I have a feeling that people are actually pissed off because they don't think the established elite are generally benevolent, but rather that they act in their own interests at the expense of the prosperity of the middle and lower classes. Whether this is true is beyond the scope of this comment, but any discussion of this seemingly relevant alternate theory is conspicuously absent from the article.
The votes for Brexit, Trump, various far left and right wing parties, etc are a way of saying "let's watch the elite's world and system collapse on itself". They've seen how little any of this is doing for them as workers, and how every system seems stacked in favour of the well off, and they just want to see it all burn to the ground.
I don't think people want to replace the elites with void. Maybe that's the case for nihilistic, fringe far-right or far-left parties. But when majorities or near majorities are voting for Trump or Brexit, they want to replace the elites with something else`.
It's funny to watch the elites suddenly renouncing democracy because she stopped serving their purposes (It was quite a relevation to watch reddit go full-on military-dictatorship this past week, but hey reddit is not reality).
Democracy is a very adaptive concept and there is a saying that there are no dead ends with it.
Today it is not just rich people but pretty much everyone. It is much more easy to migrate from a different culture and then stick your own via the internet. This makes migration much more bearable for the migrants, especially if they can tell themselves that it's just temporary. And a lot of people are migrating, because wealth is just not evenly spread.
This is all nice until you realise the difference of cultures. In the 80's it was no big deal if someone at the other end of the world was "wrong" (about how to lead your life, what to eat, etc.). If that someone moves into the house down the street that's suddenly a different matter. What if his "wrong" spreads?
On top of that, corporations have less of a need to play well with a regional population if they can move any place of the world. This has resulted in a power shift towards corporations with an impact on politicians (think revolving door politics).
The result is that many people feel abandoned, betrayed, and left helpless under a deluge of "wrong". And finally they want revenge. Let it all burn down and build something that's more like how it used to be.
But those times are gone. We cannot wind the time back to the 80's unless we roll back the internet. Because the root cause of it all is not betrayal or corruption, or a conspiracy to establish a new world order.
It is my belief that this century will be characterised by how humanity will deal with the issue of a globalised world, with contradicting cultures and beliefs. Are we going to raise fences everywhere, forming blocks protected by new iron curtains, hiding in our shells? Or are we going to form one all encompassing harmonised culture that you better not deviate from? My hope is that humanity learns that the world is not going to end just because someone is wrong on the internet or down the block.
For example high-frequency trading. Or (here in Germany) renting ruinous hotels to the government as refugee centers at bizarre rates because there was literally no other big-enough accommodation available.
Just that much explaining the article. My personal opinion is that discussing the elite as psychopaths who just want to exploit humanity as boring. Yes these people exist and at the top there may be more than in the middle, but it's simply not common human behaviour. Most people want to be geniunely valuable to the other people around them. Your boss wants to make a good impression on you, etc. But the understanding of the world and how the different factors of your life influence you differently than the factors of other people's life influences them, that is what leads people to make different decisions and set different priorities.
I blinked twice or trice to see if they were not joking. But no - they were seriously thinking that some other's country citizens' problems should be considered equal to the US citizen ones by the President of US. I agree that all people are equal, but elected officials/statesmen should always consider their constituents couple of orders of magnitude more equal than the rest of the people.
The people right now want a real statesmen like Bismarck:
"The whole of the Balkans is not worth the bones of a single Pomeranian grenadier."
The US and British (and a lot others) working and lower middle classes want to hear that they are more important to their own government than the foreigners.
And Trump and Brexiters are the only ones that give that message. So was Sanders while campaigning.
Maybe the author doesn't mean actual bankers, but is instead referring to central bankers, in which case I'd argue that the meager GDP growth achieved from an unprecedented expansion of central banking assets has been anything but efficient.
Regardless, the fact that the author can look back the past 10 years of economic policy and find among all the mad and destructive monetary actions a "quest for efficiency" just shows that the author is as out of touch as the bankers.
What's happening is that the public at large is figuring this out (and this part the author gets right) using the imperfect vehicles of Trump and Brexit to try and stop it.
I wonder how many years will pass before people realize this mantra is an article of faith.
Of course they can, we just have to be willing to let them in order to see the fundamental flaws in the system as it is.
