular accounts of globalization, the impression one frequently gets is that this is a new phenomenon and simply irreversible. What's your take on globalization?

Globalization itself is not a new phenomenon in history. The conquests of Alexander the Great and the spread of Hellenic civilization in Europe and Asia was the first great instance toward the creation of a cosmopolitan, globalized world. And, for the record, Alexander actually sought the "marriage" between different cultures and expressed disdain toward some of his own generals for failing to show proper respect for civilizations older than Greece.

To be sure, as many scholars have shown, the history of the world is practically a history of imperial expansion. Most people throughout recorded history actually lived in empires. And, equally important, there have been different visions of empire. The Roman Empire, the Ottoman Empire, the British Empire and the French Empire shaped the world in fundamentally different ways.

Nonetheless, with the advent of capitalism, sometime during the so-called "long 15th century," the nature of expansion, through trade and commerce accompanied by the sword, follows a different trajectory. Capitalism spreads to all corners of the world, resulting in the accumulation of wealth for European powers and the gradual impoverishment of the colonized countries and regions, simply out of sheer necessity. As such, capitalism is pretty much distinguished from all previous socioeconomic systems by this fact -- that is, that the system has to expand in order to survive. Alexander the Great made a decision to expand Hellenic culture to the deepest ends of Asia. Capitalists have to expand, otherwise they face possible extinction. In short, capitalism is by its nature an expansionist socioeconomic system, with the accumulation of capital being one of the system's basic but fundamental laws of motion.

In the modern times, and prior to our own age, we saw a great wave of capitalist globalization taking place sometime around the 1880s and lasting until the outbreak of World War I. The world economy was as open as it is today, and possibly even more so, and capital movement across national boundaries was so extensive of an activity that a passionate opposition to foreign direct investment had developed in the United States by the 1890s.

After World War I, there were lukewarm efforts to return to the previous era of internationalization, but the political climate of the time proved to be a major stumbling block and the outbreak, eventually, of World War II put to an end all aspirations for the revival of a new international capitalist order.

The latest phase of capitalist globalization begins sometime in the mid-to-late 1970s and comes in the aftermath of the collapse of the postwar structure of capital accumulation. Following World War II, Western capitalism experienced a phase of unprecedented growth and development: the ranks of the middle class exploded, labor rights were solidified (including labor representation on company boards) and workers' benefits were greatly expanded, all while the "social state" became a major pillar of the postwar Western capitalist world. But the postwar social structure of accumulation collapsed when capitalism entered a systemic crisis in the early 1970s, manifested by "stagflation," an oil crisis and the appearance of new technologies that made Fordist production obsolete.

Enter neoliberalism. In an attempt to overcome the accumulation crisis, the major international organizations, such as the International Monetary Fund, the World Bank, and of course, the US Treasury, began to promote throughout the world the neoliberal triad of liberalization, privatization and deregulation. These policies were accompanied by budget-cutting for social programs and generous tax cuts for corporations and the rich. In this context, globalization becomes a development strategy vehicle for the realization of super-profits.

Like many on the left, certain powerful segments of the extreme right, such as the leader of the National Front in France, think that globalization is reversible. Is it?

If Marine Le Pen wins the French presidential election coming up (April 23-May 7) and pushes forward with her goal of taking France out of the EU and returning to the Franc, the European integration project -- and hence, a major component of globalization -- could collapse like a house of cards, especially since the anti-euro fever is also spreading in Italy, and a Frexit [French exit from the European Union] will surely have immediate effects among all Europeans now skeptical of the integration project in their continent. However, it should be noted that the Frexit scenario is not as easy as Brexit. It would require a constitutional change, and that is very unlikely to happen. But, yes, globalization is certainly reversible, although it will require nothing short of cataclysmic events in the world's major power centers. Having said that, it is unclear if a return to the old nation-state is desirable. A policy of autarchy is impossible in today's world, and I don't think anyone in his/her right mind advocates such a project. Socialists and radicals must come up with a new version of a globalized economy.

Speaking of the upcoming French elections, there seems to be a new twist with the momentum gained by ultra-left candidate Jean-Luc Mélenchon. Is the French radical left back?

