Value Competition

A Disappointing Russell Shorto Article, and a Suggestion for a More Interesting One

Based in particular on a very nice article he did in the NYT magazine a while back on birth rates in different countries, I have very high expectations for Russell Shorto. Given that, I was disappointed by his recent NYT mag article on Greece. The article, though fair enough on its own terms--I'm sure lots of Greek businesses, such as the construction business doing work for the government that employed the story's central figure, have indeed gone under--struck me as Hamlet without the Prince of Denmark.

My sense is that the 64K question for Greece (and Portugal, Spain, Italy, and France) is whether to change a system in which the dominant group of employees consists of managers and workers in the private sector and government who have a very high degree of job security. A country in which most of the best people are locked into a highly protected, relatively stationary order is perhaps not a country whose prospects are good compared to countries such as the United States.  Here, a highly protected job market, though it prevails for government employment, does not characterize the private sector in the way that it does in southern Europe.

The issue of a dominant sector of employees that protects itself at the expense of others in the country and of social dynamism--as opposed to an apparently related but quite different issue as to whether Greeks are simply more laid back than Germans--did not surface in Shorto's piece. He would be extremely well qualified to write a piece that treats that issue, regardless of his underlying position on the normative issue of junking the high job security system for the private and public elites of southern Europe.

Just as Shorto's birth rates article wound up using the Nordic countries, with their combination of a big welfare state and high birth rates, as a nice qualifier to a US-centered "don't run too big a government if you want people to have kids" line, he might write a piece on the job security issue that uses the same Nordic countries as a possible counter to a line that a security system for the managerial and employee elite is a serious drain on dynamism. My sense is that higher level private sector employees are not protected in Sweden, Denmark, etc. in the way they are in Greece, Italy, etc., but I'm not sure at all about that--am writing now away from a connection.*  But even after satisfying my curiosity on that point with a net search, I'd be highly interested in reading a future Shorto comparative analysis of the job security and social dynamism issue.  A nice starting point for that article would be an NYT piece the other day comparing the bustling scene in a border town on the more flexible German side of the Rhine with the ossified, high unemployment scene in the counterpart town on the French side.



*Wified-in while waiting to testify on tenure reform in Trenton--checking on job security in the private sector in Scandinavia...looks as though Sweden has a less flexible approach and Denmark has a more flexible one...this is a tricky issue to research because the reality of whether there is an inflexible labor system of high job security lies in the details of whether poor employees can successfully avoid discharge through a hearing process...the NJEA (teacher's union) rep here in Trenton is now advocating for poison pill "due process" changes to the tenure bill that would if applied in a certain way kill the efficacy of reform and keep the current NJ system in which it is virtually impossible to get rid of teachers no matter how incompetent.  (My sense is that the current system also operates in that way for govt employees in in general in NJ and elsewhere in the US.  Teachers are a current flashpoint, but the bigger issue is that an important part of the US, the govt sector, operates in the same way that a broader part of Greece, Italy, etc., does.)

The (Im)possibility Theorem and the Future of Political and Religious Ideologies

If one believes that Arrow's (Im)possibility Theorem is important--and I do--well-functioning democratic politics will wind up having one basic dimension along which parties, pols, and the people array themselves.  If one further believes that the modern competition between a center-left that trends solidaristic-populist on economics and individualist-elitist on culture and a center-right that trends solidaristic-populist on culture and individualist-elitist on economics is effective in countering both the tyranny of the majority and of the elite minority-- and I do--the future of politics--or so one may hope-- is more of the same, with the center-left versus center-right politics of the affluent democracies eventually extending to all nations and to some form of world democracy with global elections between center-left and center-right parties as well as national and local elections.

A likely and/or desirable future for religious ideologies strikes me as a trickier matter.  Four possibilities:

1) In the end, religion and politics will always be fused, Madison's hopes to the contrary notwithstanding.  Accordingly, the future of politics will also be the future of religion.  Protestantism in the US is a leading indicator of the way the world will go: fragmentation, but with the customized religious sects arrayed on the same left-right dimension that defines politics;

2) Madison will win, and religion and politics will decouple, with religions flourishing along multiple dimensions in addition to left and right.  In particular, there will be libertarian-elitist religious sects even in the absence of significant libertarian parties, and solidaristic-populist religious sects even in the absence of significant populist parties; 

3)  Religion will continue as a key element of clashing civilizations, as in Huntington's vision, and existing religions and new religious sects will increasingly become ethno-national.  Hopes for the extension of democracy to all nations and for world democracy will be decisively defeated by assertive ethno-nationalist religion;

4)  A new version of religion will arise that is based on rejecting both left religion and right religion in favor of a different, non-political ideal of the sacred in human life.

