China in the World Order

With China it’s unsettling enough that for the first time since the end of World War II our worldwide hegemony is under challenge.  However that’s just the beginning.  As we’ll see, that change is coupled with technological and economic factors that magnify both risks and upsides.

We need first to be clear that the challenge of China is real.  We have had other challenges in the past, most notably from the USSR, but none have had the economic might to back them up. This time we’re talking about an economy that by some measures is already larger than ours.  Those others look puny in retrospect, although the Russian collapse is dangerously seductive.  According to Bob Woodward, the Trump people were convinced that China was just like Russia, and the trade wars would cause a complete collapse in the same way.  When Xi said that the US is the barrier to Chinese national success, he was just restating Trump’s declaration that he would destroy the Chinese economy.  That of course didn’t happen, and the result was a policy that ultimately produced nothing.  Whether we like it or not, we simply don’t have that power.  The Chinese are not going away as an economic, technological, and military force.

At the same time it is equally important not to get hysterical about Chinese competition.  It’s strange how we periodically become obsessed with the idea that some centrally-organized economic system is going to leapfrog us by running things in a way that we can’t.  That happened in the fifties with the USSR (hard to imagine now) and in the eighties with Japan.  In reality the US economy succeeded by reinventing itself many times over, in a way that others did not.   For China, it is historical fact that state-run enterprises have been corrupt disasters, and the current economic miracle got its impetus from an unintended burst of local free enterprise.  Xi’s consolidation of control is no miracle cure.  China is a competitor with strengths and weaknesses. As one recent paper put it, China is not ten feet tall.

If we play to our own strengths, the worry is not that we’re going to be outcompeted by the Chinese (or undermined by Chinese stealing our secrets). It’s that we won’t succeed in creating a workable framework for international competition, and we’ll all lose.

Risks

We begin with the most basic of risks.  We’ve now had many years of Pax Americana, and people forget that history shows that world-power peace is the exception—not the rule.

The reason we’ve had peace is not human progress, international institutions, or even the rise of democracy.  It’s the threat of mutually-assured destruction.  And however much we may want to believe that all-out war is obsolete, that’s in fact a technology issue.

We can be specific.  Much has been written recently about hypersonic missiles, that would fly low at many times the speed of sound and be virtually impossible to detect by radar.  That sounds like a whole new arms race, but there’s actually no point to it so long as the balance of terror remains intact.  That we’re talking about it at all means we’re not so sure.  Reagan’s old “star wars” anti-missile shield was never more than an electoral fantasy, but now there’s plenty of current technology that’s relevant:  networks of satellites for detection, AI for decision-making, precision targeting for lasers.  China already has a nominally-defensive, satellite-linked system that enables ballistic missiles to be used against moving targets (e.g. US carriers in the South China Sea).  

A missile shield would be enormously destabilizing—North Korea could defeat the US in minutes.  (It’s interesting that as long as the system was going to be ours, we never thought seriously about what it meant!)  Who knows when or if something similar could be real.  However the world has been surprised many times by revolutionary changes in the technology of war.

We can’t assume peace; we can’t dictate the world order; we can’t wish away the image of a world trapped in a ruinous and deadly competition for dominance.  An encouraging fact is that everyone is much better off not living in such a world.  However for now we’ve chosen to divide the world into no-holds-barred competing camps.  Avoiding that division requires an act of creation—establishing a workable framework for cooperation and competition.  There are many examples of countries that failed such a challenge with disastrous consequences.   That’s our challenge here.

Making Progress

The first step to progress is to recognize that just as the risks today are higher than one might think, the potential rewards are also.  There’s actually quite a lot to say about the upside, although in the last decades it has been hard to see.

Why is that?   To repeat the obvious, the working classes in the West have been hit by two simultaneous body blows:  globalization and technology.  The result was dramatic, as shown by the following chart

Globalization has been going on forever, but China’s sudden economic development produced a major hit.  For technology the effects have been not only dramatic but accelerating.  Thomas Philippon’s recent book has a chart comparing highest valuation companies over the past six decades.  For the decade of the 1970’s the five highest valuation companies collectively were responsible for 2.4% of total employment.  For the decade of the 2010 the corresponding figure was down to .4%.  The bedrock upwardly-mobile manufacturing jobs are going away, as we continue toward a world where highly-skilled product development is the issue, and production is not.  That’s true for obvious software enterprises like Facebook, but also for pharmaceuticals, integrated circuits, and many other areas. And it’s getting worse.  AI puts a whole new class of jobs at risk, and electric cars (for example) will be much simpler in both manufacturing and maintenance. 

