“The times they are a-changing”

Photo: Neda Radulovic-Viswanatha

Photo: Neda Radulovic-Viswanatha

After the mid-term elections in the US, it is unlikely that Trump will be re-elected in 2020. This is irrespective of the rising chances of impeachment (which, the chances, we will not know until Mueller publishes his report). Trump and the Republican Party are still going after the Clintons, while the Democratic Party has moved on. There are two things to keep in mind about the changing nature of the two parties.

On the Republican side, the Freedom Caucus or the Tea Party overlapping factions of the House of Representatives are on the decline. They held the veto power whenever there was a Republican majority in the Congress. As we see now at the down of their hold on power in the House of Representatives. And they monopolised the ideology of the Conservatives irrespective of whether they commanded the majority in the party or not. Both their political and their ideological hold over conservativism is weakening now, though ideological commitments tend to harden before they are abandoned.

What will define conservativism going forward is hard to say. Nationalism, so called alt-right, is one alternative, now dominant, but with Trump’s brand fading, it may not continue to be politically appealing. Libertarianism, another possibility, never truly got hold of the Republicans, and is unlikely to do better now given their support for free trade and free movement of people, not to mention commitment to social libertarianism. Going even further towards the religious right is probable, but the electoral support for that is shrinking. Going for big business and the establishment is the natural political, though not ideological, alternative, but siding with Trump they have managed to alienate the Establishment – no mean achievement having in mind that they, the Republicans, were and are the Establishment. Thus, Republicans may end up being the minority party, not just electorally, but structurally as it were. Their potential, and the most promising path, given the changing demography of the US, is to transform into a variant of the European Cristian Democrats, hoping to attract the votes of the minorities, but that requires a huge ideological shift, which will be hard to engineer.

Theoretically, there are three dimensions that are relevant for political economy or public choice (they can be disaggregated further to deal with specific issues).

One is the distribution of interests with the view to their aggregation which commands the support of majority. It tends to support the stability of the political centre, though conditional on the distribution in the next two dimensions.

The other is the distribution of opinions, i.e. of ideological commitments. It pulls towards polarisation, even if the underlying distribution of public preferences is pluralistic, in order to corner the public opinion.

The third is the degree of inequality, which can be expressed in politically and ideologically meaningful sense as the distance between the median and the average income (current as well as expected, the latter if one takes into account intergenerational and interclass mobility).

So, structurally, increasing diversity, ideological eclecticism, and rising inequality work for the Democrats rather than the Republicans. Once white nationalism fails, Republicans will have to reinvent themselves. More urgently if Trump loses the re-election bid in 2020. In addition, the Senate will then be in play because there are more Republican seats than those of Democrats at risk in 2020.

The Democrats are moving not just past the Clintons, but past Bernie Sanders too, though that may not be apparent immediately. While health-care and other social-democratic issues are gaining popularity ideologically, politically the Democrats will not end up there, at least not any time soon. The reason is intellectually, not just politically, interesting.

US is more of a union than a country – it is more like EU than like Denmark – in its attitude towards paying taxes, except of course for the military.

To see the difference, take France of today. It is going through a typical tax revolt. It, the revolt, usually breaks out when the distance between the tax system which would be supported voluntarily and the actual one gets too large. So, in France, as Piketty argues, correctly in principle and not necessarily in all the details, the most recent tax reform is being seen as unfair – which is to say the taxes people would pay voluntarily (in a counterfactual sense) for the benefits received are not those that they are compelled, or coerced, to pay. Denmark, perhaps, and some other small European countries too, may have a fair tax system in the sense that what Danish taxpayers have to pay in taxes, for what they buy with them, is about what they would be ready to pay voluntarily, e.g. by a comfortable majority of votes. In the EU, by contrast, there does not seem to exist, given the political union as it is, the tax system which would be supported voluntarily.

That is one way to see the difference between a union and a state. In that sense, US is more of a union than a state or a country.

The Democrats are, I think, aware of that, so will be pushing for social welfare reforms which reflect the fact that unlike France, where tax revolts are about fairness, the rejection of more socially responsive taxes and contributions are in the US about the rights or rather about freedom, about the repugnance of the very idea of compulsion or coercion by the federal government (which is accentuated by the way federal taxes and contributions are collected, i.e. these are direct, income taxes). The Democrats, I think, are well aware that if they want to take over, they need to reflect the diversity that is the union of the states that is the US and thread carefully when additional taxation needs to be introduced.

In addition to these changes within the parties, once Mueller’s Report comes out, the international policy position post-Trump will be a combination of reclaiming the alliances in Europe and in Asia with perhaps the return to the Obama policy towards the Pacific. But getting along, partnership like, with Russia will be off the table as long as Putin is in power. And then there will be changes in the policy towards the Middle East, though this is a developing story already. Assuming the voters in the EU do not fall for demagogues in 2020, the era of the nationalists may get closer to its end post-2020. What will the restored order look like will depend also on the choices that other countries make, most notably China. Assuming that China chooses to be primarily a commercial rather than a military power, the liberal order of some kind may well get restored. In any case, that looks like the US international stance post-2020. Though, the damage will have been done.

It is interesting that alleged detrimental cultural and social effects of immigration tend to be magnified even when non-existent while the often drastic cultural and social shake-ups of political decisions are discounted. There is no comparison between the changes brought about by immigration to the US or the UK with the social and cultural consequences of the rise of white nationalism in the US and of the decision to Brexit in the UK.

An interesting thing about some of the arguments around Brexit is how easy it seems to be to disregard the importance of institutions. Take Hard Brexit, the argument often heard from all the unlikely quarters is that because there are mutual interests to continuing to do business on both sides of the Channel, business will spontaneously continue to be done – rules or no rules, institutions or no institutions, agreements or no agreements. But, business is done with legal or general institutional support always – there is no Austrian-type market anarchy which spontaneously orders peoples economic behaviour (certainly not in Hayek’s writings, but that is another matter). Even spot transactions need security to be taken care of, mutual interest in a particular transaction is not enough. The existence of Pareto-improvement (i.e. gain from trade for all involved) in sight does not ensure that the transaction that will lead to it will be undertaken, and not just for Prisoner’s Dilemma reasons.

The point made long time ago by my favourite sociologist Emile Durkheim. He called it anomie, i.e. the state of normlessness. What people do if the rules of action are unknown, how they innovate as Merton would say, is hard to predict, though not necessarily hard to explain post factum. So, in the case of Hard Brexit, agreements of one kind or another will have to be negotiated for economic and other activities to continue. The best course of action is to continue to rely on the existing rules until they are changed, which is apparently not what is planned. Rather, it appears, some kind of state of emergency is contemplated as if that will solve anything.

As Plato may have argued, if you do not know, in the state of ignorance, use force. Or rather, if you are resorting to force or power, you are ignorant.

Peščanik.net, 22.12.2018.