The political side of me likes alternative 1 while the religious side of me likes alternative 4.  The political side of me worries about alternative 2 undermining democratic stability, and both my political and religious sides find alternative 3 a highly unappealing though entirely possible future.

 

 

The norm of non-use

Re-reading Schelling's Micromotives and Macrobehavior...the last chapter is a version of his Nobel acceptance speech on how a norm of non-use of nuclear weapons has developed over the lastr sixty years.

The norm Schelling refers to can be operationalized: We can call it shame that reduces the payoffs of a player who uses nuclear weapons when the other does not by the amount that the other loses from one's decision to use nuclear weapons.  Below are two matrices: The one on the left assumes egoism, while the one on the right assumes shame applies.

                       USE-NO USE--EGO                         USE-NO USE--SHAME

              Use                    No Use                    Use                        No Use      

Use       -10, -10                 1, -15                 -10, -10                   -14, -15 

 

No Use   -15, 1                       0, 0                -15, -14                       0, 0

The game with egoistic players is a prisoner's dilemma, with using nuclear weapons as the dominant strategy and the only equilibrium.  The game with shame is a stag hunt, with no dominant strategy; in that game both use, use and no-use, no-use as well as a mixed strategy are equilibria. 

Christopher Hitchens

I just finished reading Hitch 22, Christopher Hitchens' political memoir.  Hitchens seems to be a person whose moral emotions are not checked as much as most people's are by the cooler sides of human character.  The intensity of his loyalty to his great and good friends, of his belief in the authority of reason over religion, of his judgments of unfairness, of his sense of disgust, of his invocations of human suffering--all betoken a person in whom the inhibitions that tamp down moral feeling in many of us have been reduced.   

Obama's Peace Prize

The following op-ed uses Obama's recent Nobel Prize to combine value competition ideas about good things arising from the competition of self-interested pols with classical/neoclassical economic ideas about good things arising from the competition of self-interested businesspeople:

Robbed by Oslo:

 

Obama and Other Peacemakers Whose Successes Were Overlooked

 

Wayne Eastman

Rutgers Business School—Newark and New Brunswick

1 Washington Park

Newark, NJ 07102

weastman@business.rutgers.edu

(973) 353-1001

 

    With its airy recognition of Barack Obama for potential rather than accomplishment--"for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples"--the Norwegian Nobel Committee did the President and the cause of peacemaking a disservice, but not for the reason that most critics of the award have suggested.

    In fact, Obama would have been a reasonable if controversial choice for a peace prize based on accomplishment, given his substantial contributions as an opposition politician and then as President to the winding down of the war in Iraq.

As an anti-war Democratic candidate in 2007, Obama took the position that the U.S. needed to withdraw large numbers of troops from Iraq relatively quickly.  At the time, that position was highly controversial though popular among many Democratic primary voters, and was opposed by Hillary Clinton, John McCain and other Republican candidates, and the Bush administration.   Two years later, Obama’s position has become conventional wisdom, and has gone along with a major reduction in violence and considerable political progress in Iraq. 

    It is true that the situation in Iraq was and is highly complex, and that figures in addition to Obama--David Petraeus with his military ingenuity and Nouri al-Maliki with his outreach beyond his political base are just two who come to mind—can also be credited with major roles in the reduction in bloodshed and increase in order.  Still, a Nobel award that recognized Obama “for his central role as a democratic opposition politician and then as President in fostering a resolution to a long-running war in Iraq” would have been sound in a way that the actual award citation was not.

Although the oddity of Obama’s being recognized by the Nobel Committee for the wrong reason makes his situation unusual, he stands in a long line of figures in politics and in business over the decades who have made major contributions to peace but have been unrecognized by Oslo, with its chronic bias toward noble gestures and diplomatic agreements.

Unless they engage in dramatic diplomatic deals, hardheaded democratic politicians like Obama who care about winning elections and who often wage war as well as peace are poorly represented in the roster of Nobel Peace Prize winners.  For example, Boris Yeltsin, whose decision to end Russian control over Ukraine and the other parts of the Soviet empire was intertwined with his own electoral calculations as President of Russia and who later went to war in Chechnya, did not win a Nobel.