"Voters in large numbers have been rejecting much of the underlying logic behind a dynamic globalized economy that on paper seems to make the world much richer."
In the UK, we don't actually know why 17+ million chose to tick the leave box.
My conversations with a handful of people who did vote leave suggest a range of reasons from immigration, through to 'loss of control'. Macroeconomic policy does not seem to figure prominently.
The government of Mrs May is further to the right of that of Mr Cameron. Her published statement does mention a softer approach to social factors and a desire to spread the rewards around more evenly...
https://www.gov.uk/government/speeches/statement-from-the-ne...
...we shall see how that actually goes over the next few years in terms of actual law (look out for 'red tape' discussions - your red tape may be my employment rights) and policy (look out for some systematic way to replace the EU grant system that has recycled tax income from London/South to North).
In my part of the UK people were overwhelmingly in favour of leave. I wouldn't typically mention I was a remain voter as it was near sure to get me a discussion.
Very few claimed the immigration directly - t'was about jobs, or more precisely the lack of them, therefore immigration.
A good part of the region is not yet out of the 2008 recession, and house price growth is a joke. When you relatively recently had a well paying job with which you supported your family, yet now you're not making ends meet in a temporary delivery driver fake-freelance job, as that's all you can get despite skills, it's hard to see much logic in the "dynamic globalized economy".
Now then, I'd argue that for most in tht position, the social justice, work regulation and regional development funds of the EU would be something to heavily vote for. The EU, though, has always been appalling at making a case for itself - hence distant EU bureaucrats and other tropes.
Sadly, Boris's bullshit of £350m to the NHS and evil EU immigrants taking your jobs touched sore nerves and lead to the leave votes.
Now we get a government that looks like it will lurch heavily to the right, and as far as London and the tories are concerned, the regions can go f* themselves.
Turkeys voting for Christmas perhaps, but I do undertand the reasons why, least round these parts. I'd say the root cause goes all the way back to Thatcher and the loss of local industry, from which many towns have still not recovered.
I met a couple of neds in Spain recently on the day of the vote, and they were like "Take it back, init, take it back and be great".
I was like "What does that mean though??? Take back what??". "Take it back! We just need to run ourselves".
Despite almost an hours worth of discussion, they were passionate about something which was nothing of value. I would probably put a lot of money on 20% of the vote being people who pick up a newspaper, and copy what the editor says.
This "lets be great again" rubbish was the common theme.
- One blamed being a evacuated kid in WW2
- Two said it was a "protest" vote - and admitted that they didn't want to actually leave the EU
- Two said it was because they felt that immigrants made their search for jobs more difficult
I don't live in London so I can't comment on conversations there.
EU was pretty much our lifeline that we could move to somewhere much nicer and affordable in Europe once our careers have been established.
But in 40 years the EEC has evolved into the EU, with a constitution, a parliament, a president, a national anthem, a flag, supreme law-making powers and a currency.
Maybe the Merckel anti-integration faction will remain dominant and they'll stop there. Given the Juncker faction pushes further integration as the solution to every crisis, and given the EU is in constant crisis, the next 10 years should be interesting.
The EU is a world-historical experiment in social democracy - free markets + state regulation + the welfare state. The consensus is that this system represents the current pinnacle of political evolution. (Both 'progressive' Scandinavia and 'capitalist' America implement variants of it). An alternative perspective is that it's simply a compromise system which emerged after WWII and is already showing severe cracks.
Maybe the EU will create prosperity by such actions as forcing Google to break up, throwing state money at impoverished regions, etc. Maybe the populations of France, Spain, Italy et al will accept that they can't fund welfare states by borrowing in perpetuity and stop voting in radical left-wing governments. Maybe they'll find an alternative solution to the ever growing debt-burden, over Piketty's proposal for seizing 15% of all bank accounts. https://en.m.wikipedia.org/wiki/Proposed_long-term_solutions...
I have no idea. I would like to see pro-EU articles which actually address these issues, and not simply assume that the only reason to be against the EU is that you're an ignorant racist, deluded by propaganda and lies.
The UK was not a signatory of any relevant treaty post-EEC. It opted out of the Schengen Area, of the Euro zone and even of the Charter of Fundamental Rights.
