The Republic of Dissent

It's pouring

Just because the Red Sox broke my heart , I'm using this sugary excerpt from a German's newspaper reaction to  Obama's words on Europe and its euro crisis as a bandage for my deep wound:

The fact that Barack Obama, who is a brilliant thinker, knows full well that things are much more complicated in reality does not help. Indeed, it does the opposite. In the desperate battle for his re-election he'd rather construct myths, such as claiming that the Europeans alone are responsible for the American mess. Not only is this fundamentally wrong, but -- coming as it does from a friend -- it's downright pitiful and sad.

The danger of Europe's fear

Sentence of the day from Wolfgang Münchau: (hat tip : Buttonwood's notebook):

I have never seen Europe's policymakers as scared as I saw them in Washington last week.

I wonder whether fear mixed condescending elitism can lead policymakers to make right or at the very least decent decisions.  I doubt it.

The elites messed up!

Sentence of the day from Paul Krugman:

(...) by blaming democracy, the people who have gotten everything wrong are letting themselves off the hook. The elites on both sides of the Atlantic have messed up catastrophically, and need to face that fact.

The euro and salvation

Interesting assertions from Václav Klaus, the Czech president in an Oped in the Wall Street Journal:

It is evident that the euro—the European single currency—and the currently proposed measures to save the euro do not represent any "salvation" for the European economy. In the long run, it can be saved only by a radical restructuring of the European economic and social system. My country had a velvet revolution and made a radical transformation of its political, economic and social structures. Fifteen years ago, I sometimes joked that after entering the EU we should start a velvet revolution there as well. Unfortunately, this ceases to be a joke now.
The Czech Republic has not made a mistake by avoiding the membership in the euro zone.

Klaus's view about the euro not being a salvation is going to become the predominant view for European countries, which are yet to join the euro (and those whose economy will have to go through austerity measures) and will now take into account the Greek example. I'm just wondering how long this trend is going to last. My guess is that it doesn't depend on the EU, but on the health of other currencies, particularly the dollar

German trade and the eurozone

Tony Barber on German trade and  the eurozone:

(...)since Germany’s reunification in 1990, German trade has become increasingly less dependent on the rest of the eurozone.  In 1991, what is now the euro area absorbed 51.3 per cent of total German exports.  This fell to 45.1 per cent in 1998, just before the euro’s launch.  It went down again to 43.7 per cent in 2007.
German trade is less and less integrated with the rest of the eurozone in terms of imports, too.  Contrary to popular myth, the volume of imports of goods and services has expanded far more in Germany (48.1 per cent) than in France (39.5 per cent) since the euro’s debut in 1999.  But Germany is increasingly buying its imports from countries outside the euro area.
The obvious conclusion is that German businesses see ever more promising opportunities in trading with China, other Asian countries and the US than with many of their counterparts in Europe.  Why should this be so?  It comes down to the cost of rebuilding eastern Germany after reunification and the loss of competitiveness that this astronomical financial burden inflicted on German companies.  They regained international competitiveness partly by grinding down domestic labour costs, but also by turning to cheap non-European suppliers for their inputs.

This reality shows that the economies of the eurozone are very different and that those reasons, countries have therefore not only different interests, but also different objectives when it comes to the euro. The fact that Germany is less integrated in the Eurozone matters not only because it is its most populous country and its strongest economy, but also because it means that the Germans more than others cannot afford the euro to become weak even if it may help the group. In short, if the Greece crisis isn't solved and if there is any type of contagion, there is going to be more tensions between Germany and the others and more importantly a discussion about the reduction of the size of the eurozone to protect the euro.

Political entrepreneurs

Daniel Henninger argues in the Wall Street Journal that Obama's economic policies (particularly the jobs bill) will lead to the rise of political entrepreneurs and to the decline of market entrepreneurs who have made America America:

Market entrepreneurs like Rockefeller, Vanderbilt and Hill built businesses on product and price. Hill was the railroad magnate who finished his transcontinental line without a public land grant. Rockefeller took on and beat the world's dominant oil power at the time, Russia. Rockefeller innovated his way to energy primacy for the U.S.
Political entrepreneurs, by contrast, made money back then by gaming the political system. Steamship builder Robert Fulton acquired a 30-year monopoly on Hudson River steamship traffic from, no surprise, the New York legislature. Cornelius Vanderbilt, with the slogan "New Jersey must be free," broke Fulton's government-granted monopoly.
If the Obama model takes hold, we will enter the Golden Age of the Political Entrepreneur. The green jobs industry that sits at the center of the Obama master plan for the American future depends on public subsidies for wind and solar technologies plus taxes on carbon to suppress it as a competitor. Politically connected entrepreneurs will spend their energies running a mad labyrinth of bureaucracies, congressional committees and Beltway door openers. Our best market entrepreneurs, instead of exhausting themselves on their new ideas, will run to ground gaming Barack Obama's ideas.

I suspect that Daniel Henninger's dislike for the intervention of the state within the economy and his idolization of what he believes to be real entrepreneurship are narrowing his perception of reality. Nevertheless, reading his arguments forces one to wonder whether entrepreneurship in itself is always a good for a country and should be privileged over anything else whether it is based on politics or on the market. To put it differently, I wonder whether in an age where a lot of entrepreneurs can go wherever they want to innovate, governments have real policy choices if they believe in entrepreneurship as a good in itself.
In any case, to come back to Henninger's strong distaste for "political entrepreneurs," I wonder if his problem is more with the politics that they are following rather than politics itself. To phrase it differently, I wonder if Henninger would be saying the same time if Obama were Bush or the venerated Ronald Reagan.

Globalization and exploitative racism

Interesting stuff from Lenin's Tomb (hat tip: Chris Dillow):

Occasionally, if you open the Economist or the FT, you'll read an argument that runs something like this: people shouldn't be bigoted toward immigrants, because by they do jobs that British workers won't do for pay that British workers won't accept. In a similar way, you often hear members of the Institute of Directors or the CBI explain that 'globalisation' and international outsourcing is an excellent thing because it gives jobs to hard-working people in Third World countries who work much harder, and are much less demanding, than spoilt, recalcitrant Western workers. This is the zenith of ruling class anti-racism, and it's just another argument for exploitation. And it is, of course, deeply racist toward the recipients of its supposed benediction.

I have to say that I know longer know what racism is and what being a racist means. I feel like the Supreme Court Justices when they were trying to rule on pornography and had to define obscenity. I'm puzzled and stuck in the middle of an intellectual Sahara on this issue.

Barbarity is the future

I love predictions of the coming of the "Apocalypse" or "dark times" especially when they are well formulated as it is this by Chris Hedges:

We stand on the cusp of one of the bleakest periods in human history when the bright lights of a civilization blink out and we will descend for decades, if not centuries, into barbarity. The elites have successfully convinced us that we no longer have the capacity to understand the revealed truths presented before us or to fight back against the chaos caused by economic and environmental catastrophe. As long as the mass of bewildered and frightened people, fed images that permit them to perpetually hallucinate, exist in this state of barbarism, they may periodically strike out with a blind fury against increased state repression, widespread poverty and food shortages. But they will lack the ability and self-confidence to challenge in big and small ways the structures of control. The fantasy of widespread popular revolts and mass movements breaking the hegemony of the corporate state is just that – a fantasy.
My analysis comes close to the analysis of many anarchists. But there is a crucial difference. The anarchists do not understand the nature of violence. They grasp the extent of the rot in our cultural and political institutions, they know they must sever the tentacles of consumerism, but they naïvely believe that it can be countered with physical forms of resistance and acts of violence. There are debates within the anarchist movement – such as those on the destruction of property – but once you start using plastic explosives, innocent people get killed. And when anarchic violence begins to disrupt the mechanisms of governance, the power elite will use these acts, however minor, as an excuse to employ disproportionate and ruthless amounts of force against real and suspected agitators, only fueling the rage of the dispossessed.

