Globalization, national sovereignty and democratic politics

Earlier this year, an economist named Dani Rodrik published an article of some importance, that in part helps explain Trump’s victory.

I am leaving aside the racial-cultural element of anti-whiteism discussed recently in Identity Politics, the Polite and Rude Versions. That explanation has real but limited application, just as has this economically-oriented approach.

Briefly, Rodrik called it the trilemma of the world economy, and the trick is: you can only have two of the three outcomes.

 

 

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According to Rodrik, the choice is among the nation state, democratic politics, and international economic integration. You can get any two but not three, in full. I will question this assertion more fully below, because in the end I think one is left, in the globalized economic order, with neither state nor democracy. Let us begin with the issue of national sovereignty.

Rodrik cited the economic writer Andrew Evans Pritchard on why the latter  supported Brexit.

“Stripped of distractions, it comes down to an elemental choice: whether to restore the full self-government of this nation, or to continue living under a higher supranational regime, ruled by a European Council that we do not elect in any meaningful sense, and that the British people can never remove, even when it persists in error.

We are deciding whether to be guided by a Commission with quasi-executive powers that operates more like the priesthood of the 13th Century papacy than a modern civil service; and whether to submit to a European Court (ECJ) that claims sweeping supremacy, with no right of appeal.

It is whether you think the nation states of Europe are the only authentic fora of democracy, be it in this country, or Sweden, or the Netherlands, or France ….”

This is exactly the argument I have made about Brexit: that to remain in the EU was to revert England to a form of government last seen in the pre-Reformation Tudor era, where parliament had very limited jurisdiction and the Papacy (think Cardinal Wolsey) had very large jurisdiction. In this case replace the Papacy and Church with the European Commission and the European Court of Justice. Nowadays the Remainders get to play the role of Catholics in a protestantizing Britain. Think of Henry VIII as an early Brexiter.

Rodrik himself thought the the European Union could successfully combine a hyper-integrated common market with democratic politics. After the treatment that Greece received in the past couple of years, he no longer believed so.

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In regards to the United States and Trump, there is no ambiguity to be found. If the United States has to abandon deeper economic integration in order to preserve its nationhood, then it will do so. It will restrict illegal immigration, and raise the price of the labour of those already within its borders. If that means Americans will pay more at Wal-Mart, so be it. If economic integration with China requires some tougher enforcement of rules, then Trump will get China’s attention by beefing up the security and recognition of Taiwan.

Hillary Clinton stood for tighter economic integration and democratic politics, at the expense of the nation state.  Trump stands for a stronger assertion of the nation state and democratic politics, with economic integration the relatively less important.

To my mind, the degree of loss of national sovereignty implied in hyper-globalization ultimately means a lessening of the range and effect democratic politics as well., because in the modern age the state acts as the expression of the popular will, as transcribed and translated though constitutional arrangements. In order to make economic integration work, there must be dispute settlement, and for dispute settlement to work, the will of the people – as expressed through local legislatures – must be frustrated by the property rights of corporations and other economic actors to be compensated for any limitation on their treaty-based “rights” to earn money.

It is entirely possible to have states without democratic arrangements, as ancient and recent polities attest, but is difficult to conceive democratic arrangements without a stet in which they are housed and expressed.

Consider international copyright regimes. If Canada pursues a cultural policy favouring domestic television and movie production, it will inevitably limit, or try to limit, the economic presence of foreign copyright-holding interests on its airwaves. This is Canadian broadcasting policy, tout court.  Full economic integration of the kind foreseen in the Transpacific Partnership implies the right to sue for the violation of economic rights of a corporation by a host government. [See for example, investor-state dispute settlement mechanisms, in the Wikipedia article just cited.]

Thus I arrive at the Dalwhinnie proposition: the perfection of global trade demands a degree of extra-parliamentary adjudication that puts and end to popular sovereignty. Democratic institutions become irrelevant.

In the long run, it is not a trilemma among state sovereignty, democratic politics, and globalization. You do not get a choice among any two, if global economic integration is to be perfected. You get one: transnational global economic and political integration. National level democracies and state sovereignties would be held down by a web of rule making that is extra-parliamentary. Votes would cease to matter – as they have in most national referenda in Europe about the European Union, whether to leave or join.

That would explain the recent revolts against the consensus of the Volvo-drivers.

Accordingly, the Trump victory is no small thing. It is, truly, an American Brexit.

