Nightcap

  1. Italy’s waltz with China is business as usual Dario Cristiani, War on the Rocks
  2. Italy and the Belt and Road Initiative Tridivesh Singh Maini, NOL
  3. China’s liberals and benevolent hegemony Pär Nyrén, the Diplomat
  4. The dictatorship of the present John Michael Colón, The Point

Italy and the Belt and Road Initiative

There has been a growing scepticism with regard to the Belt and Road Initiative (BRI) project in many quarters, due to the lack of transparency with regards to terms and conditions as well as the economic implications for countries which are part of the project. A report published in April 2018 by the Center for Global Development (CGD) in Washington flagged 8 countries (including Pakistan, Maldives, Laos, and Djibouti) where the level of debts are unsustainable.

Apart from the red flag raised by a number of researchers, the removal of Pro-China leadership in countries like Malaysia, Maldives, and Sri Lanka has also resulted in problems with the BRI project, and China’s economic dealings (which are clearly skewed in favour of Beijing) with other countries is drawing more attention.

The most vocal critic of China’s economic links has been Malaysian Prime Minister Mahathir Mohamad. During a visit to China in August 2018, Mahathir, alluded to China’s trade relations with poorer countries as ‘a new version of colonialism’. Mahathir later on denied that his statement was targeted at China or the BRI. The fact is that the Malaysian Prime Minister did scrap projects estimated at well over $20 billion (which includes a rail project, East Coast Link, as well as two gas pipelines).

Top officials in the Trump Administration, including US Vice President Mike Pence, have also been critical of the BRI project for a variety of reasons. The major criticism from US policy makers has been the economic ‘unsustainability’ of the project as well as the point that the project is skewed in favour of China.

Italy to join BRI Continue reading

Some quick thoughts from Athens

I spent the last week and a half in Greece (mainly Athens and other historical sites in the Peloponnese) thanks to the Reason, Individualism and Freedom Institute, and explored ancient political philosophy in a modernly turbulent state. I’m writing this in Naples. Here are a few thoughts I had from the first couple days in Athens.

There is a strong antifa presence (at least judging from graffiti, small talk with some locals and the bios of Grecian Tinder girls). I can’t help but imagine the American antifa pales in comparison. Our black bloc — thrust into the spotlight in mostly superficial college campus debates — tends to be enthusiastic, whereas the antifa in Hellas, culturally sensitive to millennia of dictatorships, entrenched aristocracies, Ottoman annexation, great power puppeteering and a century of neighbouring fascist regimes, must be somber and steadfast. Our antifa crowd has so little targets to find Ben Shapiro a worthy protest, whereas Golden Dawn, the ultranationalist, Third Reich-aesthetics Metaxist party gets 7% in the Hellenic Parliament. Nothing here is spectacle. (Moreover, the extreme-right in Greece, according to our tour guide, has been known to worship and deify mainstream Christian figures as well as the ancient gods spawned of Uranus and Gaia. Umberto Eco’s immortal essay Ur-Fascism explained phenomena like this as the ‘syncretic’ element of fascist traditionalism.)

Moving past the fascists and antifa, in general Greece is left. The Communist Party of Greece, KKE, gets about 5% of the votes and displays a sickle and hammer. More telling still, plenty of the leftist graffiti is actually representing the KKE. Political parties tend to de-radicalize, or are supposed to in theory, and the fringe ideologues disavow the party for centrism or weakness (it’s funny to think of American socialists spray-painting the initials of the CPUSA). The graffiti stretches all the way to Lesvos, of Aristotle’s biology and Sappho’s poetry, and to Corinth of the cult of Aphrodite, but is most prominent in downtown Athens.

Athens has an anarcho-friendly district with a rich history called Εξάρχεια, Exarcheia. Antifascist tagging is complimented by antipolice, antistate, antiborders and LGBT designs, the Macedonian question is totally absent, and posters about political prisoners stack on each other like hotels on ruins. Our friends at KEFiM warned us about Exarcheia — it has a history of political/national xenophobia, and one member had been violently assaulted — but I had already visited on the first day. Aside from a recently blown-up car, it wasn’t too different from Berkeley — nice apartments and restaurants juxtaposed with street art and a punk crowd, drug dealing, metal bars on windows. Granted, this was in daylight and I saw only what was discoverable with Google maps. Still, I had the fading remains of a black eye and my usual clothing is streetwear, so maybe I wasn’t too out of place — even as an American and thus most hated representative of that target of so much antifascist graffiti, NATO.

Much of the larger politics of Greece were not easy to discover from our various tour guides. Just like the ancient myths of the country, they constantly contradict each other.

The Athens underground metro was incredibly clean and modern — infinitely more than in Atlanta, San Francisco, Los Angeles, etc. — while their roads are constipated and chaotic. Duh, the city itself is one of our most ancient settled, and so roads have proceeded in a particularly unorganized fashion. But it did cause me to consider the beauty that on a planet where our civilizations literally build on each other generation after generation — and, in an uncommon historical epoch where conquering is out of fashion — sometimes the only place to go is down. Humans have expanded our surface area in dimensions completely unfathomable to the diasporic colonizers from ancient Crete.