The problem with Chris Hedges is that he is too "religious" and therefore, my intent here is not to be demeaning, he believes in the greater purpose, in the grand design and that the future has to be bleak if the present looks a certain way because catastrophes are predetermined by the existence of certain elements/factors. I don't believe that. I'm a constant pessimistically  optimist.  I don't believe that the Dark ages are coming back or that barbarity is the future, I believe that the future doesn't look good, but I don't believe that we ever go back in times, which isn't a comfort for what may be coming might be worse for it is true that progressive isn't continuous. The interesting answer is of course, what happens when it stops. In short, my point is that all points of history are potentially point zero, a period when the unimaginable can happen and it can all end. The good news is that since everything is permissible (yes, God is dead) even though that does not mean that nothing is forbidden as always added Camus, everything, including the best and the worst, is still possible.

The democratic pretext and the need to slay the dragon

Samir Amin on what he calls the "new democratic discourse" of Global imperialism:

The new "democratic" discourse thus bore its fruits.  It seemed sufficiently convincing for "left-wing" opinion in Europe to support it.  This was so, not only for the electoral left (the socialist parties) but also those with a more radical tradition, of which the communist parties were the heir.  With "eurocommunism" the consensus became general.

The dominant classes of the imperialist Triad learnt lessons from their victory.  They thus decided to continue this strategy of centering the debate on the "democratic question."  China is not reproached for having opened up its economy to the outside world, but because its policies are managed by the Communist Party.  No account is taken of the social achievements of Cuba, unequalled in the whole of Latin America, but its one-party system is constantly stigmatized.  The same discourse is even leveled against Putin's Russia.
Is the triumph of democracy the real objective of this strategy?  One has to be very naïve to think so.  The only aim is to impose on recalcitrant countries the "market economy," open and integrated into the so-called liberal world system.  This is in reality imperialistic, its purpose being to reduce these countries to the status of dominated peripheries of the system.  This is an objective that, once achieved, becomes an obstacle to the progress of democracy in the victimized countries and is in no way an advance in response to the "democratic question."
The chances of democratic progress in the countries that practiced "actually existing socialism" (at least at the beginning) would have been much greater, in the medium term if not immediately, if the dialectic of social struggles had been left to develop on its own, opening up the possibility of surpassing the limits of "actually existing socialism" (which had, moreover, been deformed by at least partial adherence to the liberal economic opening) to reach the "end of the tunnel."
In actual fact, the "democratic" theme is only invoked against countries that do not want to open up to the globalized liberal economy.

Amin just proves, once again,  that most are still fighting the same old battle even if it has no chance or rather has never proven that it will have fruitful results. Amin is his own way a Fukuyamist. What I'm trying to say that Amin isn't wrong, but that he has a Marxist mindset that leads to another soft of moral paternalism and that leads to not laissez-faire, but to laissez-aller because people stop believe in actions if they do not  lead to the revolution or to other grand design. Amin is his own way a Fukuyamist who sees democracy solely as an ideological weapon.. Thus, my point is simply that at some point, those who believe that most of what is happening in the world is influenced or the consequences of Imperialist forces are going to have stop going to the poorly xhurch of victimization and show some spine by slaying the evil dragon.

Defending the Chinafrique

With some reservations, I agree with Barry Sautman and Yan Hairong on this:

The Chinese, it is said, are in Africa only for natural resources, to feed China’s industry and huge population. To exploit the continent, they provide loans and aid to rogue regimes. They worsen the plight of Africans by dumping cheap, shoddy products in their markets and ruin local industry. Chinese investors pay Africans a pittance, in contrast to more ethical Western firms. Given all that, China can only be an obstacle to Africa’s development.      
It’s an exciting tale but, alas, the media have gotten it all wrong. It’s not mainly China that impairs Africa’s development, but a world system of neo-liberal capitalism, based on privatization, trade liberalization, and reduced social spending, into which China is now partly integrated. As part of the same world system, China and the West have many activities in common in Africa, but there are also some distinctly Chinese trade and investment practices and these are often more appealing to Africans.

"Africa" has a lot to gain by the involvement of China and that it is too easy and too sensationalistic to keep seeing Africa and Africans as objects of exploitations. It is never go when Africa is the place where hegemons, particularly formal colonial powers, are able to come and to serve their national interests without giving much in return and diversity and multiplicity are essential, That said, the focus as always ought to be elsewhere since development  remains the central question and that we knows that it cannot be accomplished by trading partners or even solely international trade.

Fukuyamism 2.2

Francis Fukuyama in the Spectator on current events, history, and the future of democracy (hat tip: Hattie Garlick):

I think that even in the wake of the Ukrainian election and other recent reverses, the future of democracy is not so bleak. In the first place, democracy remains, in Amartya Sen’s words, the ‘default’ political condition: ‘While democracy is not yet universally practised, nor indeed universally accepted, in the general climate of world opinion democratic governance has achieved the status of being taken to be generally right.’ Very few people around the world openly profess to admire Putin’s petro-nationalism, or Chavez’s ‘21st-century socialism,’ or Ahmedinejad’s Islamic Republic.
(....)The next phase of global history will be a challenging one, as America and Europe stumble to get back their economic balance. It seems doubtful that either the US or Britain will achieve the degree of growth in the next generation that they did in the previous one. But one of the great advantages of democracy is that it does not depend for its legitimacy on continuing high levels of economic growth, as the Chinese system does.
As we move forward, it is important to keep in mind the simple power of the idea of a government by, for, and of the people. We need to match those high ideals with unglamorous but steady investments in institution-building if liberal democracy is to deliver on its promises.

It is good to see that since The End of History, Fukuyama has become timid about making bold and grand predictions about the future. However, the problem is that he has become so timid that he is no longer original so busy that he is to cleanse his reputation from his original sin, which was to have the arrogance to assert that history had ended, and from the fact that he, maybe in spite of himself, inspired Neoconservatism. To come back to his essay in the Spectator, the problem that I have with it is its shortsightedness and its author's unwillingness to ask the grand question, which is whether societies who are dominated by the market can remain Democratic no in the superficial sense of the world, but in Tocqueville's sense of it. If corporations are people and can greater influence in politics because they have more money, if the electorate's vote is solely based on identity politics,  if not all voices are represented in a representative Democracy, is  such a political system still democratic and can we really ignore its shortcomings by arguing in a Thatcherite and autocratic fashion that there is no alternative? Unfortunately, Fukuyama, in my opinion purposely, offers no answers and furthermore and that is most disappointing, he doesn't even allude to those problems by pretending that the crux of the future legitimacy of democracy is elsewhere.  

It's always about exploitation

Sometimes, in spite of himself and I would say by pure luck if I wanted to be needlessly mean, Nick Cohen gets things almost just right:

According to the received wisdom of our times, we are living through a phenomenal feminist advance. Women have stormed the bastions of male privilege and cracked, if not smashed, the glass ceiling.
But the success of women is based on exploitation of women. The households of privileged families and a large proportion of the middle class could not function without the labour of servants fleeing the Brezhnevian tower blocks of eastern Europe, Asian slums and poverty and oppression the world over. Our social structure would collapse were it not sustained by shadowy legions of women, living outside the law as illegal immigrants or living outside the welfare state in the black economy.
Stern left-wing writers in the 20th century told their readers that their wealth depended on the exploitation of far-flung colonies. Lectures on how our clothes and trainers come from the sweatshops of the east remain a standard of liberal journalism today. But the line between the rich and the poor worlds does not run between north and south or east and west but through British homes, touching the most intimate aspects of family life – the care of children and the happiness of marriages. Small wonder there is a gap between public pronouncements and private behaviour.

Pirates as globalized individuals

Interesting excerpt from Antoine Garapon, I don't quite agree with him even though his metaphor is quite imaginative:

A pirate is the purest kind of rational agent, motivated solely by a desire for gain; free of loyalty towards any flag, he is subject to no system of taxation. In that sense, the pirate symbolizes the globalized individual, free of ties, who behaves solely in response to his animus furandi, his predatory instinct. Since pirates are hostile, a priori, to any legal constraints, they refuse to "play the game"; rather than feeling bound by the social contract, they create their own, accepting only the law that they have made for themselves. "In the modern liquid world, loyalty is a source of shame not of pride"; paying taxes somewhere appears on the debit side of the balance sheet: it is the sign of a lack of creative accounting ability. If there is any form of loyalty deemed worthy of respect, it is loyalty to one's group, and in particular to one's fellow professionals. Indeed, globalized law has its origins in such peer groups. Such law dissolves the ties between the effective standard and the symbolic institution: pirates are not just anti-political, they are anti-institutional too.