This is one of the most interesting and uncertain presidential elections in the history of the French 5th Republic. None of the traditional center-right, center-left party candidates are expected to make it to the second round. This is yet another evidence of the changing nature of the political and ideological landscape in today's Western societies. Marine Le Pen will surely make it to the second round, and the only question is who will be her opponent. Entering the final stretch, it appears that the gap separating the major contenders for the second round is closing, and that Jean-Luc Mélenchon has an actual shot (although the odds are against him) of making it to the second round. If this happens, you would have a candidate from the ultra-right and the ultra-left competing for the French presidency.

Like Marine Le Pen, Mélenchon is against the EU but also promises to pull France out of NATO. And he advocates a much more radical economic agenda than Le Pen, which includes higher wages and a 90 percent tax rate on the very rich. Moreover, and this goes to the core of your question, his supporters seem to be coming from the entire political spectrum in France. This development has been helped by Mélenchon's overt nationalist rhetoric as of late, and his promise to crack down on "illegal immigration." Not coincidently, the French flag prevails over the red revolutionary flag in the latest rallies organized by Mélenchon's party. This must be seen as an indication that the concerns about the contradictions of globalization cross traditional party lines, and that the new political contest is between those who are in favor of globalization and those who are against it.

Does this mean that there is more hope now for resistance to global capitalism?

Perhaps. We may be reaching a point where the traditional terms "left" and "right" do not have much applicability in today's world, at least insofar as the reaction of a growing segment of the population around the world is concerned with regard to the impact of neoliberal capitalism on their lives and communities. But whatever may be going on in terms of people's political affiliations, hope is all we have.

Despair, as Noam Chomsky keeps saying, is not an option, no matter how horrendously depressing the current world situation appears to be, as resistance to oppression and exploitation has never been a fruitless undertaking even in more dire times than our own. Indeed, the Trump "counter-revolution" in the US has already brought to surface a plethora of social forces determined to stand up to the aspiring autocrat and, in fact, the future of resistance in the world's most powerful country appears more promising than in many other parts of the advanced industrialized world. Of course, the problem with the United States is that it is in the perpetual habit of taking "one step forward and three steps backward." But this does not mean we should give up hope, but only to work harder to create powerful organizing forces that can pose greater resistance to predatory capitalists and war-makers, while at the same time articulating consistently a coherent and realistic vision of radical change.

 

 

C.J. Polychroniou is a political economist/political scientist who has taught and worked in universities and research centers in Europe and the United States. His main research interests are in European economic integration, globalization, the political economy of the United States and the deconstruction of neoliberalism's politico-economic project. He is a regular contributor to Truthout as well as a member of Truthout's Public Intellectual Project. He has published several books and his articles have appeared in a variety of journals, magazines, newspapers and popular news websites. Many of his publications have been translated into several foreign languages, including Croatian, French, Greek, Italian, Portuguese, Spanish and Turkish. This was reposted with permission from TruthOut.


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Prudential regulation, capital controls, and second-best [feedly]

Prudential regulation, capital controls, and second-best
http://rodrik.typepad.com/dani_rodriks_weblog/2017/04/prudential-regulation-capital-controls-and-second-best.html

A usual argument against the use of capital controls as a prudential measure is that it is always better to tackle problems at their source rather than trying to deal with symptoms.  This is called the principle of economic targeting in Economics, one of the discipline's most powerful teachings. The problem with indirect remedies is that they create problems themselves, "by-product distortions" in Econ-speak. With capital controls, those would be corruption and the discouragement of trade and other flows that are not necessarily a problem.

Hyun Song Shin essentially relies on this principle when he argues against capital controls (in a speech yesterday in Washington, DC):

The lesson is to distinguish underlying causes from outward symptoms. Yes, the 2008 financial crisis was in large part a cross-border phenomenon, but focusing on capital flows confuses the symptoms (capital flows) from the underlying causes (excess leverage and funding risk). If the problem is excessive bank leverage and funding risk, then address these risks directly with traditional microprudential, or regulatory tools.

This argument always reminds me of opponents' argument about why gun controls are not needed: "it's not guns that kill people; it's people." The implication is that we should target the criminals and not the guns. Of course, if we could perfectly regulate the behavior of future criminals, we would not need controls on the sale of guns directly. But most of us are reasonable enough to realize that we have imperfect control over the behavior of gun owners and so we think direct gun controls make sense.

Similarly, if one could design the perfect prudential regulatory regime, targeting all the relevant distortions at source and adjusting pre-emptively to all future financial innovations, then indeed we would not need direct controls on capital flows. But if we cannot, and we surely cannot, we need to work on as many margins available to us as we can. That is why capital controls belong in the arsenal of sensible policy makers.

