Sep 20th 2016

The Coming Anti-National Revolution


"Oppression thrives on distance, on not actually meeting or seeing the oppressed."

NEW HAVEN – For the past several centuries, the world has experienced a sequence of intellectual revolutions against oppression of one sort or another. These revolutions operate in the minds of humans and are spread – eventually to most of the world – not by war (which tends to involve multiple causes), but by language and communications technology. Ultimately, the ideas they advance – unlike the causes of war – become noncontroversial.

I think the next such revolution, likely sometime in the twenty-first century, will challenge the economic implications of the nation-state. It will focus on the injustice that follows from the fact that, entirely by chance, some are born in poor countries and others in rich countries. As more people work for multinational firms and meet and get to know more people from other countries, our sense of justice is being affected.

This is hardly unprecedented. In his book 1688: The First Modern Revolution, the historian Steven Pincus argues convincingly that the so-called “Glorious Revolution” is best thought of not in terms of the overthrow of a Catholic king by parliamentarians in England, but as the beginning of a worldwide revolution in justice. Don’t think battlefields. Think, instead, of the coffeehouses with free, shared newspapers that became popular around then – places for complex communications. Even as it happened, the Glorious Revolution clearly marked the beginning of a worldwide appreciation of the legitimacy of groups that do not share the “ideological unity” demanded by a strong king.

Thomas Paine’s pamphlet Common Sense, a huge bestseller in the Thirteen Colonies when it was published in January 1776, marked another such revolution, which was not identical with the Revolutionary War against Britain that began later that year (and had multiple causes). The reach of Common Sense is immeasurable, because it wasn’t just sold but was also read aloud at churches and meetings. The idea that hereditary monarchs were somehow spiritually superior to the rest of us was decisively rejected. Most of the world today, including Britain, agrees.

The same could be said of the gradual abolition of slavery, which was mostly achieved not by war, but by an emerging popular recognition of its cruelty and injustice. The 1848 uprisings around Europe were substantially a protest against voting laws that limited voting to only a minority of men: property holders or aristocrats. Women’s suffrage followed soon after. In the twentieth and twenty-first centuries, we have seen civil rights extended to racial and sexual minorities.

All of the past “justice revolutions” have stemmed from improved communications. Oppression thrives on distance, on not actually meeting or seeing the oppressed.

The next revolution will not abolish the consequences of place of birth, but the privileges of nationhood will be tempered. While the rise in anti-immigrant sentiment around the world today seems to point in the opposite direction, the sense of injustice will be amplified as communications continue to grow. Ultimately, recognition of wrong will wreak big changes.

For now, this recognition still faces strong competition from patriotic impulses, rooted in a social contract among nationals who have paid taxes over the years or performed military service to build or defend what they saw as exclusively theirs. Allowing unlimited immigration would seem to violate this contract.

But the most important steps to address birthplace injustice probably will not target immigration. Instead, they will focus on fostering economic freedom.

In 1948, Paul A. Samuelson’s “factor-price equalization theorem” lucidly showed that under conditions of unlimited free trade without transportation costs (and with other idealized assumptions), market forces would equalize the prices of all factors of production, including the wage rate for any standardized kind of labor, around the world. In a perfect world, people don’t have to move to another country to get a higher wage. Ultimately, they need only be able to participate in producing output that is sold internationally.

As technology reduces the cost of transportation and communications to near the vanishing point, achieving this equalization is increasingly feasible. But getting there requires removing old barriers and preventing the erection of new ones.

Recent free-trade agreements under discussion, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership, have suffered setbacks as interest groups attempt to bend them to their own aims. But, ultimately, we need – and probably will get – even better such agreements.

To achieve factor-price equalization, people need a stable base for a real lifetime career connected to a country in which they do not physically reside. We also need to protect the losers to foreign trade in our existing nation-states. Trade Adjustment Assistance (TAA) traces its roots in the United States back to 1974. Canada experimented in 1995 with an Earnings Supplement Project. The European Globalization Adjustment Fund, started in 2006, has a tiny annual budget of €150 million ($168.6 million). US President Barack Obama has proposed to expand the TAA program. But, so far, this has meant little more than experiments or proposals.

