TPM Cafe: Opinion

In a Supreme Court term already bursting with election cases, from two partisan gerrymandering disputes to a fight about the permissibility of Ohio’s voter purges to a lawsuit challenging bans on political clothing in Minnesota polling places, it’s easy to overlook yet another significant voting appeal the Court will hear later this month. In Abbott v. Perez, the Court will examine whether the state of Texas violated the Voting Rights Act and the United States Constitution when it drew congressional and state legislative district lines in ways that hurt Latino and African-American voters. The protracted and difficult litigation involves redistricting plans from way back in 2011 and shows how much was lost when the Supreme Court killed another key provision of the Voting Rights Act in its 2013 Shelby County v. Holder case.

Abbott v. Perez could well preview what’s likely to come in the next few years. All three branches of government have pulled back on protecting voting rights, and the effects of that move are becoming clear. We may soon fulfill the late Justice Antonin Scalia’s vision of an emasculated Voting Rights Act and much weaker protections for minority voters by the federal courts.

In the pre-Shelby days, the Voting Rights Act offered two main tools to protect minority Voting Rights. Under Section 5, states which had a history of racial discrimination in voting had to get “preclearance” (or pre-approval) from the U.S. Department of Justice or a federal court in Washington, D.C. before making any changes in voting rules and procedures. States had to show the DOJ or the court that any changes would not worsen the condition of minority voters. Under Section 2, the U.S. government or private plaintiffs could bring suit anywhere in the U.S. arguing that a redistricting plan (or other voting rule, like a state voter id law) deprived minority voters of the same opportunity as white voters to participate in the political process and to elect representatives of their choice. Section 2 litigation can be successful, but the burden is on the plaintiff to prove a violation, the standard is tough to meet, the cases are expensive to bring, and they usually take a long time to litigate.

The Roberts Court’s record on reading and enforcing the Voting Rights Act has been a disappointing one, which is no surprise given that Chief Justice John Roberts himself was an opponent of a strong Voting Rights Act when he worked in the Reagan Administration to weaken minority voter protections in Section 2. The worst thing the Roberts Court has done came in the 2013 Shelby County case, where the Court created a new constitutional theory that states are entitled to “equal sovereignty” and held that Congress violated it by subjecting only some states to Section 5 preclearance based upon old racial discrimination data.

Even before Roberts became chief justice, the Court already had a relatively weak record enforcing Section 2. It has held that the Act cannot be used to challenge the power of minority-preferred representatives within legislative bodies, cannot be used to challenge the number of members of a legislative body so as to assure some minority representation, and it does not give minority voters the right to require the state to draw “influence” districts when the group of minority voters is not large and compact enough to make up a majority in a district. And that’s all aside from non-Voting Rights Act cases cutting back on voting rights such as a 2008 case rejecting challenges to the constitutionality of discriminatory voter identification laws.

The Texas case that the Court will hear this term shows just how hard it is to protect minority voting rights. Texas’ 2011 redistricting plans originally could not be put in place because a federal court had not precleared it under Section 5. A separate lawsuit sought to block parts of the plans under Section 2, and the same federal court issued an interim remedy, which led to Texas passing a similar discriminatory plan in 2013 claiming the re-enactment solved Voting Rights Act problems. The Section 5 lawsuit went away when the Supreme Court decided Shelby County, but the Section 2 lawsuit has dragged on, and the three judges hearing that case issued hundreds of pages of detailed opinions trying to figure out exactly when and how Texas violated the Act.

It has been 7 years, and the cases are only now getting to the Supreme Court, with the potential for a final remedy to be in place for just a single election before the 2020 round of redistricting arrives, and, with it, could well start this all over again.

Since the case started, it is hard to find friends for the Voting Rights Act in any of the three branches of government. The Department of Justice, which came in on the side of minority voters in the Texas litigation, has switched sides now that the Trump Administration has taken over. That means U.S. Solicitor General Noel Francisco will be arguing in favor of Texas’s position in the case at the Supreme Court.

Congress, meanwhile, has not acted to fix the formula for deciding which states need to get Section 5 preclearance, even though the Court in Shelby County invited Congress to try.

And the Supreme Court is poised to make things worse. With rumors circulating that perennial swing Justice Anthony Kennedy could retire as soon as this term, the Court is likely to lurch to the right. As I argue in my new book, The Justice of Contradictions: Antonin Scalia and the Politics of Disruption, the late conservative Justice Antonin Scalia took an even narrower view of Voting Rights than the Court as a whole, and now, after his death, Justice Scalia’s influence is only growing. If President Trump gets another appointment to the Supreme Court to replace Justice Kennedy, expect the next Justice (like new Justice Neil Gorsuch) to emulate Justice Scalia’s approach and weaken voting rights even further.

Justice Scalia openly expressed disdain for the Act, expressing the view at the Shelby County oral argument that Congress renewed the Act in 2006 by overwhelming majorities because of “a phenomenon that is called perpetuation of racial entitlement.” He believed that Section 2 could well be an unconstitutional racial preference, and argued that, regardless, Section 2 should be read not to apply to redistricting matters at all.

The bottom line is that the Court’s mixed record on enforcing the Voting Rights Act could soon get worse if Trump gets another Court appointment. Minority voters, already at a disadvantage in many parts of the country because of enduring racism and the unwillingness of white voters to support minority candidates for office, could soon have tougher political battles ahead. And the scariest part is that, thanks in part to Justice Scalia’s influence, the courts may soon no longer be there as a backstop.

Richard L. Hasen is a professor of law and political science at UC Irvine. He blogs at Election Law Blog. His newest book, The Justice of Contradictions: Antonin Scalia and the Politics of Disruption, was published in 2018 by Yale University Press.

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Probably no issue was as important as immigration in mobilizing support for Donald Trump, particularly among voters in the South and Midwest. Trump’s own appeal was on strictly nativist terms.  According to Trump, Mexico was sending rapists and other criminals across the border, and illegal immigrants were flocking surreptitiously to the polls.  But Democrats and liberals would be wise not to dismiss as nativism the concern that many voters have with the huge influx of illegal immigrants and of unskilled legal immigrants into the the country over the last 50 years. There is a real question about whether our immigration policy has has contributed to wage stagnation and inequality.  Democrats’ failure to address this question – except to insist that everyone benefits – has contributed to the party’s isolation from voters who used to be part of their majority.

George Borjas, a professor at Harvard’s Kennedy School, is one of the country’s leading experts on the economics of immigration, and he is someone who has addressed this  question forthrightly.  He was born in Havana, Cuba in 1950 and emigrated to the United States with his mother in October 1962, on the eve of the Cuban missile crisis.  He got his undergraduate degree from Saint Peter’s College in New Jersey and his doctorate from Columbia.  He has sometimes been described as a “conservative,” because he has long insisted that large-scale immigration of low-skilled workers is not an unmitigated blessing, but his views on the subject are very close to those that were held until recently by the labor movement leaders and politicians sympathetic to the labor movement.  His views, in my opinion, are an important corrective to the current liberal and Democratic view of immigration.  His most recent book, which is well worth reading, is called We Wanted Workers: Unraveling the Immigration Narrative. I wanted to ask him what he thought of the current debate in Washington about immigration reform and illegal immigration.

Judis:  Let’s talk about the Cotton-Perdue Reforming American Immigration for a Strong Economic (RAISE) Act for that has recently been introduced and that President Trump has endorsed.  It has four main features.  It gives priority to skilled over unskilled immigrants.  It reduces annual immigration from one million to about 500,000.  It limits who is eligible for immigration through family reunification. And it caps the annual number of refugees to 50,000.  Why don’t you take the provisions one by one beginning with the priority given to skilled immigrants.

Borjas: From an economic perspective, let’s talk about who gains and loses.  Think of the native population. By that I mean, people who are here already. We are considering this law, the Cotton-Perdue Act, and we want to find out which kind of immigrants would be most beneficial for this pre-existing group. I think once you phrase it that way, from an economic perspective, it’s hard not to argue that the new people who would be best for people already here would be skilled migrants.   And that’s for two reasons.  One is that skilled immigrants would complement what we already have, particularly the capital stock. There is a lot of discussion of capital skill complementarity – for example, it is more valuable to match skilled workers with the demands of an information economy —  and that complementarity is pretty important. But perhaps more important than that, new immigrants bring in new skills and new knowledge that we lack. And that knowledge can make us more productive.

