Renaissance of European national socialism, France update

A while back I suggested that national socialism might return to Europe.  Not the virulent nationalism socialism of the 30s and 40s, but a kinder, gentler version, without wars but plenty of statism, anti-capitalist and anti-foreigner rhetoric, and, perhaps, the end of the free movement of capital and people across European borders.  Plus an even deeper, more prolonged economic than the one Europe’s now going through.  How would this happen?  The key would be the rise to power, in any of a number of states, of populist socialist governments, blaming the internationalist elite, and the neo-liberal policies for which that elite seems to stand, for their countries’ problems.

How’s that going?  France is an interesting case, what with the recent election of a left-wing government, including a president who’s said international finance is his enemy, and several populist-nationalist ministers:

Well, we’ve seen nationalist rhetoric…

Arnaud de Montebourg, the Minister of Productive Redress, said the Indian owner of a financially troubled French steelmaker was “unwelcome in France”…

…leading to nationalist, socialist action:

…and, backed up the the president, threatens said owner with expropriation, coercing him to make a large, economically unjustified investment in facility, to preserve French jobs

There was an old-school socialist demarche…

Fulfilling a campaign promise of a president who’d said “I don’t like the rich,” the Ayrault government tries to introduce a 75% marginal tax rate on the highest earners…

…that came to nothing, but did product this petty nationalist spat:

…some of whom flee the country, with one then called out as “pathetic” by Ayrault, and responding by emigrating to Russia (!).

This truly old-school – as in Russian Civil War old-school – socialist rhetoric…

The housing minister calls for the expropriation of private apartments…

…inspired this spontaneous, if unofficial, socialist demarche:

…causing a leftist non-profit to do seize several properties, promising them to the homeless, then demand that said minister make the practice a matter of policy.

There are plenty of other examples.  But while the Ayrault government talks a big socialist game, it doesn’t really follow through.  Montebourg was rebuked by Ayrault for his attack on Lakshmi Mittal, and Ayrault has been similarly cold to Duflot’s demand that she be allowed to start seizing apartments.  There’s as yet no sign the government will actually expropriate anything from anyone.  This is nothing like the early Mitterrand years. Indeed, Hollande’s France is neither as socialist, or as nationalist, as any major Western European state of most of the first few decades after the war. That, after all, was a time when both confiscatory tax rates and tax exile were the norm, and when currency controls and visa served to bind Europeans much more closely to their states, and thus to the power of a particular set of governing politicians.

What could move France back to that past?  Unfortunately, what could prove most dangerous would be a step that arguably, the country needs – national-level control over its own money supply, which requires the reintroduction of the franc. The question is how a socialist government would handle such a step.  The Ayrault government seems unlikely to do anything that would truly alienate conservatives and moderates, and is also clearly committed to the pan-European managerialist ideal.

But what would happen after a few more years of economic malaise, and the closing of who knows how many more French factories, made uncompetitive by an over-strong Euro and crushingly high taxes?  Then somewhat like Montebourg might well replace Ayrault.  In this case, popular desperation – and clamoring for a truly “strong leader” – could give a socialist government broad support for using the move to the franc as an excuse for widespread expropriation, and vastly expanding state control of  the economy and the movement of money, and possibly also people, across the French border.  Unfortunately the European Central Bank continues to keep the Euro far higher than makes sense, for anyone but Germany. Which makes continued French economic malaise a certainty for the time being.  Yet the French elite, confident in the pan-European managerialist ideal – that is, blind to the political dangers of saddling itself to a harsh monetary policy dictated by unelected bureaucrats  remains committed to the Euro.  We may yet have a chance to see just how national-socialist a Montebourg government would be.

Orca and the myth of the plan

I’m still trying to process the news that the Romney get-out-the-vote machine was actually a machine… and one that didn’t work, in spectacular fashion.  I’m probably the one person who didn’t follow the campaign that closely, so I just learned about Orca, aka the ill-named and ill-starred web app for volunteers to record, over the course of election day, which likely Romney voters had voted and which hadn’t, so it could alert volunteers in areas where there were a lot of the latter, so they could in turn get those people to the polls. A simple-enough system, in its outlines, though one that, to deliver value, would have had to work perfectly.  Apparently also, according to one Romney volunteer, a web dev named John Ekdahl, this sort of thing has been done manually and effectively, with paper lists and pencils and phones, since time immemorial.  When I read this, I thought of any number of projects I’ve been in on or observed, in the course of many years working in tech, when some executive orders someone to, in effect, build the software equivalent of a bazooka to kill a fly.  Indeed the Sean Gallagher Ars Technica piece says Orca was indeed the product of executive whim – specifically, that of Romney’s Director of Voter Contact Dan Centinello and the campaign’s Political Director, Rich Beeson.