The syncretic chaos of the streets, though nauseating to the newcomer, lends itself to almost divine levels of flânerie, such that one can walk hours without reaching any particular destination and feel accomplished. Nothing much looks the same when Times Square melts into an ancient agora melts into a Byzantine church melts into the beach. Attica is wildly heterogeneous and beautiful; modernist adherents to classical Greek conceptions of precision-as-beauty should be humbled.

I should add also that my first impressions of Athens (and Catania) was how much it looked like something out of a videogame. The condition of 21st century man is that, upon visiting foreign cities for the first time, he will invariably compare them to Call of Duty maps.

On a few occasions, enough for me to notice but not enough for me to declare it a custom, my server (who sits me, takes my order and waits on me) gave me extra food on the side. This only happened at small restaurants that aren’t overly European and might be an orange juice, fruit bowl or something small and similar. Every time, of course, I left a larger tip. These actions put us in a sort of gamble. For the waiter to bring me something periphery, he might expect a grander gratuity. Then, when I notice the extra item, I have to assume that it’s not just a mistake — that he didn’t think I ordered something extra which will appear on my tab. He and I are both sort of gambling our luck. Of course, it’s not a real gamble — in every instance we were at least partially sociable prior and lose nothing substantial if it doesn’t work out. What is interesting is that we’ve removed ourselves just a little from the law — I am only legally obligated to pay for what I ordered; he is only legally obliged to bring me what I paid for. Still, without the legal backdrop, everyone leaves happy. Left-libertarians would like it.

(As everyone knows, the Greeks are very hospitable and friendly, and this is a testament to that. A counter-example: I went to a gay club for the first time in the rainbow district of Athens. I can’t speak enough of the tongue to talk to women anyway, and there is at least a chance that some guy will buy us drinks. Nobody buys us drinks. The only conclusions are that we’re not handsome enough or the Greeks are not as friendly. It has to be the latter.)

I should quickly add something about coffee. Where it not for the drought of drip coffee, I could easily stay in the Mediterranean forever. Alas, to literally order an “iced coffee” — kafe frappe — you are ordering a foamy concoction with Nescafé. To order a Greek coffee (known as a “Turkish coffee” before tensions in the 1960’s) means an espresso-type shot with grounds/mud at the bottom. But, the coffee culture is fantastic — the shops are all populated with middle-aged dudes playing cards, smoking rollies, and shooting the shit. I don’t think I need to describe the abominable state of American coffee culture. Entrenched in their mud, the Greeks resisted American caffeine imperialism. Starbucks tried and failed to conquer the coffee market: there were already too many formulas, and the Greeks insisted on smoking inside.

Latest thoughts on Brexit: Its Decay, Italy (and Ireland), Cars, and Giving up British Citizenship

The slow decay of Brexit: a Rule-Taking Country

I don’t mean that the UK will stay in the EU. I fully expect it to formally depart next year. If the poor performance of the UK economy compared with the Eurozone continues, I also expect the UK to rejoin in a few decades, when the growth divergence is not just in figures, but felt in everyday life, such as when people find it too expensive to travel in Europe or buy goods from Europe; if they do travel they notice that everything seems expensive and there are more nice things abroad than at home, while European tourists will seem to have huge amounts of money to throw around.

It might or might not work out like that, but the point here is that the UK, behind headlines about soft versus hard Brexit, is moving towards an ‘alignment’ with the single market and the customs union: not formal membership but keeping nearly all the rules. The short term losses in trade from leaving both the single market and the customs union, along with the Republic of Ireland/Northern Ireland border question, have combined to make de facto membership of the single market and the customs union inevitable. Hardening the border at all between the two parts of the island of Ireland is economically disruptive and very threatening to a Northern Ireland peace settlement, in which the Irish nationalist-republican side in NI can live with being part of the UK as long as the North and the Republic are unified via the EU and associated commercial agreements.

This is what I get from following Eurosceptic sources when they get round to proper conversation and analysis, rather than fighting the remain-leave battle. Brexit outbursts of premature triumphalism over Italy, or demands to abolish the upper House of Parliament because the Lords uses its constitutional rights to pass amendments they don’t agree with back to the Commons for the final decision, are a distraction from the collapse of full Brexit.

The idea of a ‘no deal’ walk-away from the EU has been abandoned and inevitably the UK will accept single market/customs union rules while the government makes a show of leaving everything. Because the UK very probably will not be a formal member of the single market (though there is a possibility of joining the EEA which would mean formally staying in the single market), it will be able to reduce migration from the EU (not a great thing to my mind), which will bring joy to a large part of the population (particularly the Brexit-voting part). No doubt the reality of moving to what Jacob Rees-Mogg (a well known, hard-Brexit Conservative MP) calls ‘vassal state’ status will be covered over with that issue, but the reality is the UK will accept rules for customs and economic regulation made by the EU indefinitely.

‘Indefinitely’ means ‘permanent’ though this is being covered up by talk of ‘transitional periods’. Alternatives to this have collapsed with the failure of ‘no deal’. The New Hard Brexit is to accept aligned rules on goods, but not on services, with the UK’s exceptional role in financial services in mind. However, there is no indication that the EU will give this kind of deal, despite the Brexiteer posturing about the UK being too powerful to push around, which has clearly been shown as empty by negotiations so far.