Thus far it has been convenient to blame everything on China, with the consequence that both political parties are promising to bring back the good old days once we stare down the evil Chinese.  (On the left  a 2018 paper by Susan Houseman is cited everywhere to support this position, though it’s actually about weakness in the US manufacturing sector!)  That mindset is dangerous on two grounds:  it’s a kind of scapegoating that gets in the way of rational action, and it obscures other serious problems that need to be addressed.  To get past that we need to discuss national prosperity and population welfare as separate issues.

National Prosperity

For prosperity the key point is that China has actually turned a corner in its effect on the rest of the world.  Although in aggregate terms China remains a very poor country (number 108 in per capita income, far below Mexico for example), the country is so large that its new middle class now buys enough to be a positive driver for the rest of the world economy.  Even with the current market access restrictions, China is the largest national market for Mercedes-Benz and a major market for film industries from everywhere.  The balance of payments deficit was reduced by half under Obama.  For the EU, more export-oriented than we are, the effect is even more pronounced.  (Intellectual property theft was also down under Obama.)

What this means is that, as opposed to the situation in the past, China has the potential for transforming itself from a drain on the world economy—producing more than it consumes—to the opposite.  Raising the living standards for a billion people is an enterprise with potentially many benefits for everyone concerned.  Nothing says that’s going to happen, but the difference is real.  The current situation is no longer dictated by the poverty of China, it is instead an expression of the relationship with China as it stands.  How do we make things better?  Well, if we want China to play by the rules, we need better rules.  As for motivation, growth in the West means growth for them (and, whether we like it or not, success for the ruling party).

The precondition for progress is establishing appropriate conditions for trade, that is to say a notion of fair trade which is comprehensive and up-to-date.  The comprehensive part means we need to cover many items that are not currently included, including labor conditions, environmental issues, international standards for taxation.  There is the potential for trade policy to become a vehicle for raising living standards worldwide.  Stated simply, we’ve had globalization for the rich; we need globalization for everyone else

There are of course no guarantees.  Some elements, such as environmental issues, may be clear areas of common interest.  Labor conditions will be more difficult.  Details of market access will need to be worked out.  It’s important to have everything on the table.  It is particularly important that these are not rules imposed by us on others but norms of behavior for everyone in a common enterprise.

That difference is important in any kind of negotiation, but it is of particular importance for China.  We don’t talk much about it, but China experienced some of the worst of Western imperialism extending well into the 20th century.  That shared history makes Xi’s nationalism easy.  If we want to get what we want, the last thing we should be doing is pretending it’s still true.

What Trade Rules Won’t Fix

Just as China wasn’t responsible for all problems, fixing China (even in the best case) won’t fix everything.  Two points in particular should be emphasized.  First, the kind of national prosperity we’ve been discussing thus far says little about personal welfare.  People are still going to lose jobs both from ever-accelerating technology changes as well as remaining international competition—regardless of fairness.  We’ll still be stuck with the prevailing inequality in society.   We’ll still have all of the dislocations that will result from the economic transformations with climate change.  Those are our domestic problems to solve. 

Blaming China has made it possible to ignore that reality.  Until recently in fact the prevailing ideology was that there is no additional problem of population welfare—the private sector would do it all.  So for loss of good jobs the only issue was globalization, and the only means to address it were tariffs and tax cuts.  Four years of a deficit-funded bubble with huge tax cuts to business did almost nothing for real wages or upward mobility.

Currently there are outlines of a solution.  Particularly with the transitions required by climate change, there is no shortage of work.  With the increases in corporate profit margins and high-end incomes there is no shortage of money—but workable taxation is a big issue.  The public sector needs to put all that together:  to see that the necessary work gets done and the population is supported with a national infrastructure that includes education at all levels, healthcare, so forth.  It’s a work in progress.

The second point to make is that we have tacitly assumed we will maintain our national competitiveness.  While we can see what has been successful in the past, there is no guarantee it will continue in the future.   That isn’t theory.  We just spent four years fighting science, demonizing foreigners, and favoring existing companies over new entrants.  All of that hurts.  It’s our job to play to our strengths.

Parallels with Climate Change

With that we return to the first issue—national prosperity.  For that we want to stress parallels with what’s happening for climate change.

With climate change we’re also presented with a very strong common interest, but a non-trivial task in breaking that down according to individual national interests.  As a country we haven’t thought much about that, since the national dialog has been primarily about getting our own act together, with the assumption that all the others just have to do their jobs too.  However the reality of the situation is that we in the US have twice the per capita CO2 production of any other major emitter in the world,

and we in the West are almost 100% responsible for the level of CO2 currently in the atmosphere.  The vast portion of humanity is going to have to sacrifice for our benefit, and it’s non-trivial to define acceptable justice.