I’m even more struck by the ways in which the Orca plan seems to have been conceived, to have gotten traction, and then failed, all in the manner of a ’30s Soviet economic plan.  I am hardly saying that Romney is Stalin.  But from what I can tease out of the press accounts, the Orca idea seems to have appealed to his operatives, and indeed become a central pillar of their strategy precisely because of those features that make it similar to one of the great Five Year Plans.  It showed the way toward using a technological silver bullet – industrialization then, a web app now – to “catch up” to a bitter rival (the capitalist West;  Obama) who had the advantage of a head start (the Industrial Revolution;  no primary challenge) and a resulting position of dominance (an established advanced economic base;  incumbency).  It promised to leverage technology developed and honed in the private sector, to ensure the success of a political endeavor.  Moreover – and critically – its seemingly sure success promised to validate the genius of both top-down central control of local execution of a centrally defined plan, and the genius of those who had both set the plan and shepherded the creation of the means by which it would be executed.  Like Soviet economic plans, this one ended up being more enabling myth than guide to reshaping reality.

The execution was similar too.  The focus of lower-downs seems to have been on proving their political bona-fides, rather than sweating the details – witness Ekdahl’s reference to the “marketing-style” presentations on Orca, wasting time that could have been spent getting feedback that could in turn lead to building a better product.  And in the end, the energy and intelligence, and local savvy, of thousands of volunteers, was wasted – not least on election day, when they sat helpless as Orca failed – because the campaign, at least in this one key area, had been set up to ignore and disempower them.  Meanwhile, Obama’s campaign paid keen attention to Hayekian – or perhaps Scott-ian – insights about the value of not only listening to, but indeed reshaping strategy and tactics in line with information and suggestions sent to central operatives from those working on the local level.

Of course there were other problems with Orca, and no doubt there’s blame to be put on consultants and those who managed the app’s development and testing, or failed to manage the former and skipped the latter.  But as someone with a lot of web design and development experience, I can say definitively that this was not that complicated a project.  The fault was in the planning – and, it would seem, in the Romney campaign becoming so enamored with its plan, and its own genius in concocting that plan, that it didn’t bother with the details.  Including, critically, listening to Ekdahl and the local-level folks whose expertise it needed.  That’s a top-management failure, and it’s also quite possibly why Romney won’t be president – and a sign that had he been elected, he would likely have been an ineffective one.

The missing story of the presidential election?

Last week the NYT Sunday Magazine ran an interesting piece on Obama’s campaign, saying it had been less successful than it might have, because Obama and his advisors had failed to craft a compelling central narrative and identify him with it. Perhaps this is true in the sense of a narrative making his policy positions cohere, though I think his record has done that for him. Voters knew what he would do with four more years.

The “defining” story of an event is often discovered in its aftermath.  Consider the way that many, perhaps even most Americans think the Civil War was primarily a struggle to free the slaves. A narrative like that one gains acceptance because it jibes with the other interests and beliefs of those who accept it.  In the aftermath of this presidential election, no doubt we’ll come to see that Obama’s victory was one for his aggressively statist, progressive vision. And while he may not be able to do much more to put this vision into practice, given the Republican House, he’ll no doubt do his best to push this story, if only to protect what he did during the first two years of his first term.

The NYT piece focused on what the author saw as Obama’s missed opportunity.  I think it was Romney who missed the big chance here.  He could have made this race a real choice, and thus define its central “story,” by making it about issues.  I read a piece the other day arguing that he’d refused to take specific positions because he wanted to make the election a referendum on Obama’s policies.  This was a mistake, I think, because I don’t think most people care nearly as much about Obama’s policies as they do about him.  Yes, his deep commitment to progressivism is important to them, but not because they share it.  They admire his commitment because that jibes with their opinion that he has integrity, and thus is admirable.  The fact that he’s changed his positions, often radically, on many issues – that doesn’t matter to them.  That was true for Reagan, too, the great tax-cutter who, as Walter Mondale reminded us, signed off on what was then the biggest tax hike in American history.  Nobody cared.  Reagan was likeable, and he was re-elected.  Ditto for Romney.