One of my favorite aphorisms is "the world is second best, at best" (due to Avinash Dixit). It tells us that first-best logic can be misleading in the real world. Interestingly, Shin himself starts his speech by reminding us of the second-best theorem. But then he goes on to apply a first-best argument to dismiss capital controls.


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Trump’s Alternative Economics of Climate Change


Trump's Alternative Economics of Climate Change


via the Regulatory Review
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The Trump Administration's new social cost of carbon policy muddies the waters.

President Donald Trump signed an executive order last month calling for the elimination of health and safety rules related to domestic energy production. The order starts a long—and legally risky—process of dismantling President Barack Obama's executive actions to address climate change.

One section of the order purports to withdraw the federal government's estimates of the social cost of carbon, a metric developed to quantify the economic costs of each ton of carbon dioxide pollution, based on peer-reviewed science and economics. The government uses these numbers to evaluate the benefits and costs of proposed regulations and decide if a rule makes sense.

President Trump's executive order throws out an estimate of the social cost of carbon that the federal government has carefully developed over many years, replacing it with an agency-by-agency approach that would value greenhouse gas emissions in a manner "consistent with the guidance contained in Circular A-4," a guidebook on cost-benefit analysis issued by the Office of Management & Budget during the George W. Bush Administration in 2003.

What the executive order fails to acknowledge is that the Obama Administration's estimate of the social cost of carbon is consistent with the guidance from Circular A-4. Asking each agency to develop its own metric will waste agency resources and open rules up to needless and risky legal challenges.

The executive order insists that agencies comply with Circular A-4 with respect to two main factors: "domestic versus international impacts," and "the consideration of appropriate discount rates." For each of these factors, the existing estimate of the social cost of carbon that the executive order attempts to dismantle is, in fact, already consistent with the approach in Circular A-4.

Many opponents of federal climate action argue that it is inappropriate for the United States to consider the effects of our carbon emissions on other countries when analyzing proposed regulations. They argue that if the costs of the regulation are felt locally, the government's cost-benefit analysis must focus only on local climate benefits. Experts have written extensively about why a global analysis is the appropriate approach from an economic and legal perspective, and a federal court ruling recently upheld the government's global approach to analyzing the social cost of carbon.

Moreover, Circular A-4 provides for the consideration of global effects. The guidance does note that an analysis should "focus on benefits and costs that accrue to citizens and residents of the United States," but it also instructs, "where you choose to evaluate a regulation that is likely to have effects beyond the borders of the United States, these effects should be reported separately." That is, when effects are felt globally, as with climate change, the analysis should consider those effects, with the global and the domestic effects broken out separately.

The current social cost of carbon is based precisely on this approach. The federal government has reported a global value, in addition to offering a rough estimate of the proportion of the value involving domestic damages. (As the National Academy of Sciences recently noted, a precise value for domestic damages is difficult to calculate given the fact that climate damages in other countries also affect U.S. interests, through threats to investment, trade, and national security.) By offering an estimate of the domestic portion of damages, as well as reporting a global value, the existing guidance on the social cost of carbon is consistent with Circular A-4.

President Trump's executive order also insists that agencies must evaluate climate impacts by using "appropriate discount rates," consistent with Circular A-4. Again, the social cost of carbon developed under the Obama Administration already adheres to Circular A-4's guidance on discount rates.

Discount rates are needed in economic analysis when the benefits and costs of a rule do not occur in the same time period to reflect that costs and benefits accruing sooner are worth more than those accruing later in the future. The higher the discount rate, the less value is placed on future impacts. In this case, because the harms from climate change accrue over a long time period, the higher the discount rate, the lower the estimate of the social cost of carbon.

Circular A-4 recommends that agencies analyze proposed rules using a range of discount rates that reflect the nature of the rule's impacts on affected parties. It recommends that agencies use a discount rate that reflects the "before-tax rate of return to private capital," as well as a discount rate that reflects the "real rate of return on long-term government debt." In 2003, these values were 7 percent and 3 percent, respectively, but given the low interest rates in today's markets, the Council of Economic Advisers recently noted that these numbers may be too high. Surveys of economic experts have also found that the 7 percent and 3 percent values are likely too high in the context of long-term decisions affecting the public, like climate change.