Over-excited Brexiteers getting Italy wrong (and Ireland)

So a new government formed without anti-Euro currency finance minister. 5 Star and the League (the coalition partners) are not impeaching President Sergio Mattarella. The idea they would is a bit of a joke anyway, as it would require the agreement of the Supreme Court and a vote of both chambers of the Italian parliament to achieve an impeachment. The issue behind the non-impeachment was that Mattarella had vetoed an anti-Euro candidate for finance minister: Paolo Savona (who now has another post in the government).

Some relevant facts here. 1. Italian presidents have the constitutional right to veto ministerial nominations and have frequently done so before 2. Recent Italian opinion polls show support for the Euro at over 60% 3. Neither coalition party ran on an anti-Euro manifesto.

Claims that Mattarella is some pathetic weak instrument of the European institutions who ordered him to keep Savona out are themselves absurd. 1. There is a shared preference of Mattarella, the Italian public, and European institutions for staying in the Euro 2. Mattarella is from a political family in Sicily, which went anti-mafia and Sergio Materall’s brother, Piersanti, who was head of the regional government, was assassinated by the mafia as a result. I think we can say Sergio is a character of substance to stay in politics after that.

Regarding constitutions and democracy, constitutions establish limits on the power of temporary majorities through rules and institutions designed to embed basic rules about rights and the use of power. This is why democracy of a kind worth having is referred to as ‘constitutional liberal democracy’. You cannot both be in favour of constitutional democracy and complain when constitutional constraints express themselves in the action that Mattarella took, which is well within his formal powers and previous precedent.

Many of the triumphalist Brexiteers in the UK, who were shouting about Mattarella as an enemy of democracy who was about to be punished, are admirers of the US ‘constitutional conservatism’ which, on the face of it, advocates very strict restraints on the actions of elected bodies according to the supposed original meaning of the constitution. You can’t have it both ways. And even if you think democracy means the unrestrained right of a majority, there is no majority support for leaving the Euro in Italy and no manifesto mandate for the coalition to leave the Euro.

You could argue that Mattarella made a mistake about perceptions and had been outplayed, that had some plausibility for a few days but does not look so correct now. Mattarella has got what he wanted and will not be impeached. It’s true that the League has strongly increased its support since the election in opinion polls, but that mostly precedes the ministerial crisis. Brexiteers are still clinging to an attempted triumphalism over Italy. The Italians are standing up to Brussels, which supposedly is a lesson to Britain to be tougher in Brexit negotiations. Well it is a bit soon to say whether the Coalition in Italy represents Eurosceptic triumph and hard to see what this has to do with Brexit negotiations.

What loud mouthed Brexiteers in the UK say about Italy is in some ways not very important, but what is important is the presumption to know more than they do and circulate false assumptions about European politics in the UK, which in turn distorts our debates and assumptions, and which can then pop up amongst Proper centre-right journalists and commentators Who Should Know Better.

Something similar has emerged with Brexiteer attitudes towards Ireland’s attempts to keep an open border with Northern Ireland. Manipulated by the EU institutions with naive and incompetent leaders (rather reminiscent of old prejudices about the Irish being stupid) has been standard opinion, and then there was the claim by a senior Conservative politician, Iain Duncan-Smith, that the Irish position is to do with a forthcoming presidential election. 1. The Irish president has no political powers whatsoever 2. There may not be an election, since no one has announced a wish to run against the incumbent so far and it may suit the major parties in Ireland to leave it like that. Funnily enough all those stupid naive Irish leaders manipulated by the EU have given Ireland much greater economic growth than the UK. What an economic miracle there would be in Ireland if they were as clever as Brexiteers!

It’s difficult to stop Brexiteers from 1. using simplistic rhetoric about majorities and Will of the People to suit their immediate anti-EU goals without concern for consistency and the values of liberal democracy 2. Living in an imagined world where European politicians they disagree with are stupid and/or slaves of the European Commission, conspiring against democracy. These views should be challenged and left with the true believers, away from informed debate.

Brexiteers and German car companies

UK enthusiasts for leaving the EU have a strange obsession with German car makers. They export so many cars to the UK, they will MAKE the German government which will MAKE the European Commission give us the exit deal we want. This has been going on from all kinds of people ever since the Leave Referendum (maybe during the campaign as well, but I missed that). It is an expectation that has obviously been falsified by the course of negotiations in which the EU has got 10s of billions of Euros from the UK to even start negotiations (though the UK tries to pretend otherwise) and has refused the kind of market access the Brexiteer enthusiasts assumed they would get automatically thanks to Volkswagen, BMW, and Mercedes (!).

Even today, listening to the Telegraph Brexit podcast, I heard Christopher Hope (the highly affable and mostly reasonable chair) keep on about how German carmakers were going to make Brussels gives the UK what it wants. The guests, pro-Brexit people from the Telegraph, were clearly bemused as they had been explaining how the UK was going to remain ‘aligned’ with the single market. Clearly if the UK is already de facto accepting the ‘indefinite’ (i.e. permanent) application of single market rules, German car makers have no incentive to MAKE Merkel give the UK another deal preferable to hardcore Brexiteers.

Of course the saddest expression of this muddled thinking came from Boris Johnson (the notoriously attention seeking and inconsistent foreign minister) when he claimed Italian prosecco wine manufacturers would make Rome/Brussels give the UK a Brexiteer-friendly trade deal. It turns out demand for prosecco in Italy is greater than supply and the makers can easily live with reduced demand in the UK.