The idea that the UK was being controlled by a distant bureaucracy in Brussels is one of the many lies told by tabloids. The EU is far from perfect, but the UK was never in it in any meaningful sense. It was mostly being oppressed by tomato size regulations and things of that sort. Ironically, they will probably still have to comply to all that if they wish to maintain trade agreements with Europe. This entire thing was based on lies and disgust at "experts". And a good dose of xenophobia.
I have lived in the UK and I have never seen a EU flag being flown anywhere (unlike what you see in any other EU country). It was always more likely to see an American of Commonwealth-country flag than an EU one.
There is no EU constitution, by the way. It was rejected by referendum in several member states and the project died.
The UK already enjoyed access to EU markets while giving almost nothing in return to the common project. In fact, many people in Europe felt that the UK was participating mostly to prevent further integration. Even British comedy thought so:
https://www.youtube.com/watch?v=37iHSwA1SwE
I think younger people see things differently, are less xenophobic and less attached to nationalist ideas, borders and walls. The next generation might have brought real participation of the UK in the EU (i.e. real skin in the game). Unfortunately, Baby Boomers still had another social contract to wipe their asses with before they checked out. So here we are.
It's true the EU constitution was rejected, but the project didn't die: it was replaced by the treaty of Lisbon which contained most of the changes which were in the proposal for the EU constitution. See for instance https://en.wikipedia.org/wiki/Treaty_establishing_a_Constitu...
The fact that those changes were brought back in via the back door created even more distrust in the political leaders and the EU than before, in particular in those countries where the EU constitution was rejected in referendums.
Spain has never had a left-wing government, let alone radical left. Since democracy, we have had 4 centre-right legislatures and 6 centre-left, last of which was in 2008, with the current election deadlock still resulting in a majority of centre-right votes.
I overstated that point but there certainly seems to be a strong left-wing base in every centre-left coalition in Southern Europe. And the centre-right coalitions follow a pragmatic mix of nationalism, traditionalism and capitalism. I.e., neither side has a strong will to cut state spending. Liberalism seems to be more a Protestant northern Europe thing.
Where does the EU provide the means for a welfare state? Do jobless people get money from the EU? Any country can handle its own version of welfare state. There is no mandate from the EU.
The perception is usually actually the other way round: many people think the EU caters too much to the multinationals and bends over backwards to let the "turbo capitalists" have their way with the little people. At least that is what I hear from pretty much everyone I know in the south of Europe, the left in France and Germany, and UKIP supporters in the UK (think of the TTIP discussions). So which is it now? A socialist welfare state or bureaucrats pleasing bankers and corporations?
In absolute terms, the amounts involved aren't huge right now, but this is a problem that will grow worse with time as a) most European countries have aging populations and face a pensions timebomb and b ) cutting welfare spending is politically very difficult.
Some voices in the EU have been pushing for a welfare and pensions union. It's impossible to predict if this will actually happen, but it shows that many people want to head in that direction.
The EU is indeed more pro-market than many member nations. This is where the left/right axis just confuses the debate. 'Market-friendly social democracy' is the most accurate term for the system promoted by the EU (and the linked NYT article, and most educated elites): a system with 1) free enterprise 2) state regulation of industry 3) state management of the economy and currency and 4) a welfare state.
It's a compromise system which appears capitalistic (and is denounced as neoliberal) but the underlying theory is socialist (a descendant of the gradualist theories promoted by most anti-communist socialists of past generations). History will tell whether it's sustainable.
So I think you're incorrect, the UK did try but failed to steer the EU in its direction because it was outvoted.
Now that anger has been roused about immigration, a substantial part of the Brexit vote wants to end free movement altogether, which is simply not achievable in the EU.
I agree with a lot of what you said, apart from this statement.
There are problems with borrowing in a system based on debt, particularly if the interest on that debt is in the hands of profit-motivated enterprises. However, that is not the only way of funding public spending. It's possible to shift to a debt-free money system where new money reaches the system through government spending. That way there's no debt to pay back, and the level of public spending would only need to be limited by a need to keep a manageable rate of inflation.
In other words, whilst I agree there are problems with how public spending is funded right now, the problem isn't the radical left per se, as there are ways of running a fiscally responsible 'radical left' government.