Additionally, Circular A-4 instructs agencies that if a "rule will have important intergenerational benefits or costs," then the agency "might consider a further sensitivity analysis using a lower but positive discount rate." That is, for an issue like climate change that will impact future generations, it makes sense to offer additional estimates of net benefits using an even lower discount rate.

Existing social cost of carbon estimates already follow the discount rate approach from Circular A-4. In particular, the government's guidance on the social cost of carbon recommends a range of discount rates, from 2.5 percent to 5 percent, with a central estimate based on a 3 percent rate. Especially given the intergenerational nature of climate change and low interest rates in markets, this range of estimates is consistent with Circular A-4's guidance.

In issuing an executive order to revoke the existing government-wide estimates of the social cost of carbon, President Trump is purporting to replace it with separate analyses by each agency based on the guidance in Circular A-4. However, the current government-wide estimates are already consistent with that guidance. To insist otherwise is yet another example of the Trump Administration's embrace of "alternative facts." By calling for each agency to establish its own estimates, the Trump Administration is wasting taxpayer dollars on unnecessary new models and exposing agencies to expensive and risky lawsuits.

Denise Grab

Denise Grab is a Senior Attorney at the Institute for Policy Integrity at New York University School of Law, focusing on environmental, energy, and regulatory policy issues.

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John Case
Harpers Ferry, WV

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New understandings of populism


Daniel Little via Understanding Society


It is apparent, on this first round of the presidential elections in France, that we urgently need to understand better the dynamics and causes of radical populism in democratic polities. What is populism? Why does it have such virulence in the current moment as a political movement? What roles do racism, xenophobia, resentment, and economic fear play in the readiness of ordinary citizens in Europe and America to support radical populist candidates and platforms?


The topic has been the subject of research by very talented investigators over the past twenty years. Several recent books are especially relevant in the current moment. Particularly relevant are Cas Mudde and Cristobal Rovira Kaltwasser's Populism: A Very Short Introduction; Jan-Werner Muller's What Is Populism?; and a recent collection by Social Europe edited by Henning Meyer, Understanding the Populist Revolt. Taken together, the three sources provide an excellent basis for thinking further about the nature of radical populism.

Mudde and Kaltwasser argue that populism differs from other political umbrella terms (socialism, fascism) in one important respect: it is less specific in identifying a well defined ideological program. It is, in their words, "an essentially contested concept". Here are a few of their central ideas:
A more recent approach considers populism, first and foremost, as a political strategy employed by a specific type of leader who seeks to govern based on direct and unmediated support from their followers. It is particularly popular among students of Latin American and non-Western societies. The approach emphasizes that populism implies the emergence of a strong and charismatic figure, who concentrates power and maintains a direct connection with the masses. (kl 677-680)
Beyond the lack of scholarly agreement on the defining attributes of populism, agreement is general that all forms of populism include some kind of appeal to "the people" and a denunciation of "the elite." Accordingly, it is not overly contentious to state that populism always involves a critique of the establishment and an adulation of the common people. More concretely, we define populism as a thin-centered ideology that considers society to be ultimately separated into two homogeneous and antagonistic camps, "the pure people" versus "the corrupt elite," and which argues that politics should be an expression of the volonté générale (general will) of the people. (kl 700-705)
This means that populism can take very different shapes, which are contingent on the ways in which the core concepts of populism appear to be related to other concepts, forming interpretative frames that might be more or less appealing to different societies. Seen in this light, populism must be understood as a kind of mental map through which individuals analyze and comprehend political reality. It is not so much a coherent ideological tradition as a set of ideas that, in the real world, appears in combination with quite different, and sometimes contradictory, ideologies. (kl 713-717)
A common thread of populist rhetoric is that the movement is "anti-elitist" and that it speaks on behalf of "the people". Elites, according to populist leaders, have dominated policy and captured the benefits of society; "the people" have been left behind by elites who care nothing for their wellbeing. These tropes make perfect interpretive sense of Trumpism -- the campaign's attack on the media, scientists, politicians, and universities, its virulent personal attacks against Hillary Clinton, and its efforts to divide "the real Americans" from others -- immigrants, Mexicans, Muslims, Jews, and urban dwellers. And this is the most important point: by claiming to speak uniquely for "the people", there is an implicit openness to authoritarianism in populist politics.