The market can't be the solution to all problems

An impossible task:

The task for modern feminism is therefore to devise a market-based response to inequality rather than a mandatory one.

I'm wondering two thing when I read this quote. The first is what would a market-based response to inequality be and what would it have to do with feminism, which is either an empty or rather super-charged word to mean very different things to very different people. The second is whether the expression modern feminism isn't a oxymoron.

Berlusconi is everywhere

While Martin Amis compared Ahmadinejad to Reagan,  Slavoj Žižek compares him to Berlusconi:

To put it in Freudian terms, today’s protest movement is the ‘return of the repressed’ of the Khomeini revolution.
What all this means is that there is a genuinely liberatory potential in Islam: we don’t have to go back to the tenth century to find a ‘good’ Islam, we have it right here, in front of us. The future is uncertain – the popular explosion has been contained, and the regime will regain ground. However, it will no longer be seen the same way: it will be just one more corrupt authoritarian government. Ayatollah Khamenei will lose whatever remained of his status as a principled spiritual leader elevated above the fray and appear as what he is – one opportunistic politician among many. But whatever the outcome, it is vital to keep in mind that we have witnessed a great emancipatory event which doesn’t fit within the frame of a struggle between pro-Western liberals and anti-Western fundamentalists. If we don’t see this, if as a consequence of our cynical pragmatism, we have lost the capacity to recognise the promise of emancipation, we in the West will have entered a post-democratic era, ready for our own Ahmadinejads. Italians already know his name: Berlusconi. Others are waiting in line.
Is there a link between Ahmadinejad and Berlusconi? Isn’t it preposterous even to compare Ahmadinejad with a democratically elected Western leader? Unfortunately, it isn’t: the two are part of the same global process. If there is one person to whom monuments will be built a hundred years from now, Peter Sloterdijk once remarked, it is Lee Kuan Yew, the Singaporean leader who thought up and put into practice a ‘capitalism with Asian values’. The virus of authoritarian capitalism is slowly but surely spreading around the globe. Deng Xiaoping praised Singapore as the model that all of China should follow. Until now, capitalism has always seemed to be inextricably linked with democracy; it’s true there were, from time to time, episodes of direct dictatorship, but, after a decade or two, democracy again imposed itself (in South Korea, for example, or Chile). Now, however, the link between democracy and capitalism has been broken.This doesn’t mean, needless to say, that we should renounce democracy in favour of capitalist progress, but that we should confront the limitations of parliamentary representative democracy.

I don't shared this view point, but it is difficult to disagree with the assertion that the link between democracy and capitalism is been broken or at least is no longer self-evident. It is so sad to say and surely not sympathetic enough to say, but so far nothing that has happened in Iran has surprised me. The script has been followed. I think that the spectators are just waiting impatiently for the end of the movie while the actors still have to figure out how much they are willing to risk to change the script.

The sacredness of Dimanche

The Wall Street Journal on the possible enactment of a law making possible for some French businesses to open on Sunday especially those, which attract the majority of tourists in cities such as Paris:

For many French citizens, being able to shop and work on Sunday would improve the quality of their lives. Some workers, such as students, even prefer to work on weekends. Opening on Sunday is good for the job market too. Legislative backers say the measure could save 15,000 jobs.
France being France, the bill will not make it universally legal to trade on Sundays -- that would be too simple. It will merely allow more stores to open in tourist areas and cities of more than one million people. Businesses will need the regional prefect's authorization, and the measure makes it illegal to discriminate against employees who refuse to work on Sunday. Workers will be paid double for Sunday duty. Even so, the proposal is proving controversial. The Socialist Mayor of Paris, Bertrand Delanoë, said recently: "Sunday is a day of rest respected by most citizens and it must not be sacrificed by this vision of a de-regulated economy that does not take into account the family and personal lives of workers."
Au contraire. If France is going to emerge from the economic slowdown as quickly as possible, businesses need to be free to adapt to changing times -- including the ability to serve customers when the customers want.

I have to admit that I would love it if almost everything wasn't closed in France on Sundays, but I'm wondering if it is still possible for some countries to refuse Americanization (which I love) while hanging on to what make them unique. My guess is that once that law is passed, it is the beginning of the end for in a couple of years, everything will be open on Sundays in Paris and elsewhere because the thing about Americanization is that you can just taste bit of it especially when you like perpetual movement and speed.

Exploiting the exploiters

No comment necessary...:

First there was boss-napping, now angry workers at a factory in France have come up with a new tactic in their battle against mass redundancy.
Staff at bankrupt car parts maker New Fabris are threatening to blow up the plant if they do not receive compensation from the companies that provided most of the firm's business.
The 336 workers at the factory at Châtellerault, near Poitiers in central France, want Renault SA and PSA Peugeot Citroen to pay €30,000 (£25,850) to each of them, or some €10m in total, in return for the company's remaining stocks of equipment and machinery. The workers, who are currently occupying the factory, have given Renault and Peugeot Citroen until 31 July to come up with the money.

Kierkegaard versus Ayn Rand

My first thought on the following sugary excerpt from Emmanuel Paparella's article on the crisis is that it makes the complex even more complicated in attempt to reach acceptable conclusion:

Perhaps Kierkegaard had it more on target: the crisis is not one of intellect but one of spirit. Its symptoms are visible in lives of “quite desperation” that many people live in a capitalistic system which alleges to be the best system that the world will ever muster. But as a wise man in Palestine once said: “By their fruits you shall know them.” The fruits of the capitalistic system are that in the 21st century, globally speaking, we have one man for every three living on $ 2 a day. That kind of mere subsistence level on the part of one third of the world’s population (approximately 2 billion people) is surely not something for capitalism to be very proud of as a system and as a “non-ideology,” and to continue to tolerate it means that one has become an ideologue who believes in the social Darwinism or survival of the fittest, a la Ayn Rand.
It is urgent therefore that a new system be imagined and implemented. As Barack Obama would phrase it: we need the audacity of hope. But audacity without wisdom can easily turn into recklessness. Rather, we need rather a conspiracy of hope, as Silone, a disillusioned Communist who  eventually found his moral bearings, used to say. But it certainly cannot be the cynical system of politicians and ideologues still smarting under the idea that Communism did not win in the 20^th century and now find themselves with no ideological compass by which to proceed and all they can do is carp. They are ever ready to complain and shed tears about the poverty and the injustice in the world but at the same time they shoot down any new idea that is not a mere political ideology. As mentioned in the previous article, one thing is sure: any new system has to come up from the people up, democratically, and has to take into account all of the people for as that other wise man in the US said once: “one can fool all of the people some of the times; and some of the people all of the times, but one cannot fool all of the people all of the times.” 

I am of the opinion if one takes on Kierkegaard's view and argues that the crisis is one of spirit then it is impossible to make Ayn Rand's vision of the world the problem. One of the biggest problems of our times comes precisely from the fact that the spirit has been separated from the intellect and the prevailing opinion is that feeling good means to stop thinking, questioning to be Obamamically cheerful and hopeful about change and the word. The current crisis just shows that existence has become about the material and that the material has become spiritual and that being the fittest is about having more, consuming more, and not being ashamed of being bulimic. The issue is no longer whether there are alternatives to systems, policies that brought chaotic and devastating results, but still whether modernity, technology have made humans better enough to accept to take the challenge and the danger not to repeat history and to dare to invent something new to remind themselves that existence is still the most precious gift of all.