From an economic perspective, then, it’s hard to argue that high skilled immigration would not be more beneficial.  In fact, every major immigrant-receiving country is in the market for high skilled immigrants.  The more important question is whether to use an economic perspective in enacting any type of immigration reform.  There is a more fundamental question of values, of who we are, and the answer to that is far from clear.  There is something to be said for our own history. That is, we gave a chance to many, many disadvantaged people to come to America throughout much of our history. That’s a sensible humanitarian argument, and it is far hard to argue against it.  

Since 1965, we have admitted a lot of low-skilled immigrants, and one way to view that policy is that we were running basically the largest anti-poverty program in the world.  That is actually not a bad thing at all. Except someone is going to have to pay the cost for that.

This is the question that most progressives don’t want to face up to.  They really want to believe that immigrants are manna from heaven.  That everybody is really better off and that everybody is happy forever after. What they refuse to confront is the reality that nothing in the world is like manna from heaven.  In any policy change, some people benefit a lot and some people don’t. And this point also applies to immigration, which has created the dynamics of where we are now.

The costs of immigration

Judis: Who does benefit and who doesn’t benefit?

Borjas: The way I’d phrase it is that the people who benefit are the people who use immigrants, and the people who don’t are those who compete with immigrants.  People who tend to benefit are the employers who hire them. They make higher profits.  The people who compete with the new immigrants are both the older immigrants and natives who are low-skilled. It’s a simple supply-demand argument. The question then becomes:  How do we compare the value of having run this huge anti-poverty program with the losses being suffered by the native workers and the inequality being created by that type of immigration?  

Judis: What kind of losses are suffered?  Lower wages, unemployment, higher taxes? And how is inequality affected?

Borjas: The largest loss is probably the wage drop suffered by the workers who now face more competition in the labor market. My rule of thumb is that if immigration increases the number of workers by 10 percent, the wage of workers probably drops by about 3 percent. It is not a huge drop, but it is certainly not zero. And we should all find it particularly worrisome when this wage drop is imposed on workers who can least afford it. And this obviously tends to aggravate the forces that lead to greater inequality in our economy. The other big loss that we need to think about in terms of low-skill immigration is the increased cost of government services that we provide to them. According to the latest National Academy report, this number could easily exceed over $50 billion a year.

Judis:  Some people have argued that immigrants are filling jobs that Americans won’t take, so there really aren’t any losses suffered by native workers.

Borjas: You hear that argument all the time. This summer, the newspapers were reporting that in Cape Cod, because of a shortage of immigrants, employers had to go out and offer higher wages. This real-world response is worth thinking about. The argument isn’t that natives won’t take jobs that immigrants will.  The argument is really that there are jobs that natives won’t take at the going wage. That’s a very different argument. In the absence of immigrants, employers will respond. And the usual response is to make a more attractive job offer. If you and I go to Cape Cod and demand a hamburger, believe me, somebody will provide it.

Judis:  When the Cotton-Perdue bill was introduced, some commentators argued that it was a betrayal of America’s older commitment to immigration that was based on values not economics.  But couldn’t you argue that America’s immigration policy in the 19th century was based on labor needs?  At that point there was a huge need for unskilled labor for the new factories that were going up as part of the industrial revolution.

Borjas: Those immigrants created the manufacturing sector. Something like three-fourths of the employment at Ford in 1914 was foreign-born. Think about what that means.  There was an incredible need for that kind of labor.  And luckily for those immigrants the manufacturing sector became unionized soon after. That means that immigrants ended up in a sector that was growing for decades and was paying high wages and offering job security, and they had jobs that could be passed down to their children and grandchildren. That was how they became part of the middle class.   The question is whether you expect the jobs that immigrants are holding now to have the same trajectory. I don’t have a crystal ball. But it doesn’t look good.

Judis: And it doesn’t look good because unskilled immigrants are coming into a situation where there isn’t a great demand for low-skilled labor?

Borjas:  Exactly, and no unions to protect them.  And if you go back to the 20th century, we basically put a moratorium on immigration in the 1920s. Then the Great Depression. And those two things combined to reduce immigration to a trickle.  That gave time, a lot of decades, for these things to work through the system.  We don’t have the same situation today. The union sector is not what it used to be, and it is far from clear which kinds of labor market institutions or industries will give today’s low-skilled immigrants the same future opportunities that the manufacturing sector once did.

People always like to project forward from the past to the future. They say that if immigration worked out in the 20th century, it sure will work out in the 21st. But it was a highly different circumstance back then, so we really have no idea if how things evolved then tells us much about how things will evolve now. We need to have more humility about projecting from the past what is going to happen to immigration today.

Amnesty is not the answer

Judis: Let’s go back to Cotton-Perdue.  What about reducing the number of immigrants to 500,000?

Borjas:  The numbers issue, let me be totally blunt about this. There is no single economic study that predicts what the right number of immigrants should be. The political instability created by the high levels of immigration over the last twenty years suggests to me that we’ve gone beyond the line of what is best. That we are on the too much side, rather than on the too few side. 550,000 is the number that the Jordan commission came up with twenty years ago.

Not many people are proposing that we have completely open borders. That means that if you are in a reasonable span of the political spectrum, you are going to favor some kind of limit. So one question becomes how many, and the other question then becomes which type.  Most of the cuts in Perdue Cotton bill come from cuts in the family preference system as it applies to extended families.  You go to the United States, that spouse of yours comes, then the siblings come, and their spouses’ parents, and so on. That kind of branching out is really hard to justify as a rational immigration policy. The way to go from a million to half a million immigrants is by getting rid of all these extended family connections.  

I am not sure what is right.  But do you really want to have policy in place where the entrance of an immigrant provides a path for the entrance of the immigrant’s wife’s sister’s husband’s parents? That’s not clear. I would say we need a much more reasonable way of establishing who can come in and who can’t.  And what I would say is that in so far as no one in the reasonable political spectrum is really advocating open borders, we have to decide on a number, and it is hard to do that by relying on evidence from economic studies.

Judis:  Let’s talk about illegal immigration. You say in your book that the comprehensive bill and the debate over amnesty that it provoked is a sham.  You say that a lot of the people who are here can become legal through family reunification. Is that right?

Borjas: This may not hold if the Cotton-Perdue bill goes into effect, but suppose that you are an illegal immigrant today.  The way the system is set up right now is that if you come into this country illegally, and you marry someone who is a US citizen or who has a green card, and you have children who are US citizens, all these family connections will eventually, although not right away, allow you some kind of entree into the green card line.  

One way of getting rid of the debate about what do about the illegal immigrants who are already here is just to ignore them for awhile. Let nature takes its course. People will get married and have children. Maybe at some point we can accelerate the speed at which these family preferences grant you the right to a green card. That is a much better way to handle this than a wholesale amnesty.  

But when you address the illegal immigration problem you have to make sure you don’t have to face it twenty years from now. You have to look at the underlying conditions. That was the mistake we made in 1986, when the Reagan administration granted the first amnesty. My feeling is that we should do something to reduce the flow right now, and once we are sure of that, let nature take its course as a way of handling the illegal immigrants already here. We don’t really need to do much.

Judis: And what do you think of Trump’s ideas about building a wall as a way to keep out illegal immigrants?

Borjas:  A wall could be a great symbol, but it’s not going to stop illegal immigration completely. Signals matter in this world. But I think only half the illegal immigrants in the United States actually crossed the Mexican border, so that means a lot of people come through Dulles or JFK or LAX and they come in with a legal visa, and they stay. This is a big country, and they get lost. The wall is a signal, but it may not be the answer to the problem, The key question is: do these kind of signals have a huge impact. They may.  I don’t know.

Judis: What is a more effective way to reduce illegal immigration?

Borjas: I think something like E-Verify. (ed. note: E-verify is an internet base system allowing employers to verify whether someone is eligible to work in the United States.)  Perhaps there could be an executive order or legislation mandating that every new worker has to be approved by E-Verify. Something like that would be faster and more effective. And then the government can go out and make examples of a few firms that have broken the law, and if you hit big targets, and make them really pay for breaking the law, that has a cultural impact on everybody.

