Scott Sumner  

The new political divide

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The Economist has a very good article describing how the 20th century's left/right political divide is now being replaced by a split between those who favor and oppose an open society:

IS POLAND'S government right-wing or left-wing? Its leaders revere the Catholic church, vow to protect Poles from terrorism by not accepting any Muslim refugees and fulminate against "gender ideology" (by which they mean the notion that men can become women or marry other men).

Yet the ruling Law and Justice party also rails against banks and foreign-owned businesses, and wants to cut the retirement age despite a rapidly ageing population. It offers budget-busting handouts to parents who have more than one child. These will partly be paid for with a tax on big supermarkets, which it insists will somehow not raise the price of groceries.

"The old left-right divide in this country has gone," laments Rafal Trzaskowski, a liberal politician. Law and Justice plucks popular policies from all over the political spectrum and stirs them into a nationalist stew. Unlike any previous post-communist regime, it eyes most outsiders with suspicion (though it enthusiastically supports the right of Poles to work in Britain).

From Warsaw to Washington, the political divide that matters is less and less between left and right, and more and more between open and closed. Debates between tax-cutting conservatives and free-spending social democrats have not gone away. But issues that cross traditional party lines have grown more potent. Welcome immigrants or keep them out? Open up to foreign trade or protect domestic industries? Embrace cultural change, or resist it?


Of course in America we see this with Trump, running on a platform with both right wing views (anti-immigration, distrust of Muslims) and left wing views (anti-trade, pro-deficit spending.)

I also see this as a move back closer to the politics of 200 years ago, when people called "liberals" (now "classical liberals") tended to hold views that modern Americans would view as right wing on economic issues, while also holding views that were to the left of their contemporaries on many non-economics issues. When people ask me why I don't support one of the major parties, I respond, "Because I don't live in Poland, where the choice is stark."

And this also explains why I chose to oppose Brexit, even though some classical liberals made powerful arguments in support. In the end, I concluded that Brexit was going to push Britain a bit more in the closed society direction.

Some people argued that if Britain was freed of EU regulations, it could liberalize its economy. I was skeptical; partly because when countries join the EU they are forced to liberalize their economies as a condition of membership. But mostly because the UK already has vast powers to liberalize its economy, even within the EU. Yet the Conservative government was recently taking steps such as a very large increase in the minimum wage rate.

Others said that even if Britain didn't opt for a more open model, there was an important principle involved; the British had a right to make their own decisions. Within the EU, decisions about policy are made by unelected bureaucrats in Brussels. That's a good argument in my view, but it's a question of degree. Does the good of the EU (free trade and labor mobility) outweigh the bad? Let's look at the early returns. Here's The Economist:

IF MAKING the gaffe-prone Boris Johnson foreign secretary was Theresa May's most eyebrow-raising cabinet appointment, probably her most visible policy pronouncement since taking office on July 13th has been to signal the return of an "industrial strategy".

Merely to mention the phrase in Conservative Party circles has amounted to heresy since the days when Margaret Thatcher was prime minister. She made it a test of ideological purity to reject the muddled state-interventionism of her predecessors, both Labour and Tory; there was to be no return to the disastrous meddling in, or nationalisation of, companies like British Leyland under the Iron Lady. Yet Mrs May has broken the taboo. She made a "proper industrial strategy" part of her pitch to be party leader in a speech in Birmingham on July 11th. And now in Downing Street she has created a new ministry with the phrase at the top of the bill: the Department for Business, Energy and Industrial Strategy, headed by Greg Clarke.


And here's the Financial Times:

When David Cameron left Downing Street this month, his aides and supporters emphasised that Theresa May would continue with his policies -- but early evidence already suggests a very different picture.

Mrs May's decision to delay the final go-ahead for the Hinkley Point nuclear power plant is the latest in a series of shifts that, taken together, indicate that she is sweeping away Mr Cameron's legacy across a range of policy areas.

The changes are "reflective of the fact that this is a new government", one Tory aide said. "Some people see this as being a continuity Cameron government but that is not the case."
During her leadership campaign Mrs May called for a "strong, new and positive vision for the future of our country".

She signalled that she planned to make changes in areas including economic policy -- watering down George Osborne's austerity economics and seeking to rein in capitalist excess -- and putting less emphasis on the former chancellor's Northern Powerhouse. Instead the government would work to develop the economies of cities around the UK, she said.