Communism and Fukuyamism

Sugary excerpt of the day from Slavoj Zizek

To treat communism as an eternal Idea implies that the situation which generates it is no less eternal, that the antagonism to which communism reacts will always be here. From which it is only one step to a deconstructive reading of communism as a dream of presence, of abolishing all alienating representation; a dream which thrives on its own impossibility.
Though it is easy to make fun of Fukuyama’s notion of the End of History, the majority today is Fukuyamaist. Liberal-democratic capitalism is accepted as the finally found formula of the best possible society; all one can do is to render it more just, tolerant and so on. The simple but pertinent question arises here: if liberal-democratic capitalism is, if not the best, then the least bad form of society, why should we not simply resign ourselves to it in a mature way, even accept it wholeheartedly? Why insist on the communist hypothesis, against all odds?
It is not enough to remain faithful to the communist hypothesis: one has to locate antagonisms within historical reality which make it a practical urgency. The only true question today is: does global capitalism contain antagonisms strong enough to prevent its indefinite reproduction?

Bursting the Postmodern bubble

André Glucksmann on the economic crisis:

What led to the current crisis was not so much a faulty financial technique that we might promise to control from now on, that is, but the general state of mind that allowed its unchecked use. Capitalism, we should have remembered, involves at once prudent regulation and the imprudent transgression of old rules, the sharing of risks and the audacity to risk more successfully than others. (...)The fantasy of omnipotence animated not only the trader but also those who let him go his way; not only the heads of financial institutions but also the political, academic, and media authorities who saw no problem with any of it. Indeed, the performative ideology—“It is true because we say it is”—has governed the Westernization of the planet since the end of the Cold War: because the enemy camp disintegrated, the future belonged to us, and all fundamental dangers vanished.
Postmodernism, which places itself “beyond good and evil,” beyond true and false, inhabits a cosmic bubble. It would be a good thing if fear of a universal crisis allowed us to burst the mental bubble of postmodernism—if it washed away the euphoria of our pious wishes and brought us once again to see straight.

The trouble with Glucksmann is that his obsession with morality and the idea that nihilism is the greatest ill of the twenty-first century has made him a true believer in absolute justice.  This ardent, not to say fanatical, belief has led him to support the Iraq war and Nicolas Sarkozy because he cannot stand the idea that policies aren't about truth and morality. I'm willing to bet that he is enamored withe Sarkozy's new central political goal which is to moralize capitalism.

Defending globalization

Stubborn facts:

[...] globalisation promotes peace through two channels: one from the increased advantage peace holds for bilateral trade interdependence and the other from a country’s integration into the global market, regardless of the size of trade with each trading partner. "Globalisation" has been one of the most salient features of the world economy over the past century. Emerging markets and developing countries continue to integrate into the global trading system. World trade has increased rapidly, particularly since World War II — from 18% of world GDP in 1950 to 52% in 2007. At the same time, the number of countries involved in world trade has also increased significantly. However, despite the increase in the number of country pairs between which conflict is possible, the probability of dyadic military conflicts has decreased.

Although globalization is about more than trade is capitalism, it is more important today than ever to remember that the only real debate is about what kind of globalization does the world want and that it is as erroneous and as ideological to argue that the current economic crisis show that globalization is an ill or is dead as it was in the eighties to declare that there was no alternative to neoliberal globalization.

Decentralization, deregulation and the information gap

Quote of the day from Richard Posner arguing the lack of reliable information coming from a centralized, unitary financial-intelligence apparatus made it impossible to anticipate the current economic crisis:

Most people, even most experts, were especially unlikely to be persuaded by prophets of doom in the absence of a machinery for aggregating and analyzing information bearing on large-scale economic risk. Little bits of knowledge about the shakiness of the U.S. and global financial systems were widely dispersed among the staffs of banks, other financial institutions, and regulatory bodies and among academic economists, financial consultants, accountants, actuaries, rating agencies, mortgage brokers, real-estate agents, and business journalists. There was no financial counterpart to the CIA to assemble an intelligible mosaic from the scattered pieces. Much of the relevant information was proprietary; investment banks, hedge funds, and other financial firms conceal information about business strategies that might help competitors, and they soft-pedal adverse information about the firm's prospects. Even the regulatory agencies lacked access to much crucial information about the financial system, because of limitations on their authority that were thought appropriate in an era of deregulation. Lacking authority to regulate new derivative securities such as credit-default swaps, financial regulators could not force disclosure of information that might have revealed how risky the financial system had become.

Tax havens and financial protectionism

Interesting take from Eamonn Butler on tax havens and the sudden popular and populist wrath of politicians against them as scapegoat for the current financial crisis:

If you want to pay less tax – as about five billion of the world’s population doubtless do – you have two options. You can evade taxes, concealing your income from the authorities, which is, of course, illegal. Or you can avoid taxes, which is perfectly legal. You might simply claim the full deductions allowed by the tax authorities or maybe move your money into a place where taxes are lower.
It’s avoiders, not evaders, who are the tax havens’ staple customers. The image of drug money being washed through the Cayman Islands is the stuff of thrillers rather than reality. (...) Few honest people have qualms against clamping down on criminals. But despite all the Godfather-style spin, it’s actually the rest of us whom the politicians want to clamp down on. They figure – correctly – that if we remain at liberty to put our money in the Virgin Islands or some other place where taxes are lower, we are likely to do just that. And our ability to escape puts limits on just how much they can tax us.
This explains why even Gordon Brown is calling for curbs on tax havens, despite the fact that many of them, including the Channel Islands, are British dependencies. Other countries want even tougher sanctions.
It’s pure financial protectionism. The G20 leaders signed a communiqué praising free trade and deploring anticompetitive barriers in goods and services. That’s because leaders don’t make goods and services. But they do make taxes and are really keen to keep out the competition in that sector. They don’t mind us shopping around the world for the cheapest goods, but they certainly do mind us shopping around for the cheapest taxes.
They have only themselves to blame. It’s not just that governments seem unable to rein in their bureaucracies and keep their costs under control. It’s that they have made taxes so complicated.

Social safety nets

According to this, unemployment is higher in the US than in France since the beginning of the economic crisis in part because there is no social safeguards against massive job losses in the US:

(...) the U.S. recession has gone on for longer and is deeper than in Europe, and therefore has sapped three times as many jobs.  The unemployment rate in the U.S. is higher than in the U.K., and close to France's. (The U.K. and French numbers above are estimates.) And the job-losses are accelerating faster in the U.S. than in other countries.

Hum, does this fact mean that there are good things about the so-called European way of life and capitalism after all?

Creating a new world

Two contradictory views of the G20 summit and the idea that it has created something. Doug Sanders believes that something happened, that the Washington consensus has been altered  and that the US is less powerful as it was yesterday:

The Bretton Woods institutions, and the U.S. government's financial arms, have overseen the expanding world economy for six decades and they were at the centre of yesterday's proposals to rescue that economy from its debt-driven collapse.
But their role, and the shape of the world, is permanently altered. Until 2009, the fundamental goal of the IMF and its sister organizations was to deregulate the world economy, to remove restrictions from finance capital.
Under yesterday's agreement, those organizations will serve as regulators: As well as keeping the financial system working and rescuing nations from bankruptcy, the IMF and new organizations will aggressively police the worldwide credit, finance and banking systems to prevent a recurrence of the bad-credit spiral that led to the current crisis.
In exchange, they will become far less U.S.-dominated: In exchange for substantial contributions to the fund, formerly developing countries such as China, India and Brazil will play a larger role controlling them.

Simon Heffer shares my view that the summit was pointless:

The piece of theatre that concluded in London on Thursday was one of the great confidence tricks of our lifetimes. Just getting the 20 most important heads of government on the planet together in one place and not being unpleasant about each other was, we must concede, something of an achievement. But it won't make a blind bit of difference to the world's economy. [...] this international act of posturing was pointless; because despite having caused the problem, the political class had none of the requisite skills to sort it out. It also seems that some great issues have been fudged. Is the New World Order in favour of a new fiscal stimulus or not? It pains me to say so, but I have been impressed by the Germans (with the French hanging on to their coat-tails) holding out against recklessly pumping money into the economy as Mr Obama and, to a lesser extent, our own Government have done. Perhaps it is as well for them that this summit was not held a couple of months later, for when the rioting starts on mainland Europe with the advent of warm weather, and no devaluation of the euro is possible to stop the haemorrhage of jobs, such firm principles might be harder to maintain.