Judis: What is your opinion of the debate over DACA, Deferred Action for Childhood Arrivals, the program that allows the children of undocumented workers to be eligible to work for a two-year period?

Borjas:  From a humanitarian perspective, it’s very hard to argue against it. They were children when they came to the United States illegally. They may have little attachment to where they came from, because they left there when they were very young. I was like that. I came here as a kid. It’s a very emotional thing. I could never say, “let’s kick them all out.” How could it possibly be right to send them back to what many of them might see as a foreign country? But, on the other hand, we should never have been in this position to begin with.  Ignoring our borders for so long, not enforcing the law, has created all these moral conundrums. It has created a situation where we can’t discuss this rationally anymore.

Judis:  I want to ask you a final question about who is most hurt by low-skilled legal and illegal immigrant.  I have seen studies that the groups that are disproportionately hurt by unskilled immigration are African Americans and first-generation immigrants. These are groups that liberals who oppose any new curbs on immigration claim to champion.  Is that right?  Are these groups hurt?

Borjas:  Yes, basically, if you look at the last thirty years, we have let in a disproportionately large number of low-skilled immigrants.  Many of them are high school dropouts. So the question is who are the native high school dropouts that have to compete with these immigrants. Many of them are African Americans and Hispanics who are immigrants themselves.  Those are the people who are being hurt by current immigration.

The debate over immigration is very similar to the trade debate, We talked about trade for thirty years — that it was a great thing, that everybody was supposed to gain — but we now know that that is untrue. Some people were left behind, and it’s a pretty big political problem. Immigration is the same way, not everybody will gain, and the people who lose out from low-skilled immigration. are the people we are trying to protect in many other ways. So from one perspective low skilled immigration is attenuating the beneficial impact of everything else we do to help these people.

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David Goodhart is one of the best-known commentators on British politics.  In 1995, after a career at the Financial Timeshe founded the journal Prospect, which became a key player in the debate over the future of the British Labour Party.  Goodhart himself became a controversial figure when in 2004, he wrote an essay, “Too Diverse,” which questioned whether Britain’s growing diversity in values and ethnicity could undermine its welfare state, which was based on a sense of a common good.  In 2010, he left Prospect to lead the think tank Demos, and in 2013, published “The British Dream,” a book that questioned whether the growth of immigration was threatening the country’s social democracy.  Some critics deemed Goodhart’s views “right-wing” even though he remained a Labour supporter. Goodhart’s analysis described the profound rift in the the county that resulted in the vote for Brexit in 2016.  Goodhart’s new book, “The Road to Somewhere,” which will be out in the United States next month, is the best analysis I’ve seen of why Brexit won out, and his analysis is also very relevant to understanding Trump’s victory in November 2016. I asked Goodhart about the British election and about the socio-cultural conflicts that he saw among British and, by extension, American voters.

Judis:  The results of the June 8 election in the United Kingdom seemed to surprise everyone. Was it a significant election?  Did it suggest a new direction for British politics?

Goodhart: It was a very odd election, because it happened in the shadow of Brexit, and that kind of mucked about with some of the usual allegiances. We had, once again, a two-party race with a Conservative party that campaigned with quite a left-wing, communitarian, Christian Democratic manifesto. That confused things too. It put off a lot of more traditional Tory voters without winning over as many new, particularly working class voters, as the Tories had hoped.

The full demographic analysis of the election has not happened yet. What we do know is that the newfangled Tories didn’t do particularly poorly.  They perhaps slightly underperformed the polls, but they still got 43 percent of the vote, almost as much as Tony Blair got in his famous landslide in 1997, and it was six or seven points more than David Cameron got in 2015.  It’s the most that the Tory Party got since 1983.  So even though May ran a dreadful campaign in terms of her own person and projection, the Tories did do well.

What surprised everybody was how well Labour did. They were led by an extreme left bunch —  Jeremy Corbyn, [Shadow Labour Chancellor] John McDonnell.  They didn’t have much support from their own moderate MPs [members of parliament]. They were expected to score only 28 or 29 percent in the popular vote. And they massively outperformed that expectation. With about 41 percent of the vote so cutting the difference in the popular vote to less than three percentage points.

Why Labour Exceeded Expectations

Judis: Why did Labour do so much better than expected?

Goodhart: I think it was a one-off confluence of factors that benefitted them. Corbyn, although not a particularly impressive figure, came off well compared to a very inflexible and unattractive Theresa May by playing up to this idea that he was principled.  Not that he was. Despite coming from the far left himself, he was running on a relatively moderate manifesto which he included all kinds of provisions that he doesn’t believe in, like commitment to the Trident nuclear program and freezing the welfare benefits of the poor.

He backed a huge shoring up of what one might call the middle class welfare state. Like Bernie Sanders, he was proposing to abolish student tuition fees. He had a huge presence among younger middle class voters. He was also proposing to pay out of general taxation for elder social care. The Tories had actually gone for a more egalitarian position on elder care in which older people who could afford to do so would have to expose at least some of the part of their property wealth if they were hospitalized for a long term.

Judis:  That part of their manifesto seems to have hurt the Tories.

Goodhart:  It did. It was inserted in their manifesto at the last minute and improperly road tested. And yes, and I think it showed that the party was out of touch with its base.

But they were actually dealing with the generational divide in a pretty radical way. The Tories have been accused the last several elections of stuffing the mouths of older people with gold.  And a lot of public policy had been devised in their direction.  Now the Tories, partly because they were so confident they were going to get a big majority, were being rather brave. They were saying that if you are exposed to long term care needs, and you have a house that is worth, say, more than 500,000 pounds, the state is going to come after that, probably after you are dead.

Such is the sacredness of property in this country, and probably in the U.S. too, that a lot of people who didn’t begin to live in places like that, still felt attacked by the policy.  It was brave but clumsily done, and required a U-turn in the middle of the campaign. Theresa May proved to be emotionally illiterate. She would not admit she had changed her mind when everybody in the country could see she had. It put her in a very odd position. And people began to have serious doubts about her.

So the election that was supposed to be defined by a great many non-traditional Tory voters voting Tory turned in a very different direction. And Corbyn was able to exploit that. He managed to revive the rather decayed old Labour coalition between the progressive middle class and the blue collar workers, which had fallen apart in very many ways.

The Labour Party has become essentially a liberal graduate party. Its new base is college graduates, and much of the noise around the campaign came from the youth vote, but this is not working class youth. It is mainly middle class youth. And indeed Corbyn’s policies were designed to reinforce that attraction, like the abolition of student fees. Not only the abolition of student fees, but the retrospective compensation of people who had already paid fees.

He went very hard after that vote. And if you have been through higher education, there is a sort of unthinking left liberalism that a lot of modern kids are part of. It is true in America as well. What was new was that he was able to politically mobilize this often naïve soft left student world view. In the 2015 election, well below half of that demographic voted.  This time around it was closer to 60 percent. That was what pushed up the Labour vote along with the hard core “remainers” who hated the vote to leave the referendum and thought that Labour would go for a less “hard” Brexit.

Judis: But what about his support among blue collar workers?

Goodhart: He also managed to hold onto enough of the old blue collar base. It had been dwindling and I think will continue to dwindle. This is one of the respects in which this election was a one-off.  Corbyn is a cosmopolitan, left-wing figure, he is not particularly patriotic, he doesn’t appeal to the small “c” conservative working class man or woman. But he was able to hide behind the fact that Labour supported Brexit, and the fact that Labour supported Brexit that also meant that Labour supported upper limits on immigration from the European Union, so he was able to hide behind or disguise his real attitudes.

Judis:  So his support for Brexit this time had a double effect. It got him some of the blue collar vote, but the fact that he was for a “soft Brexit” got him some of the youth and militant remain vote?

Goodhart: Yes, that’s a good point. There was a lack of clarity on what Labour actually stood for on Brexit. There are different factions in the Labour Party as there are in the Conservative Party, but it was a useful confusion because people could project their own views onto him. There was certainly a feeling that even if Labour did support Brexit, they didn’t support as hard a Brexit as the Conservatives, because Theresa May as Prime Minister had already defined it as leaving the single market, leaving the Customs Union.