Nonetheless the Paris agreement shows that with good will it’s possible to make progress.  It will require continuing work, with more commitment from the developed world, and also with a mechanism for follow-through on commitments (in the absence of any such system today).  But thus far the strength of common interest seems motivation enough to keep it going.  It’s worth noting that the Montreal Protocol to ban CFC’s (and preserve the Ozone Layer)—one of the most successful efforts at international cooperation ever—also proceeded as a series of successively more demanding steps:

So it’s no surprise—and no cause for panic—that the current Paris goals don’t yet get as far as we need to go.

The parallel with China is precise.  To keep the world economy sane and growing, everyone needs a stake in the game.  In practice it needs to be negotiated between the West and China with at least some account taken of the interests of the rest of the world.  But the issue is less a resolution of differing national interests than a recognition of the magnitude of common interest.  One can even argue that the climate discussions are a necessary prelude to the broader economic discussions that need to take place.

The WTO seems the appropriate vehicle for negotiations, although its capabilities need to be extended to deal with the broader definition of fair trade. Before Trump’s election all parties expected such discussions would begin—including of China’s continuing special status as a developing country.  Instead we got a repudiation of all international rules, in favor of an imagined omnipotent USA.  We’re now going back to the game with the doubled leverage of allies beside us, but with an adversary who views us (particularly after January 6) as weaker and less reliable.  What’s more we’ve spent four years strengthening the militant anti-western side of the Chinese Communist Party.  Certainly there’s a job to do.

It may seem strange to put such emphasis on the WTO since “Bill Clinton let China in the WTO and there was nothing we could do about the Chinese assault on American jobs.”   That truism is actually an example (among others) of what you might call bipartisan revisionist history (the left and right united against the center).  In fact the main issue raised with China’s behavior has always been currency manipulation, which was in no way permitted under WTO rules.  And as the job loss chart (from earlier) makes clear, the loss of American jobs was a phenomenon of the George W. Bush presidency—when we were too busy with the Iraq war and the financial crisis to press our case about anything else.  The WTO is what we make of it; the vast majority of US WTO cases have in fact succeeded.  For now it’s the best game in town.

Issues for Today

As a last topic, we want to be clear that we are in no way minimizing the seriousness of the immediate issues that divide the US and China.  One short list makes that clear:

– Taiwan

– Uighurs

– Hong Kong

– Islands in the South China Sea

– Regime-incited nationalism

The first point deserves special comment, because it shows how high the stakes can be.  On one side it is a matter of Chinese national pride, instilled by state propaganda for every school child.   On the other it is not only a matter of US national commitment, it’s also critically strategic.  As one example, Taiwan is the home of TSMC—the worldwide leader in IC manufacturing technology.  Every new iPhone has an TSMC processor.  (This example also shows we can’t solve global supply chain issues by just assuming we’ll bring it all home!)

Other articles have talked about scenarios for de-escalating this complicated situation.  We’re not going to go through those here, but it is nonetheless worth saying a few words about how each of the issues fits with the strategies we’ve just discussed.

The Uighurs and Hong Kong are issues that the Chinese view as internal matters.  Outside of China we can attempt to exert pressure by economic threats, but we’re in no position to change that point of view.  Four years’ worth of dictates have instead made it worse–a matter of sovereignty versus capitulation.  Ideally by bringing China into a broader realm of international standards for behavior, we can attempt to make both—and particularly the Uighurs—a different class of issue:  what it means to belong to the international order.  Hong Kong is the harder issue, because the threat to the national control is bigger.  However it’s easier to think about compromise once the sovereignty isn’t the main story.

The South China Sea is a national security question.  More than two-thirds of Chinese trade comes via the South China Sea.  China, like us, wants complete control of its immediate strategic environment.  We after all have the Monroe Doctrine.  Thus far we’ve taken the worst possible approach, asserting US control of the seas for any purpose we choose.  That’s going to be hard to walk back, but the only way to do it is by making freedom of the seas a matter outside of national whim, perhaps linked to some kind of regional agreement.  It won’t be easy, but we can at least dial down some of the immediate pressure.

Regime-incited nationalism is the usual face of fascism.  We heighten it by continuing to act as an imperialist power—asserting that it is our decision whether to continue to allow Chinese economic development.  We have limited ability to change the issue, as it is a tool the regime uses to maintain its power.  However, the more contacts there are and the less rabid our own vocabulary, the better the chance to cool it.  It’s worth noting that in the Nazi era, most Germans justified Nazi aggression by a belief that Germany had been purposely shoved aside.

