Dr. Fareed: Why I Talk to Bono


September 23, 2018

Dr. Fareed: Why I Talk to Bono

Image result for Bono and Fareed Zakaria

When confronting a challenging problem, it’s sometimes useful to listen to someone who looks at it from an entirely different angle. That’s why I found it fascinating to talk about the rise of populism and nativism with Bono last weekend at a summit in Kiev. The Irish singer-activist-philanthropist sees the same forces that we all do, particularly in Europe, but he zeroes in on something intangible yet essential. The only way to counter the dark, pessimistic vision being peddled by nationalists and extremists, Bono says, is to have an uplifting, positive vision. Homing in on the trouble in his part of the world, he told me, “Europe needs to go from being seen as a bore, a bureaucracy, a technical project, to being what it is: a grand, inspiring idea.”

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To that end, Bono’s band, U2, has been choosing a moment during its concerts to unfurl — wait for it — the flag of the European Union. “Europe is a thought that needs to become a feeling,” Bono wrote in a recent op-ed in the German newspaper Frankfurter Allgemeine. He is trying to give that feeling meaning. To him, Europe is about the ability of countries that were once warring to live in peace, for people of many different lands and languages to come together. “That idea of Europe deserves songs written about it, and big bright blue flags to be waved about,” he wrote.

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Bono admits that Europe is a “hard sell” today. The continent is ablaze with populism. These forces have taken control in Hungary, Poland and Italy and are steadily gaining ground elsewhere, including Germany and Sweden. It seems that everywhere the fuel is the same: hostility toward strangers, foreigners, anyone who is different. In April, NPR’s Joanna Kakissis reported on a Hungarian sociologist, Endre Sik, who had polled Hungarians about allowing asylum seekers into the country. He found strong resistance to accepting particular groups such as Romanians, Chinese and Arabs, and then he decided to ask about the “Pirezians.” The Pirezians are a fictional ethnic group of Sik’s own creation, yet Hungarians roundly refused to take them in. Sik told NPR, “The Hungarian form of xenophobia is, let’s say, the classic form: ‘They are different, we don’t know them, therefore we hate them.’ That’s the beast in us.”

Bono’s message resonated because I had been reading Francis Fukuyama’s new book, “Identity: The Demand for Dignity and the Politics of Resentment.” Fukuyama argues that identity stems from humans’ deep-seated psychological need to be recognized as possessing dignity. In recent decades, in the understandable search for recognition, persecuted minority groups (blacks, Hispanics, gays) have celebrated their identity — and so have working-class whites, who now feel ignored and forgotten. The answer, Fukuyama says, is not to reject identity politics but to construct broad identities that can embrace others and unify different groups.

The founders of the E.U., he argues, spent too much time building the technical aspects of the project — laws, rules, tariffs. They neglected to nurture an actual European identity, something people could believe in not for rational reasons but for emotional and idealistic ones. In the American case, he argues, the anti-populist forces have to create a broad identity centered on core American ideas and values rather than narrow ethnic, racial or religious ones. Thus, we need a much greater focus on assimilation, on the celebration of American identity, on the things that make us all love being American. We need to connect with people in their guts, not just in their heads.

The European challenge might seem much greater than the American one, but in fact, distrust of foreigners doesn’t necessarily mean a rejection of Europe. Even in Poland and Hungary, where ethnonationalist sentiments run high, support for the E.U. is quite high. According to the latest European Commission surveys, 71 percent of Poles say they feel attached to the E.U., more so than Germans or Spaniards, while 61 percent of Hungarians feel attached, outstripping the French, Swedes and Belgians. The problem is, it isn’t a deep, emotional bond — they are three to four times more likely to feel very attached to their own nation than to the E.U.

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What people in Europe and the United States ought to be proud of, what they should celebrate, are the remarkable achievements of diversity. “I love our differences,” wrote Bono, “our dialects, our traditions, our peculiarities. . . . And I believe they still leave room for what [Winston] Churchill called an ‘enlarged patriotism’: plural allegiances, layered identities, to be Irish and European, German and European, not either/or. The word patriotism has been stolen from us by nationalists and extremists who demand uniformity. But real patriots seek unity above homogeneity. Reaffirming that is, to me, the real European project.”

And, I would add, the American project as well.