So voters could assume they’d get a pretty thorough going Brexit from one party.  And the other party was pro-Brexit but in a much more muddled way.  Most of the country has to come to accept Brexit.  Just over half voted for it but about 75 percent of the country has now come to terms with it and are not going to stand in its way.  There is a group of 25 percent or so Remainers who are still very sore about the Brexit experience and would like some opportunity to dilute or reverse it.

It was thought that the Liberal Democrats who were the most favorable toward the European Union would benefit from that vote, but they had a weak leader.  If you were a passionate Remainer, you would have probably voted Lib Dem, but quite a few floating Remainers voted for Corbyn, even knowing that he was pretty extreme, as a way of reducing May’s majority.

Jeremy Corbyn probably represents the view of about five percent of the British people, but a lot of naïve people don’t remember the 1970s and the 1980s and the thing called the Soviet Union. They live in this ahistorical world. Even older people who are not so naïve and realize that Jeremy Corbyn was not to their taste in almost every respect nonetheless planned to vote for him as a protest against Brexit on the assumption that he was not going to be prime minister. The things that pushed him up, gave him twelve points more than were expected, were the very high turnout of the blob youth left, the hard core Remainers, and enough of the blue collar voters coming back to Labour on anti-austerity grounds.

[The pro-leave right-wing populist party] UKIP’s vote collapsed from 14 percent to 3 percent. Most of them went to the Tories, but a few probably went back to Labour.

Judis: Was there any Trump effect in the election the way there has been in some other European elections?

Goodhart: Not much. The one thing slightly to the detriment of the government and the Conservative Party was when he tweeted one of his really silly tweets after the latest London attack right before the election.  He misread or didn’t understand something that Sadiq Kahn, the mayor of London, had said about not “being alarmed.” He had said don’t be alarmed about the presence of armed police forces on the street, but Trump criticized him for saying don’t be alarmed  about Islamic terrorism, which was obviously not what Kahn meant. To the extent Trump did briefly enter the election, it probably helped Corbyn.

Somewheres and Anywheres

Judis: You talk in your new book, “The Road to Somewhere,” about the distinction between “somewheres” and “anywheres.”  You portray it as the dividing line in British politics.  Why don’t you explain the distinction?

Goodhart:  It’s about the value divides in British society and to some extent in all rich democracies.  There is a group I call the “Anywheres” who are about 25 percent of the society. They tend to be highly educated and mobile, and the combination of the two is especially important here in Britain because we have an overwhelmingly residential university system.  We also have a very very dominant capitol city that sucks in so much of the professional class. Anywhere people tend to value the kinds of things that you’d expect from people who live those kind of lives. They value openness and autonomy and fluidity. They generally find social change easy to handle, and they have weak attachments to place and to group.

On the other side of the ledger you have a much larger group, less politically influential, but much larger, about 50 percent of the people, who I call “Somewheres.”  They tend to be much less well educated and to be much rooted and attached to places and to value familiarity and security and the things you would expect to flow form those kind of lifestyles. Anywheres can find social change easy and have weak group attachments whereas Somewheres find social change more difficult and tend to have much stronger group attachments, whether to nation or city or place.

This where I see the divide. It can sound simplistic and binary, but there are many different kinds of Anywhere and Somewhere and there is also a big in-between group, which is about 25 percent of the population. The distinction between Somewheres and Anywheres overlaps with a really useful distinction that was made by the American sociologist Talcott Parsons. He was talking about human identities, and he distinguished between ascribed and achieved identities. All of us on a spectrum between the two. For those with achieved identities, their sense of themselves doesn’t come from who their parents were and where they were born or what group they belong to. They passed exams when they were young, they’ve been to good colleges, they have more or less successful professional careers and their sense of themselves is portable. They can fit in anywhere.

But if you have an ascribed identity – for instance, “I’m British, I’m a white male “ —  if your identity derives from things that can never change, you are likely to be more easily discomfited by change, by change to your group, by change to where you live. I think that’s a very useful way of embellishing my Anywhere/Somewhere distinction.

Immigration as a Key Issue

Judis:  I think the distinction really does illuminate the vote on Brexit, but let’s go back to the recent election for a moment. You are really saying that the election wasn’t that significant, that it didn’t amount to a change in orientation in either party, that May’s vote was quite large, but was a disappointment in terms of expectation.  Corbyn’s vote was based partly on his muddling of his message.  And in terms of coming to terms with your distinction between Anywheres vs. Somewheres, neither party is quite there yet.  It doesn’t seem to have divided the parties.

Goodhart: I think my distinction is still of value.  If May had done as well as predicted, it would have amounted to one important attempt at creating a new political settlement between the two value groups.  Both of these views are legitimate. They are decent worldviews. And yet they are tearing our societies apart.  My analysis is better at explaining what happened in 2016, a freakish year when we had Brexit and we had Trump. And a lot of people may be saying that the Goodhart type analysis with all its emphasis on culture rather than traditional socio-economics may have just reflected the freakishness of 2016.

Judis: Yes, that’s what I am asking you.

Goodhart:  I may have exaggerated the extent to which socio-economic politics had faded. Arguments about the size of the state remain or about inequality remain important.   But they have been challenged by the emergence of a much clearer socio-cultural politics. That’s always been true in the United States, but here socio-cultural politics, with much greater emphasis on security and identity issues, is relatively new.

This new emphasis is in response to the much greater economic and cultural openness of the last twenty or thirty years.  You see it in the global economics and in much more globalized culture, and in the integration required by the European Union. Both the international trade rules of WTO [World Trade Organization] or the EU rules have interfered in domestic politics and indeed have have taken many things out of domestic politics. And that has created a reaction.

One of the most visible aspects has been the immigration story.  From the 1940s to the late ‘80s, a lot of people came here from the Caribbean, from Africa, from South Asia, from India and Pakistan. And there was conflict initially, but we broadly came to the terms with it by the early ’90s. Immigrants in Britain were six or seven percent of population, which was not particularly large. We came to terms with being a multiracial society. And governments had been able to respond to people’s anxiety about immigration.

In the early or mid ’90s net immigration was very low or even negative, more people were leaving than arriving. And then the immigration story changed in 1997 with Tony Blair’s new Labour government.  They accepted much of Margaret Thatcher’s free market reforms, but one of the things that really divided them from the Tories and gave them a sense of progressive pride was that they were very pro-immigration and very pro-minority.

They came in and immediately immigration numbers went up pretty sharply, and they went up again very sharply again in 2004 when the former communist countries joined the European Union. EU countries were allowed a seven-year moratorium, but we gave workers form those countries immediate access to our labor market. It was predicted that 15,000 people from Eastern and Central Europe would arrive in Britain a year, but in fact about a million and a half people turned up over a three or four year period.

There was a lot of discomfort about that.  The economy was booming at the time. It didn’t have huge economic consequences, but people were just not ready for it, and it was particularly unpopular in working class communities. This was real in-your-face globalization. It was not just about your factory closing and going to China, but a whole population coming in and competing with you, probably holding down wages in the lower end of the labor market, competing with you for social housing and public services and so on.

Now I think most people in Britain are not xenophobic, and they were not hostile to individual Poles or Slovakians, or Latvians, but they did not accept the kind of freedom of movement that means you cannot discriminate in favor of your own national citizens, everyone from the EU has to be treated exactly the same, and that moves beyond normal nationhood.  Other forms of freedom of movement — of capital, goods and services — are all compatible with normal nation states. Being unable to control the movement of people is not compatible with the normal nation state, and people could see that.  

They remembered that only 25 years earlier we had a sovereign parliament that was able to control the numbers coming in and now we had a sovereign parliament that had no power to control it.  That is probably the single most important reason why we voted last year to leave the European Union.  It brought home to people that this was not a sovereign country in a normal sense, it was not normal cooperation between sovereign nation states the way NATO is.  This had really moved beyond that.  It was really an attempt to create a post-national confederation of states, and that is not popular.

The Future of Politics

Judis:  In your book, you attribute the decline of Labour and other social democratic parties to their rejection of nationalism.  Has Labour begun to reconcile itself with British nationalism by its support for Brexit?  Do you expect these parties to continue to decline and that it will be driven by this socio-cultural divide between Somewheres and Anywheres?