Romney made this mistake because he took Obama for a politician.  Obama is primarily a celebrity, and he’s really good at it.  I’m not questioning his seriousness or his intellect, neither of which I doubt.  I’m talking about the way voters see him, what they focus on, and how they interpret what he says and does.  He’s a good celebrity because he’s obviously a good father and husband, and, most importantly, because his personal story is appealing.  People justifiably respect his efforts to turn himself into what he’s become, and it helps too that he seems at once an honest person and genuinely likeable. He’s someone so many other both want to spend time with, and be like – and as a result, as with Reagan, many look past not only his policy 180s, but also the fact that they disagree with him, sometimes to a significant degree, on many issues. Like Reagan in ’84, all he had to do these last months was keep his picture in the paper, and not play too much against type, so his fans could continue to project their affection and hopes onto him, and, of course, vote for him – so they could be part of his story for four more years.

Romney comes off as intelligent but stiff and distant, and as having little in common with most voters. Did I mention he was born rich and went on to get richer, and that story interests no one? These are hardly original observations, but that’s exactly why Romney was foolish not to focus on policy.  He fell back on “I’m agin’ it” and a laundry list of right-wing shibboleths on abortion, gay marriage, etc., all of which were the sillier because no one thinks he believes them.  Of course it would have been difficult for him to distinguish himself from Obama on policy.  He couldn’t have drawn a sharp ideological contrast, the way Reagan did with Carter.  They’re both technocrats who are comfortable with growing, more intrusive government, as long as they’re in charge of it.  I think people understand this full well, just as they understand that Obamacare is Romneycare, and that both would offer essentially a continuation of Bush’s foreign policy, and that after that, everything is details that don’t much matter.

Still, by failing to distinguish himself clearly on policy – the area in which he had an chance to best Obama – Romney made the election into a competition between their personal stories.  His holds little interest for most people, so they ignored it.  That left Obama’s fascinating, broadly appealing life story as the implicit focus of the race.   And that was a race Romney couldn’t win.

Europe’s economic problems are rooted in a lack of democracy – Spain number

A fascinating “Theory of Spain’s political class,” from César Molinas.

More than half of Germans want the
D-Mark back

So says a new ARD survey. Also interesting is that more Germans see the Euro bringing disadvantages than see it bringing advantages.

Tyler Cowen is wrong – Europe’s problem
is a democracy vacuum

The future of Europe

Tyler Cowen argues today that Europe’s current economic problems could be solved with the filling of a “power vacuum,” presumably by the EU getting even more authority over the political and economic affairs of its member states.  He even laments that “for historical reasons, Germany isn’t up to” being Europe’s “hegemon” – that is, that the German government can’t do more to force other the rest of Europe to implement policies of his choosing.

He’s wrong.  Europe’s economic problems are an effect of not a power vacuum at the pan-European level, but a democracy vacuum.  The EU got its authority via a series of treaties among national leaders, along with occasional plebiscites.  Real democracy requires direct electoral control of European institutions.  It’s possible that even if the EU’s leadership were directly elected, and the European parliament had real power, they would have adopted the Euro and the various fiscal and other economic-policy agreements that underpin the Euro zone, even though, as JP Morgan analyst Michael Cembalest points out, the countries as a set have less in common than almost any imaginable other set of countries, even one of countries with names that happen to start with “M.”

EU-level democracy might not have made a difference then.  But it would certainly make a difference now.  It would mean that whatever solution is found to the current crisis, even if it’s just muddling through, that solution would a compromise between populist elected officials from the periphery, and austerity-minded elected officials from the core, and so would have legitimacy throughout Europe.  Even better would be if a democratically elected European government had direct control over the ECB, and could replace its leadership with one more amenable to allowing the Euro money supply to grow at a reasonable, steady rate, thus, at minimum, making it easier both for creditors to pay their debts.

Anyway, what does Cowen think a more powerful Eurocracy would do? Would it do more to force peripheral countries to cut their welfare states and raise taxes?  Good ideas, or at least one good idea (the first) and one that’s debatable.  But anything the EU does now in this vein, those actions will only hasten peripheral states’ withdrawal from the Euro and perhaps even the EU, and the coming to power, in any number of those states, of virulently anti-Europeanist, populist, nationalist, socialist parties.

More generally, does Cowen realize how his call to “fill the power vacuum” echoes a dominant strain of European political discourse of the 20s and 30s?  Fretting about the inadequacy of institutions, and the need for more, and more centralized administrative power, to solve the deep economic problems those institutions seemed incapable of solving, led, most notably in Germany and Italy, to the rise of a number of anti-democratic parties led by charismatic politicians who promised, if given unprecedented power, to solve those problems.  They got the power, and with it, created even worse problems.

Can the EU democratize?  Not now, I think, if only because the Europeanist project is so fundamentally un-democratic.  That could change, with enough pressure from below, but that’s a project for a later date.