 

 

 

 

IKEA: Our totalitarian present

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IKEA combines two things that when combined are simply odious. First: the architecture of the stores compel the shopper to snake  his was way through in a fully determined way from the moment he picks up his shopping cart to the final tally at the check out: first kitchen, then baths, then office and so forth, as a sheep going through the sheep-dip. One feels a total lack of control over one’s shopping experience. It is a one-way street through the cornucopia of cheap goods assembled from the poorer parts of the globe.

Second, while thoroughly capitalist, in the sense described above, the shopper is  confronted with self-congratulatory moral superiority from one end of the store to the other: from the garbage bins (sorry, I should say recycling) at the doors to puffery in signs announcing low-carbon this and ecologically sensitive that. And the Swedish self-congratulation smirks from every sign. “Hey! look at us: look at how kid-friendly we are, marvel at our sensible this and admire us for our no-nonsense return policy, and while you are here, sample our Swedish smoked herring and fried moose testicles at the cafeteria”.

Even the Wikipedia article seems to have swallowed the Kool-aid:

Older IKEA stores are usually blue buildings with yellow accents (also Sweden’s national colours) and few windows. They are often designed in a one-way layout, leading customers counter clockwise along what IKEA calls “the long natural way” designed to encourage the customer to see the store in its entirety (as opposed to a traditional retail store, which allows a customer to go directly to the section where the desired goods and services are displayed). There are often shortcuts to other parts of the showroom.

“The long natural way” is Ikeanese for doing exactly what the store architecture compels you to do. IKEA just can’t help but talk in self-congratulatory cant.

We have all spent much money at Ikea and learned to our frustration that, if Ikea can save money by drilling only one hole,when by drilling two the customer would find it easier to assemble the product, Ikea will cause its manufacturers to drill only one. It is as cheap and capitalist as Wallmart, but it has successfully occupied the commanding heights of virtue-signalling.

It is like eating at McDonald’s while the store reminds you that you are actually in a Michelin-rated restaurant.

And this attitude of being fully capitalist while pretending to be virtuous goes all the way to the top, if the corporate structure is anything to go by. I cite the Wikipedia article again:

 

IKEA is owned and operated by a complicated array of not-for-profit and for-profit corporations. The corporate structure is divided into two main parts: operations and franchising. Most of IKEA’s operations, including the management of the majority of its stores, the design and manufacture of its furniture, and purchasing and supply functions are overseen by INGKA Holding, a private, for-profit Dutch company. Of the IKEA stores in 43 countries, 303 are run by the INGKA Holding. The remaining 47 stores are run by franchisees outside of the INGKA Holding, with the exception of IKEA Delft which is not franchised.[83]

INGKA Holding is not an independent company, but is wholly owned by the Stichting INGKA Foundation, which Kamprad established in 1982 in the Netherlands as a tax-exempt, not-for-profit foundation. The INGKA Foundation is controlled by a five-member executive committee that is chaired by Kamprad and includes his wife and attorney.[84]

While most IKEA stores operate under the direct purview of INGKA Holding and the INGKA Foundation, the IKEA trademark and concept is owned by an entirely separate Dutch company Inter IKEA Systems, headquartered in Delft.[85] Every IKEA store, including those run by INGKA Holding, pays a franchise fee of 3% of revenue to Inter IKEA Systems. The ownership of Inter IKEA Systems is exceedingly complicated and not publicly known. Inter IKEA Systems is owned by Inter IKEA Holding, a company registered in Luxembourg. Inter IKEA Holding, in turn, belongs to an identically named company in the former Netherlands Antilles that is run by a trust company based in Curaçao.[84] In 2009 the company in Curaçao was liquidated and the company responsible for this liquidation traces back to the Interogo Foundation in Liechtenstein.[86] Ingvar Kamprad has confirmed that this foundation owns Inter IKEA Holding S.A. in Luxembourg and is controlled by the Kamprad family.[87] The IKEA food concessions that operate in IKEA stores are still directly owned by the Kamprad family and represent a major part of the family’s income.

I recommend that you read the Wikipedia article. The INGKA Foundations’s  not-for-profit status ensures that much of IKEA’s profits are untaxed. As you would expect. By contrast, the Waltons of Wall-Mart fame simply sell you stuff cheaply, and there is none of the smug moral posturing of IKEA.  Ingvar Kamprad’s INGKA Foundation has greater assets than the Bill and Melinda Gates Foundation, but gives away far less money.

To be clear, capitalism is good. But IKEA is selling  much more than cheap goods; it is selling to its clients a false moral posture, in the reflection of which the consumer is invited to bask.

Makes me ill to be there too long.