The fact that people over whether something was accomplished at the G20 Summit shows that it is not the way to formulate earth-shattering policies because the grandstanding, the gimmicks, and the schemes make it difficult/impossible to see through the smokes, the spin, and the syrupy expressions of noble sentiments.

A little progress

Paul Krugman disagrees with me and my assertion that  the G20 Summit was futile. He believes that the fact the funds for International Financial Institutions increased made it worthwhile. I don't agree because as we all know promising funds isn't the same thing as delivering them.

Europe vs. America

Quote of the day via the New Criterion :

The choice facing us is between the soporific egalitarianism and nihilism of Europe and a return to the robust individualism and self-reliance that made America, in Lincoln’s famous phrase, the “last best hope of earth.”

The winners and the losers of the London Summit

Philip Stevens on the G20 summit:

The summit’s deeper significance, though, lay in its unspoken recognition of the remaking of the geopolitical landscape. Not so long ago, this would have been a gathering of the Group of Eight rich nations, perhaps with cameo roles for China, India and a few others. Now, Hu Jintao, Manmohan Singh and the rest take their places as of right. The world, in other words, is at last catching a true reflection of itself.
Mr Obama has been more alert than most to this shift. Europe speaks the language of inclusiveness but is genuinely fearful of giving ground to the rising powers. Mr Sarkozy’s petulance is more a cry of pain than a measure of confidence.
By contrast, the US president has grasped that if America is to hold on to its pre-eminent role in the world it will be within a system in which others have a stake. Mr Obama shows wisdom beyond his years in realising that to understand the extent of US power – and it is still unrivalled – a president must also map its limits.

I think that it was a tie because everybody especially Obama had no interest in seeing the summit failed, but instead wanted to give the appearance that they did achieve something. Obama won by showing up with his 500 advisers and for looking the part without showing obvious signs of incompetence. Sarkozy won for grabbing some of the light by threatening to walk out and by associating with Merkel not to lose. Brown won because the communiqué sounded good. Finally, everybody else won by smiling at the photo-ops and by saying the right thing on the crisis and the need to work together to find solutions. In other words, all of this was much ado about nothing, but it pleases the press because it gives them something to talk about besides economics and finance, which they don't really understand.

Silly games

I find the G20 London to be a silly affair especially because it shows that the leaders (I'm using the term loosely) of our world are not, yet, up to the challenges that are crippling the lives of less privileged. They are obsessed with their political future and paralyzed by the fear of being the losers of what they view as the game to remake the economic system. A good example is this French-German ploy during the summit to matter so not to let Obama and Brown take the lead. I believe that Merkel's partnership with Sarkozy is temporary; it is mostly about showing the new king of the world that Germany is as, if not more, important than Britain to the United States. Sugary excerpt from an article in the Independent on the situation

The Franco-German intervention throws down the gauntlet to Mr Brown and Britain's chairmanship. At best, it will have precipitated much nocturnal redrafting; at worst, it risks a final communiqué even more diluted than the drafts already in circulation, or even – a prospect almost unthinkable – no significant agreement at all, either on fiscal stimulus or on regulation.
The outcome today could yet surprise. Nothing at such gatherings can be excluded, especially when the summit brings together as many divergent interests as this one and has been prepared against so fast-moving a backdrop. Yet it looks very much as though Gordon Brown's great hopes of laying the foundations of a new world order are destined to be cut down to size – and with it, his own political legacy.
But the last minute, and very public, démarche from the leaders of Europe's two biggest economies also casts the whole project for global economic management in a different light. The combination of a new and untried President in the White House, a rising China, a friendlier Russia and a more vocal Franco-German alliance marks a signal change. Yesterday, the United States and Britain seemed suddenly a little smaller, China a little bigger, and Continental Europe a force to be reckoned with.
By tonight, an agreed international plan of action along US-British lines might have shown this incipient redistribution of power to be illusory. Anything else, however, and we may be looking at the outlines of a very different future.

Obama will soon realize that he has to break Sarkozy and Merkel up if he wants to avoid these types of power-grabbing schemes, which will hurt him the most because he is supposed to change things and that he can't afford to be outplayed and outfoxed for the risk is to have his title as the leader of the free world to be undermined

Defending Anglo-Saxon capitalism

It's hard job, but somebody has to defend religiously the Anglo-Saxon economic model and way of life. I'm not sure that John Ibbitson does a good job doing it. I'm not even sure that there is such a thing as an Anglo-Saxon economic model anymore:

Anglo-Saxon capitalism – investment-friendly, export-oriented, low-taxed and minimally regulated – has been competing with its continental alternative – highly regulated, wealth-distributing and state-controlled – since the late 18th century. The Anglo-Saxon version is better. Britain launched, led and sustained the Industrial Revolution, and the United States launched, leads and sustains the Knowledge Revolution. There've been downturns, but we are wealthier and healthier than we'd have been with, say, France in charge.(...) We all want to live in a society where every child gets a good education, the poor have food and housing, and medical care is available for all. But we should also want to live in a society that encourages good ideas by making capital easily available and rewarding risk. Henry Ford and Bill Gates had good ideas. Because they were born in America, we live in their world. (...)  Anglo-Saxon isn't a race, it's an idea, which is why Mr. Sarkozy will berate Mr. Obama's Anglo-Saxon economics without irony. The recession will end, growth will resume and emerging economies will move closer to the Anglo-American model, because history has proved it works. This truth should be beyond debate, although it's a heck of a job getting some people to see it.

I wish Ibbitson's confidence was about more than a superiority complex and a blinding ideology. That said, I think Ibbitson misses the real issues because he wants to take some shots at the so-called European/French capitalism and way of life without addressing the center question of the direction and the sustainability of the current framework of globalization.

Excess and punishment

Sean Collins has a great response in Spiked to the Time's cover article by Kurt Andersen arguing that the crisis is good for America because it will force Americans to stop their excesses and to learn healthier behaviors:

Andersen blames people for taking on excessive mortgage and consumer debt; in other words, for living beyond their means. In doing so, he ignores systemic factors, such as government promotion of home ownership, the Federal Reserve’s lowering of interest rates, and the general expansion of credit facilities. Moreover, it is not a sin for people to want to take a bet on their own future success (especially when offered credit at very low interest rates): it is a personal financial judgment call. People should have the freedom to make their own decisions, including those that prove to be unwise ones. (...) In 1978, Susan Sontag published Illness as Metaphor, in which she criticised the notion that one’s character causes disease. Today, people like Andersen blame character for the economic crisis, a kind of Recession as Moral Fable. In Andersen’s world, there are no larger economic forces in play, no credit derivatives, no state intervention. Just immoral individuals who are getting what they deserve, and who need to reform.

I have to say that all of the American-centricism and Eurocentrism of the elites and analysts covering the crisis frighten me and force me to the conclusion they have never understood the globalized world. This lack of understanding explains, in great part, why the West is failing to even recognize that a global crisis requires global solutions and that global solutions aren't ones, which just concern wealthy or emerging countries. I don't think somebody  has yet made the case that in globalized world, local policies mean zilch if the context isn't taken into account. It is strange but there is about to be a G-20 summit without African countries except of course for South Africa and that nobody, not even Africa's great white hope (Obama) , find that appalling.

Inevitable clashes

The Times of London on Sarkozy, Obama, the G20 and the competition to win brownie points and  to be visible on the international scene during the economic crisis:

President Sarkozy yesterday threatened to wreck the London summit if France’s demands for tougher financial regulation are not met.
France will not accept a G20 that produces a “false success with language that sounds good but contains no commitments”, his advisers said.
(...) The French threat dramatically raised the temperature hours before President Obama arrives in London today. If carried through, it would ruin a summit for which Mr Brown and Mr Obama have high ambitions, believing it vital to international recovery. 
Mr Sarkozy, who blames the “Anglo-Saxons” for causing the economic crisis, told his ministers last week that he would leave Mr Brown’s summit “if it does not work out”.

