Lecture 23: Building Blocks of Distributive Politics

– So we're now on the, into the fifth part of the course called, what is to be done? And I want to just begin by talking about the key features of the
politics of insecurity, some of which we addressed
earlier in the course and some in the last two lectures. But they really shape
the landscape on which we have to think about,
what can and cannot be done in politics, in
the world as we actually find it. And so, first thinking about voters. One thing that we have learned is that local inequalities matter
to people much more than global inequalities. Bernie Sanders can talk
as much as he likes about the top 1% and it will motivate activists on the left of the Democratic party but most voters really
care about much more local inequalities.

And we talked about this
earlier in the course when we were talking
about how capuchin monkey experiment was misinterpreted when the angry monkey was likened to
the Wall Street protester but whether the monkey was
angry because she or he was not getting something
that a similarly situated monkey was getting. The monkey was not troubled
that the researcher had a big bowl of grapes and cucumbers. So people tend to compare
themselves to similarly situated others. Oil workers might compare
themselves to coal miners. Auto workers might compare themselves to steel workers. And this is true up and
down the occupational scale. I think I mentioned to you, a professor would be much more troubled to learn that she or he is paid significantly less than say, $10,000 less than
a professor in the next office than to learn
they're paid half a million dollars less than the attorney next door.

So people tend to make local comparisons. And the idea that marked hope for, that people would start
to make more global comparisons, is not
supported by the research of sociologists and social psychologists. Secondly, think about
Rick Santelli's rant, another illustration of this point. This is the famous rant
on the Chicago Mercantile Exchange right after
the Obama Administration came into office and had
started talking about minor mortgage relief for homeowners. Nothing like John
Geanakoplos was proposing, but nonetheless he was proposing reducing interest rates at least
for a time on peoples loans and it produced a lot of
rage that was articulated in that video I showed you. At the end of it, his
calling for a tea party and people credit the formation
of the tea party with… As being, if you like,
catalyzed by Rick Santelli's rant on the Chicago Mercantile Exchange.

And you might also recall
that one of the things he complained about was, he
said, it's a moral hazard. It's a moral hazard. But notice of course,
bailing out the banks is also a moral hazard, right? Bailing out the banks is
giving banks the incentive to gamble with taxpayer's money. So while it may be a
moral hazard to bail out the homeowner's, it's
no less, you might say in some ways it's more
consequential moral hazard to bail out the banks. Nonetheless, what enraged him was that do you wanna pay for your
neighbor's mortgage?, he rhetorically said. So again, local comparisons
that matter to people. Think about the difference
between the Trump and Sander's campaigns on this question of who people compare themselves with. In many ways Trump and
Sanders ran a populist campaigns in the 2016 election. They attacked Wall Street
elites for being corrupt. But a difference was that Sanders talked a lot about inequality
whereas Trump did not. Trump never promised to reduce inequality. He never, as I said, even said what Ronald Reagan had said, that he wants America to be a country in which everybody can get rich.

All he said was that, you
people have been screwed. You people have been… Left behind by the… By the policies of foolish elites, he calls everybody idiots. And I'm gonna put America first and so on. And to the extent there
was a fairness argument. We talked about this in connection with Arlie Hochschild's
narrative of cutting in. Some people have cut in front of me and taken something that I would otherwise have gotten, right? Again, very local comparisons that people are making.

They are not thinking about what people, very distant from them
in the socioeconomic order are making. Related to that, closely related to that is a loss aversion and in its insecurity, often matter much more to
people than inequality. Again, think here of Trump's
make America great again. Something's been taken away from you. We're gonna bring it
back and do something. We're gonna recreate something
that had existed before. I am gonna bring back those jobs. I'm not gonna make you rich. I'm gonna bring back those jobs. That was the essence of his campaign whereas Hilary's was, she
took that other Reagan line, American's best days are ahead. Sunny optimism which is
a lot harder to sustain during an era of endemic
employment insecurity. And again, just driving
home the point that it's insecurity and the
fear of downward mobility that matters much more to
people than their place in the distribution of income and wealth, globally conceived.

Remember those data about
Trump primary voters. Only a third of whom earned
lower than the median income, below $50,000 a head per family. Another, 2nd and 3rd earned
between the median income and 100,000, and the third
third of primary voters not Republican voters
in the general election were Trump supporters. And in those primaries, so, again, middle-class people who feel insecure, and this is, what Dan
Markovits' book is about, may be just as anxious and mobilizable by a populist politician as poor people who feel insecure.