 

 

 

Comment on Peter Thiel’s comments

Peter Thiel is a Libertarian and has been for a long time. His opinions are not a surprise, but what is surprising is his comment on government efficacy, with a nod to Manhattan and Apollo project. With that he inoculates himself from the “crazy-libertarian” charge. His venture capital background gives him a rational thought process which he displays in his speech. He also touches on the fact that we have moved from a military-industrial complex to a government-industrial complex. Hence the disparities he alludes to, i.e. either you are a player, or you are being played.

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Bourgeois Dignity: Why economics can’t explain the modern world

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Deirdre McCloskey is a phenomenal writer, economist, and thinker. Visit her website for an explosion of academic productivity and a highly intelligent viewpoint. We share one thing in common. Both of us have had the gravest doubts that economics as it is usually practiced is capable of explaining much. My friend Oban calls it the anorexic profession: not merely starved, but self starving. Its insights are few, but powerful, but it has become wedded to asking very narrow questions and getting very narrow, if important, insights.

McCloskey breaks the mould. Here is how she begins Bourgeois Dignity: Why Economics Can’t Explain the Modern World (2010) “Sixteen. The magic number is sixteen. The world is on average sixteen times wealthier than it was in 1800.” She finds that the economic discussion fails to comprehend or explain why ‘the largest revolution in human affairs since the invention of agriculture’, as she puts it, has occurred in the past two hundred years. She looks at all the explanations proferred by the economics profession , and finds them inadequate to explain the scale of the transformation from $3 a day world average in 1800 to $48 a day world average (or $147 a day in formerly impoverished Norway).

After demolishing the usual explanations (rule of law, expansion of trade, rise of the middle class – without reference to ideas, war, slavery, imperialism, or population growth) she settles on changed ideas and social attitudes towards innovation.

Changing social ideas, in short, explain the Industrial Revolution. Material and economic factors – such as trade or investment or exploitation or population growth or the inevitable rising of classes or the protections to private property – do not. They were unchanging backgrounds, or they had already happened long before, or they didn’t actually happen at the time they are supposed to have happened, or they were weak, or they were beside the point, or they were consequences of the rhetorical change, or they required the dignity and liberty of ordinary people to have the right effect. And it seems that such material events were not in turn the main causes of the ethical and rhetorical change itself.

Most of the book consists of a careful elimination of the causes usually offered for the Industrial Revolution, and involves naturally a series of disputes with the standard materialistic explanations offered by the economics profession. Many if not most of the economists with whom she disputes  have been at various times her teachers, mentors or students, and on the whole the arguments are kept at the friendly tone with which old friends argue.

I grant that I am inclined to non-materialist explanations. Materialism is the doctrine that there is only matter and its motions, and that mind is an epiphenomenon, as a shadow is to the body for example, and not a primary cause in its own right. Yet anything we know to be important in our own lives has occurred by decisions we have made, that led to actions on our part.

McCloskey argues in this book that the standard sets of explanations for the huge rise in human wealth since 1800 are insufficient, when they are not merely wrong. Bourgeois Dignity is the second of a series of six books she has planned. The next in the series, Bourgeois Equality (2015) is already out. I have already ordered it.

McCloskey is one of those writers who are so enlightening and well argued that you need not fully agree in order to profit from them greatly.

She may think it relevant, but I do not, that she underwent a sex change from man to woman in 1995. More pertinent, in my view, was that she was an atheist and is now an Episcopalian, and was an acolyte of Milton Friedman and now entertains a broader conception of her profession.

 

The US has lost a quarter of a million jobs in journalism

 

 

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Who knew we needed so many print journalists in the first place?

Yahoo News reports:

Washington (AFP) – The US newspaper industry has shed more than half its jobs since 1990, losses which have only been partly offset by gains in online media.

Official US Labor Department data showed the newspaper sector lost 271,800 jobs in the period from January 1990 to March 2016, or 59.7 percent of the total over the past 26 years.

The numbers, first cited in a report by the news website Engadget, confirm the massive shift to digital media that has hammered traditional newspapers.

Magazines fared only slightly better, losing 36 percent of their jobs in the same period.

Employment in Internet publishing and broadcasting, meanwhile, rose from about 30,000 to nearly 198,000, the Bureau of Labor Statistics data showed.

So, the net loss seems to be about 73,000 jobs when broadcasting and internet are included.

I am far more concerned with net job losses in manufacturing.

What intrigues me, however, is that despite the job losses I now read the Telegraph, the Guardian and the Drudge Report nearly every day, the Straits Times (Singapore) occasionally, and I am awash with information.

I cannot even mention the large numbers of blogs I manage to delve into when I am not too busy.