So what is "not-Populism"? What is a political ideology and movement that falls outside the populist rubric? They identify pluralism as the main rival:
Pluralism is the direct opposite of the dualist perspective of both populism and elitism, instead holding that society is divided into a broad variety of partly overlapping social groups with different ideas and interests. Within pluralism diversity is seen as a strength rather than a weakness. Pluralists believe that a society should have many centers of power and that politics, through compromise and consensus, should reflect the interests and values of as many different groups as possible. Thus, the main idea is that power is supposed to be distributed throughout society in order to avoid specific groups— be they men; ethnic communities; economic, intellectual, military or political cadres, etc.— acquiring the capacity to impose their will upon the others. (kl 733-738)
Mudde and Kaltwasser pay close attention to what seems like the most important current problem: mobilization around populist political agendas.
By mobilization we mean the engagement of a wide range of individuals to raise awareness of a particular problem, leading them to act collectively to support their cause. Overall, three types of populist mobilization can be identified: personalist leadership, social movement, and political party. (kl 1246-1248)
They highlight three kinds of mechanisms of mobilization: social movements, charismatic leaders, and local grassroots organizations. (See an earlier post on work by McAdam and Kloos on racialized social movements in the United States; link.)

What factors lead to success in populist mobilization?
For any political actor to be successful, there has to be a demand for her message. Most populist actors combine populism with one or more so-called host ideologies, such as some form of nationalism or socialism. Although populism is often noted as a reason for their success, many electoral studies instead focus exclusively on the accompanying features, such as xenophobia in western Europe or socioeconomic support for disadvantaged groups in Latin America. This is in part a consequence of the lack of available data at the mass level. Empirical studies of populist attitudes are still in their infancy, but they do show that populist attitudes are quite widespread among populations in countries with relevant populist parties (e.g., Netherlands) and social movements (e.g., the United States) as well as in countries with no relevant populist actors (e.g., Chile). (Kindle Locations 2063-2069)
This passage highlights some of the kinds of messages that populists have deployed to support mobilization -- xenophobia and its cousins, and "nation first!" appeals for economic improvement for "the people". Mudde and Kaltwasser highlight the use of mistrust as a political theme -- "elites" are abusing "the people's" interests and needs, the elites cannot be trusted.  Appeals by populist leaders to fear, mistrust, and resentment of others have proven widespread and durable in numerous countries, including the recent presidential campaign in the United States.

A crucially important question before us is why racist and xenophobic attitudes appear to be becoming more common and more readily mobilized, in Europe and in the United States. Why is the rhetoric of division and hate so powerful in today's politics? Mudde and Kaltwasser do not shed much light on this question; indeed, they barely confront the topic. The terms "hate" and "race" do not appear in the book at all. They address the topic of xenophobia more generally (largely in the context of immigration issues). But they do not consider the more basic question: why is hate such a powerful political theme in the politics of extremist populism?

The other two books mentioned above provide more insight into this question, and I will return to them in a subsequent post.

*     *     *

There is today a little bit of good news for everyone concerned about the ascendancy of extremist populist politics in modern democracies. It appears that political novice and moderate candidate Emmanuel Macron has slightly bested far-right populist Marine Le Pen in today's French election results (23.7% vs. 21.8%, with 96% of polls reported). So the final round will involve a run-off election between the two leading candidates, and almost all commentators agree that the advantage in the second round will go to Macron. So the anxiety felt by many around the world that France would follow Great Britain (Brexit) and the United States (Trump) with an unexpected victory for the extreme right populist position is now much abated.

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Lessons for tackling income inequality from mid-20th century US education laws

Bridging the gap: Lessons for tackling income inequality from mid-20th century US education laws

Karen Clay, Jeff Lingwall, Melvin Stephens 22 April 2017


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Harpers Ferry, WV

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Review of Peter Temin (MIT): America's Vanishing Middle Class

America's two-track economy

Economist's new book examines decline of the nation's middle class.

Peter Dizikes | MIT News Office 
March 13, 2017



For many people in America, being middle class isn't what it used to be.

Consider: In 1971, the U.S. middle class — with household incomes ranging from two-thirds to double the national median — accounted for almost 60 percent of total U.S. earnings. But in 2014, middle-class households earned just about 40 percent of the total national income. And, adjusted for inflation, the incomes of goods-producing workers have been flat since the mid-1970s.

"We have a fractured society," says MIT economist Peter Temin. "The middle class is vanishing."

