October 3, 2017 § Leave a comment
In my previous post I talked about economic protectionism in very broad terms, rather than the common definition (propping up a particular industry to serve local self-interests). But in a broad sense any kind of policy that protects certain agents from the full effect of market forces can be seen as a form of protectionism. This would include policies like setting a minimum wage.
If we took an even broader view, any regulation of the market can be conceived as some form of protectionism as it will usually result in protection for some agents. Assuming that markets need rules to function (i.e. that they are “not self-creating, self-stabilising, self-regulating or self-legitimising”), then the main issue then becomes – what rules?
Conventional party lines were formed as follows: right-wing parties advocated for rules that tipped the balance in favour of the owners of capital, left-wing parties campaigned for rules that tipped the balance in favour of workers. Now, a new battlefront has formed between rules that prioritise domestic interests and rules that prioritise free trade and globalisation.
It’s difficult to see where the old and new battlefronts cross, but you could make the argument that with more resources and wealth, owners of capital (in many cases, corporations) side with globalisation (given they operate in markets that have already transcended national borders), while only some workers would benefit from a globalised labour market (i.e. not everyone has skills to offer to the global market) and in any case several factors limit individual mobility including:
- visa and immigration laws (in general, while markets have transcended national borders, citizenship has not and has become more exclusive),
- issues of social and cultural-fit, in addition to economic opportunity, and
- the personal cost of moving to a different country.
September 15, 2017 § Leave a comment
As discussed in my previous post, here’s how I imagine the political ‘spectrum’ today:
Within each quadrant, politicians will be conservative/progressive to different extents. For example, Trump is probably much more protectionist than Sanders (if we took his campaign rhetoric at face value).
Protectionism tends to be an ugly word. But in the quadrants above, I refer to it in a much broader sense, not just ceasing free trade in order to artificially prop up struggling, weak industries at home. It means giving priority to certain interests above economic interests and freedoms. Most of the time these ‘interests’ turn out to be national interests (e.g. preserving the environmental and social state of the nation), so the point I’m making may be irrelevant if preserving the state of the nation is no longer valued (e.g. if economic globalisation is followed by worldwide labour mobility, dissolution of national borders and transactional/flexible or even no such thing as citizenship other than ‘citizen of the world’). Conservatism in this sense really means blocking certain transactions or dealings which may be economically beneficial to both parties, but may violate other principles. These transactions or dealings could be:
- Adani and the Carmichael mine project
- Chinese investors buying Australian farms
- Darwin Port lease, with the owner now using the Port as security to seek a $500 million loan from the Chinese government’s trade bank, and former Trade Minister Andrew Robb now consulting for the Chinese firm that owns the Port
- The Clinton Foundation and the Russian Uranium Deal
- Sam Dastyari pledging to support China on the South China Sea
September 14, 2017 § Leave a comment
Where do major parties stand now?
In a previous post, I wrote about what it means to be liberal on different fronts, including the difference between being culturally and socially progressive and economically progressive.
Formerly, major parties in western democracies largely differed in the extent of national economic liberalism they promoted. By national economic liberalism, I mean economic liberalism within a country. Left-wing parties supported workers and unions, right-wing parties supported big businesses and the owners of capital. Both sides were not particularly engaged in social or cultural rights, though perhaps right-wing parties more openly supported traditional social structures as time wore on.
Early capitalism was about economic liberty within a nation, and that’s how major parties aligned themselves – capital vs labour. However, when this “low hanging fruit” was picked, capitalism became less about capital vs worker and more about globalism vs protectionism, where the remaining gains lay. Most western major parties, whether left or right are largely pro-trade.
The negative effects of globalisation are only really being felt now (e.g. GFC, Brexit, Trump), but major political parties have been slow to re-align themselves along the globalism/protectionism spectrum.
Compounding this issue is the confusion over where major western parties stand on social and cultural liberty. While most major centre-left parties identify as socially progressive, at times this has jeopardised the support from their traditional voter base (blue collar workers).