Finally we return to Taiwan.  The only thing you can say is that it’s clear how much the issue means for both sides.  If cooperation is necessary for continued prosperity, then both sides need to find a way to save face.  That’s what we were doing for decades.  Trump and Pompeo were part of the change, but it was probably happening on Chinese side anyway.  The only way out is to strengthen the motivation for sanity.  For that, common interest (with a united West) is always better than military threats.  Even today, the impediment to invasion is more economic than military.  International institutions strengthen both the carrot and the stick—you’re giving up more and making retaliation more comprehensive and certain.

All that being said, we end by again emphasizing the parallel with climate change.  Climate change is a pending catastrophe that is forcing the world to come together in a more closely-coordinated way than ever before.  As with climate change, the China-US relationship constitutes a critical issue that can only be resolved by strengthening international frameworks for both cooperation and competition.   The world can be a better place, or we’ll all face the consequences.

Reasons to be Thankful

It may be the day after Thanksgiving, but it’s worth thinking more about reasons to be thankful.

Hopefully we can make it through the next few weeks until the Electoral College meets and Biden takes office.  If that happens there are good reasons to be optimistic.

– The coronavirus siege will end.  It looks like the vaccines will work and can be manufactured.  We have all kinds of logistical problems to solve, but we will get out of this and move on (having killed off far too many in the interim).  You can contrast that with the despair when Obama took office, and it wasn’t clear when or if we were ever going to get out.

– As a result, economies will start doing better.  This will happen sooner if Republican don’t try to sabotage it and make recovery unnecessarily painful (as they did last time), but it should happen eventually in any case.  That can give us a second chance at what ought to have happened under Trump.  Trump’s economic policy of a deficit-funded bubble in good times (an unprecedented act of self-serving immorality) wasted the chance to rebuild national infrastructures.  We should have a chance at prosperity and wise use of its opportunities.  That would be good for everyone.

– The virus should provide ample incentive for progress on the many festering issues of international governance.  Regardless of what anyone says, the virus showed how bad it can get when there is no effective means of dealing with a critical world-wide problem.  Climate change is the prime example, but there are many other issues with globalization that need work.  A Biden administration has a chance of dealing with international standards for trade, labor, environmental protection, etc.  There is tremendous upside to this—defusing the climate crisis, worldwide economic growth, diminished domestic unrest, reduced threat of war.

None of this is guaranteed, but we have a chance.  By the skin of our teeth we have managed to beat back fascism in this country.  That’s no small achievement, and if we’re diligent and lucky there can be dividends.

Who Are Those 73 Million Trump Voters?

There is quite some consternation about how 73 million people could actually have voted for Trump.  What does that say about the electorate?  Has half the country gone mad?

There have been many answers to that question, but I’m going to propose something simple. We just need to recognize that without Covid19 we would have had no chance of defeating Trump.  The strength of the economy would have reelected him.  In fact that almost did happen, and it’s why the polls were wrong. 

Trump almost had his November surprise.  In the debates we were able to lead with Covid19, because we could point out how Trump’s botched non-leadership compared with other countries.  That argument collapsed at the last minute, when Europe entered a new Covid crisis not yet shared by the US.  Normally international developments don’t affect domestic opinion much, but this effectively exonerated Trump. Our election day fit neatly into that short period where Europe was reeling with a second Covid wave, but the US looked better.

With that, the economy returned as primary issue.  Biden was going to turn things upside down—as an overreaction to Covid and to deal with nonsense such as climate change.  It wasn’t just a matter of socialism-mongering. We had invested so much in Covid as evidence of Trump’s dangers, that people had to think themselves about the rest. Trump, shockingly, had his reelection turned into the safe choice!

What does that say about Trump voters?  There were of course whole blocs of true-believers such as the Evangelicals, but the rest of the group was familiar:  they’re the same ones who would have elected Trump without Covid.  With Covid off the table, the Trump time had been okay, and the rest was electoral noise. 

That’s the level at which the election was fought. We shouldn’t delude ourselves that the electorate was as excited about all our issues as we are.  Maybe I’m pushing things, but I’m going to draw a parallel with the last British election.  In that election the primary issue for the voters was Brexit, but the Labor leader Corbin was only interested in promoting his classically socialist programs.  Those programs were actually popular, but they were irrelevant for that election, and the population judged Labor irrelevant too.  We’ve won the election on Trump and Covid, but we shouldn’t think we’ve finished the job of making our other issues relevant.