Sarkozy is realizing that he has absolutely nothing to gain by letting Obama impose himself as the one taking the lead in these times of crisis and doing the most to solve complicated issues by investing more and by being bolder. Sarkozy's only choice is to recreate a barrier, which he has never really believed in, the one between the French and the Anglo-Saxons. He  is attempting to separate, to distinguish himself from Brown and Obama to remain not only relevant, but essential. The funny and execrable thing about politicians is that they have no shame, no hesitation about becoming what they despise when it is for the greater good, which in almost all the cases, is the protection of their political career. Sarkozy is doing a Chirac because he is slowly learning that it pays to standing out and saying no in times of crisis is  a better way to exist than just saying yes and following the leadership of the United States. Sarkozy doesn't want to follow Obama, he wants to be his equal, if he can't be an equal partner,  he isn't going to hesitate to become his foe, a sympathetic foe, but a foe nevertheless.

It's everywhere...

I haven't heard much about this, and I wonder why:

The president of Brasil, Lula da Silva, at a joint press conference on the 27th of March 2009 with Gordon Brown, the UK prime minister, made the following statement: “This crisis was caused by the irrational behaviour of white people with blue eyes, who before the crisis appeared to know everything and now demonstrate that they know nothing.”
That statement is not merely ignorant and stupid.  That statement is racist.  As a white person with blue eyes, I am offended by it.  I am waiting for Mr. Lula da Silva’s apology to the entire population of white people with blue eyes.

What amazes me is that Brown didn't stop him and I hope that it was just a case of something being lost in translation. Willem Buiter wonders if Lula's assertion is an example of acceptable racism  ( I think that the political correct expression for that is acceptable/tolerable bias) and that the fact that his question is a legitimate shows that all the post-racial stick is garbage especially in societies where it is tolerated to assume that race determines identity and behavior.

Bossnappings

The Guardian has an article on the current wave in France of Bossnapping, which is the kidnapping of bosses by workers in attempt to avoid firings or to solve other crisis in the enterprise:

France is braced for a wave of such "bossnappings", as desperate staff take desperate action. Mass layoffs blamed on the financial crisis have seen the protest movement splinter into spontaneous hostage-taking at plants and factories around the country. Chief executives arriving from Paris to announce redundancies find themselves barred from leaving. It is "our only remaining bartering tool" one union leader said.
France has a history of bossnappings dating back to May 1968 and the 1970s, when executives were held hostage in the struggle for rights. Today's demands are more mundane: hostage-takers range from single mothers to the nearly retired - they want jobs, proper pay and no brutal layoffs. The two "bossnappings" this month are the latest examples in a rise in radical gestures that has seen members of the public stage commando "picnics" in supermarkets, feasting from the shelves in revenge against multinationals, shouting "we will not pay for your crisis".

Bossnappings are able to happen in France because the French look at entrepreneurs and other's rich people who are at the head of a business with suspicion because to them, they aren't as honest and as hard working as their workers who are doing the real work, which is enabling them to get rich. The point is that in France, an successful entrepreneur is more often than not viewed as a opportunist who has been able to exploit his workers by taking full advantage of the fruits of their labor. The bosses who are the victims of these bossnappings will not be viewed as victims, but rather as people who are the causes of their employees' despair.

Facts that kill

Just the facts from Willem Buiter:

The US authorities have no money to fulfil their ambition of stopping large US banks from failing without taking them into public ownership.

Something tells me that in a couple of months, people are going to Obamanize Krugman by taking the worship of his person to unhealthy levels because he would have been proven right.

The possibility of failure

I guess hope and change can't hide the fire when it is getting close to the believers' home and that some of them, John Ibbitson in this case, are force to face the possibility that the hopeful one can fail:

We could be entering a future that none of us wants to face, a future in which we will be much poorer, a future in which we realize that everything Barack Obama tried only made things worse.

The laments of the superpowerful

It is hard for me to share James Surowiecki's sense of injustice over the fact that Europeans are once again taking advantage of America without doing their fair share. It is a familiar refrain and I have to say that given the status of America as the sole superpower, it is hard to empathize (easier to sympathize) because after all with power comes great responsibilities as well as great freedoms. All one has to do is to read Krugman's post  last week on Spain (even though he shares the views that Europeans aren't doing enough. An official of the European Central Bank responded to this assertion in the Wall Street Journal) to understand why Europe can't follow the "lead" of United States especially given the fact that its president doesn't seem to know its own mind when it comes to economic issues. Sugary excerpt:

The thing about government spending is that it “leaks”: a good chunk of our stimulus package will buy other countries’ goods. So Europeans can avoid getting too deeply into debt and still reap some of the benefits of our borrowing. This is unfair: in effect, Europe is refusing to carry its share of the global economic burden and is piggybacking on us. But it’s hard to see how things could have turned out otherwise. The U.S. economy, much more than Europe’s, is like the proverbial shark: if it doesn’t keep moving forward, it dies (or at least creates a lot of misery). In some sense, we need economic growth more than Europe does. It’s not surprising that we’re going to be the ones who end up paying for it.

Making the right diagnosis

Arthur Goldhammer has a great post, which has the merit of seeing the forest through the trees in the situation of France without focusing on the folklore:

Democracy is fickle that way, and often a disappointment to the rational calculators. Sarko was never one of those, but he has experienced the fickleness and no doubt figures this latest episode will also pass. Nevertheless, his nervousness has been apparent in his recent public statements: sniping at the weak-kneed members of his own party, imprudently insulting teachers and professors, and still insisting that he was elected not to raise taxes but to "reconcile" France with "enterprise," as if either of the two parties to that divorce were in the same condition they were in 2007. France is morose, and enterprise is prostrate. If the president hopes to be their marriage counselor, he needs to acknowledge the sad state in which they find themselves.

The Beef is gone

I agree with this:

In the recession so far, popular outrage against the establishment has focused mainly on ‘greed’. Yet alongside impulsive disgust about avarice lies another sentiment: anger towards politicians’ manifest incompetence. (...) The main thing to grasp is that, both in Britain and abroad, incompetence rests upon a profound lack of political direction. If there existed party-political goals more tangible and more exciting than ‘values’, ‘fairness’ and ‘tolerance’, society would throw up people who had the imagination and the competence to see those goals reached.

Old answers

Mikhail Gorbachev has a solution to the global financial crisis and it is the return of the State. The question, at this point, isn't whether to bring the State back or not, but how to bring it back and how much should it do. Paul Krugman has argued, for example, that Obama's stimulus package was too small. My guess is that he is right and that the Obama administration knew it or rather sensed it but figured that for political reasons, it had to start small and ask for more later when hopefully(here is that word again), things were getting better. There is the problem: the State to make a difference, politics and politicians have to be responsible and avoid petty calculations.

Jérôme Kerviel, the French and the mépris of capitalism

Agnès Poirier’s reading of the Jérôme Kerviel and the Société Générale scandal:

Beyond the humour and self-derision that such a story provokes, Kerviel's coup and the way the French are taking it have revealed once again the very different nature of French attitudes towards haute finance, and towards capitalism in its most abstract form. Together, they are looked on with utter suspicion by most people in France.

[…]I remember how in school, when I was 13, we would all snigger at the concept of an ever-virtuous free market. "As if a free market didn't produce gross inequalities!" we would say on cue. The free market may have become a necessary evil for my generation, but most of us still agree that only strong state regulation can correct capitalism's inherent injustice.

[…]Of course, globalisation and the growth of the European Union have weakened the power of nations and the extent to which nation states can play solo in the world economy. Nonetheless, France continues to live a very French paradox: her schoolchildren are taught to despise capitalism, yet she remains the second-largest trading nation in Western Europe. France boasts some of the world's leading utilities and transport and construction companies, and yet maintains a large public sector, employing 4 per cent of her labour force - that is to say 864,000 people - in the country's 1,100 state-owned companies.

The question is: how long can France thrive on her contradictions? Perhaps as long as the French find Zidane's headbutt and Kerviel's ?5bn coup equally sublime.

France is probably the only developed country where Jérôme Kerviel could be regarded as Robin Hood precisely because the French look suspiciously not only at capitalism, but also at wealth, which to them isn’t as in America a sign of success, but of exploitation. The point is that most of the French still believe that the most of the rich make their wealth by exploiting the poor and by taking advantage of an unfair system. In America, someone who is rich is most of the times not ashamed of showing his/her wealth because s/he feels that it was earned. In France, people who earned too much are encouraged to feel ashamed of their wealth and to hide it because it is considered indecent to show it when too much people don’t have enough to live.