(c) 2018, Washington Post Writers Group

 

“Global Britain” Is Already on Its Own


March 25, 2018

“Global Britain” Is Already on Its Own

by Mark Malloch-Brown

British voters’ decision to leave the EU may have been motivated mostly by domestic issues such as political dysfunction and immigration, but the costs of departure are being felt first on the foreign-policy front. The international response to the recent nerve-agent attack in Salisbury, England, suggests that the costs will be high.

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LONDON – British Prime Minister Theresa May has finally had a good crisis. Responding to the nerve-agent attack on former Russian double agent Sergei Skripal and his daughter Yulia in the placid market town of Salisbury, England, May projected strength – including to her fellow European leaders – by demanding that the Kremlin answer for the crime. As a former home secretary, security is clearly her strong suit, and she has now gone a long way toward repairing her tattered authority in Parliament.

Moreover, May also managed to reach an agreement with European Union negotiators on a 21-month transition period for the United Kingdom’s withdrawal from the bloc. And yet, despite May’s personal successes, this week might well be remembered as the moment when the foreign-policy costs of Brexit became clear.

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Until now, the British foreign-policy grandees and former ambassadors warning that Brexit will severely damage the UK’s standing in the world have been dismissed by much of the public as discredited elites and fear-mongers. Understandably, Brexit supporters have taken little notice of various straws in the wind heralding the direction their country will take. They are unmoved, for example, by the fact that, after losing a United Nations vote, their candidate pulled out of the race and the UK now has no judges seated at the International Court of Justice for the first time in 71 years.

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The Cranky Boris Johnson with The Russian Foreign Minister Sergei Lavrov

Still, if that wasn’t enough to reveal Britain’s new loneliness, the use of a Soviet-era nerve agent on British soil certainly is. Though EU members have expressed their support for Britain and made assurances that Brexit will not disrupt solidarity or security, there are signs that this united front may, in fact, be just a front. The European Commission President, Jean-Claude Juncker, congratulated Russian President Vladimir Putin on his election to a fourth term – a move that rankled the UK. Greece and others also expressed some skepticism about the relationship with the UK as they arrived in Brussels for the European Council summit.

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Across the Atlantic, US President Donald Trump also congratulated Putin. While he also condemned Russia for the Salisbury incident – a rare departure from the Putin-loving corner he has painted himself into – support for Britain on this occasion seems to have been motivated more by his political calculus than a deep sense of solidarity. After several days of deafening silence, Trump was under growing pressure to speak out. And on the whole, his unpredictability and transactional approach to alliances has already called into question Britain’s most important relationship outside Europe.

Beneath the surface, the international response to the Salisbury attack reveals alarming cracks in the UK’s position on the world stage. It is widely assumed that the UK’s weak response to similar incidents, not least the 2006 murder of the Russian defector and former spy Alexander Litvinenko, has convinced Putin that he can get away with such provocations. But Putin may also have anticipated the public outrage over the attack on the Skripals and calculated that EU member states with pro-Russian governments – namely, Hungary, Greece, and, soon, Italy – would veto any strong EU response. By this reasoning, Putin could drive an even larger wedge between Britain and Europe, thus advancing his longstanding goal of undermining European solidarity.

In any case, the UK’s isolation and vulnerability are now abundantly obvious. In its efforts to apply pressure on Europe, the Kremlin has identified Britain as a weak link. And those efforts go well beyond attempted murder on British territory. It seems increasingly likely that Russia also interfered in the Brexit referendum, as it did in the 2016 US election; and that Russian criminal elements have penetrated London’s financial and services sectors.

Britain is a beachhead in Russia’s strategy to undermine European security. Unfortunately, the territorial defense guarantee that comes with NATO membership does little good in a conflict conducted in the shadows through assassinations, cyber warfare, and criminal subterfuge. Nor does NATO membership help in responding to the Kremlin’s exploitation of European dependence on Russian energy, such as when it uses natural-gas supplies as a geopolitical weapon.

The decision by a slim majority of UK voters to leave the EU may have been motivated mostly by domestic issues such as political dysfunction and immigration, but the Skripal episode has made it clear that the costs of departure will be felt first on the foreign-policy front. The rest of Europe will sink or swim together in confronting Russian aggression. But the UK, having singled itself out, is a prime target for a dunking.