The German car industry is of course much larger and not dependent on the supply of a particular kind of grape. Still, just one seventh of German cars are sold in the UK. Now obviously it would be very bad news to lose one seventh of the market, but there are no circumstances in which German manufacturers would sell no cars in the UK, the drop would never be as great as one seventh. Sales of German cars are already declining in the UK and given weak UK economic performance compared with Germany, the decline is likely to continue. Anyway, it should now just be really bloody obvious that German car manufacturers have not united to force Berlin/Brussels to accept a hardcore Brexit agenda! There is clearly a very big stream of reality distorting national self-obsession amongst Brexiteers who believe this kind of thing. Well it has now been shown to be thoroughly incorrect, let go now!

Brexit Bureaucracy and Renouncing UK Citizenship

UK nationals living outside the UK in the EU are applying for citizenship abroad to retain rights they lose after Brexit. Some of these countries forbid dual citizenship so UK citizens are renouncing UK citizenship. The Home Office takes the opportunity to raise fees for renouncing citizenship, though evidently its revenue is already increasing because of charges for renouncing citizenship. Didn’t Brexiteers tell us Brexit would reduce state bureaucracy?

Nightcap

  1. How Alan Shepard Became First American in Space Rick Brownell, Historiat
  2. Public Debt: a global perspective Livio di Matteo, Worthwhile Canadian Initiative
  3. Italian voters head for euro showdown Alberto Mingardi, Politico EU
  4. What good is religion? Manini Sheker, Aeon

Divergence and Convergence within Italy

Two years, I wrote a post on this blog on the process of regional convergence in Italy. In that post, I made the observation that it seems that, economically, Italy was as fragmented at the time of the unification as it is today which made it an oddity in terms of regional convergence. To make that claim, I used this table of relatively sparsed out observations produced by Emanuele Felice: which was published in the Economic History Reviewitaliangdp

 

 

 

 

 

 

 

 

 

As one can see, there is a pronounced “lack” of integration for the Italy in terms of living standards. This is reinforced by a more “continuous” set of estimates produced, again, by Emanuele Felice (this time, its a working paper of the Bank of Italy) that now include the 1870s and go to 2011 (as opposed to 2001). This is the result, which I find fascinating. The first graph shows GDP per capita – for which there is divergence to 1951 and then a mild convergence thereafter but still well above the levels at the time of unification.  More fascinating is the fact that productivity is at its most integrated since unification (2nd figure) suggesting a divergence in levels of labor activity (3rd figure). In these three graphs, you have a neat summary of Italian labor markets since 1870.

Italian Convergence

Revisiting Epstein’s Freedom and Growth


I was fortunate to be invited give the Epstein Lecture at LSE this March. The series is named after the great LSE economic historian Larry (Stephen) Epstein. Here I’ll summarize why it was such an honor to give the lectures. The content of the lecture will be another post.

Epstein was a historian whose origin field of expertise was medieval Italy. I encountered him through Freedom and Growth. Published in 2000, I first read it a couple of years later, perhaps in 2002 or 2003. At the time I was devoted to a story of economic growth shaped by Douglass North, particularly Structure and Change in Economic History (1981).

The focus of Structure and Change was on transaction costs. High transaction costs limited market exchange and kept societies poor for most of history. Sustained economic growth could only occur once transaction costs fell to a level that allowed markets to expand and the division of labor to develop. On this view, market expansion or Smithian growth was itself a stimulus to technological innovation. But what kept transaction costs high?

One answer North gave was the state. To paraphrase: the state had the ability to both keep a society mired in poverty through predatory behavior and to provide the preconditions for growth by securing property rights. The origins of sustained economic growth for North lay in institutional changes that occurred secured property rights and lowered transaction costs. The most important such institutional change was the Glorious Revolution of 1688.


North’s account received many challenges, but the issue that Epstein honed in on was the assumption that there was such a state, able to either revoke or secure property rights. It was assumed that “rulers rule”. Epstein contested this arguing that New Institutional Economists

“project backwards in time a form of centralised sovereignty and jurisdictional integration that was first achieved in Continental Europe during the nineteenth century; they therefore fundamentally misrepresent the character of pre-modern states.”

North, Wallis, and Weingast would address this in their 2009 Violence and Social Orders. But Epstein’s criticism was spot on in 2000. Epstein argued that alongside the problem of predatory states, a central problem was the lack of integrated markets. He attributed market disintegration to coordination and prisoners’ dilemma problems between political authorities. In so doing, Epstein set the agenda for the subsequent “state capacity” research agenda.

Epstein made several points which continued to be expanded upon by current research (see here). First, he documented that the lower interest rates that the British state paid after 1688 were characteristic of city republics from the middle ages onwards. He argued that the English monarchy in the 17th century was characterized by an anomalously backwards financial system. Lower interest rates after 1688 partly represent a convergence to the Republican norm achieved by Italian city-states centuries earlier.

Second, he challenged the argument that monarchies “overtaxed” cities. There was “no evidence that townspeople paid higher taxes under monarchies than republics”. Per capita taxes were likely higher in Republican city-states.