If we can’t make progress on the Covid recovery, healthcare, and climate, we will be judged irrelevant.  Internal fighting only hurts. I’d even say that so much needs doing for climate and the Covid recovery that the remaining divisions are less important. 

We may of course be in a real battle to be able to govern at all.  There’s a fair chance that after January 20th Trump will still be talking about a stolen election, and—if we can’t pull off a Senate win in Georgia—Mitch McConnell could be back with the same scorched-earth used with Obama.

The Republicans got off scott-free for six years spent deliberately prolonging the 2008 recession.  After the abject hypocrisy of the “balanced budget amendment” followed by Trump’s deficit-funded tax cuts, we can’t let that happen again. 

That’s a worthy battle. But as with the election itself, we’ll need everyone or we’ll all lose.

Democratic Unity

The press is hard at work speculating why the current truce among Democratic factions is more apparent than real.  That may of course turn out to be true, but the real story seems the other way around—how the Covid crisis has improved the prospects for party unity.  I’d even go beyond that.  It has forced a common Democratic program that is more complete than anything we’ve had before.

This is necessarily theory, but there is logic to it.  Consider a few topics:

– Magnitude of the effort.

Any meaningful approach to Covid unemployment and climate change will be massive.  The scale is so large it’s hard even to formulate rational differences among factions.

– Jobs.

Previously the left wanted tariff protection and the center wanted retraining and support.  The answer now is something else—federal jobs.  Lots of them.  We still need to worry about trade, but that can become a matter for the WTO, where there is a real opportunity to go after all the factors that need to be taken into account.  We’ll still need retraining, but now we’re talking about real, waiting jobs better adapted the people we’re trying to help.

This is not just a temporary issue.  With Covid we’ve seen the limits of what the private sector can do.  There’s no question about the magnitude of our needs, and people must be hired to meet them.

– Healthcare

After Covid, it’s clear that an employer-based system is no solution.  Everyone wants to cover the whole population with a program that somehow or other grows out of Medicare.  The discussion is now about tactics, not policy.  Since this new form of Medicare is a non-trivial change, it seems reasonable to start with something less than a full flash-cut.  So we’re down to the size of the initial population group.  Is it really worth fighting about the 60-65 starting age group?

– Education

The Federal Government has stiffed the states and punted on federal help for the overwhelming job of reopening the schools.  Fixing this is real work.  We need Covid help, adequate state funding of K-12, keeping colleges and universities afloat, paying off student debt, and more.  At this stage you can’t really talk about factions, just a hope to make it right.

– Climate change

The current Biden proposal is the best I’ve seen yet. It even recognizes the importance of the international aspect—we need a new model for international cooperation or we will all fail.   There have been past differences of approach, but at this stage we need all of the above.

– Racial justice and national unity

This is obviously more than a Covid item.  But in any case events have made it an aspirational item for the party and even the country as a whole.  Differences may come, but for now there is commitment on all sides.

In all of these areas the biggest issues are actually planning and management—not partisanship.  These programs are not make-work precisely because there is so much that needs to be done.  We have to be the diametrical opposite of the corruption and self-dealing of the Trump people.  That’s a challenge all right, but one that all sides should be ready to embrace.

How We Won the Cold War

Map-Flag_of_the_Soviet_Union

“File:Map-Flag of the Soviet Union.svg” by NuclearVacuum is licensed under CC BY-SA 3.0

We hear every day how we need to get tough for our new cold war with China.  The unstated subtext is that threats and bluster are the “getting tough” that’s going to win. In fact we know exactly what won the last Cold War.  It’s worth paying attention to what that was.

The dynamism of our economy won the last cold war.   Our technological base reinvented itself many times over, and the top down economy of the USSR just couldn’t match it.  There were many individual factors behind the collapse—low growth, corrupt state enterprises, spending on defense, oil price collapse, Chernobyl.  But what it all came down to is that the Soviet economy collapsed because it just couldn’t find the resources to keep up.

Many factors made the difference—the historical strengths of the United States:

– A free market for new technologies.  A venture capital industry supported by anti-trust enforcement to protect new companies from powerful old ones.

– The US as world’s best destination for entrepreneurs from everywhere to realize their dreams.

– Openness to ideas from everywhere and active participation in international organizations of all kinds.

– Government support for pure research–to be on the forefront as new developments translated to opportunities.

– Expanding equality of opportunity, so ideas can come from everywhere.

The USSR had a well-trained population of elite engineers and scientists, but ultimately they couldn’t compete with the ability of the US model to reinvent itself and grow.