Currently, major parties in western democracies tend to be either:
- Pro-globalisation (economically liberal) and socially progressive e.g. Democrats, or
- Pro-globalisation (economically liberal) and socially conservative e.g. Republicans, LNP
While the old capital vs worker division still exists between major parties, that division no longer meaningfully captures the biggest issues facing people living in western societies.
The common ground between Trump and Sanders
Lots of journalists have analysed the similarities between Trump and Sanders before. My understanding of their political alignment is that
- Trump is anti-globalisation and socially conservative, and
- Sanders is anti-globalisation and socially progressive
They differ from major parties because they recognise that western countries are now at a stage where pursuing more pro-globalisation policies may do more harm than good. This is a difficult message to sell, possibly because
- globalisation made so many people richer
- free trade is the logical extent of capitalism, which in many ways has also become a moral way of living
- protectionism has nationalistic connotations, and extreme nationalist countries in the past have limited individual cultural and social freedoms
Rebalancing freedoms: economic conservatism and social progressivism
Is the strongest society one that strikes a stable balance between individual freedoms and social cohesiveness? We’ve seen 20th century communism collapse because the balance was too far in favour of social cohesiveness. Maybe the problem with western democracies now is that the balance is too far in favour of individual freedoms.
But what kind of freedoms? Australia is currently conducting a same-sex marriage postal survey and among other reasons for voting no, is the broader concern that certain freedoms should not be allowed in society. This argument does not conceptualise and engage with same-sex marriage as a basic human right, and on its own logic fails to be convincing if same-sex marriage is the kind of freedom that society can absorb without affecting its fundamental “cohesiveness”.
In fact, such cultural and social rights have only been actively explored in mainstream politics since the 70s or 80s. Capitalism, and by this I mean economic liberalism, has had a much longer run time. If there is a critical threshold at which too much freedom becomes bad for society, then I think an argument can be made that this threshold has already been breached but not in relation to social and cultural rights. If western liberalism is retreating it is because we have afforded individuals and other economic agents too much freedom in the market.
A lot of social frustrations and instability stem from the lack of real wage growth and the growing wealth divide in developed countries. In terms of identifying the weakness of western democracies, expanding social and cultural freedoms is at best a distraction from the real issue, and at worst used as a scapegoat for the decline of western societies.
November 9, 2016 § Leave a comment
I just finished J.D. Vance’s book Hillbilly Elegy and have three thoughts to offer.
1. There is a strong connection between privilege and social mobility
Social mobility is an equaliser. If it’s easy to move from one social class to another then we might conclude that a society is fairly equal and meritocratic.
However, there is a strong connection between privilege and social mobility, and I mean all kinds of privilege: wealth, educated parents, a loving and stable family and a safe neighbourhood. I identify with Vance on some level because I’m also a child of poor migrants. But I’m incredibly luckier because the statistics were on my side. My parents, though poor migrants initially, are both tertiary educated. They value education and provided a caring and secure family home. Vance on the other hand is the first person in his family to go to college; his father gave him up for adoption and his mother is a drug addict. He attributes much of his success to the love of his sister and grandmother and the fact that his grandmother (and when she was sober, his mother) cared about his education.
He admits that this is probably the only thing that changed his life’s trajectory. Otherwise he went to the same school, grew up in the same neighbourhood, witnessed the same fights and crises that other kids in his town saw.
Parents should love their kids, but I’m beginning to see that a loving and caring family is almost a privilege in those areas, because when everyone’s parents are poor and uneducated, kids with parents who are still willing to invest in them the only way they can (i.e. by providing a loving family home) will probably go furthest.
The problem is this: can you provide a stable home for your child when you’re a single-teenage parent? Will you love your kids if you’ve never known love from your own parents? Poverty is like a disease in these families; it gets passed down through generations.