Third, he disputed that Republican city-states like Florence brought economic freedom noting that “republican subjects faced several limitations to their economic and political freedoms that monarchical subjects did not”. All of this challenged generalizations made by historical sociologists like Charles Tilly and economic historians like North.


Epstein’s historical evidence came from medieval Italy. Late medieval Italy was highly urbanized and prosperous by pre-industrial standards. According to Broadberry’s estimates, per capita GDP in Italy in 1450 was not matched by England until 1750. Like growth elsewhere in the premodern world, it was Smithian growth, driven by trade, market integration, and the division of labor. But unlike in England, this Smithian growth did not continue and blossom into modern growth. Epstein’s explanation for why this did not take place was that late medieval Italy suffered an “integration crisis”.

He saw the late medieval period as characterized by new opportunities for growth and innovation. Urbanization increased. Capital markets expanded and deepened. Interregional trade developed. Proto-industrialization took place. But Epstein contended these opportunities were only seized in areas where political authority was centralization.

In reference to proto-industrialization, he observed that

“Crucially, the success of regional crafts was inversely proportional to the concentration of economic and institutional power in the hands of a dominant city.”

With respect to the establishment of permanent fairs, he noted that

In fifteenth-century Lombardy, new fairs proliferated only after the balance of power shifted decisively from the former city-states to the territorial prince with Francesco Sforza’s victory in 1447.

Market integration was complemented and perhaps driven by political integration. Integrated urban hierarchies were themselves the product of political centralization.

“Centralisation underlies all the major institutional changes to market structures previously described. It lowered domestic transport costs, made it easier to enforce contracts and to match demand and supply, intensified economic competition between towns and strengthened urban hierarchies, weakened urban monopolies over the countryside, and stimulated labour mobility and technological diffusion.”

The more centralized parts of Italy — notably Lombardy — were better able to benefit from these trends than was Tuscany. But in general, political fragmentation and regional diversity were “distinctive features of pre-modern Italy” in general and an impediment to its long-run growth prospects.

Unlike in his analysis of interest rates, Epstein brought little data to bear on these claims and I am unaware of subsequent research on late medieval Italy. As such, the thesis of a late medieval integration crisis laid out in Freedom and Growth remains speculative. Epstein would no doubt have fill in the details had he lived longer. Subsequent research has mostly focused on early modern rather than medieval Europe (see here).  But the larger message: the importance of the state for premodern economic development has been central to subsequent research, including my own work (e.g. here).

World War I destroyed Christianity

That’s the argument I put forth in this week’s RealClearHistory column. As usual I frame the argument in the form of a “Top10,” and in this case I used battles. An excerpt:

6. Battle of Asiago: May 15 – June 10, 1916. Another nasty battle fought along the Austro-Italian Front, Asiago is considered a victory for Italy even though it lost more men than the Austro-Hungarians. Altogether, the surprise attack launched by the Hapsburgs inflicted severe casualties on the Italians, with the latter losing 140,000 men and the aggressor losing 100,000. The surprise did not work for the Hapsburgs, either, as their armies were turned back and the position continued to be held by the Italians. There is a beautiful war memorial dedicated to both sides in Asiago today, and there are no crosses to be found for the dead there.

Please, read the rest.

Nightcap

  1. Dutch Jews face tough, age-old questions Bruce Clark, Erasmus
  2. Elections signal the end of an era in Italy Joel Weickgenant, RealClearWorld
  3. Hamas dips its toes in regional politics Adnan Abu Amer, Al-Monitor
  4. Stunningly beautiful photos of art from Tibet Joshua Daugherty, JHIBlog

BC’s weekend reads

  1. heads roll at top of Turkey’s military in latest purge | Turkey’s 16th of April referendum will pave the way for authoritarianism
  2. great piece on Macron’s recent economic policies | French expatriates and foreign Francophiles
  3. Italy will be the EU’s third power once the UK leaves | the uniqueness of Italian internal divergence
  4. attempts to shut down free speech will no longer be tolerated, at least at Claremont McKenna | when is speech violence?
  5. cool science stuff is gonna happen soon | what makes it science?

Wedding date and superstitions

There is a neat new paper in the most recent edition of the Journal of Population Research by Gabriele Ruiu and Marco Breschi on wedding dates and superstitutions in Italy. Here is the abstract:

In Italy, it is believed that Tuesdays and Fridays are particularly unlucky days for weddings as well as the 17th day of each month. Previous studies realized in the aftermath of the Second World War have shown the strong influence that these superstitions had in determining the wedding dates in the entire country. We have used exhaustive data collection of all marriages celebrated in Italy in the years 2007–2009 to investigate whether superstitions are still able to influence the choices of spouses. We find that this influence is still present after the great economic, social and demographic transformation of Italian society. We also show that a wife’s education reduces the influence of superstition on the choice of the date of marriage while those who opt for a religious rite are also those who are more careful in avoiding inauspicious days.

Trump’s Inauguration: Ageing Pains

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Vincent has discussed the relative age of US presidents. There is something to be said about the age of electorates.

I was living in the United Kingdom when we voted for Brexit (I was a soft remainer). I was living in the United States when Trump won the election. So I can’t help but feel that Trump’s inauguration is part of a generalised nationalist turn that, ironically, transcends national borders. Why is this nationalist turn happening? And why has it wrong-footed pollsters and political scientists more than once now?

