The populist right in India, and the US

All eyes in India have understandably been on some important political developments over the past few days.

First, the by-election results of 3 parliamentary seats and 2 legislative seats were made more interesting by fact that BJP (Bharatiya Janata Party, a Hindu nationalist party, and India’s largest) had to face a surprising rout in the strongholds (Gorakhpur, Phulpur) of Uttar Pradesh’s Chief Minister (Yogi Adityanath) and Deputy Chief Minister (Keshav Prasad Maurya).

Second, there has been talk of other regional parties joining hands and forming an Anti-Congress Front. Two days after the election results, the exit of the Telugu Desam Party (TDP) from the BJP-led National Democratic Alliance (NDA) and its decision to pass a no confidence motion (which BJP is likely to win) has certainly made the fight for 2019 more interesting.

While it remains to be seen whether the opposition parties in 2019 can give the BJP a run for its money, those interested in US politics will have closely followed the result of a Congressional by-election (18th District) where Democrat candidate Connor Lamb (a 33 year old Marine) defeated Republican Candidate Rick Saccone in a close contest. This is a significant win after the triumph of Senator Douglas Jones in Alabama. Jones became the first Democrat to win a Senate Seat in Alabama (a Republican stronghold referred to as “Ruby Red”) since 1997.

The US President, who is quick to comment on virtually every issue, on Twitter, remained silent on the result of the 18th District.

The US President did state, at a private fundraiser for Missouri Senate candidate Josh Hawley, that the Democrat candidate’s stance on key economic issues was akin to that of Trump:

The young man last night that ran, he said, ‘Oh, I’m like Trump. Second Amendment, everything. I love the tax cuts, everything.’ He ran on that basis, Trump said. He ran on a campaign that said very nice things about me. I said, ‘Is he a Republican?’ He sounds like a Republican to me.

Lamb conservative on social and economic issues?

Trump’s views were echoed by a number of other Republicans. House Speaker Paul Ryan called Lamb a “pro-gun, anti-Nancy Pelosi conservative.”

While Republican Representative Chris Collins of New York said that he doesn’t “think you’ll see another candidate like Lamb,” another representative from the state of Pennsylvania, Mike Kelly, argued that Lamb was “more like a Republican.”

There is some truth in the President’s assertions, because Lamb did support the President’s imposition of tariffs on aluminium and steel imports. Said Lamb: “we have to take some action to level the playing field.” Even on issues like gun control and abortion, his views were to the right of conventional Democrats, though not absolutely in sync with the Republicans.

Why Trump can not ignore this defeat

Irrespective of what US President Donald Trump may say, the fact is that he had won the state by 20 points in the US Presidential election of 2016, and his economic agenda had found strong resonance. Trump, along with Vice President Mike Pence, had also campaigned for Saccone.

Significantly, in the last two Congressional elections, Democrats had not even bothered to field candidates in PA 18.

The announcement to impose tariffs on aluminium and steel had been made one week before the election, clearly with an eye on reaching out to large sections of ‘blue collar workers’. The US President calculated that he would be able to regain his popularity, but the results clearly show that Trump’s ‘ultra nationalism’ and economically inward looking policies by themselves will not suffice. He will also need to change his style of functioning and not continuously sack individuals.

Republican Speaker Paul Ryan himself had dubbed this verdict as a ‘wake up call’. Other Republicans have been forthright in their analysis of the defeat and blame Trump’s approval ratings for the same.

Doug Heye, a Republican strategist and former spokesman for the Republican National Committee, said:

There is a very real problem facing Republicans in the months ahead and that problem is Donald Trump’s approval rating.

What does Lamb’s win mean for the Democrats

Lamb’s victory may also result in some changes within the Democrats. Lamb has been pitching for a change in leadership and does not get along particularly well with Nancy Pelosi, Minority Leader of the US House of Representatives:

I have said, and I continue to say, that I think we need new leadership at the top of both parties in the House.

Pelosi however was quick to deny that Lamb’s criticism of her had anything to do with the outcome:

I don’t think that that really had that much impact on the race […] He won. If we hadn’t won, you might have a question, but we won — the ‘D’ next to his name was very significant.

The electoral verdicts in India and US have one common message: ‘economic insularity’,  and the whipping up of ultra-nationalist emotions can not make up for vacuous policies.