So the insecurity and
loss aversion matter more than inequality and
it's local inequalities that matter much more to
people than global ones. And then we're living in a world in which almost everywhere
organized labor is weaker than it's been in decades. We've seen, in country after country, the decline of union
movements, it's way down into single digits, in the US, and the majority of workers that are organized now are in public sector unions which do have some political clout. We will see next week when
we talk about education. But for the most part,
as a force in politics, unions have seldom been as weak, if ever, in the last 80 or 90 years, if ever, as they are today. This is particularly pronounced in the US, but we saw pretty much everywhere except one or two places like
Finland and Iceland, we've seen a decline in the
power of organized labor.

A concomitant to that, business interests are stronger than
they've been for decades. Partly because of the
collapse of a serious alternative out there. Communism to the extent
it exists politically is now supported by capitalists economies in places like China and
Vietnam and so there's no real alternative to
capitalism out there, which obviously, greatly,
increases the power of capital. Particularly in an era of globalization when it can easily flee, the flying East theory that Christina talked about in the China lecture. And in these, as jobs going
increasingly to technology, capital doesn't even need to flee in order to increase its leverage over labor. So we're living in a world in which labor is weaker than its been in living memory and business interests are more powerful than they've been in living memory. And then coming to Thursdays lecture of last week, we're also living in a world in which political
parties have become weaker and more fragmented just about everywhere.

And this is not something that has gone on for eight decades, but it certainly has gone on over the past
four decades as labor has become weaker, parties on the left have fragmented and we saw that as induced fragmentation on the right in multi-party systems and
all over the democratic world, this impulse to
democratize parties, to get more and more direct democracy in the governance of parties, and in making of decisions has greatly weakened parties in both multi-party systems and even two-party systems and indeed, even the… The platonic form of what used to be two-party systems. The Westminster system between their going for referendum between the changes in their leadership selection rules, between adopting things
like fixed parliaments and candidate selection
also being decentralized, they have replicated much of the rest of the democratic world in
making it much more difficult for parties to present, get elected on programmatic platforms
and then implement them as governments.

It's a world that's ripe
for populist charlatans who exploit insecurity and
promise snake oil solutions. So, what is to be done? Now at the beginning of the course when I prefaced some of these themes, in the first few lectures, I also said don't get too depressed. (class laughing) And in many respects, this
is a depressing prospect. But what I want to be arguing in these last lectures is that,
certainly we shouldn't give up hope and there
are ways of thinking constructively about
politics going forward. And indeed, in some
respects, there are reasons not just for hope but even some optimism. This was a distinction
Martin Luther King made towards the end of his life. He said he was no longer optimistic but he hadn't given up hope. I think there are some reasons to think that it might be possible to come up with constructive change and
build regressive support for it to happen.

And so that's where we're
headed in these final lectures. So, a central message of this final part of the course, and if
you like, presupposition of much that I'm gonna
say to you, power phrasing Immanuel Kant is that,
policy without politics is empty, but politics
with policy is blind. Policy, politics without policy is empty and politics without policy is blind. So, let me emphasize that it's not just in the real world but in
the academic literature, for the most part, people who study policy don't think very much about politics. They think about what
policies would be good, what should happen. But they have relatively little to say about how they're gonna get it to happen. Whereas people who study politics tend to explain why what happens happens but have way little to say
about what should happen.

And so there's this sort of
divergence of preoccupations. But I think that that is misguided. That we really need to think about what's desirable in the context
of what's feasible and take into account the constraints and possibilities that might be offered for thinking about policy rather than thinking about it in a vacuum. So just to give a couple of illustrations of policy without politics. Perhaps the most influential
book of political economy written in the last couple of decades is Piketty's Capital in the 21st Century. This is the book in which he argues that the reason for increasing inequality is that returns to capital exceed returns to the other factors of production. And so, wealth accumulates over time at the top. Economists debate his data and some ways of measuring this but
that's not my concern here. The other one I wanna just mention to you as examples of these brilliant economists, there's no question about
that, but the things that he says about politics are… Bereft if any serious attention as to how they might be enacted. So for example, in his
book published in 2014, in the penultimate chapter of that book, he calls for aggressive
tax on global capital.