Globalization and French cheese

Michael Johnson has an interesting article on Globalization, modernization, and French cheese in the International Herald Tribune, which makes the point that it is difficult to mix tradition and commercialism.

The advantage of being a small country

Via Gideon Rachman, an interesting argument about the advantages that there is for a country in being small in the globalized world:

Globalisation has opened up markets across the world. China and India are getting richer largely because they have access to the markets of the developed world, not because of the size of their domestic markets. Small countries can trade their way to success even more swiftly. Think of Singapore or Switzerland.

Small is also no longer synonymous with insecure.

In Europe, many minnows have enhanced their security by joining Nato. This is sometimes denounced as free-riding. Belgium or Luxembourg can afford to be small, secure and smug – because they are under the security umbrella, proffered by big and generous Uncle Sam.

But joining a collective security organisation is not an absolute necessity for a small country. Ireland and Switzerland are not members of Nato – and neither appears to be in imminent danger of invasion.

The fact is large countries are now less instinctively expansionist than they were in the days of empire. These days, invading and occupying small countries can be a massive pain in the neck – as the US has discovered in Iraq and Afghanistan.

Since the traditional disadvantages of being a tiddly country are disappearing, you are just left with the advantages.

Above all, small countries tend to be more homogenous. This makes them less prone to civil strife or dictatorship. It also means higher levels of social trust – which may be why small Scandinavian states are willing to spend so much on health and education and fare so well on human development indices.

Governments in small countries also find it easier to craft and implement policy – an advantage that might be replicated in the US by federalism. Small, homogenous countries should also be less tempted to waste money on pork-barrel projects, designed to buy off discontented minorities.

The size of a country is less of an issue than its geography. I would argue that neither Singapore nor Switzerland if there were African countries or located next to Russia or to India or Pakistan. In other words, location is more important than size.

The West and power

Niall Ferguson has an interesting take on the relationship among Bush, Sarkozy, and Brown, the leaders of the United States, France, and Britain. He argues that their biggest challenge is not to get along with Bush with each other and to develop strong alliances, but rather to face up to the fact that the West is weaker and that therefore the sphere of influence of their different countries is as narrow as it has ever been:

France, Britain, America: They each have had their era of hegemony. Now, however, they all belong to the club of developed debtors, with combined current account deficits of $970 billion last year. Other members of this club are Australia, Greece, Iceland, Ireland, Italy, New Zealand, Portugal and Spain. Apart from Iceland, it reads like a list of ex-empires, with the former members of the British Empire (energy-rich Canada excepted) in the lead.
Collectively, the developed debtors had to borrow about $1.3 trillion last year. On the other side of this great global equation is the club of emerging exporters. According to the International Monetary Fund, more than 40% of the developed debtors' funding requirement last year was met by China, Russia and the Middle East.
The problem for the deficit countries is essentially that their people think the world owes them a living. Their politicians pander to this assumption by making a series of more or less incompatible promises: that expenditure on healthcare and education will always go up; that direct taxation will never go up; and that the assets against which voters borrow will never go down. The only way to fulfill these promises is to pump out ever more printed paper: bank notes, bills, bonds, stocks and the rest. The emerging exporters buy these. The net result must be a creeping transfer of financial ownership from West to East.
[…] So the big question is not whether Sarkozy or Brown will get along better with Bush, but what China's sovereign wealth fund will buy when it embarks on its first investment spree. By comparison with these sovereigns, the traditional sovereigns of the political world are starting to look about as powerful as, well, professors.
And the really bad news for these presidents and prime ministers? Not only are the stakes getting lower all the time, you guys don't even have tenure.

Stop fighting over the Sixties !

Daniel Finkelstein has some worthwhile things even though self-satisfying to say about hippies, capitalism, the sixties, and love and freedom. His argument is that money can buy love and that on the contrary to what is believed capitalism that is responsible for the Sixties Revolution:

Because of the Sixties. It is even clearer now than it was at the time that this was a watershed decade. Forty years ago, it was thought that the generation gap between teenagers and their parents would be a permanent feature of modern life. Instead, there was just one generation gap, but the gulf yawns between those who grew up in the years before the Beatles and those who grew up after it.

The mistake is to regard this as the consequence of the counterculture. The real cause of the Sixties revolution was something much more powerful and much more widespread – capitalism.

Finkelstein isn’t totally wrong, but his argumentation is sad because it is useless attempt to rewrite history in other to justify the present, where some of creating a false dichotomy between the rich and the workers and the leftists and the freeloaders. Capitalism doesn’t need to be responsible for the Sixties revolution to be a force for the good, but it needs to about something more soulful than being rich. Finkelstein reminds me of Sarkozy with his attempt to say that only capitalism can create values and lead to freedom. It is a legitimate point of view to have, but it doesn’t justify a rewriting of history. Finkelstein makes me sad because he is the proof that the real battle for the future of the world and indeed of capitalism isn’t between the rich and the poor, but among the rich, among the caviar right and the caviar left. The poor don’t have the tools to fight because they are too hungry and ill equipped for an ideological and societal struggle. The middle class is too preoccupied by keeping the gains that it has made in the last decades and too worried about the future of its children. Only the rich have the time and the means to fight. The real battle is about how much to change the status quo. It opposes two groups of rich. The first one is the one which feels that it deserves to be rich and is so because it is better than everybody else (because of nature or because of God). Its members say to the masses, who are hungry “Let them cake”. The second group is made of people who feel fortunate to be rich, believe that being rich comes with both privileges and responsibilities. They are aware that the system can only work if it is based on merit and if the poor do not become roaches. I for one are tired of people who are still fighting over the sixties to justify the present and to reduce the alternatives that exist for the future.

Hating the rich and the need for ladders

Ross Clark characterizes the protests around the G8 as a revitalization of radical leftism and as a resurgence of the pathological hatred of the rich. He argues that anti-globalisers are mostly anarchists who are against any form of order and who have no legitimate complaints. Sugary excerpt:

It would be easy to dismiss the resurrected anti-globalisation movement as a bunch of incoherent nutters. But that would be to underestimate the influence of anti-globalisation on left-wing thought generally — and not just on the fringes. It has become such a commonplace to blame the oil industry for any meteorological-induced hardship in the Third World that no one seems to protest any more — even though such cheap jibes are polluting serious debate over climate change. Likewise, no one seems to mind any more that Western clothes manufacturers — in adverts by once respectable aid charities — are blamed for creating poverty in the Third World: when the reality is that they only attract workers to their factories by paying higher wages than any other local employers.

Clark attempts dishonestly to brand as leftists, extremists who are apolitical for they are in the streets precisely because they no longer believe in politics and think that protests are the only way to provoke change. This would be clever if his arguments weren’t polluted by his erroneous assumption that all anti-globalizers are leftists who hate the rich when in fact even a shallow examination of the globalization debate show that the real divide isn’t really between the left and the right, but between those who like the status quo because it makes them winners and enables them to offer nothing more than charity to the others and those who want to shake things up in order to catch up and to make globalization really global by compressing and flattening the world.

Most people in our world want to be rich and the tragedy isn’t that there exist people who are rich, but that there aren’t enough of them and that poverty not only exists, but that it spreads like a disease by condemning millions of people to a life where they will never escape the distressful conditions within which they were born. So it is easy for Clark from his little and comfortable world to castigate spoiled groups of people who represent nobody, but themselves in order to then use them as blindfold not to see that the most important people in the globalization debate aren’t anti-globalizers and that the most important events weren’t the violent protests of Rostock. The most important people of the globalization debate are the leaders of the G8 and yes, the rich. The most important events were the elaboration of a tiny aid package by the G8 to help Africa and the collapse of the World Trade Organization’s Doha talks last year. Everything else is just window-dressing for globalization is here to stay. Thus, the key question isn’t whether to globalize or not, but rather what form to give globalization and whether it is possible to make the current model with all of its inequities and inequalities the only alternative.