There are messages for the opposition in both the US and India; in spite of right wing nationalism having failed to address substantive issues, the voter is looking for new options — leaders with imaginative ideas outside of the cozy club .

If one were to specifically look at India, the fence sitters may not be particularly happy with the existing order, but does that imply that they will automatically tilt towards the opposition? The politics of doles and sops will not work. A progressive social agenda, which is in sync with the diverse ethos of this country, has to be complemented by a pro-reform economic agenda (which is of course inclusive, and sensitive to the concerns of the poorest).


What is clear however is that Trump’s re-election in 2020 and Modi’s in 2019, are not a done deal. One would have to say though, that in spite of the recent UP verdict, there is a higher probability of Modi being re-elected than Trump.

It remains to be seen whether the current populist right narrative, which is a lethal cocktail of inward looking economic thinking and conservative social policies, can be countered effectively, and defeated at the hustings, by a progressive, forward looking agenda. Will India and the US take the lead in challenging this narrative?


3 key problems with Trump’s style of functioning

The removal of Rex Tillerson as Secretary of State (who was replaced by Mike Pompeo, Director of the CIA) reiterates three key problems in US President Donald Trump’s style of functioning: First, his inability to get along with members of his team; second, impulsive decisions driven excessively by ‘optics’ and personal chemistry between leaders; and, finally, his inability to work in a system even where it is necessary.

Tillerson, who had differences with Trump on issues ranging from the Iran Nuclear Deal (which Trump has been wanting to scrap, though his stance was moderated by Tillerson) to the handling of North Korea, is not the first member (earlier senior individuals to be sacked are, amongst others, Michael Flynn, who was National Security Adviser, and Chief Strategist Steve Bannon) to exit hurriedly. Gary Cohn, Director of the National Economic Council, quit recently after opposing the US President’s tariffs on imports of steel and aluminium.

The US President tweeted this decision:

Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all!

The US President admitted that Tillerson’s style of functioning was very different from his own (alluding to the latter’s more nuanced approach on complex issues).

Interestingly, the US President did not even consult any of his staff members, including Tillerson, before agreeing to engage with North Korean Dictator Kim Jong Un. The South Korean National Security Advisor, Chung Eui Yong, had met with Trump and put forward the North Korean dictator’s proposal of a Summit.

The US President agreed to this proposal. Commenting on his decision to engage with Kim Jong Un, Trump tweeted:

Kim Jong Un talked about denuclearization with the South Korean Representatives, not just a freeze. Also, no missile testing by North Korea during this period of time. Great progress being made but sanctions will remain until an agreement is reached. Meeting being planned!

While Chung stated that the Summit would take place before May 2018, White House has not provided any specific dates.

There is absolutely no doubt that, at times, bold steps need to be taken to resolve complex issues like North Korea. Trump’s impulsive nature, however – refusing to go into the depth of things or seeking expert opinion – does not make for good diplomacy.

In fact, a number of politicians and journalist have expressed their skepticism with regard to where North Korean negotiations may ultimately lead. Ed Markey a Democratic Senator from Massachusetts, stated that Trump “must abandon his penchant for unscripted remarks and bombastic rhetoric to avoid derailing this significant opportunity for progress.”

In a column for the Washington Post, Jeffrey Lewis makes the point that there is a danger of Trump getting carried away by the attention he receives. Says Lewis in his column:

Some conservatives are worried that Trump will recognize North Korea as a nuclear-weapons state. They believe that an authoritarian North Korea will beguile Trump just as it did his erstwhile apprentice, American basketball player Dennis Rodman. They fear that Trump will be so overjoyed by the site of tens of thousands of North Koreans in a stadium holding placards that make up a picture of his face that he will, on the spot, simply recognize North Korea as a nuclear power with every right to its half of the Korean peninsula.

All Trump’s interlocutors have realized that while he is unpredictable, one thing which is consistent is the fact that he is prone to flattery. During his China visit, for instance, Trump was so taken aback by the welcome he received and the MOU’s signed with Chinese companies that he started criticizing his predecessors.

