Saturday, March 31, 2012

Axis of Bastards

What is the next cold war?

The US has benefitted in the past from simplified foreign policy frameworks. The Monroe doctrine, Containment, "Making the world safe for Democracy". However crude, they helped define and communicate our basic intentions. In the last decade, we have labored under a welter of much less clearly thought out or coherent policies, from the Axis of evil to "hearts and minds" and the global war against terror. It has not been a good period, either rhetorically or substantively.

Worst of all was the "Axis of evil", George Bush II's lumping together of his motley foes (Iran, North Korea, Iraq) whose only shared characteristic was their imperviousness to US influence. The rhetoric had nothing to do with either Iran or North Korea, it turned out, as Iraq was the target (in January, 2002) for reasons better given over to personal psychology than foreign policy.

We head into an interesting world from here, as Bush's wars die down. The relative influence of the US declines as other countries grow economically. The influence of our European allies is fading even faster as they stumble through the current crisis to ever-deeper economic retrenchment.

On the other hand, we face no mortal enemy of diametrically opposed philosophy or globe-straddling totalitarian ambition. All countries of any consequence are more or less market-based in their economics, and geopolitically stable within the confines of the Pax Americana we have managed since World War II. The jihadis are a nuisance, but hardly a state threat.

What we face on the long term is a third way of quasi-repressive government and "controlled democracy": authoritarianism exemplified by China and Russia, but shared with many other countries, from Pakistan, Belarus, Kazakhstan, Saudi Arabia, Syria (most notoriously ), with new members Hungary and perhaps also Turkey, depending on how things go, and on to old friends Iran and Vietnam, among many others.

The old model of Stalinism is out, aside for the very few holdouts like North Korea. Even Cuba is tiptoeing into market-based reforms. However attractive to the power-mad, Stalinism tends toward complete implosion on the medium term. So the way I see the world developing is as a contest between the truly free world, exemplified by the US, Europe, India, Japan, South Korea, et al., and this other class of repressive countries, which one could call an Axis of Bastards. In truth, the spectrum is very broad. We in the US have an impaired democracy with open political corruption and a legal system that is applied in highly selective, not to say prejudicial, fashion; overly complex, and much mocked and evaded. On the other hand, the state does not routinely kill journalists, rig elections, or own all the major media, either.

I'll note in passing that a third class of country is the failed states, like Somalia and Congo, and perhaps Afghanistan again within a few years, (given that we are standing up a government with little legitimacy and doubful capacity), which pose entirely different problems of humanitarian disaster, extremist infestation, and Hobbesian politics. An Axis of Hobbes, if you will. As uncoordinated an "axis" as the others, one would have to confess, quite unlike the original Axis of World War II.

Just as Stalinist systems break down in the span of a few decades, authoritarian systems are also untenable on longer time scales. Their economics are clearly more productive, as China, Singapore, and post-war South Korea have shown. But there remain economic and social soft-power limits to systems whose closed nature (at least at the top of policy-making) makes them prone to corruption and determinedly unresponsive to wider currents of technological and social change. As long as completely free states / systems show superior levels of economic prosperity along with all their other attractions, the authoritarian system will clearly be second-best. A way to stave off chaos- yes- which post-communist Russia and China are understandably sensitive to, but no way to fully enjoy the fruits of their own economic potential.

What does the future hold? With some apologies to Jean Kirkpatrick, who advanced the idea that authoritarian governments were inherently more likely to open up and evolve into open democracies, (towards the Reaganite policy of befriending all and sundry bastards of her day), the tide does seem to be heading in that direction, following where South Korea and Argentina, among many others, have gone before. Burma is perhaps the latest intriguing example.

China is on a vaguely positive track, experimenting with local democracy and slowly instituting rule of law as ways of combatting the disease of corruption. It seems unlikely that China would face down another Tiananmen square crisis in the same way today, though with the sincere jingo-ism it has stoked in its young, the prospect of needing to do so also seems far off. But the debates within the ruling structure may also become increasingly divisive after the simplest goals of economic development are attained, and break out into the open, forming parties that seek legitimacy from their ultimate source, the people.