Ross Clark likes the status quo not because he is a conservative or because he loves riches, but because he believes that globalization is an extension of the state of nature in the sense that winners are the fittest and the losers are the weakest who must just work harder to become stronger and to climb the ladder. However, globalization has made those notions archaic for the ladder is crumbling and is becoming so unstable that it is too difficult to climb. It is no longer possible to shut the losers out of paradise by throwing them the meager remains of a luxurious meal so that they can shut up and let the others enjoy the sun. Of course, the rich must not apologize for being rich and feel guilty about having so much when others have so little or nothing at all. They must just consent to make the rules of the game fairer so that the poor and the losers can aspire to a better life. After all, if hard work is no longer enough to survive and at least to give millions of people the hope that their children have the chance for a better future, what kind of world are we creating?

Transcitizenry and immigration

John Sutherland has an interesting article in the Financial Times about immigration. He it from a different and a much-needed point of view, which shows that immigration is a complex issue even though some are trying to simplify by appealing to people’s fears and resentments. Sutherland defends the concept of transcitizenry to show that citizenship and nationality have become fluid concepts. Sugary excerpt:

Transcitizens, let’s call us. People, that is, with half- nationalities (or smaller fractions) in different countries. Not quite resident, not quite alien. In the US, the number of LPRs (legal permanent residents) increases at about 1m a year. Illegals probably arrive in much larger numbers. For them the home and away game that I, and other professionals like me, play, is impossible.

I honestly don’t know any more which is home and which is away. When I cross the yellow line I mysteriously forget whole swathes of my English telephone numbers and passwords and – like toast jumping out of the toaster – my American keywords and PINs magically install themselves. […] Transcitizenry, is I believe, centrally in the American grain. Uniquely and admirably so. More importantly, I would argue, it’s been as good for America as it has for transcitizen beneficiaries such as myself. When people such as me go to America, to join professional, business or academic communities, we’re not somehow flushed away. We are, I would maintain, more fully used and more useful in both places.

The problem is that the more fluid citizenship and nationality with the compression of time and space, the fiercer the backlash against this fluidity becomes. People want to hang on to outdated concepts to feel like they are still in control of their lives and to feel that they can still put their foot down by saying no to the changes, which they dislike. After all, isn’t it possible to summarize the immigration in the United States and in the rest of the world with two words: control and choice? Globalization has made everybody, third world’s citizen. Nowadays, everyone has to face the sad fact that their government, their state, their nation, their will may not be enough to make their life what they want it to be. The point isn’t that everybody is a victim now, but that people, like citizens of developing countries have had to accept for a long time: not only do foreigners exist, but they matter in the sense that globalization means that no human is really an island by making true the old eighties and cheesy adage, “we are the world.”

The French Left, the future, and sculpture

Jules Treneer has a thorough, but in my opinion somewhat biased reading of the political landscape and of the state of the French Left. Although, I disagree with much of his premises and with his slanted analysis of the French election, I agree with his conclusion that the French Left hasn’t adapted to the post-Soviet world. It is still trying to fight the old and settled dispute between capitalism and whatever else without ever acknowledging that this issue has been settled by the fall the Soviet Union and globalization. That doesn’t mean that TINA (There is no alternative) prevails, but that the solution isn’t in the past and its dead, dumb, naïve, and sterile ideologies, but that it must be invented by imagining a different future. Sugary excerpt:

Now, after this third successive presidential defeat, the socialists are in disarray, and a leadership struggle is in the offing. Various camps will vie for control, either to “modernize” or to return the party to its roots, while the battles over trade (a.k.a. globalization) and Europe (a.k.a. globalization) that have riven the party will rage on. How these challenges are addressed will demonstrate whether France is a laboratory or a museum of the left. How to straddle the distance between a pro-union anti-globalist left and one that is social democratic and market-friendly?

Before we follow this question too far, it’s worth considering the possibility that the question itself may prove irrelevant, since it assumes that the present global situation is sustainable and must therefore either be resisted or accommodated. That assumption may prove wrong. The present paradigm, which began when the fall of the Berlin Wall released an enormous pool of pent-up labor and demand, is an era of increasing trade and an increasingly interlocked global economy.

The French left is going through what the American left went through after the loss of Jimmy Carty and the succession of two Republican Presidents, a transition period due to an identity crisis. It has to adapt to the fact that the French electorate has steered to the Right because it seems more inspiring and more able not only to protect the French, but also to fight back against its enemies, which Sarko pointed out were responsible for the so called French decline: those who didn’t work, who didn’t love French, who refused to integrate French society and who were content to live on the backs of the early rising and hard working French. The greatest magic trick, which the French right pulled during this election was to make something new and glamorous of what was left of Chiraquism and Villepinism by making the French feel that they weren’t responsible and that their country could be great again if they had a superman i.e. Sarko who was willing to kick out of the roaches who were spoiling its grandeur. The left didn’t have any magic because all of its unresolved issues and its unwillingness to look anywhere but to the left broke the golden wings of Ségolène Royal.

Is the French Left withered and almost dead? Yes, but is it over? No because the French to the contrary of Americans aren’t dreamers at heart but sculptors in the sense that they sense that they always come a moment when they stop to dream to scream, to complain, and to  ask for something, which they can touch, feel, and mold. Sarkozy right now is Rodin. He has painted a masterpiece, which may last or simply end up like much modern art after a while be considered to be overvalued because it is fluffy. The left needs a Camille Claudel. I think she is Ségolène Royal, but what is more important is that the new leader be willing to accept madness (figuratively speaking) in order to reconstruct the French Left and to sculpt its own masterpiece.

Globalization as a miracle

Clive Crook believes that Globalization is a miracle not an ill and the West and the United States have made tremendous gains because of it. He argues that the Globalization of labor hasn’t harm Americans workers because although the average wage of unskilled workers has fallen, the wages of other members of the workforce has risen:

True, labor's share of national income has fallen in the United States and in other rich countries. In industries using mostly unskilled workers, labor's share of income has fallen significantly; in industries using mostly skilled labor, its share has tended to rise. But, thanks to trade, which has made prices lower than they otherwise would be, pay in real terms has kept on rising regardless -- albeit more slowly in some places than in others. In America, real compensation per worker has risen by about 20 percent since 1980. In Europe, it has risen by more than 30 percent. (Note, though, that America has added new jobs at roughly twice Europe's rate -- hence its consistently lower unemployment rate.)

Yes, growth in American wages and benefits was lower at that rate than the country had grown accustomed to. But see this in the global context: Despite the staggering increase in the effective global labor supply during the past two and a half decades -- a phenomenon that is off all the charts and that, to repeat, heralds unprecedented inroads against global poverty -- wages and benefits in the United States managed to keep on rising. This seems little short of miraculous.

The problem however is that American workers will not be persuaded by such type of arguments because they perceive globalization not as a phenomenon, which is leveling the playing field, but as one which distorts it by making them disposable since they can be replaced whether they are skilled or not by people in other countries, who will be cheap and less demanding. The real question is really about whether Globalization is a miracle or an ill, but about whether it will continue to happen in a vacuum of any kind of governance to control its shortcomings and to ensure that common rules exist so the globalized world has some values, such as equality and equity, which still have some meaning.

America, France, and the menacing specter of the welfare state

Kevin Hassett argues that the United States is on its way of becoming France because of the size of its entitlement programs particularly the one concerning retirees. Sugary excerpt:

America has consistently outgrown its European allies for many years. There is little dispute among economists that America's big advantage is its relatively small government. Federal government outlays take up about 20% of  U.S. gross domestic product; in France, it's almost 55%.

The latest budgetary maneuverings in America have virtually guaranteed that a good bit of that advantage will disappear, at least if Democrats remain in power.The current laws, as written, have put America on the road to France. The primary culprit is our programs for retirees.

Kevin Hassett obviously knows nothing about France, which in his little world epitomizes the worst country of all possible western countries possible. But the real issue, which Hassett refuses to address to make a cheap political point, is whether there is only one model for the world to follow, the French or the America model and whether those two are incompatible and therefore have nothing to learn from one another.