We are repeatedly, and correctly, warned not to over-interpret individual events as somehow determined by given factors. Both the Brexit vote and the presidential election were close, with Trump taking the electoral college without the popular vote. One domino that didn’t fall last year was the Austrian presidency that, after a close call, went to a Green rather than a Nationalist. So whatever explanation we are looking for has to be a tendency that’s slightly shifted the odds in favour of nationalist politicians without the experts being able to anticipate it in advance.

Some suggest that this resurgent economic nationalism is an inevitable outcome of the overreach of trade liberalisation that has undermined national self-determination and humiliated local cultures. Others argue that the real cause is growing income and wealth inequality. I think a potentially more straightforward factor is demography. The electorate is simply older than it used to be.

There are a few reasons why this explanation may work better than the more popular ones. The ageing electorate is almost unprecedented in history. This could make it harder for political scientists to predict its impact on elections. Surveys might be able to tell us how older people vote as individuals without being able to work out how older people surrounded, in addition, by lots of older peers will behave.

Countries like Italy and Japan were somewhat ahead of us on this demographic transition. And perhaps not entirely coincidentally, Italy repeatedly elected a mini-Trump, Silvio Berlusconi as Prime Minister, while continuing to support the elderly at the expense of opportunities for the young. Meanwhile, Japan has always been more ethno-nationalist than other developed economies and in some ways has grown more politically reactionary in recent decades.

This explanation chimes with the fact that Trump voters were not typically economically disadvantaged. They were older and less educated but typically economically secure. Age was also a big factor explaining support for Brexit. At the same time, an ageing population presents real economic challenges that translate into politically salient problems. Demography is probably responsible for a great deal of the sustained drop in real interest rates, precisely the sort of thing that worries ageing savers with slowly growing pension pots.

Trump wants to boost infrastructure, construction and manufacturing. But these sectors do best with young and growing populations, where families want new and bigger houses and offices, roads to connect them and cars to drive to and from them. What happens when everyone already has a great deal of material goods and a country hasn’t got as many young adults to demand new stuff? Inevitably, an economy’s trend growth declines and may even contract, leaving investors with fewer places to get a good return.

What could this mean about the future? On the one hand, this could be quite a pessimistic explanation. There is very little that can be done in the short or medium term about the demographics of an electorate. So we might just be in for a more reactionary period. The vote is not about strength of belief, just the sheer numbers nudged in that direction, and that is what age can do.

On the other, this could be an optimistic hypothesis. The situation we find ourselves in is a side-effect of two generally attractive outcomes: people living much longer, and lower fertility thanks to women becoming more educated. The balance between the young and the elderly might eventually improve once the demographic bulge of the baby boomers has passed into history (this depends critically on whether institutions permit new family formation). In addition, tomorrow’s elderly are not the same as today’s elderly. They will probably be more educated, less nationalist and possibly less subject to cognitive decline than the current generation. They are less likely to be impressed by a bad sales pitch.

The Uniqueness of Italian Internal Divergence

A few weeks ago, I got engaged in a twitter debate with Garett Jones, Pseudoerasmus and Anna Missiaia (see her great work here) about institutions in Italy. During the course of that discussion, I was made aware that I held a false belief. Namely, the belief that since the late 19th century, there had only been a minor divergence within Italy. In reality, there has been considerable divergence within the country since the late 19th century.

In the wake of the Italian referendum, it is worth examining how big is this divergence. Below is a map of regional GDP per capita taken from Europa.ec.  The southern regions of Italy have GDP per capita below 75% of the European average while some of the northern regions have GDP per capita above 125% of the European average. The IStat database suggest similar levels of divergence across regions in Italy.

Gross_domestic_product_(GDP)_per_inhabitant_in_purchasing_power_standard_(PPS)_in_relation_to_the_EU-28_average,_by_NUTS_2_regions,_2014_(¹)_(%_of_the_EU-28_average,_EU-28_=_100)_RYB2016.png

So, how much divergence was there – say a little a more than one hundred years ago? Well, according to the great work of Felice (see here in the Economic History Review and here), there were more similarities back in the 19th century than there are today. Take the Liguria which – in 1891 – had per capita value added of 44% above national average. Take also Campania which was 3% below the national average. Today, the IStat data places Liguria 9% above national average but the region of Campania is 37% below the national average. Overall, regardless of how you present the data , divergence has increase. Just expressed at coefficient of variations, there has been an increase. In 1891, the coefficient of variation stood at 22.95% while it stood at 28.95% in 2013.

italiangdp

This makes Italy into an oddity. My own work shows that in Canada, since the 19th century, there has been considerable convergence (see article in Economics Bulletin). The same happened in the United States (see this paper by Michener and McLean), in England (here and here) and in Sweden (here). Among western countries, increased internal divergence is rare and Italy is the prime case example. And this is a strong indictment. Either Italy as a whole shares the same steady-state status and something is preventing upwards convergence from the South or Italy has two different economies with two different steady-states. In both cases, the implications are depressing.