I'd like to point out that nearly every government in EU is right-wing at the moment. The UK government that is apparently giving so many benefits away and letting so many immigrants in was right-wing for quite a while now, so I don't think it's the "radical left-wing" which is the problem here.
And the reason why these issues as you called them are not being addressed is that maybe not everyone sees them as issues? I'd love to live long enough to see creation of United States of Europe, where my own nationality was just replaced with one EU passport - but a lot of people are vehemently against that, thinking that national identities matter in 2016.
Ah, downvote me for replying with a question. Mature. I guess you don't have a reason that doesn't boil down to "I don't want foreigners next door"?
By integration I mean political integration. I think very large states have scale problems, large democracies in particular. (Look at India or the US). You either end up with populist parties who need to appeal to the lowest common denominator of hundreds of millions of people, or technocratic elites who ignore the people. The EU has 500 million citizens from 27 ancient nations, with wildly different cultures and economies. There's no way you can fuse them into one giant country, and the inevitable outcome is fuelling nationalism and populism centred around anti-EU resentment.
That's a very different narrative than the one I recognise. From what I've seen the main effects of globalisation have been twofold:
1. Lowering prices by getting the working classes of all countries to compete with each other.
2. Giving multinational companies greater leeway in tax avoidance.
The narrative that either benefits us all is somewhat misleading. Furthermore, with increased automation we'll see an even more rapid concentration of wealth in the hands of the few.
On a semi-related note, if you have the time to watch it (it's roughly 2 hours long, but it stays interesting throughout IMO), I can recommend this video, it's a conversation between Yanis Varoufakis and Noam Chomsky, it helped me develop a further understanding of the problems in the EU, and the issues that come from unelected bodies taking over our democracies:
I am not sure what he even means by 'optimizing for efficiency'
If your business depends on the happiness of your employees then optimizing for their happiness increases your bottom line.
If your business will be shut down if you commit fraud then optimizing for transparency is in your interest.
Is this person blaming economists for something that they do not have much control over - and that is thinking about individual lives. Its mathematically not possible for economists to worry about each person.
The reason why people are angry is that employment is closely linked to your ability to feed yourself and be a consumer of the global economy.
So when politicians talk about employment - what they mean is a person's ability to survive.
Nitpick: this statement is about absolute advantage, whereas Ricardo emphasised comparative advantage: https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo....
Imagine that you're better than me at everything (both programming and needlework). You can program three times as fast, and sew twice as fast as I can. Does that mean you should do all your own programming and sewing? No.
However small my contribution, I can save you some time by doing some sewing for you. In that saved time, you can do more programming than I could have achieved in the time I spent sewing. So in sum we're better off. So, there are potential gains from trade.
This seems slightly off to me. Cotton can be grown more efficiently (in the usual sense of less cost per unit return) in some climates than others. But the economy as a whole may be more efficient if cotton is grown exclusively in subpar-for-cotton areas; perhaps the ideal-for-cotton areas are needed for another crop.
As I understand it, "efficiency" in economics will refer to one of two ideas:
1. Small deadweight losses. The smaller they are, the more efficient the economy is.
2. Pareto efficiency. (That is, the economy is efficient, in this sense, if there is no reallocation of resources that makes somebody better off without making anyone worse off.)
Jobless recoveries, debt deflation, etc.
The answer of course is a reversal of the trend of neoliberalism over the past 40 years, to re-regulate banking and finance, increase government spending and return to full employment as a policy priority.
This is all achievable through understanding Modern Monetary Theory. If anyone is interested in finding out more check out this Facebook group[1].
If anyone in Australia is interested I'm also starting a political party based on these principles.[2]
- Many people want to be able to have agency in what their future is like.
- A quest for economic and technological growth makes the future unknowable, and makes predictions about what skills (and capital) will provide a livelihood to support your family as tricky as predictions about how much a startups equity will be worth. Many (most?) people can't effectively make these predictions and they suffer pretty badly.
Did the author communicate at all with Trump supporters and leave voters, or is this just speculation? The support given in the article seems pretty weak: an unrelated abstract experiment about efficiency versus equality and a reference to another newspaper article about a BMW worker.
Look at Obama, he had the Hope and Change rhetoric going, they even gave him a Nobel Peace Prize.