Now Temin, the Elisha Gray II Professor Emeritus of Economics in MIT's Department of Economics, has written a book exploring the topic. "The Vanishing Middle Class: Prejudice and Power in a Dual Economy," published this month by MIT Press, examines the plight of middle-income earners and offers some prescriptions for changing our current state of affairs.

The "dual economy" in the book's title also represents a bracing reflection of America's class schism. Temin, a leading economic historian, draws the term from the work of Nobel Prize winner W. Arthur Lewis, who in the 1950s applied the model of a dual economy to developing countries. In many of those nations, Lewis contended, there was not a single economy but a two-track economy, with one part containing upwardly-mobile, skilled workers and the other part inhabited by subsistence workers.

Applied to the U.S. today, "The Lewis model actually works," Temin says. "The economy can grow, but it detaches from the [subsistence] sector. Simple as it is, the Lewis model offers the benefit that a good economic model does, which is to clarify your thinking."

In Temin's terms, updated, America now features what he calls the "FTE sector" — people who work in finance, technology, and electronics — and "the low-wage sector." Workers in the first sector tend to thrive; workers in the second sector usually struggle. Much of the book delves into how the U.S. has developed this way over the last 40 years, and how it might transform itself back into a country with one economy for all.

Headwinds for workers

As Temin sees it, there are multiple reasons for the decline in middle-class earning power. To cite one: The decline of unionization, he contends, has reduced the bargaining power available to middle class workers.

"In the [political and economic] turmoil of the '70s and '80s, the unions declined, and the institutions that had been keeping labor going along with rising productivity were destroyed," Temin says. "It's partly [due to] new technology, globalization, and public policy — it's all of these things. What it did was disconnect wages from the growth in productivity."

Indeed, from about 1945 until 1975, as Temin documents in the book, U.S. productivity gains and the wage gains of goods-producing workers tracked each other closely. But since 1975, productivity has roughly doubled, while those wages have stayed flat.

Where "The Vanishing Middle Class" moves well beyond a discussion of basic economic relations, however, is in Temin's insistence that readers consider the interaction of racial politics and economics. As he puts it in the book, "Race plays an important part in discussions of politics related to inequality in the United States."

To take one example: Again starting in the 1970s, incarceration policies led to an increasing proportion of African-Americans being jailed. Today, Temin notes, about one in three African-American men will serve jail time, which he calls "a very striking figure. You can see how that would just destroy the fabric of a community." After all, those who become imprisoned see a significant reduction in their ability to obtain healthy incomes over their lifetimes.

For that matter, Temin observes, incarceration has expanded so dramatically it has affected the ability of society to pay for prisons, which may be a factor that limits their further growth. At the moment, he notes in the book, the U.S. states pay roughly $50 billion a year for prisons and roughly $75 billion annually to support higher education.

Solutions?

Temin contends in the book that a renewed focus on education is a principal way to distribute opportunities better throughout society.

"The link between the two parts of the modern dual economy is education, which provides a possible path that children of low-wage workers can take to move into the FTE sector," Temin writes.

That begins with early-childhood education, which Temin calls "critically important" — although, he says, "in order to continue those benefits, [students] have to build on that foundation. That goes all the way up to college."

And for students in challenging social and economic circumstances, Temin adds, what matters is not just the simple acquisition of knowledge but the classroom experiences that lead to, as he puts it, "Knowing how to think, how to get on with people, how to cooperate. All the social skills and social capital … [are] going to be critically important for kids in this environment."

In the book Temin bluntly advocates for greater investment in public schools as well as public universities, saying that America's "educational system was the wonder of the 20th century." It still works very well, he notes, for kids at good public schools and for those college students who graduate without burdensome debt.

But for others, he notes, "We don't have a path for the next generation to have what we expect for a middle-class life … [and] not everyone wants to finance it."

"The Vanishing Middle Class" comes amid increasing scrutiny of class relations in the U.S., but at a time when the public discussion of the topic is still very much evolving. Gerald Jaynes, a professor in the departments of Economics and African American Studies at Yale University, calls Temin's new book "a significant addition to the existing literature on inequality."

Temin, for his part, hopes that by the end of "The Vanishing Middle Class," readers will agree that a society paying for more education will have made a worthy investment.

"The people in this country are the resource we have," Temin says. "If we maintain the character of our fellow citizens, that is really our national strength."


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John Case
Harpers Ferry, WV

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