Goodhart:  I think this socio-cultural story still matters enormously and that it is changing the electoral map. I think we are in process of doing what you have done in terms of class and political party.  In your country, the traditional party of property and the middle class, the Republican Party, is becoming the working class party and the Democrats are becoming the party of the progressive middle class and the minorities.  This election [in Britain] seems to be a pause on the way to that outcome too. I still think that is the way we are headed, towards a redrawing of the class map, or rather class getting overlaid by these socio-cultural considerations in such a way that working class voters end up voting center-right rather than center-left.  But you’re right about this election.

The old coalition of the progressive public sector middle class and blue collar workers has been very badly frayed by these socio-cultural changes. Going back in twenty years, one could talk about the Hampstead intellectual [an area of London known for its artists and intellectuals], or the Labour-supporting university professor or doctor.  They would have had different concerns from the blue-collar trade unionist but they would still have had interests in common.

Now I don’t think they have interests in common. Their interests conflict on so many of these issues like immigration and freedom of movement. The Hampstead lawyer or Hampstead lawyer’s children would regard freedom of movement as a great boon. They can go and work without any bureaucratic hassle, they can work in Berlin or Paris without any difficulty.  If you are a blue collar worker working in the food production sector it is very different. The sector employs 400,000 people and 120,000 of those people come from Eastern and Central Europe, just since 2004, and they are competing for jobs and public services and social housing and making your life more uncomfortable. So you approach the whole issue of immigration and mobility in a very different way.

I think the traditional Labour coalition has blown apart, but on a one-off basis Jeremy Corbyn has managed to stitch it back together sufficiently to give him the uplift of ten percent in the vote. By going helter skelter for the educated or semi-educated youth vote and playing on the soft left ideology that so many kids come out of the university with, combined with this bribe to abolish student tuition fees, he is shoring up for his own political ends, the middle class welfare state.  So he has this huge uplift of the student vote and enough of the blue-collar vote, but it’s a one-off and I think Labour is still on the road to oblivion as a party.

If we have an unsuccessful Brexit, then people will be worrying very much about their jobs and their income and they will not be looking to a bunch of quite extreme solutions to fix the British economy. They will definitely prefer the devil they know. And I think if Brexit is a success, it will be a success because it has been negotiated by the Conservative Party. In addition waiting in the wings we will have an attempt to create a new center-left liberal party. I think the success of Emanuel Macron won’t be lost on people like [former Labour Party leader] David Miliband who is now an American and seems to have given up on his political career.

Judis: You also sent us Nigel Farage, the guy from UKIP.

Goodhart:  I’m sorry. A lot of people end up cruising around your streets. I do think Corbyn’s much better than expected performance has saved him in the short run, but it makes it more rather than less likely that a new party will emerge. Corbyn’s temporary success will emphasize to the Milibands, the Peter Mandelsons, people like that that, that they can’t take back the Labour Party and that they’ve got to do something new.

Corbyn is not going to be a good opposition leader, and it’s quite likely that May, after that dreadful campaign, will be replaced either sooner or later. She is a much weakened figure, and whoever they replace her with cannot possibly be bad as she was in the election campaign. For all those reasons, the Labour revival is a sort of mirage. I don’t think Britain has suddenly become a far left country. I don’t think 41 percent of the population are Corbynites.

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I first learned of Dani Rodrik in 1997 when I came across his pamphlet, Has Globalization Gone Too Far?. That pamphlet created a sensation in a Washington awash with “new economy” optimism. It was an opening salvo against what Rodrik has come to call “hyper-globalization.” Since then, the fissures that Rodrik saw in the global system have become crevasses. Rodrik has continually updated his own critique. His most comprehensive statement was in his 2011 book, The Globalization Paradox.

Rodrik was born in Istanbul in 1957, part of Turkey’s small Sephardic Jewish community. He came to the United States to attend college at Harvard and subsequently got a PhD. in economics at Princeton. He has taught political economy at Harvard’s Kennedy School for most of the last 32 years. Besides writing books and articles, he also has a blog, where he comments regularly on American, European, and Turkish politics. He is a noted critic of Recip Tayyip Erdogan’s administration.

As globalization has come under attack from the left and right, I wanted to ask Rodrik what he thought about the jeremiads from the Trump administration and how he assessed the problems of global capitalism in the wake of the Great Recession.

Real Grievances And Fake Solutions

Judis: During his campaign and presidency, Donald Trump has made a big issue of America’s trade deficit, and singled out China, Mexico, and Germany for blame. When Trump was in Europe recently, he attacked the Germans for having a trade surplus. He even threatened to block German car exports to the United States. Is there any basis for Trump’s complaints?

Rodrik: Like most everything with Trump, I think there is a significant element of truth in the causes that he picks up. He is addressing some real grievances. But then the manner in which he addresses them is completely bonkers. So in the case of Germany, I do think Germany is the world’s greatest mercantilist power right now. It used to be China. China’s surplus has gone down in recent years, but Germany’s trade surplus is almost 9 percent of GDP. And they are essentially exporting deflation and unemployment to the rest of the world.

I think the damage, though, is done to the rest of Europe and not the United States. In addition, it is not a trade problem. It is a macro-economic problem. The solution is to get German consumers to spend more and save less and the German state to spend more and to increase German wages. It is not the trade policies of the US or any other country that is going to be able to address this issue. It is similar to the way Trump has picked up grievances about how trade agreements have operated in the United States. These agreements have created loses, and grievances that have not been addressed, and I think there is a lot of truth to those kind of things, but I don’t think he has any realistic way of dealing with those things.

Judis: So you do think our trade deficit is a problem?

Rodrik: Yes, but I don’t put it on the top of our concerns. There have been times when it is a bigger issue. The U.S. could use more aggregate demand and one of the places it could come from is smaller trade deficit. But you could get the same result more effectively through a more aggressive fiscal stance on the part of the federal government and the states, particularly through expenditure on infrastructure. I do think the low labor force participation is something we should try to bump up and I think there is a place for increasing demand. A lower trade deficit might contribute a little bit to raising it, but I don’t think it’s where the major action is.

Judis: Do you think there is a point in trying to renegotiate the North American Free Trade Agreement (NAFTA)?

Rodrik: The damage of NAFTA has already been done. Many communities affected by NAFTA have already experienced sizable losses, but there is no way you are going to bring back the jobs that have been lost. Those are water under the bridge. So we shouldn’t fool ourselves that we can reverse the consequences of NAFTA.

If we are going to be renegotiating NAFTA, we might be able to put a symbolic stamp on a new type of trade agreement, but there is absolutely no sign that the current administration is approaching it that way. I would have let NAFTA be NAFTA. I would have put TPP on hold, and I would have articulated a new approach to trade agreements before starting on new agreements. There is a complete disconnect between what Trump said he wanted to do on trade agreements and what seems to be happening.

Rebalancing Trade Agreements

Judis: Where do you see the disconnect?

Rodrik: I don’t think Trump’s proposed remedies for the issues that he picked up from the angst, the anxiety created by jobs losses have any chance of working. I also thought from the outset his bite would be much less than his bark. That when push came to shove, he would not do some of the radical things that he said would do, like building a wall or putting 35 percent tariffs across the board on imports from China. I am glad he is not doing these things, and I think the optics at some point will look more and more awkward and at that point his base will start to wonder what is really happening with his promises.

Judis: And what should a president concerned about trade do? What are new types of trade agreement that are worth pursuing?

Rodrik: There is a kind of rebalancing we need to do in the world economy. I would put it under three major headings. One is moving from benefiting capital to benefiting labor. I think our current system disproportionately benefits capital and our mobile professional class, and labor disproportionately has to bear the cost. And there are all sets of implications as to who sits at the bargaining table when treaties are negotiated and signed, who bears the risk of financial crises, who has to bear tax increases, and who gets subsidies. There are all kinds of distributional costs that are created because of this bias toward capital. We can talk about what that means in specific terms.

The second area of rebalancing is from an excessive focus on global governance to a focus on national governance. Our intellectual and policy elites believe that our global problems originate for a lack of global agreements and that we need more global agreements. But most of our economic problems originate from the problems in local and national governance. If national economies were run properly, they could generate full employment, they could generate satisfactory social bargains and good distributive outcomes; and they could generate an open and healthy world economy as well.