The government has dropped Mr Osborne's target of seeking a surplus on the public finances by 2019-20 . . .


I see two things to worry about if you are a classical liberal supporter of Brexit. First, Theresa May's instincts are clearly in favor of bigger government over a wide array of policy areas, not just "industrial policy".

More importantly, note what the FT said about this being a "new government" not a continuation of the Cameron government. Also note that the British public did not elect this new government; they elected the Cameron government, in 2015. Also note that Theresa May was not chosen to be leader of the Conservatives by the voters, and hence her new policies have not been endorsed by the voters. But no worries, the next election is only . . . oh wait; it's 4 years away.

Thus one irony of the Brexit vote that was supposed to "give the British people back their government", is that the vote has resulted in an unelected government (leadership) for a period of 4 years, by which time hugely consequential decisions will be made about Britain's future.

Yes, the backbenchers were elected, but they don't make the big decisions. And yes, I know that this is how parliamentary systems work. And I understand that after 4 years the British voters may indeed have more power than before Brexit. But I would emphasize, "may" (pun intended). Keep in mind that protest votes can have lots of unintended consequences. We are still very early in the Brexit process, and we still don't know how those will play out. Indeed we don't even know whether the UK will fully leave the EU, or leave in name only, while striking a Norway-type deal that forces it to adopt EU regulations. So it's way too soon to say that the British voters have successfully struck a blow for freedom. All we know is that the early returns show a UK that is less free, and less democratically accountable than just a few months ago.

The bigger issue here is the global rise of nationalism. I hope that classical liberals don't make a "pact with the devil", and assume that the nationalists will support greater freedom over a wide range of issues. History provides dozens of examples of exactly the opposite.


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COMMENTS (21 to date)
Michael writes:

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Roger McKinney writes:

Classical liberal economics got the nickname "dismal science" from the left who favored slavery and opposed free trade and immigration.

Read Mises' Omnipotent Government and you'll see that socialists were the first to oppose immigration and international trade because both hurt their socialist programs and they wanted someone to blame.

Socialists invented nationalism, not classical liberals.

The idea that the right is nationalist and anti-immigrant came from the socialist propaganda that Nazis were capitalists. The media loves to portray free market capitalists as Nazis because it serves their goal of trashing capitalism.

There never was a right and left in Germany after 1870, only versions of socialism. People exaggerated the differences. The same is true of the US and much of the world today. There is no left-right divide because there is no right any more. All that remains is varying shades of socialism and the media grossly exaggerating the differences. That goes for Democrats and Republicans.

Kit writes:

"vote has resulted in an unelected government"

Nope. In the UK they vote for a Member of Parliament, MP, to represent them. It is up to the MP's to choose the government.

James Alexander writes:

Roger
Very true. Most classical liberals regarded Cameron/Osborne as less free-market than Blair. And getting less and less. They were just following consensus, rather than leading it.

Hard to know what the new lot will be like, key man is Hammond. Osborne seemed a showman of little substance, a poor tactician, and most importantly lost interest in monetary policy. Hammond has dropped some hints he knows a bit more.

On Brexit, I am happy to agree to disagree. Except one thing. The European Commission has significantly less democratic legitimacy than the UK government.

Matthew Moore writes:

I'm remain more optimistic that Brexit will uincrease openness (especially compared to the counterfactual of remaining in an increasingly sclerotic EU).

Exhibit A: a leading article extolling the nascent opportunities for new free trade deals in the Sun (Britain's largest circulation newspaper: a right-wing working class tabloid, always strongly pro-Brexit, with a tradition of telling the people what they want to hear)

https://www.thesun.co.uk/news/1387904/post-brexit-britain-is-a-great-place-to-do-business-with-countries-clamouring-to-do-trade-deals/

Exhibit B: the same info on the front page of the Sunday Express, another paper for the supposed 'little Englanders': http://www.express.co.uk/news/politics/694787/BREXIT-BOOM-27-countries-around-world-want-trade-deal-UK

The British certainly came out against literally unlimited immigration from (particularly poorer Eastern) Europe. But no Leave campaigner ever made a protectist case on trade. Quite the oppositez including from UKIP. The dominant line was about escaping the closed restriction of the Customs Union

Yaakov writes:

Thanks for this important and saddening post. Already the bible has warned us that when people give up their freedom for some pressing issue the long run out come tends not to be what was intended. It seems that the belief in "democracy" has made people much too easily willing to forgo their freedom. While the democratic process does slow down the process of increasing government control, it does not stop it.