In recent years, Russian officials had already become increasingly derisive toward Britain’s presumptions about its international status and power. Like many observers around the world since the Brexit vote, the Kremlin does not look at the UK and see a country able to wield anything approaching global influence. Rather, it sees a country mired in nostalgia – easy pickings for destabilization.

In a sense, “Leave” voters were right that the EU is out of touch with the times, but not for the reasons they thought. One can debate whether the EU is a stale champion of the rules-based liberal international order. But what is now clear is that it is not ready for the emerging post-liberal order.

In the new order, strong states will throw their weight around with little care for the rules-based system that the EU has long epitomized. But at least the EU will have numbers on its side. Putin’s Russia will be just the start of post-Brexit Britain’s worries. The UK will also have to contend with China, Turkey, Egypt, Saudi Arabia, and even its most important ally – the US.

Just as Britain negotiates its exit from the EU, the consensus-based multilateralism of the post-war era is being supplanted by muscular nationalism. In this new schoolyard, only those with committed friends will be able to stand up to the bullies. Others will have no other choice than to cower and hope for the best.

Moving from Defence to Offence on Trade Strategy


March 5, 2018

Moving from Defence to Offence on Trade Strategy

Author: Editorial Board, East Asia Forum

Image result for Trump declares a trade war  Commerce Secretary Wilbur Ross with his Boss,President Donald Trump

 

The trade architecture in East Asia — the most dynamic region in the global economy — is up for grabs. The very system on which regional arrangements are built is under threat.

US President Donald Trump’s withdrawing the United States from the Trans-Pacific Partnership (TPP), his ‘America First’ agenda and his declaration last week of the first shots in a global trade war undermine the WTO and the global rules-based economic system that it underpins. Asia and the global community, including the United States, have relied upon and benefitted from that system for over 70 years.

Can East Asia put aside its differences and define a set of arrangements that protect its own economic security interests absent the United States? US leadership put this system in place and drove its expansion throughout the post-war years. Now the United States is generating the headwinds that threaten to unravel it. Just last week Trump announced the first salvo in what could be a trade war with a 25 per cent tariff on all steel imports and 10 per cent tariff on aluminium imports. The temptation for other countries is to retaliate with their own self-harm policies.

What’s at stake?

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The multilateral trade regime provides the cement and ballast that makes it easier to manage tricky rivalries and conflictual relationships of the kind that abound in Asia but around which large-scale economic interdependence and prosperity have been built. The ‘America First’ challenge threatens the collapse of that system and a descent into beggar-thy-neighbour protectionism and political conflict reminiscent of the lead-up to World War II.

How leaders in Asia respond to this challenge and the arrangements that the region settles on will matter for three important reasons. It will substantially affect the welfare of individual countries and the communities within them. It will affect the atmosphere for both economic and political cooperation in the region. And, given the size of the Asian economy, it will matter for whether the global rules-based economic system withstands the assault upon it.

No single country  acting on its own can lead a response to the vacuum that United States is daily creating in global governance. This US-sized hole in the Asia Pacific will have to be filled with leadership from the rest of the region as a whole.

Asian and Pacific nations have responded definitively so far. And leadership has come from one of the most unexpected places: Japan, traditionally shy to step out in front.

Once Trump declared that the United States was getting out of the TPP, Japan led the remaining 11 members towards the agreement’s conclusion without the United States. That deal is expected to be signed in Chile this week. The awkwardly named Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), otherwise known as TPP-11, would not have happened were it not for Prime Minister Shinzo Abe’s leadership. Australia’s also played a major role, but Japan (the Partnership’s largest economy absent the United States) was the decisive player.

As Shiro Armstrong explains in this week’s lead essay, ‘conclusion of the CPTPP does not deliver the big strategic goal of keeping the United States entrenched in Asia. Instead, it sends to Mr Trump a strong message of the region’s commitment to openness. Holding the line and pushing back against growing protectionist sentiment keeps the pressure up, with market opening and reform on which US businesses and consumers miss out’.

Most surprised about Japanese leadership are the Japanese themselves. As Armstrong says, Japan ‘has found itself in an unusual position. Japan has often relied on external pressure, usually from the United States, to advance its diplomatic goals and even to push domestic reforms’.

Asia cannot count on Japanese leadership alone, nor can it count on Japan’s continuing in this manner. In saving what’s left of the TPP, Mr Abe saw an opportunity to hedge ‘against the uncertainties that Trump has generated in regional and global trade policy, strengthening ties with other partners like Australia and India and laying the groundwork for improving relations with China’.