2. Pessimism among poor, working class whites results from a complicated mix of poor life choices and factors outside of their control
Vance is still figuring out whether the balance is in favour of the individual or forces outside of their control. He blames his mother for not being able to quit drugs but at the same time he admits that she grew up in a violent household. A lot of people he knew who failed did so because of their own choices, and he cites a guy he used to work with in a tile factory who eventually lost his job because he was always late to work and would take 1 hr toilet breaks. When he lost the job he turned against the boss and said he couldn’t be fired because he had a pregnant girlfriend to look after.
Yet at the same time Vance recognises that there are rarely any examples of happy families to look up to, and rarely anyone in the community to show a kid that if you study hard you will get somewhere. People are disillusioned with hard work because they don’t see the rewards, and they don’t feel like they can control their own lives. This leads to a high level of pessimism among working class whites. For example, working class whites are more likely to believe that their children will do worse than them, compared to African-American and Hispanic parents.
In the end, Vance says that a community can either empower people with a sense that they can control their own destiny or encourage them to take refuge in resentment at forces beyond their control.
3. Politicians have capitalised on this resentment
Politicians like Trump, Farage and Le Pen tap into this resentment and blame the white-working-class-plight on immigration, globalisation and a corrupt political establishment. People are call this the rise of populism, perhaps best defined as a type of politics that
scorns elites and experts. It supposes that the purpose of politics is to act on the will of the people, and it proposes simple solutions to complex problems that require serious and effective policy responses
In the end, these simple solutions are not going to help poor working class whites. We need to communicate that, instead of ignoring their problems because we disagree with its political manifestation. Schemes like vote trading undermine democracy and further belittles the political voice of what is already one of the most disempowered groups in America. We label them stupid, racist, sexist and homophobic. But we don’t recognise that they are just very poor, and no one has done anything about it for too long.
July 25, 2016 § Leave a comment
A while ago, I saw this blog post about the Bell St divide (a.k.a. the ‘Wall of Gentrification’) in the seat of Batman in Victoria, where the Labor and Greens vote was very close.
I thought it’d be cool to have a look at my own seat, Chisholm, which at one stage had 66 votes between the two major party candidates, although I think it ultimately widened to 2000+ votes.
Anna Burke, the previous member, only just won the seat in the last election. Perhaps she kept her seat because the community knew her (she’s been around since the late 90s and signed my primary school graduation certificate!). However, with her retirement announced, it was hard to see how Labor would retain the seat amidst growing Liberal support.
Anyway, a friend of mine who’s a data analyst was keen to practice his visualisation skills, so if you want to see how voters voted by booth in the Chisholm electorate here it is. The size of the bubbles represent the % margin.
July 5, 2016 § 1 Comment
Brexit and Trump represent the increasing destabilisation of mainstream politics. What’s going on?
The underlying issue: no wage growth
In public discourse, the Leave and Remain side largely battled it out over immigration policy, but the real underlying issue of Brexit is the poor economy.
The leave vote expresses the frustration of low-income earners. Britain’s productivity has dropped relative to other developed countries, leading to stagnant wages and living standards. Income gains have accrued to the top one percent and unemployment is concentrated amongst the less skilled. These demographics appear to match those who voted for leave.
Solving these issues require costly, long-term investments in education, training and research. It is much easier to blame immigrants and EU policy, and politicians have capitalised on this accordingly to curry favour with voters.
In fact, immigrants tend to increase workers’ wages. The UK’s disillusioned blue-collar working class are actually losers of globalisation. Globalisation has meant that their job has been outsourced to other countries that can do it cheaper. Goods might be cheaper to consume as a result, but this can hardly make up for not having a job. Transition to new jobs has also been slow due to lack of training and education. Furthermore, unlike Australia, which has a strong union movement, labour markets in the UK are much more deregulated – a remnant of the Thatcher era.