Migration from Bangladesh: Causes and Challenges

Migration and emigration from Bangladesh is a regular phenomenon. Historically, large scale migration from the region constituting present-day Bangladesh started after the tea plantation was introduced in Assam by the British rulers in the early nineteenth century. Large numbers of coolies (porters) were needed for the tea gardens. To fulfil that demand the Assam Company began to import labourers from Bengal (especially from its eastern part) in 1853. In contemporary times, the first batch of emigrants from Bangladesh were the ‘refugees’ seeking shelter in a foreign country, after atrocities started by the Pakistan Army in East Pakistan in 1971. This phenomenon did not stop even after the East Pakistan was liberated and Bangladesh was formed in 1971. Instead, since then many Bangladeshis have been migrating to Europe, West Asia, India, and East Asia. Migration has its impact on the demographic composition of the host countries. For example in some cities of Italy, like Lazio, Lombardy, and Veneto, the migrants from Bangladesh comprise a significant number of the population. In developed countries most of these migrants are engaged in service sector jobs like souvenir selling, or being a vendor, shop worker, restaurant waiter, or domestic maid.

Causes for large scale Migration from Bangladesh

Although its economy is stable, maintaining between 5-6 percent Gross Domestic Product (GDP) growth for the last two decades, it is not viable enough to occupy all skilled, semi-skilled, and non-skilled workers in the country. Statistically, only 26 percent of its population lives below the national poverty line of US$ 2 per day, but a substantive percentage remains unemployed or underemployed. To evade poverty, unemployment, and under employment, many Bangladeshi migrate to other countries. Often, they do so even at the cost of their lives. Many times, such a desperate act has lead them to be trapped in a situation like the one happened in May 2015, when about 8,000 people consisting of Rohingyas from Myanmar and Bangladeshis were stranded at sea close to Thailand. While moving illegally, many Bangladeshis have even lost their lives. The most recent high profile case of death of Bangladeshi migrants occurred on 28 August 2015 in North Africa, where at least twenty four Bangladeshis, including two minor children, died after two boats carrying up to 500 migrants sank off the coast of Libya. The first boat, which capsized early on 27 August 2015, had nearly 100 people on board. The second, which sank later, was carrying about 400 passengers.

As 80 percent of Bangladesh’s geographic area is situated in the flood plains of Ganges, Brahmaputra, Meghna, and many other small rivers, a contributing push factor to the migration is the character of these deltaic rivers. They often change their course, forcing many inhabitants to move to new settlements. The submergence of chors (silt areas) during the flood season forces many inhabitants, deliberately or out of sheer ignorance, to migrate into India. Out of these total number of environmental migrants, only a few return after the normalisation of the situation; others look out for ways to earn their livelihood in their ‘acquired ‘or ‘adopted’ land.

Changing Gender Pattern and Consequences of Migration

Gender-wise, like other countries from the developing world, the migration-related statistics of Bangladesh too is tilted in favour of males, of which there are around three million working in different parts of the world. But in last few years there has been a constant increase in the number of female migrants, who can migrate either alone or as a spouse. As reported in the Daily Star (a well-respected English language daily in Bangladesh), according to the June 2015 statistics of Bangladesh’s Bureau of Manpower, Employment and Training (BMET), a total of 37,304 female workers had gone to different countries in 2012; it has increased to 76,007 in 2014. One country which stands out in terms of employment of female workers from Bangladesh is the United Arab Emirates (UAE). According to the BMET statistics, the UAE is home to 27 percent of the total female migrant workers of Bangladesh. Two basic reasons can explain this rising trend. Firstly, the demand for female workers in the UAE is higher than that of other countries. Secondly, attractive salary in the UAE draws more female migrant workers there than other countries. After the UAE, Lebanon hires a large number of female migrant workers. While the country has only 1.3 percent of total Bangladeshi migrants, it nevertheless has the second highest percentage of female migrants (24.3 percent) compared to all other countries. About 97,000 female workers reside in Lebanon.

Host countries remain hostile to the migrants. Sometimes, under pressure from political and economic constituencies, the host country (ies) restricts its visa policy for the citizens of a particular country or even denies issuing it to them altogether. The migrants are accused of ‘cultural invasion’ through demographic transition. They are also blamed for taking away job opportunities from the locals. Quite often, the migrants face violence from the locals, which is a sign of an extreme form of hatred towards them. Bangladeshi migrants have faced both situations. In 2014 Saudi Arabia stopped issuing visas for Bangladeshis even for the Umrah (a pilgrimage to Mecca performed by Muslims; it can be undertaken at any time of the year, in contrast to the Hajj). The Saudi officials claimed that in 2014 many Bangladeshis for whom Umrah visas were issued did not return to their country after performing the ritual. The Umrah visa was restored on August 5, 2015, after Bangladeshi foreign minister Md Shahriar Alam’s visit to Saudi Arabia, where a request was made to the Saudi State Minister for Foreign Affairs (Nizar bin Obaid Madani) for Umrah visas to be resumed.

Termed as ‘illegal’, the Bangladeshi migrants have faced violence in the Indian states bordering Bangladesh. The radical groups in the area have centuries-old grievances against them. They are considered to be an economic and cultural threat to the region. Many contrasting figures are being presented by these groups to justify their position; in reality, according to the United Nations data of 2013, the number of Bangladeshi in India is around 3.2 million. Migrants from Bangladesh have faced violence not only in India, but in other parts of the world too. In Thailand there have been rampant cases of exploitation of Bangladeshi women working in various sectors, including the flesh trade. In West Asian countries, the women workers are forced to work in many houses as a maid and beaten when they demand salary from their ‘masters’. In Malaysia, too, the cases of abuse of maids is on the rise. Most of these maids are from Bangladesh. In February 2015 Bangladeshi workers faced targeted violence in Rome, Italy.