And in the beginning of that chapter he does say, well this
might be a utopian idea. But we should still put it out there for thinking about where we want to get to and besides, it could
inform more realistic proposals like a
Europe-wide tax on capital. Now you might say, well in 2014, that wasn't, you know,
it might not have seemed a naive thing to say,
as naive a thing to say as it is today, but nonetheless, in 2018 he has pushed this
idea further with some other intellectuals in Europe, publishing what they call our Manifesto
for the Democratization of Europe, and you can
find it and peruse it at your leisure on their website.

They're calling for the creation of a new European assembly that would essentially function as a European-wide parliament that would have powers to raise revenue and manage budgets and it would be… The idea is that 80% of the legislators would be elected in the national elections so when you vote for your MP in the UK or Austria, they would
also, not only would they go to the British or Austrian parliament, they would also participate in this new European assembly. 80% of them would come there. The others would come from
the European parliament by proportional allocation. And they portray this as an alternative to the current EU structures
which are so constrained by the treaty-based character
of the European union which I lectured to you
about some months ago. But what do they ignore in proposing this? Why is it that the Lisbon Treaty ended up with a treaty-based system? It was because the more
ambitious proposals envisaged at Maastricht
were roundly rejected in referendums in Europe.

And so they had to
actually cancel a number of the plan referendums
because they saw the whole project of a never closer
union heading for catastrophe. And so they retreated. The Lisbon Treaty is really a retreat back to the idea that while EU is essentially a system of intergovernmental treaties in its ultimate legitimacy. They also argue that the purpose of this new European parliament is to do things like reduce inequality within the member countries. But why, if the member
countries in their own parliaments can't reduce inequality, why would anyone think
that sending them to a European parliament would enable them to reduce inequality any more effectively? So, and if you go and read the website that they have there,
which I urge you to do. It's certainly an
imaginative and interesting proposal in an intellectual sense, you will find the thing I said you should always be careful of.

Or should make you watch your wallet. The vast majority of it is written in a passive voice. The vast majority of it said
about what should happen. What should occur. What needs to happen. But of course, we can
talk until we're blue in the face about what needs to happen without having anything
to say about how to make it happen. What will be the political
forces that are gonna produce an outcome of this kind? And when you think back to the literature on the European Union, Tony Judt published his book in 2006,
post-war, when he warned. He said, the problem
with the European Union is that it's been an elite
project from beginning until end and as soon as
it gets into any trouble the popular resentment
of European-wide politics is going to erupt and it's
not gonna be pretty to see.

He turned out to be right about that. Adam Tooze in Crash
gives chapter and verse of the inability of the
European governing structures to come up with policies
that the populations in the constituent
countries will live with. And so, the nationalists of the countries within the European Union is very powerful in the idea that it's going
to go away anytime soon, I think is implausible. And I gave you a reason, if you think back to my lecture. Among the reasons is that the Europeans have contracted out their security to NATO over these past several decades whereas in the American case, what
built a sense of national purpose when we transitioned
from the Confederacy to the Constitution was the
creation of a National Defense and the funding of
Central National Defense. And then the idea that
people would identify with the national project rather than, what we might call the federal project, rather than the states,
that was a transition that was set in motion
by the centralization of our power over national security in the American system at the
time of the Constitution. There's never been an analog of that and so the idea of an ever closer union has largely been a fantasy
of elites for which popular support has never been dealt and indeed is less likely
to be forthcoming today than it has been since anytime since the financial crisis.

So the idea that we can
now create a new European parliament that, as they argue in cases of disagreement would
actually trump the decisions of the European Union
who which are constrained by the treaty-based
caricature that strengthens national parliament I think is, it's an example of policy without politics being ultimately empty. What about politics without policy? Well we have examples of that. Just to give one here. (drum music) (crowd chanting) – [All] Occupy Wall
Street all day, all week. Occupy Wall Street. – It's our duty as Americans to fight for our country and to keep it, you know, true to serving its people. And when it doesn't do that, it's immoral not to stand
up and say something. – I'm here myself as a free individual to humanize the markets and to have true participatory democracy.