BC writes:

Interesting observations on the new May government. I would make the following comments.

(1) On Brexit and openness, I would separate structural issues from policy issues. By structural issues, I mean which entities have which powers, like British parliament vs. EU parliament legislative powers. Structural issues operate over time scales of decades and centuries rather than years or months and should be evaluated without regard to specific preferences on current policy outcomes. For example, in constructing our Constitution over 200 years ago, the Founding Fathers were not asking themselves how to structure the government to make Obamacare more or less likely to pass or repeal in 2016.

(2) On the new political divide, I think that politics works along two dimensions: ideology and identity. Identity includes the traditional markers of race, ethnicity, religion, etc. but may also include "cultural" markers that are harder to label or recognize. For example, when W. Bush beat Kerry, some people suggested that it was because voters preferred drinking a beer with Bush over Kerry. The "beer sharing test" is an imprecise way of describing cultural identity. Identity is separate from ideology, so we get confused sometimes when elections are decided along identity rather than ideological dimensions, especially when the identity is non-obvious (the "beer test" rather than race, ethnicity, religion). Identity divides are not new ideological divides; they are divides along an orthogonal direction. Anti-trade voters may identify culturally with W. Bush even though he was ideologically open on trade and immigration.

It's especially confusing in the US because the Republicans are (or at least were pre-Trump) ideologically classically liberal (free trade, less regulation, smaller government, etc.) but many classical liberals identify culturally with the Democrats.

I see Brexit as aligning primarily along cultural identity, which is why so many in the US, primarily on the Remain side, seemed to be so *emotionally* invested in the outcome, even though it wasn't our own country. (I don't include Scott as one of the emotionally invested, by the way.) They felt a trans-national cultural affinity bond with the Remainers. If the vote had fallen along racial lines, with similar racial alignment in the US, then we would have recognized the identity dimension immediately. Non-racial, non-ethnic cultural identity, however, is more subtle.

E. Harding writes:

"First, Theresa May's instincts are clearly in favor of bigger government over a wide array of policy areas, not just "industrial policy"."

-And she supported Remain.

quadrupole writes:

I think the divide is only coincidentally about open vs closed societies. I believe its more about *class* than anything.

On one side, you have folks on the upper side of the class divide who find borders an inconvenience, both for their own movement and for the movement of goods.

They don't see borders open to goods as threatening their own livelihood, they are on the winning side of that with more, better, and cheaper goods available to themselves, and no (perceived) threat of being displaced.

They don't see borders open to people as threatening their own neighborhoods or children's schools, because they live in places sufficiently expensive that only upper class immigrants can move in. Since they have much more in common with those folks than the lower class members of their own nation, that's not in the least a problem.

They don't see issues like gay marriage as being any skin off of their nose, because they are not in demographics that feel like marriage is under threat (plus, they probably know adorable gay couples they think *should* be allowed to marry).

On the flip side, you have you have people below the class divide, who see borders as protecting them from goods that they perceive as threatening their livelihood, and people they don't want to live among.

They see open borders for goods as meaning they are going to loose their job or make less or have to work a lesser job: ie, economic insecurity.

They see open borders for people as meaning they are going to have their neighborhoods flooded with what they perceive as lower class foreigners who (for a variety of reasons) they consider to be poor neighbors. They also perceive the children of those lower class foreigners soaking up resources in their own children's schools, and thus harming their own children's education (and future prospects).

They see marriage as an institution crumbling around them, and so easily believe that any number of things represent a threat to it (ie, gay marriage).

You and I (and I suspect most of your readers) are on the upper side of that class divide. Simple self interest drives our interests to those of our class.

One can make a reasonable argument that much of the history (at least in the US) of the last 60 years has consisted of the upper class remaking society in ways that have strongly benefited it, but been disastrous for the lower classes... I suspect what we are starting to see is the lower classes waking up to that. Its important to recognize given the history that they don't trust us.