Conclusions

Remittances play a crucial role in pushing the Bangladeshi economy. According to the World Bank, total remittance received by Bangladesh in 2013 was $14.5 billion, which has increased to $ 15.0 billion in 2014-15. In 2014, the remittances constituted 8.21 % of the GDP of Bangladesh. In January-March 2015 quarter Bangladesh earned $ 3771.16 million of remittance, which is 8.49 percent higher than the previous year. These remittances have helped Bangladesh’s economy maintain its 5.5- 6 percent GDP growth.

Though the migrants are important to Bangladesh’s economy, many serious ill effects of migration too have emerged. Under the guise of migration, human trafficking is taking place from Bangladesh to many parts of the world. Women and children from Bangladesh are trafficked into India, East Asia, and West Asia for commercial sexual exploitation and to serve as bondage labour. To check this activity, especially human trafficking of females, the government of Bangladesh issues licences to the recruiting agencies, which are renewed at regular intervals of time and maintained by the concerned agency. Also, in 2013 the Government of Bangladesh revised the Overseas Employment and Migration Act which includes Emigration Rules, Rules for Conduct and Licensing Recruiting Agencies, and Rules for Wage Earner’s Welfare Fund. Despite all such steps migrants are being exploited by the domestic agencies and they face umpteen challenges in the host country they end up in.

Myths of Sovereignty and British Isolation XVII: Common and Civil Law

The last post referred to the need to investigate ideas about law and related ideas in discussing Britain’s relation both with the Anglosphere (USA, Canada, Australia, New Zealand) and with the rest of Europe. The big issue here is Anglosphere common law tradition versus Roman or civil law tradition in the European mainland and indeed most of the world outside the Anglosphere. Common law in this context refers to judge-made law based on precedent versus civil law referring to statute laws based on the will of the sovereign. Statute laws are laws instituted by the state, in writing, in public explicit acts of law making.

Judge-made laws based on precedent refers to the ways in which judges, using a general sense of justice, make judgements according to that sense of justice with the precedents of previous relevant judgements shaping the sense of justice along with the whole set of laws and their general principles. Civil law judges look at the text of statutes, as do common law judges, but apparently the latter category of judges are also concerned with the mixture of precedents and general spirit of the laws.

There are certainly some real differences between common law and civil law traditions, but how straight forward are these difference? The phrase ‘common law’ itself comes from the codification and national harmonisation of laws undertaken by French-speaking kings of England, after William, Duke of Normandy, conquered England. So the phrase ‘common law’ itself refers to the opposite of what common law has come to mean: the English legal tradition since the High Middle Ages has come out of conquest by an external power. We can argue about how far Anglo-Saxon laws and judicial formalities survived the Norman and Angevin re-codification, but there is no denying that the re-codification happened and that nothing now survives from the Anglo-Saxon era.

England started off in the earlier Middle Ages where all of post-Roman Europe stood, that is Roman law had collapsed and Germanic tribes introduced their own laws in conquered territories, where some elements of Roman law survived in the canon law of the church. The Roman law system itself reached a peak with the final codification undertaken under the Emperor Justinian in Constantinople during the sixth century. The transformation of the eastern part of the Roman Empire into a Greek empire included a decline in knowledge of Latin so understanding of the definitive law text was limited, but survived in the Empire including the last Roman-‘Byzantine’ holdings in Italy.

Knowledge of Roman law increased in the thirteenth century, in association with the growth of new universities where legal education played a very large role. England was not outside this process, but it is fair to say that it was less influenced by it than some continental powers, particularly France. The process of Revolution and Bonapartist rule, from 1789, produced a large scale deliberate construction of law as a unified system based on the will of the sovereign (whether elected assembly or absolute monarch) with regard to the laws, which was exported to other parts of Europe in the Revolutionary and Napoleonic wars.

The British commitment to common law was not entirely consistent since Scotland has always retained some differences from England in its legal system, which place it closer to the civil law tradition, at least compared with England. In the United States, there was a parallel to the French republican and Bonapartist experience of redesigned institutions in the process of adopting first the Articles of Confederation and then the Constitution of the United States, which unified the thirteen British colonies in a common structure.

The difference between French and American constitution making is often held to be that the French constitutions claimed that laws are the will of the people and the product of nature, while the American constitution is designed to disperse any idea of a single political law-making will between the different branches of federal government and the ‘several states’. However, the preamble to the US Constitution refers to ‘we the people’ and therefore asserts that it is the product of a single political will of the people in the union.

While the US Constitution does not refer directly to good laws as the work of nature, there were shared underlying assumptions in France and the US concerning the ‘natural’ status of good laws, good political institutions, and justice. It is at least true that the US constitution federalises rather than centralises, while the French process of about the same time ended in a very centralised state. This cannot be the difference between common and civil law systems though, since there are federal civil law states like Germany and Switzerland and unitary common law states like the UK and New Zealand, though the UK has been evolving in a more federal direction, if in a rather ad hoc and limited way, since the turn of the century.

Next, laws, charters and constitutions