Australia almost single-handedly led the push back against Trump’s team  tearing up multilateralism as APEC’s central tenet at the summit in Vietnam last November.

With Australia having held the line in APEC and moved forward on the TPP, what is needed now is for the other powers in Asia to join Australia and Japan in preserving and protecting the global system.

The CPTPP, even if it expands membership to include other middle powers in East Asia, is not systemically important enough to do the job. With the United States in the agreement, the TPP would have accounted for 38 per cent of the global economy but without it the agreement accounts for only 13 per cent.

In East Asia, there is fortunately another vehicle that has the weight to do the job. The Regional Comprehensive Economic Partnership (RCEP), which is currently being negotiated, involves the 10 ASEAN members plus Australia, China, India, Japan, New Zealand and South Korea. That grouping accounts for 31 per cent of global economy.

RCEP (perhaps the second-worst acronym in Asia after the CPTPP) is as important as it is difficult to realise with the required ambition. Including the major economies of Indonesia, India and China makes a tall order out of large and credible commitments to economic opening . The anxiety to get a deal done quickly could compromise the quality of the arrangement and therefore its impact. A hastily concluded RCEP deal that is not credible in its ambition would be a mistake and a huge lost opportunity, risking more harm than good. India is still playing its familiar role of spoiler by dragging the agreement down and other leaders have yet to expend political capital that they need to on RCEP.

There is no clear leader in RCEP. The Partnership is not China-led as is often wrongly claimed: ASEAN is the hub and inspiration, and the major powers, including China, are the spokes. The only leadership that China can show that Australia, Japan, India and others can accept is one where it commits to reforms and opening up its economy. That will benefit both China and the global economy.

RCEP is the best chance at an agreement that is inclusive of China and locks it into reforms. The CPTPP may be easier for countries to join than the original TPP since it has frozen ‘some of the more egregious provisions of TPP — especially the US-pushed intellectual property protections that were likely to benefit big business in the United States at the expense of consumers in the region’, as Armstrong explains. But expanding CPTPP membership to China is unlikely since it would close the door to any possibility that the United States might rejoin at some time in the future.

There is little chance of the United States rejoining the TPP under Mr Trump or even the president after him. Piecing together political leadership on trade in Washington will be difficult without making progress on an agenda for dealing with the issues that have led to the current problems: stagnant middle-class incomes, wider distribution of the gains from trade and a properly functioning social safety net. The US Congress is unlikely to agree to join an existing deal, even though the United States was the driving force of the original TPP. The United States’ joining a deal that China is party to any time soon is inconceivable.

If East Asia does not hold the line on corrosion of the global trade regime and protectionism, no one else is likely to.Crafting regional trade architecture without the constructive participation of the United States is the immediate challenge and will remain the challenge for the foreseeable future. Australia and Japan have led the initial charge, but China, India and Indonesia will need to step up.

Asian powers may not be ready for the sort of leadership that is needed, but the threat to their interests in the global system will not wait until they are.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.

 

Europe needs to step up vigilance on China’s influence


February 21, 2018

Europe needs to step up vigilance on China’s influence

https://www.ft.com/content/a58b0a0c-127b-11e8-940e-08320fc2a277

Beijing’s authoritarian brand presents a direct challenge to liberal traditions
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 President Xi Jinping and France’s President Emmanuel Macron

Mike Pompeo, the director of the US Central Intelligence Agency, said last month that Beijing’s efforts to exert influence in liberal democracies are just as concerning as those of Moscow, citing China’s “much bigger footprint”. Indeed, China’s rapidly increasing political influencing efforts and the self-confident promotion of its authoritarian ideals present a fundamental challenge to western democracies.

Drawing on its economic strength and a Communist Party of China apparatus that is geared towards strategically building stocks of influence across the globe, Beijing’s efforts are bound to be much more consequential in the medium to long term than those of the Kremlin. Nowhere is the gap between the scale of China’s efforts and public awareness of the problem larger than in Europe. EU member states urgently need to devise a strategy to counter China’s authoritarian advance.

As we detail in a new report, Beijing pursues three related goals. First, it seeks to weaken western unity within Europe and across the Atlantic. One aim of this is to prevent Europe from challenging China’s human rights record and its hegemonic ambitions in the South and East China seas.