In the meantime, the EU should make a Euro zone exit as smooth as possible for any country whose elected leaders decide leaving is the way to go.  Cowen has ideas about, for example, the EU subsidizing food and fuel for Greece if it leaves.  Fine.  The Eurocracy should focus on preserving the free movement of goods, people, and investment, which is its true achievement.  Sure, the periphery countries’ governments have squandered enormous amounts of money.  And much of that money is due in bond and loan payments to investors in the core, which controls the EU, and those payments will never be made.  This is not good.  But let the market deal with that.  If the EU tries to arrogate to itself even more power, to fill some supposed “power vacuum,” that endeavor isn’t just doomed to fail.  It will both hasten and harshen the coming anti-Europeanist nationalist, socialist reaction.  And no one needs that.

Is European union the longest, most painless
route from national socialism
to national socialism?

In Russia there’s a joke about socialism being the longest, most painful route from capitalism to capitalism.  I wonder if European union will one day be seen in the same light.  Not as the punchline to a joke, necessarily, but as an odd-in-retrospect social engineering effort, one that ultimately foundered on a badly misconceived, technocratic approach to economic policy.

The European project is all about breaking bad habits.  Everyone breaks the bad habit of nationalism, by opening their borders to one another’s people, investment, and products.  The Germans break the habit of bending everyone to their will, and indeed make up for having done this in the past, by paying for all manner of infrastructure projects, then forking over cash to prop up everyone else’s bonds, once things started to go sour.

In general this process has gone smoothly, and while the political part has been only intermittently democratic, arguably the biggest beneficiaries are the millions of ordinary people who’ve been able to move around in search of better jobs.  Mostly this has taken the enterprising working class from poorer countries to richer ones. But plenty of others have taken advantage too – not only are there 120,000 Poles in London, there are more than 400,000 French.

Now comes the tough part.  One bad old habit, on the part of a number of countries, was printing too much money.  They broke it by giving up the ability to print money at all.  Trouble is, printing too much money was a useful if inefficient way to deal with economic slowdowns.  Whenever times got tough, governments could print a bunch of lira, drachma, pesetas or whatever.  Inflation led to price increases, but also higher tax revenues, which enabled governments to meet pension and other welfare payments, and cover the salaries of state-sector workers.  Not incidentally, this also enabled political leaders to satisfy key interest groups, and thus stay in power.  Currency depreciation, the natural result of too much of it being in circulation, was fine too for propping up local industry, and thus winning private-sector support, by making its products price-competitive, whatever its inefficiencies or quality problems.

In giving up their currencies, these countries got a number of benefits, not least of which was the ability to borrow money at the same rates as countries that didn’t tend to do such things.   This was the painless part, and you can see the results in bond-financed infrastructure projects all around Europe.  The painful part comes now, when, to pay not only state employees, pensioners, and all manner of others who depend on the state, but also those who hold all the bonds they’ve sold, these governments can’t just print more money.  They have to cut spending and raise taxes.  This is tough even in normal times but apparently now politically impossible.

How does this relate to national socialism? The EU and the ECB are not democratic institutions.  All the key posts are held by appointees, and because the core countries, primarily Germany, pay the bills, they in turn control the appointments.  So whatever the underlying causes of economic collapse in peripheral countries, it’s hard to argue with the perception that some real measure of responsibility lies with decisions taken by appointees put in power by foreigners.  That includes the decision not to print more Euros, even in the face of evidence that at least in some peripheral countries, deflation has replaced inflation.  Private capital is another easy scapegoat – especially as private, and especially foreign private investors flee peripheral banks, many of which are already weakened by virtue of having taken on so much debt issued by local national and lower-level governments.

Is it so far-fetched to think that more and more politicians will try to make hay by threatening to expropriate private investors who’ve “harmed” local national economies, by, say, taking money elsewhere?  Won’t they also call for their national governments to take power back from the EU, restricting trade and the free flow of migrants and capital in the process?  That’s already happening, and not only in Greece.  All the top candidates in the French presidential election – not just LePen – attacked the rich, with Hollande calling for confiscatory taxes on high incomes, and even Sarkozy attacking tax eliles as unpatriotic.  Sarkozy, LePen, and several minor candidates have suggested the reerection of border controls, and radically reduced immigration.  It’s to Hollande’s credit that he did neither. But he’s just appointed a “ministry of industrial redress” who’s an outspoken advocate of digiriste industrial policy and deglobalization.  Everyone knows about the recent success of the nationalist and socialist Greek far right and far left, but the French political elite seems eager to catch up with their rhetoric.  And France is nothing if not a “core” country, in the pan-European system.