What did he actually accomplish? Medical costs are 5x what they were in some cases. The middle east is still in disarray. Police and protesters are clashing.
They talk a big game before getting elected, but the reality is that they have very little power once they are elected.
They would be better off reading Economics in One Lesson by Henry Hazlitt then working off improving minor things.
Not sure the theory fully checks out, but it seems very clear indeed that the policy narrative that's all about economics is not something normal people can feel connected to. It's just that it's easy (?) to measure and thus has taken over the debate. But if I'm a German or Dutch worried that TTIP will bring America's 'chlorine-soaked chicken' on my plate you can tell me as much about job gains as you want and i won't hear it - statistics and numbers don't feel real. Policy has to find the reconnect with reality, that means probably to purge the lawyer and economist thinking that pretty much dominates all ministries and government.
Supporting rent control doesn't make you stupid/uninformed, but the only other option is evil.
Protectionism is a complex topic in a world with currency manipulation, labor laws variability and geopolitical conflicts; it's only simple (and evil/stupid) in a world without these things.
And immigration is not just about economics, it's about who you want to live next door and vote. Here, people can disagree regardless of economic views.
I think this is the wrong trade off. More equality does not necessarily mean less efficiency.
Central bankers can't seem to get it into their thick heads that their 'wealth effect' is a 'poverty effect' for those who didn't get the chance to own those assets before they pumped them up out of reach.
The fact that the central banks of Japan and Switzerland own most of the companies that we are employed by and pay money to thanks to their ability to create money out of nothing should make people angry.
http://fivethirtyeight.com/features/the-mythology-of-trumps-...
One thing that confounds it is that Hispanic and African-American voters avoid Trump due to his appeals to white supremacy, and they are poorer than average. So if you only count "real Americans" then there may still be some truth in it.
People rent a home, and then exploit the democratic process in a beggar-thy-potential-neighbors strategy. They use things like rent control and other anti-migrant policies (e.g. anti-Google bus policies in SF, anti-Hijab laws in France) to enrich themselves at the expense of others.
Because her wealthy uncles lost their job, and had a small drop in their standard of living, "Andrea" wants to screw over a bunch of desperately poor people a world away.
Unlike "Andrea", our elites behave far better. Populists try to protect their favored ethnic groups - witness Shiv Sena trying to pass laws preventing non-Marathis from driving taxis, or "tech bros" entering SF. In contrast, I've never heard a white banker complaining about allowing a Marathi to be the CEO of Citi. Elite institutions - think of banking or tech - tend to be truly global enterprises, open to anyone who can demonstrate the requisite ability.
Somehow the author doesn't draw the obvious conclusion: that our elites are honest, moral and principled individuals, while our masses are selfish, tribal and greedy people out to beggar their neighbors. For good policy making the conclusion is that we should try and increase the power of the elite.
In addition, people are concerned about things that effect themselves. The elites don't care about the neighborhoods they don't live in, or the jobs they don't have to compete for.
But they do care about profit, and about getting richer. In all of the examples you gave, that motivation would work just as well as being "principled" as to explaining their allegiance to the opposite side of the issues as to that of the lower class.
If the world ends up 99.99% of us are either starving or doing jobs such as building a carbon fiber toilet for some rich guy's yacht, simply because the elite "own" everything, the world would be a worse off place, wouldn't you agree?
And, IMO, that's what will occur if we strip away all laws meant to protect the little guy.
The local elites don't need to compete for CEO jobs with Satya Nadella or Sunder Pichai? That's news to me.
I cringe when I see my customers outsource their IT to India, but that is mostly because it immediately makes my life much more difficult. There are fantastic Indian engineers and sysadmins, but they aren't the ones working the grunt jobs at these cut-rate outsourcing firms...
We don't owe them very much, we don't have jurisdiction over them and we certainly can't help them all.
For any value of we.
Maybe it's better to create jobs "a world away"? If it's a genuine concern.
So you're saying that people of color and women just aren't fit to rule the world? The ethnic and gender distribution among elite managers etc. is certainly not representative.
It's true that Asians are overrepresented in tech. I believe this is, in fact, because more Asians are fit for the job. Do you disagree? Why do you think Asians are overrepresented, and what do you think should be done about it?