Second, it aims to build European support on specific issues such as market economy status and a free pass for Chinese investments.

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President Xi Jinping seeks strategic partnerships around the world for business. Europe should not be tempted to adopt  Trump’s hostile attitude towards China. Be smart.–Din Merican

 

Third, Beijing pushes hard to create a more positive global perception of China’s political and economic system as a viable alternative to liberal democracies. To further these goals, China commands a comprehensive and flexible influencing toolset in Europe, ranging from the overt to the covert and strategically deployed across three arenas: political and economic elites, media and civil society & academia.

Beijing uses investments in infrastructure and public utilities to create political leverage in Europe’s periphery. In Greece, for example, it controls the port of Piraeus, leading the government in Athens to torpedo a joint EU resolution on human rights in China in the Human Rights Council.

In the Czech Republic, it placed an adviser in the president’s office. Across Europe, it buys the services of former politicians such as Philipp Roesler, the former German vice-chancellor who was hired by HNA, the Chinese conglomerate, and David Cameron, the former UK prime minister, who has signed up to lead a joint UK-China investment fund.

Many smaller eastern and southern EU members align with China in fits of “pre-emptive obedience”. They try to curry favour with China and lure investment by supporting China’s political positions. Some illiberal governments, such as that of Viktor Orban in Hungary, do so all too happily. They see China’s authoritarian model as attractive and a convenient source of leverage against Brussels and western EU members pushing back against their illiberalism.

Mr Orban has already played the China card to put pressure his EU partners who are considering reducing structural funds in response to his authoritarianism and a post-Brexit recalibration of the EU budget. “Central Europe needs capital to build new roads and pipelines. If the EU is unable to provide enough capital, we will just collect it in China,” Mr Orban said in Berlin this year.

To sweeten the deal for China, Mr Orban is gladly working to prevent a strong EU stance on China’s territorial advances in the South China Sea.

In parallel, Beijing has invested in shaping the narrative on China. Across central and eastern Europe, China-supported Confucius Institutes, as well as China-linked think-tanks and university scholars dominate discussions, while an increasing number of journalists go through training programmes designed and funded by the Chinese Communist party.

In Brussels and other capitals, China funds think-tanks and pays lobbyists to project a favourable image. It spreads Chinese official views and creates subtle dependencies by paying for inserts in European quality newspapers.

It uses the lure of the Chinese market to encourage self-censorship in film, art, and academic publishing. Springer Nature, the German group that publishes Scientific American, has removed content in China that was deemed politically sensitive by the party. China even went as far as demanding that Germany ensure that its visiting football teams are not met by protests about Tibet during paid friendly games on German soil.

If the EU is unable to provide enough capital, we will just collect it in China Viktor Orban, Hungary’s prime minister.

 

In part, China uses covert methods, such targeting German lawmakers and government employees via fake social media profiles. But most influencing comes through the front door. Beijing takes advantage of the EU’s one-sided openness. Europe’s gates are wide open whereas China seeks to tightly restrict access of foreign ideas, actors and capital.

Beijing profits from willing enablers among European political and professional classes who are happy to promote Chinese values and interests. They do so mostly for financial or other advantages but at times also out of genuine political conviction or convenience. Rather than only China trying to actively build up political capital, there is also much influence courting on the part of those political elites in EU member states.

China has already made significant progress toward a more fragmented and pliant Europe that better serves its authoritarian interests. If Europe intends to stop the momentum of Chinese influencing efforts, it needs to act swiftly and decisively. In responding to China’s advance, European governments need to make sure that the liberal DNA of their countries’ political and economic systems stays intact.

Some restrictions will be necessary, but Europe should not copy China’s illiberalism. While staying as open as possible, Europe needs to address critical vulnerabilities to Chinese authoritarian influencing through a multi-pronged strategy that integrates different branches of government, businesses, media, civil society, culture/arts as well as academia.

To better leverage the collective weight of EU member states, larger member states, such as Germany and France, need to take serious steps towards putting their privileged bilateral relations with China in the service of common European interests. Complaining about the 16+1 format China uses to interact with smaller EU members in central and eastern Europe while engaging in 1+1 formats with Beijing undermines a common EU response to challenges from China.