This is an important issue with the cosmopolitan and progressive left because we tend to be embarrassed when we talk about the national interest. I think we should understand that the national interest is actually complementary to the global interest, and that the problem now is not that we are insufficiently globally minded, but that we are insufficiently inclined to pursue the national interest in any broad, inclusive sense. It might seem a little bit paradoxical but it’s a fact.

The third area for rebalancing is that in negotiating trade agreements, we should focus on areas that have first order economic benefits rather than second or third order. When tariffs are already very small, you do not generate a lot of economic benefits by bringing them down further. When you restrict governments’ ability to regulate capital flows and patent/copyright rules, or when you create special legal regimes for investors, you do not necessarily improve the functioning of our economies. In all these areas, global agreements generate large distributional effects — large gains for exporters, banks or investors, but also large losses to rest of society – and small net benefits, if any at all. In other words, past agreements addressing trade and financial globalization have already eked out most of the big efficiency gains. Pushing trade and financial globalization further produces tiny, if not negative, net gains.

One major unexplored area of globalization where barriers are still very large is labor mobility. Expanding worker mobility across borders, in a negotiated, managed manner, would produce a large increase in the size of the economic pie. In fact, there is no other single global reform that would produce larger overall economic benefits than having more workers from poorer nations come and work, for a temporary period, in rich country markets. Of course, this too would have some redistributive effects, and would likely hurt some unskilled native workers in the rich nations. But the redistribution you’d get in this area per dollar of efficiency gain you’d generate is small – much smaller than with trade liberalization, greater capital mobility, or any other area of the world economy. This may seem paradoxical, but it is an economic fact. This is a major reorientation in our global negotiation agenda we need to think about.

Skepticism About Global Governance

Judis: Let me go through these three kinds of rebalancing more specifically. Let’s talk first about the movement toward global governance. In The Globalization Paradox, you express skepticism about global government and hyper-globalization, and you advocate a movement backward toward a new Bretton Woods, the monetary agreement that the World War II allies signed in 1944 and that governed global capitalism for three decades. Bretton Woods allowed nations a great deal more latitude in stimulating their economies and control capital flows. Explain that more clearly.

Rodrik: My starting point is the view if you have well functioning markets, you need to embed them in institutions of governance. Markets aren’t just created on their own. You need to stabilize markets and legitimatize markets, and the wonderful thing about capitalism over its long history is that we have learned how to do that for national markets. We have national political systems that provide stabilization, regulation, and legitimation.

Now what happens when your markets are global? Who is going to provide those supporting institutions? You can’t really have fully integrated international markets without all fully integrated political systems. You can’t have an imbalance between the scope of markets and scope of political accountability and political institutions. But we end up relying on global agreements and global commissions that essentially become technocratic arrangements with no political or social content to them.

Nationally we have democratic institutions for deciding who benefits from markets and how resources and income are to be distributed. Internationally, all we have are tool shops and arrangements whereby trade lawyers and technocrats decide on a global agenda without any of the legitimacy or authority that you have at the national level. When you look at it from that perspective, I am not surprised at the backlash against the international arrangements that were created in the 1990s and that have led the push to globalization.

Wrong Turns In The 1990s

Judis: Are you saying that in the ‘90s, the United States should have been much more wary and cautious when it helped to found the main international trade group, the World Trade Organization (WTO), in 1995?

Rodrik: A lot of wrong turns were taken in the 1990s. The WTO had some good things in it, but as a trade regime, it exemplifies global overreach. It tries to fix global standards for intellectual property rights, industrial policies, and various health and safety regulations. As a result, it reached into areas that are more properly a national responsibility and where the argument for global harmonization is quite weak. It was bad economics that resulted in a loss of legitimacy for the global trade regime.

Another wrong turn came in what the United States didn’t do when it opened its economy with NAFTA, the WTO, and then the entry of China into the WTO. At some point, the United States could have done what Europe did in an earlier stage in this history when Europe became an open economy. That is to erect very generous social insurance and safety nets. The kind of insecurities and anxiety that openness to trade creates can be compensated or neutralized by having extensive social policies, and that’s what Europe managed to do.

Europe is much more open to trade in the United States. Yet to this day, trade remains uncontroversial in Europe. When you look at populism in Europe, it’s not about trade at all. It is about other things, it is about immigrants going to reduce the welfare state.

Judis: But aren’t populists in southern Europe and France up in arms about Germany and its trade balance?

Rodrik: It’s about macro finance, it’s about the role of Brussels, it is not about putting trade restrictions on China and Mexico. In Britain, the Brexiteers wanted to leave Europe in part so that they could pursue free trade policies unencumbered by Brussels. The issue of trade and import competition was largely neutralized as a political issue in Europe by the tradeoff of a generous welfare state. When the United States became an open economy in the ‘80s and ‘90s, it largely went the other way. We didn’t try to erect a stronger safety net. If anything, the safety net was allowed to erode. That I think was a major wrong turn and we are paying the price for that now.

Judis: If you look back at the 1996 election, and Bill Clinton’s speeches, when he said change is our friend, he was saying what you’re saying. He was talking about a more generous welfare state, mainly in terms of education and health care. And in his second term, before the Monica Lewinsky scandal broke, and Republicans began impeaching him, he wanted to expand Medicare, and other programs,

Rodrik: You’re right, there was a fork in the road. I do remember that. I remember my stuff getting cited at that time [Has Globalization Gone Too Far? came out in March 1997], but in fact there wasn’t much action. There was a general problem even with the center-left. You heard let’s liberalize finance and let’s do trade agreements and don’t worry then we’ll have compensation and the education and the transfers. In the end, we got a lot of the first and very little of the second, and that’s how I think the center lost its credibility.

The Problem With Global Finance

Judis: There is another aspect to your analysis. You are not saying simply that we can have these open economies if we also have generous welfare states. You are also saying in The Globalization Paradox that there is a problem with the model of the open economy. You talk about the need for capital controls and for countries to undertake industrial policies without violating the WTO. You are saying there is something wrong with a completely open global economy.

Rodrik: I think that’s right. I think what we should have is a moderate degree of openness. I don’t think anybody wants to cut their country off from international trade and finance and international ideas and technology, but what we have learned is that the successful relationships between a country and the world economy are always managed. They are not just a matter of removing barriers by a stroke of the pen, believing that good things will follow.

If the trade agreements were about free trade, they would be one sentence long. They are thousands of pages, because they consist of a new set of regulations. And the question then becomes what are these regulations for, whose interests are they advancing.

No country has a completely free trade policy. There is always some management of trade. We don’t let goods come in that don’t satisfy our health and safety standards, that go beyond our regulatory standards, so we always have these controls. It’s never about free trade vs. protection. It’s always about where we should and shouldn’t regulate.

And the same is true about capital markets, and financial globalization. I think we have too easily internalized the norm that financial capital should be free to move without any restriction. There is no justification in economic theory for the idea that free capital mobility is optimal. These are things we know we need to approach pragmatically. There are real decisions that need to be made.

Judis: Let’s talk about capital controls and this idea of global finance. What are capital controls, and what has been the effect of eliminating them?

Rodrik: In the Bretton Woods regime, nations put restrictions on the flow of capital both inwards and outwards, so that domestic firms and banks could not borrow from banks elsewhere or from international capital markets. They would ask for permission or they would not be permitted. Domestic corporations or banks could not put their money in other countries. They couldn’t simply take the money out.

What that meant was that domestic financial markets would be segmented from international or financial markets elsewhere. That gave you the ability to run your own macroeconomic policy without being truly encumbered by monetary or fiscal policies elsewhere. It also meant that you could have your own tax policies, your own industrial policies without having to worry that capital and international capital would leave. It meant you didn’t have to constantly look over your shoulder and try to seek market confidence for every policy. You didn’t have to worry that if you didn’t have market confidence, capital would flee.

Judis: Were there currency speculators then as there are now that drive the price of a currency suddenly up or down?