Bottom up democracy. And to make Wall Street hear the sound of what democracy means. – What kind of power? – [All] People power. – Wall Street, it crashes, and you know, people start, people lose their jobs and things like that. We're very angry at Wall Street. It's a part of capitalism,
American capitalism especially, that's why we're here today… At Wall Street. – There's no reason to not be peaceful. We just wanna get a point across. We're just trying to let people know what's going on and why we're here for it.

– One in seven children
in the United States suffer from hunger, at
the same time we're giving billions and almost
trillions to Wall Street just for bailouts. Something needs to change. We need an economy for the people and by the people. Not by the rich and for the rich. – I mean, and the
government's doing the work for us, all they have
to do is cut some more people's insurance, unemployment benefits and it won't be a bunch
of 20-year old white college students out here, you know? – What would make today a success? What kinds of changes
would you like to see as a result of everyone
demonstrating today? – A success, it's already happening.

They corral the bull. And that's pretty much a
huge symbolic statement. – So there you have it. This is the beginning of
the Occupy Wall Street Movement. It was a movement that
was famously uninterested in articulating particular policies, in organizing itself behind
any particular agenda, but rather its purpose was to express this moral outrage at the
bailing out of the financial crisis and the inability
of the Obama Administration to do much else. They were to some extent triggered by the Arab Spring Movement
which had gotten going that year. But they really didn't advocate
any particular policies. And indeed if you think about… If you think about the
decision to occupy Wall Street, it was, you know, unlike,
at least the Vietnam protesters went to
Washington where something might be done about it. Whereas, here they went to New York and then spent the following Fall on many town and village greens around the country but because they lacked
organization or leadership or resources, once the cold weather came, they soon faded away. Now, this doesn't mean
that they were irrelevant to American politics. They articulated a moral
narrative that was, that had a certain kind
of coherence to it.

You might call it a
reactive moral narrative but I'm gonna have some more to say about the importance of moral narratives in effective distributed
politics later this morning. But they had nothing else. They had nothing more
than a moral narrative. And moral narratives on
their own is not enough. Again, this is politics without policy. So my agenda today is to get us to start thinking about
how, we can think about how there can be effective
policies in light of what we do know about politics. And one phrase that falls to mind is in one of John Rawls's less famous writings, his Law of Peoples it comes from, I believe, the way he first used it, this is the idea of Realistic Utopianism. And so, the thing about being a realist, about politics, in the real
politics sense of realist it is the danger of being
a realist is it might prevent you from trying
to do things that will change reality, right? That you'll be so constrained by one sense of the politic, you know, the politics is the art of the possible. You'll be so constrained by the notion of what's possible that you won't push for policies that might
change what's possible, right? So that…

I think we actually say in our book on the Death by a Thousand Cuts that real political creativity gets people to think that what they
had previously regarded as impossible is in fact possible, right? That's, you know, you wanna use the buzz words. You wanna push the envelope. Think outside the box. You've heard them all before. And if you're very
constrained in your thinking about what appears to be feasible in politics as we know
it today, you will not push to change the boundaries of what is possible in politics today. And so you run a risk
of being, if you like, captive of the inability
to think imaginatively about ways to change what is possible.

And so I like this phrase
realistic utopianism in that, it conjures up the idea of trying to get to a better
place but thinking about the steps from here to there. You've gotta think about
how you're gonna join the dots. How you're gonna in fact get policies adopted that might change the politics on the ground, which I think
is conspicuously missing in the proposal for European parliament that we just talked about. And so to make that case, what I'm gonna do today and then I'm gonna use this framework in
our remaining lectures is talk about what I'm gonna
call building blocks of effective distributive politics. And there are six of them. And I'm gonna spend a little bit of time on each of them.

And I will start with coalitions. Very important in politics
to think about coalitions. And the reason it's
very important politics to think about coalitions
goes back to our discussion of the differences between
the median voter story and the majority rule divide
the dollar game, right? So just to remind you,
the median voter story created the expectation that
because the median voter is always below the mean
voter, there would be downwardly distribution of wealth because politicians in search
of the median voter would advocate policies that the
median voter would prefer.

And that was the fear of
19th century liberals. It was the hope of Marx in his later years when he started talking
about the parliamentary road to socialism and it's embodied in the median voter theorem. The puzzle was that it doesn't happen in any kind of systematic way. And we thought one
reason for that might be that there's another
dimension such as race that people care about more. And we talked about
Nixon's southern strategy in connection with all of that. But then we talked about
the majority rule divide.

A dollar game …