Ultimately, the next revolution will likely stem from daily interactions on computer monitors with foreigners whom we can see are intelligent, decent people – people who happen, through no choice of their own, to be living in poverty. This should lead to better trade agreements, which presuppose the eventual development of orders of magnitude more social insurance to protect people within a country during the transition to a more just global economy.


Robert J. Shiller, a 2013 Nobel laureate in economics and Professor of Economics at Yale University, is co-author, with George Akerlof, of Phishing for Phools: The Economics of Manipulation and Deception.

Copyright: Project Syndicate, 2016.
www.project-syndicate.org

 


This article is brought to you by Project Syndicate that is a not for profit organization.

Project Syndicate brings original, engaging, and thought-provoking commentaries by esteemed leaders and thinkers from around the world to readers everywhere. By offering incisive perspectives on our changing world from those who are shaping its economics, politics, science, and culture, Project Syndicate has created an unrivalled venue for informed public debate. Please see: www.project-syndicate.org.

Should you want to support Project Syndicate you can do it by using the PayPal icon below. Your donation is paid to Project Syndicate in full after PayPal has deducted its transaction fee. Facts & Arts neither receives information about your donation nor a commission.

 

 

Browse articles by author

More Current Affairs

Sep 24th 2020
EXTRACT: "China’s foreign minister, Wang Yi, recently declared that aggression and expansionism have never been in the Chinese nation’s “genes.” It is almost astonishing that he managed to say it with a straight face. Aggression and expansionism obviously are not genetic traits, but they have defined President Xi Jinping’s tenure. Xi, who in some ways has taken up the expansionist mantle of Mao Zedong, is attempting to implement a modern version of the tributary system that Chinese emperors used to establish authority over vassal states: submit to the emperor, and reap the benefits of peace and trade with the empire."
Sep 16th 2020
EXTRACT: "Seventy-five years ago, the prestige of the United States and the United Kingdom could not have been higher. They had defeated imperial Japan and Nazi Germany, and they did so in the name of freedom and democracy. True, their ally, Stalin’s Soviet Union, had different ideas about these fine ideals, and did most of the fighting against Hitler’s Wehrmacht. Still, the English-speaking victors shaped the post-war order in large parts of the world. The basic principles of this order had been laid down in the Atlantic Charter, drawn up in 1941 by Winston Churchill and President Franklin D. Roosevelt on a battleship off the coast of Newfoundland."
Sep 14th 2020
EXTRACT: "After Trump’s inauguration in January of 2017, millions demonstrated their disapproval. We can expect the same, no matter how this election turns out. With both sides framing this election in “end of the world” terms; with the president calling into question the legitimacy of the vote, even before it happens; and with the president warning his supporters that they may have to take up arms to defend him – we have a recipe for disaster that may occur in the days that follow this election. This may very well be the Armageddon election of our lifetime."
Sep 8th 2020
EXTRACT: "The Huawei case is a harbinger of a world in which national security, privacy, and economics will interact in complicated ways. Global governance and multilateralism will often fail, for both good and bad reasons. The best we can expect is a regulatory patchwork, based on clear ground rules that help empower countries to pursue their core national interests without exporting their problems to others. Either we design this patchwork ourselves, or we will end up, willy-nilly, with a messy, less efficient, and more dangerous version."
Sep 7th 2020
EXTRACT: "China’s footprint in global foreign direct investment (FDI) has increased notably since the launch of the Belt and Road Initiative (BRI) in 2013. That served to bring Chinese overseas FDI closer to a level that one would expect, based on the country’s weight in the global economy. China accounted for about 12% of global cross-border mergers and acquisitions and 9% of announced greenfield FDI projects between 2013 and 2018. Chinese overseas FDI rose from $10 billion in 2005 (0.5% of Chinese GDP) to nearly $180 billion in 2017 (1.5% of GDP). Likewise, annual construction contracts awarded to Chinese companies increased from $10 billion in 2005 to more than $100 billion in 2017."
Sep 2nd 2020