Rodrik: There were restrictions on domestic residents trading on foreign currencies. You couldn’t buy and sell foreign currencies without going through your own central bank and you were restricted how much foreign currency you could buy. I think a lot of these restrictions in the 1950s and 1960s may have been excessive, but I think we went from the norm being that every country would have capital controls to run sound economic policies, which was a consensus view among the economists, to the 1990s where the consensus view became that every country should have free capital mobility, and if they didn’t have now, they should move to it.

Judis: So what has been the effect of having free capital mobility?

Rodrik:. The most important effect has been to exacerbate financial crises. Even without international capital mobility, financial systems are always subject to boom and busts. Financial panics and crashes have always been with us. But if you were to put on the same chart two trend lines, one having to do with the degree of international capital mobility, how free is capital to move, and another trend line having to do with the incidence of banking or sovereign debt crises around the world, those two trend lines would essentially match up.

The more financial globalization there has been the greater incidence of financial crises as well as their severity. There was a time when you looked at these things, when Mexico or Brazil or Russia or India were going through financial crises, and you said there is a problem with those countries, they mismanaged their economies, but when the United States or the Eurozone were having their crises, you suddenly knew that there was something systemic going on, that it was in the nature of the free flow of capital.

The Power Of Banks And Multinationals

Judis:. When you think of what is going on now, what can be done? Is the genie out of the bottle the way you said it was with NAFTA?

Rodrik: I think there is a recurrent and ongoing issue with capital flows that is unlike NAFTA. I think it is important to realize that many economists and even the IMF have revised their view on the desirability of free capital mobility. The IMF has come to accept that there is a role for continued capital controls.

There have been tons of caveats. They should only be used as a last resort and so on, but they have gone from saying every country should free up capital mobility, to saying there might be a role for capital controls. So I do think this is an area where intellectually some progress has been made.

I think we need countries to be willing to be much more aggressive and experimental in their willingness to apply capital controls. Something else we have learned is that there is difficult to be surgical when you are talking about capital controls, because capital is extremely fungible, and there are all kinds of ways that you can evade capital controls that are very finely tuned and very finely targeted.

Judis: Is there something that is preventing countries from imposing capital controls? Why don’t countries go back to using them?

Rodrik: There is a tremendous amount of hesitation for two reasons. One is a genuine concern of states that you don’t want to be the country that is applying capital controls. I think those who make decisions still worry a lot they will be stigmatized if they were to use capital controls.

The second is the same underlying cause for a lot of the problems we are talking about, which is asymmetric political power — that is, whose opinions get listened to. The banks and multinationals and financial interests have a huge amount of influence and they are able to simultaneously argue to governments and policy makers that imposing capital controls will be very costly, and that if you do them, we can easily evade them. Sometimes they use one argument, sometimes the other. I think they still have enormous sway on policy and politicians.

Trade And The Social Dumping

Judis: So we are get down to nitty-gritty Let’s go back to the three steps for rebalancing trade agreements and to American trade policy. Do you think Trump was right to abandon TPP?

Rodrik: Yes.

Judis:. There are a lot of people who thought it was a good idea on geopolitical if not economic grounds. It was a way to strengthen America’s position in Asia against that of China.

Rodrik: I think many people thought the economics was unimportant and that geopolitically it was a way of getting Asia to play by American rules and counterbalancing China and so forth. Whether that is good or not, whether that made sense or not from geopolitical standpoint, I think it is crazy to have a trade agreements which is extremely contentious politically and which contains a lot of elements that are highly problematic and use it for geopolitical reasons. If you want to achieve a geopolitical agreement not an economic agreement, do that. I think it was very dishonest and very inappropriate.

On the economics, it is another instance of a trade agreement that would have produced aggregate gains that were really miniscule. The best that the most pro-TPP economists could produce was an estimate that it would increase US GDP 0.4 percent after 10 years. And that included all kinds of assumptions of how employment would not be affected and workers would move to new jobs and new opportunities and so forth, stuff we know from earlier that we doesn’t happen, Even in the best circumstances, the overall gains were miniscule.

Then it had really problematic elements. The one I find the most problematic in these new trade agreements is the ISDS, the investor state dispute settlement, which is an abomination. [The TPP would have established independent tribunals that corporations could use to file suit to overturn national regulations.] I think it is a derogation of domestic legal standards and it undermines the integrity of a domestic regulatory and judicial system.

Judis: You talked earlier about changing trade agreements so that they reflect the interests of labor rather than capital. But the main thing you mentioned in explaining it is allowing increased visas for guest workers. That wouldn’t seem to benefit a host nation’s workers. Look at the abuse of H-1B visas in the United States.

Rodrik: That’s true. But is also depends on how you manage it. If am a worker in the United States or Europe, would I rather compete with a Bangladeshi workers who is working in Bangladesh under Bangladeshi labor standards and rules and exporting goods into my market or would I rather compete with him in the United States or Europe earning American and European wages and operating under our labor standards? I would much rather than have the second.

Temporary labor mobility schemes would regularize something that is already happening, but informally and with much greater damage to labor markets and countries. They would also improve labor standards of the workers with whom you are competing. I would add it’s not only about guest worker schemes. It is also about much better safety nets. It’s about social dumping.

Judis: What is social dumping?

Rodrik: We have remedies against dumping when a foreign country sells things below cost. You protect your domestic company by putting tariffs on the importer who is dumping. Now we often subject our workers to competition with workers elsewhere who are working under very dangerous or substandard labor regulations. These are workers who don’t have bargaining rights and so forth. I think in those cases there is an argument we should have a parallel trade remedy that allows for a policy to protect American or European workers from unfair competition.

We protect workers from competition from other domestic workers. I can’t hire workers in the United States who work below minimum wage, but I can compete back door by outsourcing to a company in Bangladesh and doing it that way. So social dumping is essentially a mechanism that undermines domestic labor standards and other norms. Preventing it would be one way of changing the rules to make them more symmetric with respect to how we treat businesses and workers.

Judis: A lot of things you are proposing are difficult politically. It would be very hard to get an agreement on social dumping given the power of banks and multinationals. Where do you see changing coming?

Rodrik: I think the change comes because the mainstream panics, and they come to feel that something has to be done. That’s how capitalism has changed throughout its history. If you want to be optimistic, the good news is that capitalism has always reinvented itself. Look at the New Deal, look at the rise of the welfare state. These were things that were done to stave off panic or revolution or political upheaval.

I don’t want to overdramatize but I think in some ways we are at the cusp of a similar kind of process. You have the populists at the gate, and the centrist political figures and the powers behind them are looking for ways of maintaining the system, and I think they realize they need to make adjustments.

We say we wonder how the people that benefit from the system, the multinationals, the high tech companies, will ever be willing to change, but we forget where these people get their idea of what their interest is. They operate with a particular narrative. The way to change the way they act is to change their ideas of what their interests are.

I think this might be a moment where this is happening. They are seeing the process they believed was perfect is not so perfect. And they see that if nothing is done, there are going to be a bunch of rightwing populists and nativists and xenophobes who are going to gain in power.

So I think the powerful interests are reevaluating what their interest is. They are considering whether they have a greater interest in creating trust and credibility and rebuilding the social contract with their compatriots. That is how to get change to take place without a complete overhaul of the structure of power.

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Ruy Teixeira (pronounced Tush-aira) and I have been friends since the early 1970s when we were members of a socialist group, the New American Movement, that was supposed to perpetuate the saner parts of the new left. (It merged later with the Democratic Socialist Organizing Committee to form the Democratic Socialists of America.) I didn’t see him for 15 years or so until we both turned up in Washington, D.C. In 2001, we co-authored “The Emerging Democratic Majority.”  Radio and television producers would sometimes call me to do interviews because, one TV person explained, they wanted someone who could speak English clearly. In fact, Ruy, the son of a Portuguese diplomat, was born and raised in Silver Spring. Ruy has worked with various think tanks in Washington and most recently has been a fellow at the Center for American Progress. His new book is titled “The Optimistic Leftist: Why the 21st Century will be Better Than You Think.” It’s a potentially tough subject, but Ruy writes clearly and persuasively, and it’s surprisingly easy to read. As readers will note from this interview, I don’t quite share Ruy’s optimism, but I certainly hope that he is right.