Branko Milanovic’s work elegantly summarises this phenomenon. When we plot change in real income against global income distribution we get a clear view of which people in which countries are the most disenfranchised:
The vertical axis shows the percentage change in real income over the years 1988-2008. The 50th percentile of global income distribution represents the middle class in developing countries like China and India, they have experienced the greatest growth in real income. At around the 80th percentile is the working class in rich, developed nations like the US and UK. These people have not experienced any real wage growth at all.
Rise of the new Right
No major political party represents these people. The conventional Right (i.e. the Conservatives in the UK and the GOP in the US) represent the socially conservative and economically elite. The major left parties are increasingly differentiating themselves by being socially progressive. Protectionist policies, from either side of the spectrum, are no longer politically feasible given the amount of wealth that globalisation has generated, and the tendency for such policies (such as the Brexit leave campaign, and Trump’s ‘make America great again’ campaign) to align with racist and anti-immigration agendas.
The established Right is now juggling between rich people who want liberal markets and small government and working class people who want to feel middle class again. Trump, who represents a ‘new Right’ speaks to the latter, while his Republican colleagues speak to the former.
Similarly, the Left is also juggling between the blue-collar working class (now abandoning leftist parties for the new Right), and urban-dwelling, socially progressive university graduates with well-paid jobs. Jeremy Corbyn represents the interests of the latter, who have flocked to join the Labour party, but fails to gain traction with those struggling to survive in rural towns and villages – Labour’s traditional voter base, and the very people the party was set up to support. It’s telling that Jeremy Corbyn advocated to remain in the EU, yet a third of Labour voters voted to leave – perhaps enough disaffected voters to strip Labour of its major party status come the next UK election.
There is a lot of focus on the supposed stupidity of Leave voters and their support of new extreme right-wing parties, but the real question we should be asking is why are these people voting this way, and how can we make sure they aren’t left behind by globalisation?
An act of economic self-harm
David Cameron called the Brexit result an act of economic self-harm before promptly abandoning the sinking ship. The irony is that by voting to leave the EU, struggling working-class people have only made their lives harder. The fault lies with politicians who have ignored their needs, failed to explain their policies, and yet still capitalise on their struggles to gain political popularity. An unsympathetic and angry Remain constituency can only lead to further ugliness and division, while the real issues at heart remain unsolved.
Economic liberalisation is not to blame. Globalisation and neoliberal economics has led to greater wealth, a bigger pie, if you will. We shouldn’t be shrinking the pie, we just need to divide it more evenly.
May 30, 2016 § Leave a comment
These days I don’t watch Q&A because it often descends into pointless bickering. Questions are followed by very unhelpful answers. Sometimes politicians (particularly Labor politicians) issue rallying cries of social justice that only serve to win over the audience. Sometimes the hysteria that follows Q&A (e.g. the Duncan Storrar saga) really encourages me to avoid the show.
Q&A does sometimes have guests who manage to make a sensible point. Germain Greer for example, in response to a debate about raising the corporate tax rate, said that raising the tax rate doesn’t matter if Australia doesn’t have a way of collecting the tax. But most of the time it is politicians stating their position without engaging in the question or discussion. There is no thinking. This is why I don’t like Q&A.
What do I watch instead? I like shows where people actually engage with what other people say rather than just staking out a position. For this reason, I like Kitchen Cabinet. The light-hearted feel of the show might make it come across as shallow, but I think it’s one of the rare avenues where politicians can actually explain their view rather than just stake a position. And it gives a much more reasonable and rational account for why their public stance is the way it is. I particularly enjoyed the episode with Jacqui Lambie.
Another show I really enjoy is Insight (on SBS). One of favourites is the one on guns. Robert Brown, a member of the Shooters and Fishers Party who disagrees with current gun laws, is confronted with a Port Arthur massacre survivor, Carol. He is clearly upset and empathetic, but does not change his views. Even though I disagree with him, I still respect his stance and persistence. This is the kind of respect that I feel is lacking in Australian political discourse. People sometimes get confused between disagreeing with a point of view and disrespecting a point of view. All thought has integrity and this should be recognised.