In addition, European governments need to invest in high-calibre, independent China expertise. Raising awareness about and responding to China’s political influencing efforts in Europe can succeed only if there is sufficient impartial expertise on China in think-tanks, universities, NGOs and media across Europe.

Furthermore, the EU needs to continue providing alternatives to the promises of Chinese investments in European countries. It also needs to enable EU members and third countries in the neighbourhood to properly evaluate, monitor and prepare large-scale infrastructure projects, including those financed by China.

The EU and its members must be able to stop state-driven takeovers of companies that are of significant public interest. In addition to high-tech sectors as well as key parts of public infrastructure, this notably includes the media, as an institution of critical importance to liberal democracies.

Foreign funding of political parties from outside Europe, not least from China, should be banned across the EU. European intelligence services urgently need to enhance co-operation on Chinese activities to arrive at a common understanding of the threat and to deliver joint responses.

EU members should put additional awareness-building measures in place sensitise potential targets of Chinese intelligence activities. In particular, decision makers and scholars should be briefed more systematically about common patterns of contact-building and approaches by Chinese intelligence agencies or related actors.

For the wider public to get a full picture of authoritarian influencing, liberal democracies need to leverage one of the key assets of open societies: the power of critical public debate. Implementing transparency requirements concerning collaboration with Chinese actors for media agencies, universities and think-tanks, among others, would help raise awareness of the various influencing mechanisms Chinese state actors employ.

“Vigilance is wise; confidence a useful adjunct,” the Economist counselled recently in a piece on China’s influence in Europe. With the necessary defensive mechanisms in place, confidence should come more easily.

Thorsten Benner is director of the Global Public Policy Institute in Berlin. Kristin Shi-Kupfer is director of the research area on public policy and society at the Mercator Institute for China Studies in Berlin. They are co-authors of “Authoritarian Advance: Responding to China’s increasing political influence in Europe”. Copyright The Financial Times Limited 2018. All rights reserved

Post-Davos Depression


February 4, 2018

Post-Davos Depression

by Dr. Joseph E. Stiglitz@www.project-syndicate. org

The CEOs of Davos were euphoric this year about the return to growth, strong profits, and soaring executive compensation. Economists reminded them that this growth is not sustainable, and has never been inclusive; but in a world where greed is always good, such arguments have little impact

..,the lessons of history are clear. Trickle-down economics doesn’t work. And one of the key reasons why our environment is in such a precarious condition is that corporations have not, on their own, lived up to their social responsibilities. Without effective regulations and a real price to pay for polluting, there is no reason whatsoever to believe that they will behave differently than they have..–Joseph E. Stigltz

DAVOS – I’ve been attending the World Economic Forum’s annual conference in Davos, Switzerland – where the so-called global elite convenes to discuss the world’s problems – since 1995. Never have I come away more dispirited than I have this year.

Image result for The Economic Elites at Davos 2018Demonstrators in Zurich this week. While many are poised to recoil at President Trump’s arrival in Davos this week, much of the moneyed elite there are willing to overlook what they portray as the president’s rhetorical foibles in favor of the additional wealth he has delivered to their coffers. Credit Ennio Leanza/European Pressphoto Agency.

 

The world is plagued by almost intractable problems. Inequality is surging, especially in the advanced economies. The digital revolution, despite its potential, also carries serious risks for privacy, security, jobs, and democracy – challenges that are compounded by the rising monopoly power of a few American and Chinese data giants, including Facebook and Google. Climate change amounts to an existential threat to the entire global economy as we know it.

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Perhaps more disheartening than such problems, however, are the responses. To be sure, here at Davos, CEOs from around the world begin most of their speeches by affirming the importance of values. Their activities, they proclaim, are aimed not just at maximizing profits for shareholders, but also at creating a better future for their workers, the communities in which they work, and the world more generally. They may even pay lip service to the risks posed by climate change and inequality.

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But, by the end of their speeches this year, any remaining illusion about the values motivating Davos CEOs was shattered. The risk that these CEOs seemed most concerned about is the populist backlash against the kind of globalization that they have shaped – and from which they have benefited immensely.

Not surprisingly, these economic elites barely grasp the extent to which this system has failed large swaths of the population in Europe and the United States, leaving most households’ real incomes stagnant and causing labor’s share of income to decline substantially. In the US, life expectancy has declined for the second year in a row; among those with only a high school education, the decline has been underway for much longer.