Miguel Madeira writes:

«Classical liberal economics got the nickname "dismal science" from the left who favored slavery and opposed free trade and immigration.»

Who invented the expression "dismal science" was the tory Thomas Carlyle.

Scott Sumner writes:

Kit, It's much more complicated than that. A Labour Party headed by Corbyn is very different from one headed by Tony Blair. To ignore those differences is to miss much that is important in politics. In modern politics, one votes for both the party and the leadership, even if (de jure) the vote is just about the local MP.

Matthew, You said:

"But no Leave campaigner ever made a protectionist case on trade."

My point is that nationalism almost inevitably leads to protectionism. May is certainly more protectionist than Cameron.

BC, Lots of good comments, but be careful here:

"It's especially confusing in the US because the Republicans are (or at least were pre-Trump) ideologically classically liberal (free trade, less regulation, smaller government, etc.)"

I'm not at all convinced by this. The only time they controlled both parts of government (during recent decades) was under George W. Bush. They significantly expanded government in a number of dimensions.

They are certainly anti-government in some respects, but I think we get fooled by their rhetoric to overlook lots of exceptions. When you talk about "regulations" there are few more consequential than the War on Drugs, supported by the GOP, which imprisons hundreds of thousands of people. They also favor regulation on social issues (abortion, prostitution, porn, etc.) They favor regulation on who can move to the US. They favor an intrusive NSA, spying on the public. I could name 100s of other examples. Yes, they oppose Obama's regulations on clean air and the new employment regs, but there are many types of regulations out there.

Harding, Yes, she (weakly) supported Remain, but her ascension to power was a direct consequence of the Brexit vote.

Quadrupole, Here's why I don't agree with you. Hillary will probably win a majority of votes among the bottom 20% of the income distribution, and Trump will probably win a majority among the top 20%. So I think a class approach to the issue doesn't do justice to the complexity of the problem. Lots of low income Hispanics would like to make it easier to move back and forth over the border.

One sign of someone being a closed society person is that when they talk about "Americans", their talking points refer to white Americans.

Josiah writes:

Scott,

Two months ago, you wrote:

While I tend to agree that small government is best, I also know that there is nothing special about my opinion. I'm not smarter than lots of economists with different views. It's not my job to decide whether future Americans should be predisposed to prefer my views on economics or Krugman's. Thus I should not take political inclinations into account when deciding on which groups should be allowed to immigrate to the US. And I apply this rule to lots of other issues as well. When deciding whether the Electoral College or the popular vote is the best way to pick a president, I pay no attention to which party is helped (it's not clear in any case, and FWIW I favor the popular vote). Ditto for the parliamentary political system (which I prefer).

Now you write that you oppose Brexit because you thing the people of Britain would choose worse policies than if they stayed in the EU. Have you changed your mind?

Matthew Moore writes:

Scott,

I think that might be true in the US, which has a strong tradition of isolationist thought. But I don't think it is globally true.

The English national identity (also, but to a lesser extent, the British one) is strongly linked to buccaneering / imperial / maritime engagement. Global trade and military reach is a defining point of national pride, including amomg the working class. There is no major backlash against outsourcing or foreign takeovers, as in the US. Against low wage immigration yes, which is making the country more closed. But these issues seem to be more separable in the UK.

(Introspection only, in have lived in England, Ireland, Northern Ireland and the US)

Thomas Strenge writes:

On Brexit, what moved me to cheer for the "Leave" team was a tidbit from NPR, of all places. Apparently, one third of all rules and regulations passed last year in the UK originated from the EU. Think about what that means. Think about what that means every year for a decade and beyond. There is no direct accountability between EU rule-making and those who have to abide by it. As much as I resent the absurdity of the last 8 years here in the USA, at least it was absurd rules made by Americans. And I understand what needs to happen to repeal those rules. No such feedback loop exists with respect to the EU. It is fundamentally undemocratic. Furthermore, I submit that a key gift of the English success story is Common Law. Common Law is under assault by the regulatory state with the EU a key driver in Europe. Exiting the EU will help restore primacy of Common Law and protect the legal freedom necessary for a market economy to thrive.

Matthew Moore writes:

Somewhat off-topic but a big +1 to Thomas's comment on common law.