Finally, while Trump, like many global leaders, has risen as a consequence of being an outsider to the establishment, with people being disillusioned with the embedded establishment, the US President has still not realized that one of Washington’s biggest assets has been strategic alliances like NATO and multilateral trade agreements like NAFTA. The United States has also gained from globalization and strategic partnerships; it has not been one way traffic.

It remains to be seen how Tillerson’s removal will affect relations with key US allies. If Trump actually goes ahead with scrapping the Iran nuclear deal (2015), it will send a negative message not just to other members of the P5 grouping, but also India. In the last three years, India has sought to strengthen economic ties with Iran and has invested in the Chabahar Port Project. New Delhi is looking at Iran as a gateway to Afghanistan and Central Asia. If Tillerson’s successor just plays ball, and does not temper the US President’s style of conducting foreign policy, there is likely to be no stability and consistency and even allies would be skeptical.

Japan on its part would want its concerns regarding the abduction of Japanese citizens by Pyongyang’s agents, decades ago, to not get sidelined in negotiations with North Korea. (13 Japanese individuals were abducted in 2002, 5 have returned but the fate of the others remains unknown.) Prime Minister Shinzo Abe has made the return of the abductees a cornerstone of his foreign policy, and his low approval ratings due to a domestic scandal could use the boost that is usually associated with the plight of those abductees.

The removal of Tillerson underscores problems with Trump’s style of functioning as discussed earlier. The outside world has gotten used to the US President’s style of functioning and will closely be watching what Tillerson’s successor brings to the table.

On demography and living standards in the colonial era

This is a topic that has been bugging me. Very often, historians will (accurately) point out mortality statistics in the United States, Canada (Quebec) and the Latin America during the colonial era were better than in the comparable Old World (comparing French with French, British with British, Spanish with Spanish). However, they will argue that this is evidence that living standards were higher. This is where I wish to make an important nuance.

Settlement colonies (so, here there is a bigger focus on North America, but it applies to smaller extent to Latin America which I am more tempt to label as extractive – see here) are generally frontier economies. This means that they are small economies because of small populations.  This means that labor and capital are scarce relative to land. All outputs that come from the relatively abundant factor will thus tend to be cheaper if there is little international trade for the goods that they are best at producing. The colonial period pretty much fits that bill. The American and Canadian colonies were basically agricultural colonies, but very few of those agricultural outputs actually crossed the Atlantic. As such, agricultural produces were cheap. This is akin to saying that nutrition was cheap.

This, by definition, will give settlement colonies an advantage in terms of biological living standards. As they are not international price takers, wheat is cheaper than in the old world. This is why James Lemon spoke of the New World as the “Best poor man’s country” (I love that expression) : it was easy to earn subsistence. However, beyond that it is very hard to go beyond. For example, in my dissertation (articles still in consideration at Cliometrica and Canadian Journal of Economics) I found that when wages were deflated by a subsistence basket containing very few services and manufactured goods and which relied heavily on untransformed foods, Canada was richer than the richest city of France. Once you shifted to a basket that marginally increased transformed goods and manufactured goods, the advantage was wiped away.

Yet, everything indicates that mortality rates were greater in Paris and France and than in Quebec City and Quebec as a whole (but not by a lot) (see images below).  Similar gaps seem to exist for the United States relative to Britain, but the data is not as rich as for Quebec. However, the data that exists for New England suggests that death rates were lower than in England but the “bare bones” real incomes measured by Lindert and Williamson show that New England may have been poorer than Great Britain (not by much though).

Crude Death Rates


I am not saying that demographic and biological data is worthless. Quite the contrary (even I wanted to, I could not since I have a paper on the heights of French-Canadians from 1780 to 1830)! The point is that data matters in context.  The world is full of small non-linearities between variables. While “good” demographic outcomes are generally tracking “good” economic outcomes, there are contexts where this may be a weaker relation (curvilinear relations between variables). I think that this is a good example of that point.


Trump’s humor is not very funny to the world’s liberal democracies

The Chinese Communist Party, on February 25, 2018, made a significant announcement — that the two-term limit for Presidency will be abolished through an amendment to the constitution. This means that current President Xi Jinping will be President for life. This amendment was tabled on March 6, 2018 by the Communist Party during the two week National People’s Congress (which began on Monday, March 5, 2018).