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I first encountered Robert Atkinson when he was working at the Office of Technology Assessment on Capitol Hill in the early 1990s. OTA was an invaluable resource for anyone who wanted to understand American industry, and when Republicans won back the Congress in November 1994, they naturally shut it down. Rob subsequently went to the Progressive Policy Institute as its vice president, and then in 2006, he founded the non-partisan Information Technology and Innovation Foundation, which does a lot of what OTA used to do. During Barack Obama's presidency, it was the place to go for analysis of the high-tech industry, and also a prime promoter of industrial policy. ITIF helped inspire the administration's attempts to set up programs in advanced manufacturing. I wanted to ask Rob what he thought about Donald Trump's pledge to revive American manufacturing, which has been widely criticized by liberal and conservative pundits. Is Trump making good on it or not?

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In the spring of 2007, famed union organizer Marshall Ganz began meeting with the Obama campaign. Ganz persuaded them to create a field operation using the techniques that Ganz had developed with the United Farm Workers in California. Thus the army of thousands of volunteers that helped Obama win the Democratic primary and the presidency in 2008 was born. Ganz, 73, is from Bakersfield, California, the son of a rabbi. He dropped out of Harvard in 1964 to work with a Southern student civil rights group, the Student Nonviolent Coordinating Committee (SNCC). The next year he moved back to California to join Cesar Chavez's fledgling movement to organize the state's migrant farm workers into a union, eventually becoming the United Farm Workers' Director of Organizing. In 1991, Ganz returned to Harvard to get his B.A. and in 2000 received a Ph.D. in sociology. For three decades, he has been lecturing in the principles of organizing at Harvard's Kennedy School, while remaining deeply involved in organizing projects in the United States and overseas. I wanted to ask him about the prospects of the left, liberals and the Democratic Party in the face of Donald Trump's presidency and Republican control of Congress and the majority of statehouses.

Judis: We talked a few years ago after the Occupy movement fizzled about a Tahrir Square phenomenon [in Egypt], where protests rise up and then die off and achieve results contrary to what they intended. We now have tremendous protests against the Trump administration. What is going on? And what can come out of this?

Ganz: It takes a little hubris to say what is going on. It seems to be that what is happening is this overwhelming reaction to Trump's assault on just about everybody other than his supporters in just about every way. It has created a solidarity in the face of a shared threat. One of the things that was interesting was that for the people who went to the Women's March it wasn't just about women's issues and for the people who showed up at the airports it wasn't just about immigration issues. There seems to be a moment of much broader recognition of the values that a progressive or democratic politics stands for. I think that is a great opportunity.

But the challenge is crafting that reaction into the capacity for strategic response. Unless this solidarity can become solidarity for shared purpose, we are going to dissipate a lot of it. Ever since the 1960s and 1970s, the problem on the progressive side, of fragmentation based on each group pursuing its own separate issue, seems to be far more substantial than on the other side.

Organizing opposition to Trump

Judis: How do you see this solidarity coming to pass. Doesn't there have to be leading organizations at this point? One suggestion I've heard is that progressives have to focus on transforming and taking control of the Democratic Party.

Ganz: I don't think so. There are a couple of places to look for instruction on this. For one thing, the rise of the conservative movement didn't happen through the RNC [Republican National Committee]. Conservatives successfully created a more or less coherent network of organizations linked to local, state and national politics, which is a traditional form of effective political organization in the U.S. There was the Christian Coalition which started with school boards and moved upwards to take over the Republican Party. Or there is the Koch Brothers' network. Not to mention the Tea Party or the NRA or ALEC.

The point is that it didn't happen through the RNC. It happened through movements and movement organizations structured outside that could develop a coherent or at least semi-coherent strategy. If you go back to the civil rights movement, there was the Leadership Council for Civil Rights, it was everybody from the Urban League over to SNCC, and it lasted for a number of years. At least they knew what everybody was doing. They could disagree, but at least there was some sort of possibility of coherence, and occasionally they could converge, as they did on the March on Washington.

You look in vain for something like that on the progressive side. There is such a proliferation of groups, all kinds of groups, some of which take up space without filling it. Our challenge is to put together that combination of local, state and national organizations that can, first of all, handle defense, especially in terms of immigration because that's an immediate threat to people’s security, and there is resistance on many fronts, but what needs more attention is initiative. If we expect the Democratic Party to do that we are smoking something because the closest they ever got was Howard Dean and his 50 state doctrine. I don't think that's where it happens. It happens through the stepping up of leadership at all levels to bite the bullet in a coherent way so that we can turn this opportunity to some real purpose.

The success of Indivisible is evidence of the enormous numbers of people out there who want to take action who are connected to no existing group.

Judis: What is Indivisible?

Ganz: They are a bunch of congressional staffers, one is an SEIU [Service Employees International Union] guy. They got the idea of doing to the Republicans what the Tea Party did to the Democrats. The put out a very simple, accessible manual of how to do that, and they got it out there in a very timely way, and it really clicked with people. They weren't asking people to send emails or sign petitions. They are asking people to organize locally in the form of those town meetings they are having with the Republicans just like the Tea Party did. And it really took off. They’ve scaffolded some 7,000 groups. They are in every congressional district except for one. What they have done is to scaffold a barebones structure enabling people to focus on a specific tactic. Now the question is how they can take it to the next step. But that's a very helpful development because of its scale, its depth and its simplicity. [For more on Indivisible, see this article. Or see their own site.]

I really want to underscore the significance of Indivisible. It's the same experience we had with Obama in 2007 and 2008. You create a plausible pathway to action and all kinds of people come out of the woodwork. The problem is that there haven't been many plausible pathways to action. And that's a strategic responsibility, and it requires creating enough structure so that that kind of strategy can be developed and articulated.

Judis: What about Our Revolution, the Bernie Sanders organization?

Ganz: I don't know enough to know what is happening. I know the Sanders campaign didn't turn their mobilization into organization like Obama did. They did a lot of mobilizing, but the campaign wasn't committed to organization. It was an Old Testament prophet at the head of the great multitudes.

Judis: Their focus seems to have been on getting Keith Ellison elected as the DNC chairman.

Ganz: The DNC is a distraction. If you look at what the RNC did for the Republican resurgence, it was not much. If you expect the DCCC or the DNC to do it for the Democrats, you'll be disappointed. Dean temporarily defied the logic with his 50 state strategy. The usual business about not campaigning in every district is so counter-productive. If you look at it from a purely financial standpoint, we have to invest the money where there is the greatest marginal payoff, but it is all short-term. It is not looking at base building, so all these red areas never even hear a counter argument because nobody runs. It is not shocking that all they have is the Fox view of the world. It's not being challenged.

Democratic politics depends on contention and challenge. One way to do that is through campaigns. It takes people with courage to run for school board. That is one piece of that I just don’t see happening through the DNC.

The goal is to organize, not just mobilize

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It is hard not to compare Donald Trump’s chilling performance last Friday to Charles Schumer’s tepid one—the Big Lie countered by the half-truth, the worse-than-expected introduced by the better-than-nothing. Trump told the assembled, in effect, that the other political leaders on the stage with him were either ignoring, or profiteering from, middle America’s misery. Foreign governments were either ripping them off or riding for free. This day would be remembered for returning the government to the people. Trump alone was the people’s champion: their allegiance to America, thus to “solidarity,” should be “absolute”; he led, not a party, but “a movement.” America first, America’s new leader fighting (here comes the fascist’s pathos) with “every breath in my body.” Forget information provided by government officials; this was not to be trusted. The press was not to be trusted. The movement had its truth, the champion alone could be trusted.

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Joshua Landis is head of the Center for Middle East Studies at the University of Oklahoma and publishes the influential blog “Syria Comment.” He is, perhaps, the nation’s foremost expert on Syria. He has been consistently right about the events of the last five years. When most Washington policy-makers were predicting that Syrian President Basher al-Assad would fall, Landis warned that he would hang on to power. While liberals and conservatives were calling for military intervention in Syria to overthrow Assad, Landis advised caution. In this interview, he assesses the Obama administration’s policy in Syria and the prospects facing the new Trump administration as Russia and Iran consolidate their hold over the Northern tier of the Middle East. It is, in my opinion, the clearest and most comprehensive analysis of why the United States failed to get its way in Syria and what it should do now. – John Judis

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