Given the Nobel Committee’s tilt against practical politicians, Yeltsin’s failure to win is not surprising.  But considering that it was Yeltsin—not Mikhail Gorbachev, who wanted to preserve the Soviet Union—who ended the coercive Russian empire, the Nobel Committee wound up snubbing one of the century’s major contributors to peace. 

Another politician who didn’t fit the Nobel Committee’s preferences for idealism and diplomacy but who made a major peacemaking contribution was Charles de Gaulle.  Given his deep identification with the French military, French nationalism, and French party politics, along with his often undiplomatic diplomacy, de Gaulle did not fit the Nobel Committee’s criteria well at all.  But as the man who led his nation out of a brutal, futile, and very difficult to end war in Algeria in the early 1960s, he would have been a deserving winner.   

Hardheaded businesspeople who worry about profits are even more poorly represented among Nobel Peace Prize winners than hardheaded democratic politicians who worry about elections.  But business leaders who have knit the world together economically have likely done far more for international peace in the past several decades than many actual Nobel winners have. 

For example, Sony founder Akio Morita and long-time Toyota leader Eiji Toyoda would have been worthy Peace Prize recipients, given their roles in transforming a nation that had been convulsed by violent nationalism into a model of how to succeed through economic rather than military strength.  Neither Toyoda’s contributions to a just-in-time inventory system that has encouraged businesses to integrate their operations with those of other businesses around the world nor Morita’s contributions to innovations in electronics that in turn have contributed to a global popular culture fit into the familiar Nobel categories of idealism and diplomacy.   But if the right test is how much a life’s work has moved a nation and the world away from the ways of war to ways of peace, both men would have been good choices.

Given that consequences are tricky to evaluate and that hardheaded democratic politicians and businesspeople have multiple motives and are not saints, recognizing them for contributions to peace will always be controversial.   If Sam Walton had won a Nobel Peace Prize for his central role in knitting together the Chinese and American economies and in doing so enhancing the prospects for world peace, the award would have been simultaneously reasonable and open to reasonable criticism from the many critics of Walton and Wal-Mart.

   Likewise, it would undoubtedly have been controversial if Obama had been recognized in 2009 for his contributions over the last two years to reduced violence in Iraq, given the complexity of the situation there and the close connection between Obama’s actions and his political ambitions.  But such recognition would have been much more sensible than what the Nobel Committee actually did.

There have been all too many Nobels awarded over the years for high-minded but less than effective idealism and ultimately futile diplomatic deals.   Progress toward world peace has depended and will depend in large part on hardheaded, calculating actions by imperfect, unsaintly leaders like Boris Yeltsin, Charles de Gaulle, Akio Morita, Eiji Toyoda, and Sam Walton.  Perhaps in his acceptance speech in Oslo, Barack Obama can employ his formidable gift for explaining to tell us how he is proud to be one of those leaders, rather than the plaster saint that the Nobel Committee takes him for.

Popular Cosmopolitanism and Business Nationalism in Indonesia

Sukarno, Indonesia's post-colonial leader from 1945 to 1966, was, along with Nehru in India and Nasser in Egypt, one of the pillars of the non-aligned movement, and shared with his counterparts a modernizing, internationalist, secular ethos on culture and a belief in state-led, populist approaches on economics.   By contrast, Suharto, the dominant figure in Indonesia from 1965 to 1998, led a regime that was pro-business on economics and, by comparison with Sukarno, nationalist and traditionalist in its cultural orientation. 

Business Cosmopolitanism

Business cosmopolitanism involves choices by a nation-building elite to ally with business on economics and with modernizing, internationalist forces on culture.  In recent times, it could be termed the Westernizing option for nation-building, in which the newly formed political regime embraces Western capitalism and Western cultural freedom, and makes peace with if not embraces the military dominance of the United States and its Western allies.  Among the large middle-income and lower-income nations with political competition, very few have featured nation-building elites that have made across-the-board Westernizing choices.  The only clear example is Russia in the late 1980s and 1990s, with Boris Yeltsin as the pivotal Westernizing leader who privatized huge swathes of Russian industry, freed the press, and backed off from military confrontation with the West. 