According to a CNN recording, Donald Trump, while reacting to this development, stated:

He’s now president for life, president for life. And he’s great. And look, he was able to do that. I think it’s great. Maybe we’ll have to give that a shot someday.

The US President also called Xi a “gentleman,” and said that the latter had treated Trump very well during his China visit in November 2017. Trump’s reaction to Xi’s decision has been criticized by some politicians in the US, while other major Western democracies have not commented on the decision.

Trump’s inconsistency on China

Trump’s views with regard to China have not been consistent, as is the case on many other issues. Candidate Trump had used tough language for China; at one campaign rally, for example, candidate Trump stated:

We can’t continue to allow China to rape our country and that’s what they’re doing. It’s the greatest theft in the history of the world.

During his visit to China in November 2017, the US President had, interestingly enough, criticized his predecessors, and said that he does not hold China responsible for the skewed trade relationship:

[…] I don’t blame China. After all, who can blame a country for taking advantage of another country for the benefit of its own citizens? I give China great credit […] I do blame past [US] administrations for allowing this out of control trade deficit to take place and to grow. We have to fix this because it just doesn’t work […] it is just not sustainable.

While the US President is unpredictable, the criticism of his predecessors on foreign soil came as a shock to everyone.

Trump’s myopic approach towards complex economic and strategic issues has helped China

Trump’s recent praise of the constitutional change which will enable Xi to be President for life may have embarrassed many Americans and Liberals in other parts of the world. They would have perhaps expected the US President to raise a red flag.

The fact is, however, that many of Trump’s foreign policy decisions – withdrawing from the Trans Pacific Partnership (TPP) trade deal in January 2017, or repeatedly criticizing NATO (North Atlantic Treaty Organization) and stating that members are not meeting their ‘financial obligations’ or, more recently, the imposition of tariffs on imports of aluminium and steel – are embarrassing steadfast allies in Asia and Western Europe. All these decisions have sent a message globally that Trump’s view of the outside world is driven by domestic politics and transactionalism – and not realism as some would have us believe. This is in contrast to his predecessors, who valued relationships but also understood the relevance of common democratic values as a binding thread. Trump on the other hand is quite comfortable with authoritarian leaders.

Trump has often expressed admiration for authoritarian leaders like Vladimir Putin, and Phillipines President Rodrigo Duterte. Duterte, who is controversial for using extrajudicial methods to deal with a Filipino drug problem, has presided over a drug war that has cost the lives of more than 4,000 people. While praising Duterte, Trump said:

I just wanted to congratulate you because I am hearing of the unbelievable job on the drug problem. Many countries have the problem, we have a problem, but what a great job you are doing.

During their meeting on the sidelines of the ASEAN Summit in Manila (November 2017), Trump did not sufficiently raise US human rights concerns, and was criticized by many American politicians, including Republican Senator John McCain. The US-Philippines Joint Statement, while speaking about the challenge of the drug problem, did refer to a human rights issue (issued after the meeting between Trump and Duterte):

The two sides underscored that human rights and the dignity of human life are essential, and agreed to continue mainstreaming the human rights agenda in their national programs to promote the welfare of all sectors, including the
most vulnerable groups.

It would be pertinent to point out that the previous administration had criticized Duterte for adopting such measures. In return, Duterte used offensive language aimed at President Obama.

While the US has been in bed with authoritarian regimes in the past and turned a blind eye on many occasions to human rights violations, no one can deny the fact that even transactionalist Presidents like Ronald Reagan paid lip service to democracy and human rights. In a speech at Westminster, Reagan stated:

Democracy is not a fragile flower […] Still it needs cultivating. If the rest of this century is to witness the gradual growth of freedom and democratic ideals, we must take actions to assist the campaign for democracy.

Similarly, George W Bush, who was often thought of as being very simplistic, spoke about the importance of democratic values as a common binding factor with many of its allies.


In conclusion, while reasonable ties between Washington and Beijing are good news, Trump’s public appreciation of authoritarian leaders and their methods is worrying because at the global level there is a feeling that authoritarian leaders and systems deliver better results compared to chaotic democracies.

The US has always been the flagbearer of democracy, liberal values, and human rights. It is a matter of concern, then, when the leader of such a country pays little attention to these issues. In a way, Trump has played a pivotal role in wrecking the liberal order, and by doing so has created a situation where Beijing will not have to change its ways, but may well create a parallel order which many countries will be willing to join due to China’s economic prowess.