What can we say about the current situation with China?  There are three points:

  1. The rise of China actually followed the US model.

One part of this is familiar—China invested in its people:  education, infrastructure, health care, etc.  The regime tolerated no disagreements, but it put money (as we used to) into the environment necessary for success.

However the bigger part is less-discussed—what kicked off the Chinese miracle was an accidental surge of free enterprise.  As a weakening of collective economic control, Chinese municipalities were freed to carry out their own businesses once obligations to the state had been met.  That minor bit of freedom took over the economy.  Independent municipal businesses became dominant to the point that they dwarfed the hugely-corrupt state-run enterprises.  Municipal businesses grew into the independent private sector.

  1. Under Xi, China is abandoning that approach in favor of a return to central planning and control.

Xi is a princeling—a child of former revolutionaries brought up to believe he was born to rule.  All of his recent actions have been directed at crushing independent forces in the Chinese economy.  Appointments have been based on loyalty above all.

China is back to the old Soviet and Chinese world of massive state enterprises and a dictated economy.   That won’t change the immediate future, but we have no reason to despair of our ability to compete.

  1. Under Trump we are similarly abandoning our strengths.

Trump, like Xi, is an autocrat who view himself as the all-encompassing genius who needs to run everything.  He picks winners and losers with tariffs.  He awards exceptions to supporters.  He ignores real problems (such as Covid) that he doesn’t want to deal with.  Job appointments are based on loyalty over competence.  Every one of the listed US strengths is at risk:

– New enterprises are sacrificed to the existing powers that be.

– Xenophobia and nativism are pushing entrepreneurs elsewhere.

– Global participation is discouraged.

– Science is discredited and only mainstream technologies (e.g. AI) or Trump whims are funded. Climate change can’t even be mentioned.

– A political strategy of divisiveness means we’re fighting internally rather than drawing on everyone for progress.

 

We didn’t beat the Russians by mimicking their authoritarian control and top-down economy.  We won because they couldn’t compete with our ability to reinvent ourselves over and over again.  We have that opportunity today, but we’re losing it to the false god of dictatorship.

Democracy is not a nicety but the core of our success.

Dictatorships lose.  All-powerful leaders make disastrous mistakes that cannot be remedied.  They can ignore the well-being of the population.  They create massive corruption that cannot be contained.  All these tendencies are visible today (Covid alone shows several), and the effect is—as always—accelerating.

We still like to talk about the power of democracy and free markets, but both are slipping away.  Voter suppression is an openly-discussed goal.  Anti-trust enforcement has effectively ceased to exist.  The power of corporate lobbyists has starved the public sector (including infrastructure of all kinds) and defended the economic status quo against all comers.

Our problems today are not weaknesses of democracy but an indication of how far we’ve strayed from it.  There’s no reason to despair for our competition with China—or for the country generally.  It’s just a sign we have to get back to doing what we’ve always done best.

The Public be Damned

5498722717_30cccefc95_b

“Face Mask” by shibuya246 is licensed under CC BY-NC 2.0

The logic behind medical face masks was never obscure.  When you sneeze or cough, droplets with virus are largely contained rather than spread.  That logic is clear and confirmed by statistics.

Who knows what Trump thinks, but the Republican Party certainly includes people capable of understanding that sentence.  Such people had a choice.  They knew they could save the country from a serious and completely unnecessary health risk, but they chose the political opportunities of divisiveness instead.

They made that choice.  Face masks had nothing to do with how quickly we were reopening the economy.   Many thousands will die for it.

This is hardly the first case of “public be damned” behavior.  But it is a very pure one.

The Green New Deal is Our Moment

32995070824_07e34ccddf_b

“Earth” by kristian fagerström is licensed under CC BY-SA 2.0

The name “Green New Deal” has become more apt than ever.  It was always a good idea to emphasize that fighting climate change can bring important benefits elsewhere in society.  However, post Covid-19 the name means more.

We’re in a deep hole, and both “New Deal” and “Green” are now policy imperatives.  That means we have to think more broadly about what the Green New Deal needs to be.  A new New Deal with a climate focus is the way out.

This isn’t a matter of changing the legislation but of realizing its aspirations.  There is much that was left deliberately unspecified in the initial draft.  Here are some suggestions for what there needs to be.

  1. We need a national plan.

The two recent stimulus measures (whatever their value) are examples of what we cannot afford to keep doing—quickly hacked-together combinations of incomplete and conflicting policies with problems in implementation.

Green New Deal is huge undertaking.  The climate side alone is a combination of many rapidly-changing technologies with major architectural choices and all sorts of issues with competing interests and local versus national administration.  In the new scope we have even more to do in making sure that our choices deliver economic and social benefits.  Business isn’t going to do it.  State and local interests aren’t going to do it.