A renaissance of national socialism wouldn’t produce anything like Hitler or World War II.  Europe isn’t filled with tens of millions of people with deathly bitter grievances against their neighbors, accustomed to settling international disputes with mass violence.  Nor should we equate today’s ECB with the Versailles victors.  But if the ECB doesn’t ease monetary policy, and EU bureaucrats, hoping to keep countries from defaulting, continues to press for state spending cuts and all manner of revenue-raising measures, a meaningful reaction against technocratic pan-Europeanism will be inevitable.  European institutions have no democratic legitimacy;  national governments, whatever their problems, do have this.  So the anti-Europeanist reaction would have democratic legitimacy.  And it would bring politicians rebuilding the power of national governments, along with border stations, tariffs, and currency controls.  National currencies too.  Even if all these measures are more symbolic than not, they’ll have an inevitable negative economic effect, which, in countries where so many are so dependent on the state, will increase pressure for more state control, and in turn higher barriers against international trade.

Inflation following on the reintroduction of national currencies, sovereign defaults, a sharp decline in international trade, sharp cuts in government benefits, the demonization of foreigners and capitalism, waves of nationalization, and confiscatory tax rates, as politicians respond to anti-capitalist sentiment, and grab for resources to meet growing welfare commitments…  Not to mention the possibility of the widespread introduction of harsh immigration controls.  Can this be avoided, in the peripheral states?  In France?  The alternatives are the core countries bailing everyone out, or the ECB choosing a policy of immediate, intensive reflation – i.e. printing a lot more Euros, and committing to keep the money supply growing at a steady, meaningful rate.  Neither seems likely to happen.

Is Mickey Kaus a legitimate
alternative to Barbara Boxer?

Mickey Kaus is running against Barbara Boxer for the Democratic nomination for Senate in California, presenting himself as the “common-sense Democrat.” By this, he means, primarily, that he opposes government giving too much power and too many resources to unions. He also says he’s in favor of government playing a large role in our society, in particular, in the area of health care.

I admire the first sentiment, but wonder how he can square it with the second. If government takes more control of any area, politicians inevitably distribute more power and resources to their powerful supporters who work in that area – otherwise, those supporters throw their weight behind other politicians, who, on being elected, reward them in turn with the spoils they weren’t getting before. If Kaus wants to disempower government-sector unions, he’d advocate for smaller government.

Of course, calling for less government wouldn’t get him the Democratic nomination in Calfornia. But he’s a longshot candidate with a good job he can fall back on if he loses – shouldn’t he care about being right, not being elected? I suspect he does, but believes, in keeping with what’s unfortunately become a dominant line of thought among Obama-era centrist Democrats, that if government is run by the right technocrats, it can be big, efficient, and fair, all at the same time. Oi.

1974

At The Money Illusion, Scott Sumner has an interesting post asserting that 1974 was the year everything changed. “Everything” meaning the ideological climate in the developed West, with the long-dominant statist-technocratic consensus collapsing, in favor of a fundamentally anti-statist belief in markets. I’d add that this completed, and complemented, the shift toward bottom-up democracy that had begun in the 1960s – a shift marked, in the US, by civil rights marches and anti-war protests.

I’d always thought of 1979 as the critical date, with Thatcher’s election the key milestone. But Sumner makes a good case for 1974. He treats the oil-price shock as the prime mover, one that pushed governments throughout the West toward deregulation and tax cuts, and away from hands-on management of all manner of economic activity. His argument is convincing not least because in his treatment, the rise of marketism, if we can call it such, is an effect, not a cause. That is, he sees that this shift was the upshot of a pragmatic “try this and see if it solves our problems” process, on the part of ruling elites as well as voters and interest groups, i.e. everyone involved in politics.

What about the cultural sphere? If you overlook the Stooges and early Black Sabbath, you could argue that 1974 marked the beginning of pop music’s reaction against entrenched elites, their long-dominant strategies, and their rote collectivist pronouncements. What was the relationship between punk and politics? I think of punk as fundamentally anti-statist, and libertarian. Of course for many who were in that scene, anti-elitism was a matter of dissatisfaction with elites’ failure to come through on promises to use state-administrative power to achieve standard leftist goals, not a rejection of centralism and the elite-technocratic ideal. But the Ramones hardly fall into that category. And while their (very) occasional forays into overt politics were cringe-inducing, God bless them for standing up for DIY, straight eighths, and everyone for themselves.

Earth Day