Quad: The way ahead and the key challenges

The Quadrilateral Security Dialogue (QSD) consisting of India, Australia, Japan, and the US has been pitching in favor of a ‘Free and Fair Indo-Pacific’ ever since the first meeting between representatives of member states in November 2017.

Shinzo Abe, the current Prime Minister of Japan, actually proposed this arrangement about a decade ago. Diplomatic engagement began, and joint military exercises were even held, but a change in guard in Australia, as well as Chinese complaints to member states, resulted in the end of the arrangement. Given the increasing focus on the ‘Indo-Pacific’ region and the strengthening of strategic ties between all four countries, reticence was finally shed and representatives of the four countries met in November 2017, on the eve of the East Asia Summit in Manila. The main aim of the alliance, thus in other ways, has been to check China’s assertiveness, especially in the South China Sea, and democracy has been one of the key binding factors between the Quad. The U.S. State Department, after the meeting in November 2017, issued a statement that the United States is “committed to deepening cooperation, which rests on a foundation of shared democratic values and principles.”

More recently, the joint statement issued after the meeting between Trump and Australian Prime Minister Malcolm Turnbull in February 2018, reiterated the point about a Free and Open Indo-Pacific. Said the joint statement between both countries: Continue reading


The Gradual, Eventual Triumph of Liberty

Today I’d like to write a few words of hope and encouragement to those who already understand liberty’s value. I read a speech from 1853 that stood out to me. It’s easy to be caught up in the daily news cycle and feel that liberty is constantly under attack and threatened at every hand, that every gain is clawed back as liberties are eroded one at a time. At times like that, it is good to step back and took a better look at the broader history of the world.

The speech I read was by a gentleman named Parley P. Pratt, an apostle of the Church of Jesus Christ of Latter-day Saints in the Utah territory. This was just a few years after the Mormons, including Pratt and his family, had been driven from their homes by mobs and by indifferent and sometimes hostile state and federal governments in the United States proper to find freedom and refuge in the Rocky Mountains. There they still held 4th of July celebrations, honoring the sacrifices for liberty their fathers had made. Pratt, by this point in his life, had traveled through England and parts of Europe, much of the US, Canada, and along the Pacific into Mexico, and met with many people from Asia as well – a remarkably well-traveled man.

Despite the very real failures of the government to protect their individual rights or redress their grievances, he spoke in praise of the Constitution. The main thrust of his address was that the cause of liberty would expand and someday fill the world:

The longer I live, and the more acquainted I am with men and things, the more I realize that … the Constitution of American Liberty was certainly dictated by the spirit of wisdom, by a spirit of unparalleled liberality, and by a spirit of political utility. And if that Constitution be carried out by a just and wise administration, it is calculated to benefit not only all the people that are born under its particular jurisdiction, but all the people of the earth … . It seems broad enough, and large enough, to receive and protect all that may be in any way deprived of the common rights of man. …. [The principles of the Constitution] embrace eternal truths, principles of eternal liberty, not the principles of one peculiar country, or the sectional interest of any particular people, but the great, fundamental, eternal principles of liberty to rational beings – liberty of conscience, liberty to do business, liberty to increase in intelligence and in improvement […]

There is a day coming when all mankind upon this earth will be free. When they will no longer be shackled, either by ignorance, by religious or political bondage, by tyranny, [or] by oppression (Journal of Discourses, Vol. 1, p. 137-143)

Pratt claimed this would not happen predominantly by revolution and violence, but by America being a beacon light to the world. He spoke of throngs of people who would sit in his day enjoying to hear of our freedoms, our institutions, and our scientific and cultural progress. He spoke of the immigrants coming to this country from all parts of the world specifically to find that freedom, and that once enlightened by being allowed to think and reason and act for themselves without the bondage of kings, state religions, or other powers they would blossom and rise up in greatness. Whether they eventually returned to their native lands or not, this would act as an “indirect influence … on those despotic nations” of Europe and Asia.