I feel mildly sorry for the many journalists who have had to find another way of earning a living, but when I contemplate how much better I am most of the time than Geoffrey Simpson, Charles Krauthammer, or Andrew Coyne – I place myself well below Conrad Black and Rex Murphy – I have to wonder, what were all those print journalists doing? Did we really need them? Apparently not.

Getting to Denmark

Francis Fukuyama wrote that the object of all political development lies in “getting to Denmark”.

By this I mean less the actual country Denmark than an imagined society that is prosperous, democratic, secure  and well governed, and experiences low levels of political corruption. “Denmark’ would have all three sets of political institutions in perfect balance: a competent state, a strong rule of law, and democratic accountability. The international community would like to turn Afghanistan, Somalia, Libya and Haiti into idealized places like “Denmark” but it doesn’t have the slightest idea of how to bring this about. As I argued earlier, part of the problem is that we don’t understand how Denmark itself came to be Denmark and therefore don’t comprehend the complexity and difficulty of political development.

Certainly anyone who has seen the Danish movie “A Royal Affair” will have observed that Danish society in 1800 was in a state of feudalism that English society had left by the late 1400s: the peasants were enserfed, had no property in their lands, and were obliged by the noble landowning class for everything they grew. Denmark only became a constitutional monarchy in 1849. The revolution that saw the end of absolute monarchy in England happened 161 years earlier, in 1688.

How then did Denmark move so rapidly and effectively to become one of the models of the world for stability, progress, peace and good order?

I have no idea.

But after a recent trip there I am pleased to suggest several cultural attributes we could do well to emulate.

  1. It is okay to be clever. From this attribute much else inevitably follows.

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2. It is okay to eat meat and cheese. Charcuterie is a normal serving in a Danish wine bar/tavern. Note the subordination of vegetables to fats and proteins.

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3. Globe-embracing capitalism

Denmark is headquarters to companies as diverse as Lego and Maersk shipping. Lego is cuter so it  gets the photograph. See ‘cleverness’ above.

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4. Vikings (see globe-embracing capitalism above)

 

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Viking shipbuilding techniques should be studied.

 

5. Fit blond people

The people are remarkably fit-looking. Handsomeness and beauty cannot be achieved without breeding for it, and that implies an aesthetic sense and social arrangements whereby beautiful people were encouraged to breed and ugly ones bred out. It means women must always have had the power to turn down the proposals of ugly men, and vice versa. That means in turn that the chastity of daughters was protected by fathers  and brothers without turning guardianship of daughters into purdah. There may be other implications to high degrees of beauty in a population, but I shall refrain from poaching in the territory of American Renaissance.

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6. Architecture is taken seriously.

You may not like modernist architecture. But I have to commend a society where new building is not put up without thinking about how it will look in a hundred years. Below is the Danish Royal Opera.

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7. Copenhagen/København

The Danes turn the ‘v’ into a ‘u’ in places, so it is pronounced like Koebenhaun. A dozen times prettier than Amsterdam: no red light district, wider streets, less litter, with a couple of magnificent royal palaces.

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The Amalienborg (above) features four identical palaces built around an octagonal square, with suitably pompous fountain and statue of King Fredrik V on horseback.

 

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I recommend that you go there if you can.

New and important: practicable space exploration

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Yuri Milner, a Russian zillionaire, is proposing to spend $100 million on light sail driven space probes that could reach Alpha Centauri within about 20 years. He has recruited Stephen Hawking to shill for him and has enlisted Mark Zuckerberg for his board of directors.

Alpha Centauri is the closest star to us, at 4 light-years. The light sails are expected to be accelerated to 1/5th C, the speed of light, by a powerful laser.

At noon [yesterday, in fact] today, Yuri Milner, the Russian tech billionaire, will join Stephen Hawking atop Manhattan’s Freedom Tower, where the pair will announce Starshot, a $100 million dollar research program, the latest of Milner’s “Breakthrough Initiatives.” (Mark Zuckerberg will serve on Starshot’s board, alongside Milner and Hawking.) With the money, Milner hopes to prove that a probe could make the journey to Alpha Centauri in only 20 years.

It was great to hear some hopeful news for a change.

On reflection, it is obvious that our own planet’s system might well have been mapped by tiny invisible cameras carried by light sails from another star system in any age past. Going further afield from our mechanistic 21st century headspace, we might allow ourselves to consider the view held by Terence McKenna. He held that the most practical way to get to distant stars is by spores travelling through the depths of cold, foodless, and irradiated space. His view – or, according to what the psychedelic mushrooms told him – their story, was that the mushrooms he ingested travelled as spores between star systems, and can colonize any carbon based system, and communicate with the minds of those that happen to eat them.