This is a seriously under-made argument for Brexit.

Not just the superiority of common law (my opinion), but the clear incompatibility of the UK common law tradition with continental Civil Law.

n shackel writes:

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Shane L writes:

Regarding a perceived rise in nationalism, I've noticed big differences in attitudes towards nationalism in big, former imperial countries and in small, perhaps formerly colonised countries.

Left-wing friends celebrate the nationalisms of Ireland, Scotland, Palestine, Tibet and so on, while horrified by the nationalisms of Italy, England or Australia. It seems that some ethnic nationalist movements managed to associate themselves with a left-wing anti-imperialist sentiment during the Cold War, even while perpetrating violence for an ethnic nationalist goal. The Provisional IRA's attempts to conquer Northern Ireland from an unwilling population won sympathy from people who would find the same behaviour elsewhere odious.

Likewise I've seen some sympathy for Scottish nationalism by the centre-left, but revulsion for English nationalism. I wonder if this could backfire quite horribly. I gather surveys show that many ethnic immigrant groups in England talk about having a "British" identity, not "English". The already multiethnic "British" identity may help to integrate diverse immigrants while an exclusive ethnic nationalist "English" identity may not. If Scotland leaves the UK it might provoke a strengthening of English nationalism that makes life harder for non-ethnic English. The sympathy for ethnic nationalisms of perceived underdogs could lead to a revival of exclusive ethnic nationalism in big European countries. The British National Party have already absorbed some of the rhetoric of these anti-imperialist nationalist movements, describing the ethnic British as "indigenous".

David Condon writes:

"Others said that even if Britain didn't opt for a more open model, there was an important principle involved; the British had a right to make their own decisions. Within the EU, decisions about policy are made by unelected bureaucrats in Brussels. That's a good argument in my view, but it's a question of degree."

I strongly disagree. It is common to take as given that more democracy is good, but this conclusion eventually leads to direct democracy. We have representative democracy for a reason. Increasing democracy often results in worse outcomes. Brussels isn't completely unrepresentative of the UK. It is just less representative than the national government. It is not clear that smaller government is better, and I would argue that it is often worse. This is hard to separate however because larger governments also have larger populations, so it's hard to separate the effects of a larger population participating in an economy from the effects of a larger population participating in government.

Scott Sumner writes:

Josiah, I suppose there might be some comparison, but I think of the EU as a specific set of policies, like free trade and migration, plus some busybody regulations--not just an overarching structure.

In addition, I was partly responding to classical liberals who saw Brexit having positive side effects, such as economic liberalization. I'm not seeing those side effects. That was my main point.

Shane, Scott Alexander has a couple recent posts related to that same point, which I strongly encourage you to read.

http://slatestarcodex.com/2016/07/25/how-the-west-was-won/

http://slatestarcodex.com/2016/07/27/post-partisanship-is-hyper-partisanship/

David, I believe smaller government is usually better.

Shane L writes:

Thank you Scott. I am working my way through Scott Alexander's first article and enjoying it. I have noticed in the past that McDonalds restaurants often have highly multiethnic customers. It seems that what Malaysians, Indians, Brazilians, Nigerians, Spaniards and Poles have in common is exposure to their own McDonalds, and when they travel abroad the local McDonalds are a taste of home. Strange times indeed! McDonalds is part of the "universal culture" Scott Alexander describes, apparently.

R. Jones writes:
Quadrupole, Here's why I don't agree with you. Hillary will probably win a majority of votes among the bottom 20% of the income distribution, and Trump will probably win a majority among the top 20%. So I think a class approach to the issue doesn't do justice to the complexity of the problem. Lots of low income Hispanics would like to make it easier to move back and forth over the border.

One sign of someone being a closed society person is that when they talk about "Americans", their talking points refer to white Americans.

This proves Quadrupole's point that this class based voting is driven by self interest. Hillary benefits the cosmopolitan elite, what Taleb calls the "no skin in the game" class, as well as the brown lower-classes with handouts and identity politics. The middle class loses, the middle class is white and they are beginning to realize this.

http://reason.com/blog/2016/03/15/nassim-taleb-the-global-rebellion-agains

http://gablog.cdh.ucla.edu/2016/07/the-high-low-alliance-toward-a-middlist-absolutist-politics/

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