Recognizing that our liberty is remarkably multi-faceted, I will focus on the same categories Pratt mentioned. At the time he spoke, there were exactly 3 nations that were in some measure democracies, where at least some large percentage of the populace had the liberty of choosing their leaders. You can see for yourself how this has grown in the intervening 160+ years:

NOL Watson 1
source: Our World in Data

Billias’ 2009 work on how the principles of American constitutionalism were “heard round the world” shows that waves of influence gradually spread the principles of self-determination, liberty, separation of powers, and checks and balances into the freedom movements and constitutions of most of the world. Even while warning that the last ten years have seen declines in liberty overall worldwide, Heritage shows us that the last thirty years still show remarkable improvement:

NOL Watson 2

From a time when the US was one of very few countries to legally protect religious liberty, today nearly three-fourths of all the countries in the world have a constitution that specifically protects freedom of belief, and two-thirds permit some religious proselytism – which preserves freedom of expression (Pew Global Restrictions on Religion). There is still much to do to improve and preserve religious liberty around the world, both in legally acknowledged protections and in fostering an actual peaceful society where religious groups are not subject to violence and persecution.

Despite the distance left to go, the cause of liberty has clearly moved forward in great ways in the last 160 years. Much as Pratt predicted, much of this was accomplished without great revolutions and civil wars, but through the power of example as free nations and free people proved themselves a beacon to the world. There is still good cause to believe in that fundamental converting power from setting the right example and allowing free people to govern themselves.


Adam Smith on the character of the American rebels

They are very weak who flatter themselves that, in the state to which things have come, our colonies will be easily conquered by force alone. The persons who now govern the resolutions of what they call their continental congress, feel in themselves at this moment a degree of importance which, perhaps, the greatest subjects in Europe scarce feel. From shopkeepers, tradesmen, and attornies, they are become statesmen and legislators, and are employed in contriving a new form of government for an extensive empire, which, they flatter themselves, will become, and which, indeed, seems very likely to become, one of the greatest and most formidable that ever was in the world. Five hundred different people, perhaps, who in different ways act immediately under the continental congress; and five hundred thousand, perhaps, who act under those five hundred, all feel in the same manner a proportionable rise in their own importance. Almost every individual of the governing party in America fills, at present in his own fancy, a station superior, not only to what he had ever filled before, but to what he had ever expected to fill; and unless some new object of ambition is presented either to him or to his leaders, if he has the ordinary spirit of a man, he will die in defence of that station.

Found here. Today, many people, especially libertarians in the US, celebrate an act of secession from an overbearing empire, but this isn’t really the case of what happened. The colonies wanted more representation in parliament, not independence. London wouldn’t listen. Adam Smith wrote on this, too, in the same book.

Smith and, frankly, the Americans rebels were all federalists as opposed to nationalists. The American rebels wanted to remain part of the United Kingdom because they were British subjects and they were culturally British. Even the non-British subjects of the American colonies felt a loyalty towards London that they did not have for their former homelands in Europe. Smith, for his part, argued that losing the colonies would be expensive but also, I am guessing, because his Scottish background showed him that being an equal part of a larger whole was beneficial for everyone involved. But London wouldn’t listen. As a result, war happened, and London lost a huge, valuable chunk of its realm to hardheadedness.

I am currently reading a book on post-war France. It’s by an American historian at New York University. It’s very good. Paris had a large overseas empire in Africa, Asia, Oceania, and the Caribbean. France’s imperial subjects wanted to remain part of the empire, but they wanted equal representation in parliament. They wanted to send senators, representatives, and judges to Europe, and they wanted senators, representatives, and judges from Europe to govern in their territories. They wanted political equality – isonomia – to be the ideological underpinning of a new French republic. Alas, what the world got instead was “decolonization”: a nightmare of nationalism, ethnic cleansing, coups, autocracy, and poverty through protectionism. I’m still in the process of reading the book. It’s goal is to explain why this happened. I’ll keep you updated.

Small states, secession, and decentralization – three qualifications that layman libertarians (who are still much smarter than conservatives and “liberals”) argue are essential for peace and prosperity – are worthless without some major qualifications. Interconnectedness matters. Political representation matters. What’s more, interconnectedness and political representation in a larger body politic are often better for individual liberty than smallness, secession, and so-called decentralization. Equality matters, but not in the ways that we typically assume.

Here’s more on Adam Smith at NOL. Happy Fourth of July, from Texas.