EXTRACT: "Emergence and spread of the coronavirus COVID-19 have created and still creating health issues, economic challenges, political crises and social conflicts around the world. These challenges and conflicts lead the international community to re-evaluate global governance and international structures, which is based on the second world-war and post-cold war. The pandemic will emerge a new era of international society that will not be similar to the pre-Corona world."
Aug 28th 2020
EXTRACT: "Russia has changed, and has been changing, since its beginnings in ancient Muscovy to its current condition as Putin’s realm. Some general features appear in much of Russian history. Most of its rulers have been authoritarian—but so, too, were most of England’s, France’s, and Germany’s. Many of its political and intellectual elites have considered Russia a special civilization deserving a place in the sun—but just as many have not, wanting to transform Russia into a Western state with Western values. Many Russians have been enamored of their country, but even more have probably damned it for destroying them and their children. What, then, is Russia? It is, and has always been, many, oftentimes contradictory, things—sometimes coexisting, sometimes getting the upper hand, always shifting, always eluding simplistic analysis. But, and this needs to be emphasized, the same holds true for every other country in the world."
Aug 26th 2020
EXTRACTS: "Double dips – defined simply as a decline in quarterly real GDP following a temporary rebound – have occurred in eight of the 11 recessions since the end of World War II. .............Financial markets aren’t the least bit worried about a relapse, owing largely to unprecedented monetary easing, which has evoked the time-honored maxim: “don’t fight the Fed.” Added comfort comes from equally unprecedented fiscal relief aimed at mitigating the pandemic-related shock to businesses and households.......This could be wishful thinking."
Aug 26th 2020
EXTRACTS: "There is no question that the re-election of President Donald Trump would endanger both the US and the world. Moreover, there is ample reason to fear that a close election could drive the US into a deep, prolonged constitutional crisis, and perhaps into civil violence.........One can only hope that the election will produce a decisive winner both in the Electoral College and in the popular vote. Yet, even then, tallying the final result may take time, owing to the massive increase in mail-in voting that is expected. Every ballot that has a postmark of November 2 or 3 (depending on the state) will be considered valid, which means that the final result will not be known until after Election Day. During that window of uncertainty, either or both campaigns may try to claim victory based on the current vote count. In any case, there is no chance that Trump will wait graciously in the Oval Office for days or weeks to receive the final tally. In interviews, he has already issued vague statements suggesting that he will not leave the White House if he loses; indeed, he seems to be actively preparing for such a scenario. If he follows through, the world’s leading superpower will find itself facing a protracted – and perhaps intractable – constitutional crisis.
Aug 26th 2020
EXTRACT: "the European Union is a community of values as much as an economic and trade bloc. But the behavior of member states such as Poland and Hungary has called into question their commitment to liberal democracy. Above all, in the US, President Donald Trump is widely criticized, even by lifelong Republicans, for not respecting or understanding the US constitution and the separation of the executive, legislative, and judicial branches. Does Trump even believe in democracy? Does he want all Americans to vote in November, regardless of race or party affiliation, or only those who will support him? And will he accept the election result if it goes against him? "
Aug 25th 2020
EXTRACT: "The fundamental difference in values between the West and China will remain indefinitely, and it is here that the West must draw the line. Any concession that entails a sacrifice of fundamental principles, for example in cultural matters, must be rejected. If this values-based approach results in economic disadvantages, so be it. By the same token, the West should abandon the conceit that it can push, force, or cajole China to become a democracy wrought in its own image. "
Aug 16th 2020
EXTRACT: "China is light years ahead of most of the rest of the world in deploying digital payment technology. Alipay or WeChat Pay apps are all that is necessary to accomplish almost anything that requires a payment in China; the country is largely already making paper money obsolete. "
Aug 15th 2020