If you think this method of interstellar travel and communication is weirder than micron-thin lightsails being sent by lasers, that is merely a local and chronic (centred on our own time) prejudice. Expand the range of allowed possibilities. There is no reason to consider current human technologies, and human-only communications, as the only ways to get around this galaxy.

McKenna’s True Hallucinations is well worth a read. And if a taste for psychedelics makes me a bad conservative…I offer no apologies. The same taste made me immune to all materialistic doctrines: marxism, materialism, reductionism, freudianism, and any of the nonsense so well described in Roger Scruton’s Fools, Frauds and Firebrands.

 

 

Two charts explain Trump: why the US social contract is breaking

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Steen Jakobsen, chief economist at Danish investment bank Saxo Bank, believes the “social contract” — the agreement between the ruled and the rulers — is now broken, and this can be seen in the rise of Donald Trump.

Jakobsen says we may have reached a nadir in terms of political ambitions, investments, capital expenditure, employment, inflation and growth. He sees this as the end of “planned economies” that were adopted after the fall of the Berlin Wall.

In a recent research note, he said the ratio between employee compensation to gross domestic product in the U.S. is the lowest in history and corporate profits are at their highest-ever point. This, he believes, is a key reason why U.S. citizens now want anything but the traditional establishment.

from: http://www.cnbc.com/2016/03/29/hillary-clinton-cannot-win-us-election-economist.html

 

 

A villain’s life celebrated

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The Establishment is turning out for one of the biggest villains this country has ever produced: author of the Great Global Warming Scam, progenitor of trillions of dollars of wasted wealth, immiserator of nations, wrecker of economies, blighter of landscapes with noxious bird-killing giant windmills, preventer of economic development in the poor nations of the world, Maurice Strong. In today’s Hill Times

There will be a celebration of life for former public servant Maurice Strong at 3:30 p.m. in the Sir John A. Macdonald Building in Ottawa. Along with members of Maurice Strong’s family, this celebration will include Governor General David Johnston, Prime Minister Justin Trudeau, Speaker of the Senate George J. Furey, Speaker of the House of Commons Geoff Regan, Ontario Lieutenant Governor Elizabeth Dowdeswell, Environment and Climate Change Minister Catherine McKenna, as well as former Governor General Adrienne Clarkson, John Ralston Saul, and former prime ministers Joe Clark and Paul Martin. James Wolfensohn, former World Bank President, and Achim Steiner, executive director of UNEP and Under-Secretary General of the United Nations will also be at the ceremony. A broad range of Senators and Members of Parliament will be coming to pay tribute along with representatives from the diplomatic corps.

Those who long for earthly justice will wait for centuries before this man’s reputation matches his vile deeds and influence.

For what is a man profited, if he shall gain the whole world, and lose his own soul? or what shall a man give in exchange for his soul? Mathew 16:26

 

Trump scares the Davos crowd

I guess that Trump has the minimum amount of money these days to buy himself complete political independence. That is what scares the rulers of the earth today, who are congregated in Davos, Switzerland, busy networking with the latest chattering class memes. Goldman Sachs does not own him. He can run a Presidential campaign out of his own pocket.

This alarms our invisible government.

The prospect of Trump in the White House is ratcheting up anxiety among the 2,500 business and political leaders gathered at the Swiss ski resort for the annual World Economic Forum. With less than two weeks before voting in primaries gets under way and Trump in the Republican Party lead, those who fear a rise in protectionism and economic mismanagement are speaking out against the billionaire property developer.

“Unfortunately I do think that if there were to be a Trump administration the casualty would likely be trade,” said Eric Cantor, a former Republican House Majority Leader and now vice chairman of Moelis & Company. “That’s a very serious prospect for the world.”

Be afraid, elites, be very afraid.

The presidential race shows that the U.S. is not immune to the wave of populism sweeping the globe. In the U.S. case, the economy has recovered faster than other developed nations from the global slump of 2008 and 2009, and yet wages haven’t kept pace with a rebound in corporate profits. That’s helping candidates like Trump and Bernie Sanders who say the system is rigged against average Americans.

I recall that great patriot, public servant and war hero, George Herbert Walker Bush, being defeated after one term by a hillbilly genius called Bill Clinton because Bush was thought to be out of touch with Americans in an ordinary economic downturn. Here we are, in an eviscerated economy, and a President playing golf more than he is at the office, and a Democrat representative of the billionaire class trying to succeed a Democrat representative of the Muslim Brotherhood. How likely to you think Hillary is to be the next American President?