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Justin Trudeau of Canada and Narendra Modi of India–The Globaists at Davos 2018 who together with Germany’s Angela Merkel, Emmanuel Macton of France and China’s Xi Jinping will make America First’s Donald Trump irrelevant.

Not one of the US CEOs whose speech I heard (or heard about) mentioned the bigotry, misogyny, or racism of US President Donald Trump, who was present at the event. Not one mentioned the relentless stream of ignorant statements, outright lies, and impetuous actions that have eroded the standing of the US president – and thus of the US – in the world. None mentioned the abandonment of systems for ascertaining truth, and of truth itself.

Indeed, none of America’s corporate titans mentioned the administration’s reductions in funding for science, so important for strengthening the US economy’s comparative advantage and supporting gains in Americans’ standard of living. None mentioned the Trump administration’s rejection of international institutions, either, or the attacks on the domestic media and judiciary – which amounts to an assault on the system of checks and balances that underpins US democracy.

No, the CEOs at Davos were licking their lips at the tax legislation that Trump and congressional Republicans recently pushed through, which will deliver hundreds of billions of dollars to large corporations and the wealthy people who own and run them – people like Trump himself. They are unperturbed by the fact that the same legislation will, when it is fully implemented, lead to an increase in taxes for the majority of the middle class – a group whose fortunes have been in decline for the last 30 years or so.

Even in their narrowly materialistic world, where growth matters above all else, the Trump tax legislation should not be celebrated. After all, it lowers taxes on real-estate speculation – an activity that has produced sustainable prosperity nowhere, but has contributed to rising inequality everywhere.

The legislation also imposes a tax on universities like Harvard and Princeton – sources of numerous important ideas and innovations – and will lead to lower local-level public expenditure in parts of the country that have thrived, precisely because they have made public investments in education and infrastructure. The Trump administration is clearly willing to ignore the obvious fact that, in the twenty-first century, success actually demands more investment in education

For the CEOs of Davos, it seems that tax cuts for the rich and their corporations, along with deregulation, is the answer to every country’s problems. Trickle-down economics, they claim, will ensure that, ultimately, the entire population benefits economically. And the CEOs’ good hearts are apparently all that is needed to ensure that the environment is protected, even without relevant regulations.

Yet the lessons of history are clear. Trickle-down economics doesn’t work. And one of the key reasons why our environment is in such a precarious condition is that corporations have not, on their own, lived up to their social responsibilities. Without effective regulations and a real price to pay for polluting, there is no reason whatsoever to believe that they will behave differently than they have.

The Davos CEOs were euphoric about the return to growth, about their soaring profits and compensation. Economists reminded them that this growth is not sustainable, and has never been inclusive. But such arguments have little impact in a world where materialism is king.

So forget the platitudes about values that CEOs recite in the opening paragraphs of their speeches. They may lack the candor of Michael Douglas’s character in the 1987 movie Wall Street, but the message hasn’t changed: “Greed is good.” What depresses me is that, though the message is obviously false, so many in power believe it to be true.

Brexit: Britain’s nervous breakdown, and Theresa May’s Waterloo


February 2, 2018

Opinion Brexit

Brexit:  Britain’s nervous breakdown, and Theresa May’s Waterloo

https://www.ft.com/content/3687f1b0-067d-11e8-9650-9c0ad2d7c5b5

The country is upending the policies that have set its national course for 50 years

by Philip Stephens@www.ft.com

Familiarity is a distorting prism. All too easily the extraordinary becomes the unremarkable, the aberrant the commonplace. This is what has happened in Britain following the referendum  decision to leave the EU. The attempt to wrench the nation out of its own continent has triggered a national nervous breakdown. Only the British cannot see it.

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Open plotting against an enfeebled Prime Minister, civil war in the cabinet, a ruling Conservative party riven by faction, a Labour opposition led by a life-long admirer of Fidel Castro, parliament imprisoned by the referendum result, paralysis at the heart of government — all have become the stuff of everyday politics. Britain was once a sturdy, stable democracy. Anger and acrimony are the new normal, as likely to elicit a weary shrug as incredulity.

Historians will scratch their heads in wonder. These are truly extraordinary times. Britain is upending the economic and foreign policies that have set its national course for half a century. Nothing in modern peacetime matches the upheaval. The impact on the nation’s prosperity, security and role in international affairs will be felt for a generation and beyond. Unwrapping decades of integration is a task of huge complexity.