The Green New Deal proposal already talks about modernizing the electrical grid.  That’s important but not the whole story.  We need a comprehensive plan including priorities at each stage of development. That effort needs to be funded, competent, and free of corruption.  It will take an organization charged with planning (starting even now) and a feedback process to work with all constituencies.

  1. Don’t limit the scope of jobs.

It’s true that fighting climate change will create many jobs.  But that was never the end of the story.  The country needs infrastructure of all kinds—and not just roads and bridges.  Education and healthcare are infrastructure too.  We don’t need make-work or “universal basic income” to stimulate the recovery; we just need the work that needs to be done.

The American Society of Civil Engineers keeps a website with a breakdown of national infrastructure requirements.  We currently rate a D+, and the inventory of problems is long.  We also need to restore our much-diminished upward mobility, through education and healthcare as mentioned but also with more mundane needs such as public transportation.  As a practical matter we also need daycare.

We also need to worry about the negative side—job loss.  The changes in fighting climate change will be significant; you only have to think how many people will be affected by the move to electric cars.  We have to guarantee that people will be made whole and plan how we’re going to do it.

  1. This really can be a locomotive for social justice.

The original New Deal was also conscious of this kind of goal, for example in bringing all regions of the country into the 20th century.  However its impact was more limited in matters of race or national origin.  For those we needed an even bigger national project—the mobilization of the population in World War II—to achieve some success (though blacks were explicitly excluded).  For many groups US history divides neatly into before and after World War II.

World War II was enough of a success to say it can be done.  The Green New Deal has to provide equal opportunity for everyone—again without corruption.  Fighting both climate change and a depression will require all of our resources in another nationwide battle against an existential threat.  Everyone has a part.

  1. This isn’t the 1930’s (any more than it was the 1950’s).

MAGA was a failed attempt to return the US to the 1950’s.  The failure was explicit: manufacturing was in recession before the virus hit, and essentially no jobs were ever brought home.  We have to be careful not to make a similar mistake about the 1930’s. This is a different economy.  As we’ve noted before, the transition of the US economy from manufacturing to services is a long-term trend with strong reasons to continue.

More and more companies are functionally software companies—with no skilled manufacturing career paths.  Amazon’s warehouse workers are not on track to the corporate offices in Seattle.  We can raise the minimum wage, but no combination of tariffs or other government policies is going to change the need to educate everyone for the good jobs that will exist.  We need a safety net and stronger unions, but above all we need to give people the tools to succeed.

We also need to think about government revenue in a different way.  Software companies are different—there is a strong tendency to monopoly, and cost of production is much less of an issue than product differentiation. Successful companies will tend to be highly international and with monopoly power.   The high profit margins and barriers to competition mean they should be taxable, but–as amply demonstrated by Apple—it’s seriously hard to do it.  That’s an international problem that needs to be solved.

  1. Don’t shortchange the international side.

Discussions of climate change tend to be parochial—solar panels on the house, then state issues, then national issues, and usually not beyond.  It’ll be tough to get carbon neutral, but then our job will be done; it’s up to everyone else to do the same.

In fact international issues are at least as important.  We control at most 15% of what happens to our atmosphere.  Our per capita energy consumption is twice anyone else’s, and we are by most measures the richest country in the world; it’s simply not going to happen that the rest of the world will just take care of itself.  We will need to be involved internationally, both for the underlying technologies and for their deployment.

The only international framework that exists for climate is the Paris Agreement.  That is entirely based on voluntary compliance in service of a common need.  There is no other mechanism.  We can’t bomb or tariff our way out of it.  We have to make it work.  Solving climate is a cooperative venture.

At worst this is a mess.  At best it is a model for international cooperation in other areas as well (trade, labor standards, taxation, environment standards).  The unanimity of the Paris Agreement was a major achievement of the Obama people.  The collapse of discussions since we opted out shows the risk.

  1. Need to create ongoing institutions.

For any activity with a fixed target—such as keeping carbon dioxide under the scientists’ limit—there is a tendency to think of reaching a new era where problems will finally be behind us. That’s a dangerous mindset.  For one thing it can produce a kind of eco-paralysis—with so many problems to be solved at once that you can’t make progress on anything.  (The recent Michael Moore movie is a symptom.)

More generally we have to recognize that even though we’re solving an existential problem for mankind, that will still leave plenty to do.  Having enough clean energy will help in many areas, but even for the environment we won’t finish all the problems we know.  And there will always be new issues beyond that.  So part of the job is making sure we will have the right institutions to go forward.