EXTRACT: "Seven hundred fifty billion euros is less than 5% of the stock of US government debt held by the public. It’s a drop in the bucket, in other words. And a drop does not a liquid market in safe assets make. Even if this really is Europe’s “Hamiltonian moment,” ramping up EU issuance by a factor of 20 will take decades. "
Aug 14th 2020
EXTRACT: "But the race is not over. In the 2016 election, prices moved the most in the two months just before the election. Trump trailed Hillary Clinton in prediction markets throughout the campaign and was seen as favourite only on election day – showing that the underdog can recover. So despite Trump’s poor position now, he might still regain some ground."
Aug 11th 2020
EXTRACT: "Last year, in the midst of the country-wide protests against corruption, I was honored by a Lebanese humanitarian organization. I began my remarks paraphrasing Kahlil Gibran’s poem “You have your Lebanon, I have my Lebanon.” Like Gibran, I love the Lebanese people, their poetry, art, song, and love of life. I love their generous and welcoming spirit. I also love what Lebanon has given to the world – especially its gifted people. And I love the sheer beauty of the country – its majestic snow-capped mountains and its pristine seascapes. And, like Gibran, I do not love Lebanon’s petty bickering politicians who lead because of an accident of birth. Nor can I embrace the country’s system of sectarian privilege and the corruption that is endemic to the political-economic regime that has squeezed Lebanon dry to the benefit of their chosen ones. And I reject the armed militias, whether they be Christian, Muslim, or secular that in the past and in the present continue to torment those who challenge their dominance. I told the audience that the Lebanon I loved was in the streets making their voices heard demanding fundamental reform – an end to sectarianism, corrupt feudal elites, and rule by force of arms."
Aug 8th 2020
EXTRACT: "It is time for the world’s governments and companies to wake up. Beijing’s reach is wide and deep. It is taking advantage of the West’s openness – and gaps and inconsistencies in our data protection protocols - to acquire information on all of us. The hacks on Anthem, Equifax, Marriott, and the US government are good examples of how they have already done so. American and Western companies need to take a hard look at the costs and benefits associated with operating in China and continuing to have Chinese partners. Those partners must comply with these Laws. American and Western companies that continue to operate with them may unwittingly well be aiding and abetting the Chinese government."
Aug 5th 2020
EXTRACT: "James Murdoch is not the most obvious candidate for editorial heroism. His route to resigning from the News Corp board because of “disagreements over certain editorial content” has been circuitous and colourful."
Aug 4th 2020
EXTRACT: "Say what you will about the slippery slope the US government has been on since Trump came to power, America has a rich history of promoting creative thought, running head-first into particularly uncomfortable subjects, and encouraging robust debate internally and among its allies and partners. Once Trump leaves the scene, America is sure to be perceived as having briefly lost its senses and will come charging back into the mainstream of global thought, debate, and engagement. China has entered the global arena crippled by its own ideology. Ultimately, the US is better equipped to lead the world. It knows that, and so does most of the rest of the world. Someone had better tell Beijing."
Jul 29th 2020
EXTRACT: "The Chinese government has for years argued that its ‘nine-dash line’ of sovereignty over the entire Sea is based on centuries of maritime history, and that China’s claim is air tight. The Chinese Foreign Ministry has even asserted that ample historical documents and literature demonstrate that China was “the first country to discover, name, develop and exercise continuous, effective jurisdiction over the South China Sea islands”. "
Jul 23rd 2020
EXTRACTS: "Like many, I have long been critical of Europe’s Economic and Monetary Union as a dysfunctional currency area. Notwithstanding a strong political commitment to European unification as the antidote to a century of war and devastating bloodshed, there was always a critical leg missing from the EMU stool: fiscal union. Not anymore. The historic agreement reached on July 21 on a €750 billion ($868 billion) European Union recovery fund, dubbed Next Generation EU, changes that.................Unlike the United States, which appears to be squandering the opportunities presented by the epic COVID-19 crisis, Europe has risen to the occasion – and not for the first time."