And yet Theresa May, the Prime Minister, dare not set out her preferred course for a post-Brexit settlement lest she be toppled by her own Tory MPs. Instead she pleads with Germany’s Angela Merkel to tell her what Berlin might offer in terms of a future relationship. The humiliation is excruciating.

With each step back from the melee, the picture becomes all the more incredible. Most MPs in the House of Commons consider Brexit an act of folly. They will vote against their judgment because the referendum, with its narrow majority for leave, has been invested with an absurd, almost mystical status. Let no one dare question “the will of the people”. With the odd, honourable exception, Tory and Labour pro-Europeans seem inclined to let Britain sink rather than make common cause across party lines. A nation that calls itself the mother of parliaments has somehow mislaid the meaning of representative democracy.

Brexit is an act of protectionism promulgated by English nationalists who inexplicably style themselves free-marketeers. Every study produced in Whitehall suggests departure from the single market will leave Britain poorer and less able to promote its interests overseas. Throwing up barriers across the Channel will weaken its voice across the Atlantic.

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Michael Gove
“Baffled historians will search in vain to find a single official in the high echelons of Whitehall — from the cabinet stary down — who thinks Brexit is anything less than a catastrophe…[T]he vision amounted to no more than rhetorical flatulence on the part of Boris Johnson…The foreign secretary has no project or purpose in mind. He wants to be prime minister because, well, he wants to be prime minister. Parallels with US president Donald Trump are not far-fetched”.–Philip Stephens

 

Only this week Mrs May sought unsuccessfully to suppress an official analysis showing the alternatives to EU membership will reduce growth and cut living standards. Tory Brexiters are unmoved. The cabinet Brexiter Michael Gove sets the intellectual tone when he pours scorn on the insights of experts.

Baffled historians But what of “global Britain”, the bold Elizabethan future imagined by the Brexiters? Alas, the historians will discover, the vision amounted to no more than rhetorical flatulence on the part of Boris Johnson, the foreign secretary…Mr Johnson, whose calculated mendacity is matched only by inflated self-regard, is determined Mrs May should be ousted.

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Boris Johnson–What he wouldn’t to be British Prime Minister

Where all this leads, it is impossible to say. Mr Johnson, whose calculated mendacity is matched only by inflated self-regard, is determined Mrs May should be ousted. Personal ambition burns more brightly here than any convictions. The foreign secretary has no project or purpose in mind. He wants to be prime minister because, well, he wants to be prime minister. Parallels with US president Donald Trump are not far-fetched.

Mrs May could survive. But to what end? Without the confidence of her cabinet and deprived of a majority in the House of Commons by an ill-judged general election, Mrs May has neither the wit nor the authority to reach a sensible agreement with the EU27. Most MPs would back a “soft” Brexit, leaving Britain’s economy closely connected to Europe. Mrs May feels threatened by the English nationalists. Her strategy, if you could call it that, is to leave all the serious decisions until after Britain’s departure from the EU in March 2019.

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Labour’s Jeremy Corbyn

Jeremy Corbyn is a 1970s hardline socialist who sees the EU as a capitalist conspiracy. Mr Corbyn may launch opportunistic strikes against the government but shows no enthusiasm for a close relationship with the EU27.

In other circumstances Her Majesty’s loyal opposition might offer a counterpoint of stability. Instead Labour is led by Jeremy Corbyn, a 1970s hardline socialist who sees the EU as a capitalist conspiracy. Mr Corbyn may launch opportunistic strikes against the government but shows no enthusiasm for a close relationship with the EU27.

As for the voters, some may have changed their minds. Polls suggest the 52:48 per cent tally in favour of Leave would be reversed in a second referendum. Maybe. But these numbers are well within the margin for error. Why anyway should people take a different view before they have seen the deal on offer from Britain’s erstwhile partners and, pace Mr Gove, have weighed the evidence as to the likely effect on living standards?

If there is a slim hope that Britain can emerge wounded rather than broken, it lies in the possibility that things will get still worse in the short term. Mendacity, chaos and division could end in complete paralysis — with parliament failing to agree on any form of Brexit. If Britain does remain part of the EU after all this, it will be because, in its present state, it is simply incapable of leaving.

philip.stephens@ft.com