On the domestic side that means strengthening the regulatory agencies we have, and determining what is missing.  It’s possible that we will need more direct federal supervision or even operation of the power grid, for example.  We certainly need decades worth of large-scale spending on energy research.

On the international side there is also much to be done.  It should be recognized that the Covid-19 crisis was less an act of God than a failure of international governance.  China’s quarantine of Wuhan should have been matched by coordinated actions of other countries throughout the world.  That such an obvious consequence didn’t happen shows the vacuum created by the US abdication of power.  It also shows how we cause ourselves to suffer.

Most international institutions were our creation.  We had learned that the best way to exercise power was with rules we were willing to obey for ourselves.  We’ve now rejected that approach.  However, as a country, we have actual historical experience with such a situation.  The Articles of Confederation after the Revolutionary War almost destroyed the US before it could get started.  The solution was not more chaos, but an appropriate structure for success.

There’s another historical parallel worth mentioning.  After the second World War the US experienced unprecedented prosperity brought on in part by our rebuilding of Europe, including Germany.  The Marshall Plan paid real dividends.  The world has a similar opportunity in the developing middle classes of China, India, Korea, and elsewhere.  Instead we’re fighting a non-productive economic war with China that neither country will win, but virtually everyone will lose.  That’s not to say we have no issues with China, but in our eagerness for war we’ve shot ourselves in the foot.

The Green New Deal has become the defining task for our national moment.  For many issues—economic, political, racial, environmental, international—it represents a coherent way forward.  It is not the same task as the original New Deal, but certainly as challenging in its scope.  We have to recognize that we have it in our power to create a bright future for ourselves and for humanity.  The founding fathers of this country rose to their occasion.  Will we?

 

The Coronavirus Message for Climate

Since the coronavirus is at the top of everyone’s consciousness, there has been a lot written about what the coronavirus experience has to say on a great many issues.  After a while you start to get numb.  However for climate change the parallels are so explicit and telling that they need to be emphasized.  The argument in this piece is not new, but it’s worth spelling out in detail.

The coronavirus shows just how hard it is for us as a country—or as a world—to act ahead of a disaster even when the evidence is clear.  We were unprepared when the crisis came, because we just didn’t want to believe it could happen.  Our reluctance not to believe was of course encouraged by players (foreign and domestic) who felt there was something to be gained by delay.

The result is measured both by the numbers of dead and by the economic consequences of the drastic measures taken to stop the exponential growth of cases and deaths.  In the US that means on the order of 200,000 deaths and the worst job loss since the Great Depression.  The weeks of delay made this situation exponentially worse.  You can argue about the details, but there is no question that failure to act early cost us dearly on both counts.  We’ll muddle through, but badly wounded.

The parallels to climate change are explicit—but for climate the muddling through is no sure thing.  There are two primary points:

  1. CO2 in the atmosphere just adds up—which means that whatever problems finally force us to act will keep getting worse until we can manage to stop fossil fuels completely.  In other words from whatever time we recognize a crisis, we will be locked-in for many further years of worsening crisis.
  2. That’s even worse than it sounds because—as with epidemics—there is an exponential growth aspect here too.  To see this we can start with the example of hurricanes.  For hurricanes, the damages in the wind-speed categories are such that each step makes the previous look trivial.  In other words, as wind speed grows in a regular, linear way, damage goes up exponentially.

This isn’t just a matter of hurricanes; it’s typical for damage.  For floods you go from marginal areas affected to major cities.  In any category you can think of, damage goes up exponentially.  The bottom line is that for all those years of lock-in, every additional ton of carbon dioxide we add to the atmosphere will pack a wallop.  This is the stuff of nightmares.

The latest climate report gives us the timescale.  To avoid catastrophic consequences CO2 production needs to drop 45%  by 2030 and reach 0 by 2050.

We couldn’t get ourselves to believe the coronavirus would really happen, and climate disaster is even further from our past experience.  So the tendency to disbelieve is even stronger.

There are plenty of well-connected, interested players out to convince us to wait.  The oil companies and their allies are doing quite a good job of it.  Pence and Pompeo (among many others) are Koch organization soldiers in a Trump organization out to sabotage all efforts to control climate change.  Another indication of oil company power is Harvard University’s recent announcement of a commitment to fight climate change—by making their investment portfolio carbon-neutral starting in 2050, the year when the scientists say we need to be done!

That’s where we are.  Climate change is the coronavirus on a bigger scale.  It’s much more dangerous and with even more powerful forces out to convince us to wait, and wait, until it’s too late to matter anymore.  We’ve been warned.