Lipset and Rokkan Updated: Culture

Per Lipset and Rokkan, the basic choices for European nation-building elites on culture involved allying with secular forces (as in France or Italy), with Catholicism (as in Austria or Belgium), with a national Protestant church (as in Britain or Scandinavia), or with both a national Protestant church and Catholicism (as in Germany and the Netherlands, with their large Catholic minorities).  As in the economic sphere, these choices, along with the parallel, reactive choices of peripheral groups resisting the dominance of the nation builders, became the basis of long-lasting European party systems. 

Compared to the Lipset-Rokkan economic framework, which can be best updated by adding a category, their cultural framework needs to be pared down in order to fit the nation-building experience of populous lower income and middle-income countries around the world that have substantial elecoral competition.   Instead of four choices keyed to the nuances of 19th century European Christianity, it makes more sense to view the basic cultural choice facing recent nation-builders in Asia and Eastern Europe as a basically dichotomous one.  Contemporary nation-builders can ally themselves with secular and/or cosmopolitan and/or Westernizing cultural forces, or alternatively with religious and/or nationalist and/or traditionalist forces.  India in the 1940s, South Africa in the 1990s, and the Gorbachev-Yeltsin Russia of glasnost and rapid cultural liberalization in the late 1980s and 1990s exemplify the secular/cosmopolitan/Westernizing option being taken by nation-building elites.   On the other side of the ledger, Khomeini's Iran from 1979 on and Suharto's Indonesia from the 1960s to the 1990s exemplify nation-building elites that by comparison with their comparatively cosmopolitan discarded predecessors (the Shah, Sukarno) took a more nationalist/traditionalist/religious line on culture.  Park-Hwan South Korea in the 1970s and 1980s is a trickier case given its strong alliance with the US and the ambiguities of Korean nationalism, but is also reasonably classified as illustrating the nationalist-traditionalist-religious cultural choice by a nation-building elite.

Lipset and Rokkan Updated: Economics

In the economic sphere, Lipset and Rokkan contended that nation-building elites in 19th century Europe were faced with a choice between allying with urban business elites or with rural landowning elites, and that these choices exercised long term influence over national political systems.   More recently, those two choices have remained options for nation-building elites, but the rise of the universal franchise has gone along with another economic choice becoming available: a popular alliance between the nation-building elite and the less affluent majority of the population.  Among large middle-income or lower-income nations with competitive electoral politics, the best examples of that alliance involve the Congress Party in India, the Khomeini-led Islamic Revolution in Iran, and the African National Congress in South Africa.   In these three cases, the new nation-building elites in comparison to their predecessors (the British, the Shah, South African whites) took a populist, egalitarian approach to economics.  The connection between the nation-builders and egalitarian doctrine on economics was especially clear in India, where the Congress Party of Nehru identified itself with socialism, land reform, and state planning.  In Khomeini's Iran and Mandela's South Africa, nation-building took place later in the twentieth century, at a time in which nationalization and central planning had lost much of the appeal it had had during Indian nation-building.  At least partly for that reason, the Khomeinist revolutionaries and the ANC did not espouse a clear left of center economic agenda, but both groups of nation-builders relied in part on a populist appeal that they, unlike their predecessors, would stand up for the majority of the nation's people rather than a small, economically privileged elite.

War, Guns, and Votes

Paul Collier's latest book on the travails of the "bottom billion" of the world's population in Africa, Central Asia, and pockets of poverty elsewhere does an excellent job translating high-tech economic studies replete with instrumental variables into lively prose and an imaginative argument for internationally-sponsored coup protection for bottom billion leaders who run fair elections.   The arguments of the book focus pretty much exclusively on incentives for the political elite; my sense, though, was that Collier's limited focus does not reflect a belief on his part that cultural, values-oriented factors are irrelevant or minor to the huge project of improving the lot of the bottom billion.

A value competition take: Making economic development and political democracy work is in large part a long-term cultural project of developing certain character types that blend self-interested and altruistic values.  On the economic side, two types are especially important.  Society needs a class of Weberian businessmen who are not necessarily Calvinists but who are influenced if not always governed by altruistic moral rules such as following the law and keeping promises even when it is to one's disadvantage to do so, who believe in markets rather than government favors, and are willing to work irrationally hard on behalf of their personal gain--and it is even better if society also has a fair part of its work force that adopts similar values, not just its business leaders.  Society also needs a class of civil servants-regulators-lawyers-accountants-professionals who have an egoistic, self-interested belief in their useful role in correcting for market failures, who work irrationally hard in doing their jobs, and who also have an altruistic belief in markets and stepping aside and not controlling the private sector.