Rumblings of freedom have erupted into the open in Russia, Syria, and Iran, with crackdowns of varying brutality. Russia has rushed to Syria's aid, just as Saudi Arabia rushed to Bahrain's aid during the Arab Spring protests. Syria and Iran are close allies, with healthy ties to China and Pakistan. So these repressive countries tend to help each other, knowing that the weight of world opinion is against them, and that cracks in the facade of happy Orwelliansm are damaging to all of them together.

Perhaps the key question is technological. Stalinism was a creature of its technological moment, with the advent of crude mass media and industrial mass-production somewhat amenable to brutal top-down command-and-control. Today, no one would dream of running a command-and-control economy, but command-and-control media are quite a different matter. Russia and China are each, in their own ways, highly sophisticated in controlling their media environments. We have our own FOX news- organ of the plutocracy, for heaven's sake.

So a global arms race is afoot in the new media environment, between freedom, connectedness, transparent openness, and repressive forces (both corporate and state-sponsored) that divert, dilute, drown out, or if needed, destroy dissenting voices and movements. Information is power, as the old saying goes. And along with the repression comes corruption, its natural corollary in abuse of power. Free information is the prerequisite of all other freedoms, as our founders knew very well- the killer app of democracy, if you will.

"Minsky criticized the Kennedy-Johnson War on Poverty, warning that without a significant job creation component it would fail to reduce poverty even as it created a welfare-dependent and marginalized class. He showed that offering one full-time job per low income household instead– even at the minimum wage- would raise two-thirds of all poor families above the poverty line. Further, he estimated that the output created by putting people to work would more than provide for the extra consumption by increasing GDP by a multiple of the extra wages. 
Minsky argued a legislated minimum wage is “effective” only with an “employer of last resort”, for otherwise the true minimum wage is zero for all those who cannot find a job.
 The government as employer of last resort serves as a bookend to the central bank as lender of last resort– just as the lender of last resort sets a floor to asset prices (by lending so that banks do not have to engage in firesales), the employer of last resort sets a floor to wages (anyone willing to work can get the minimum wage) and thus also to aggregate demand and consumption."
  • Bonus- economics figure. It is the private debt that leads to bubbles and collapses:


  1. One of the interesting questions is whether democratic free-market capitalism and authoritarian state capitalism will converge or diverge. Are we moving toward a future of more managed economics and, if so, toward what end and for who's benefit? The superior performance of the east asian economies and their gradual democratic evolutions indicates a form of convergence. The social democratic paradigm of most european countries and europe's great wilingness ro regulate the economy indicates another.

    A core question will be who controls the financial sector and to what end. The american answer is that private individuals control it for their own enrichment, with the side effect of economic growth. The chinese answer is that the state controls it for the explicit purpose of economic growth.

    If a financial elite captures the state by manipulating the electoral system, how is that fundamentally different from a party elite running the state?

    Finally, a more educated population with more economic means will always demand more voice in governance. If capital is mobile (money, knowledge) versus stationary (land, natural resources), rulers will have to accomodate the demands of the governed. Otherwise, the wealthier and more talented of the governed will either leave or deny their capital to the state in some other way.

  2. Thank you for your excellent thoughts. I agree that some convergence is in prospect, and insofar as it takes the form of our system becoming less democratic and more corrupt, that is deeply depressing / disturbing. That is why I support the Occupy movement, and modern monetary theory, each offering fundamental critiques of our drift into "free" market orthodoxy and a crippled / corrupted public sphere. I do have hope that the ideas come first, and then the public movement towards a new vision of democratic possibilities. Unfortunately, the recession has been virtually wasted in economic and social terms, as the rich continue to get richer, the banks bigger, and the politicians more money-mad.

    As yet I do not see the transmission mechanism from ideas to real action. The occupy protests served a consciousness raising function, but not a policy changing one. We will see from the fall campaign just how things have changed. Obama is pretty much hewing to an Occupy narrative, while Romney hews to the pre-recession Milton Friedman-esque mantras.

    But that makes it all the more important that on the international stage, we keep our moral compass in sight, moving as many nations as possible toward openness. I forgot to mention in this piece that the repressive states play a big role in making the UN the worthless, neutered institution it is.