Global Economic Growth
and the Rise of Populism

Prelude: Can Democracy Survive Global Capitalism? 100 min video

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Parts 1-3 Post WW2 Chronology
 

Part 4 Neo Liberal's Caused Financial Collapse

Part 5 Democracy Failures Caused Latest Popularism

Part 6 Understanding Right and Left Populism

Part 7 Populism in Reset Mechanism

Postscript: Trump's New Political Era?
 



Post WW 2 Economic Chronology

 

The Good

World Wide Great Depression Made Low Unemployment "the" Public Policy Goal.

 Post WW2 Pent-up Demand
increased AD, increasing US wages and Profits.

The Resulting High Inflation pushed interest rates up followed by a 30-year decline.



2. The Bad

Profit Margins Stayed High as Western business used continuously falling interest rates
 for highly leveraged refinancing creating higher profit.

Western Business Adjusted to a mounting profit squeeze caused by increased flat world AS.
 "Wages fought profit and
Profit Won."

Only U.S. Increasing Demand was available to soak up global savings surplus
 to negate AS > AD. Will continue?

3. The Ugly

Resulting Political Turmoil will also continue but its effects may be less volatile,
 maybe not.

Fiscal Policy AD Could Increases in the form of Infrastructure spending
and or helicopter money drops like tax reductions.

Government Guaranteed of Debts may allow 2% real 1950's style economic growth.


See U.S. Post WW 2 Adjustments Part 1     Part 2    
 

1. The Good

Cold War to 198
0 AD > AS

Full Employment Goal =
 Inflation, Debtors Paradise

2. The Bad

Neo Liberal Reset 1980- 2008
AS > AD

Business Responded to Inflation
Led to Deflation. a Creditors Paradise

3. The Ugly

Reactions to Neo Liberalism

Sustained Deflation has Winners and Losers
Globalization Failed
Pickett's R > G
Back to Equilibrium with Increased Income Inequality

1. Structural Causes
Strong Unions
Restricted, Rigid Labor Markets
Central Government Strong
Central Bank Weak
Finance Weak

 

Economic Results


Sustained Inflation
Wages Share All Time High
Corporate Profits All Time Low
Inequality Low

2 Structural Causes
Weak Unions
Open Flexible Globalized Labor Markets
Government Less Economic Responsibility
Central Bank More Economic Responsibility
Finance Strong
Economic Results
Secular Deflation
Wages Share All Time Low
Corporate Profits All Time High
Inequality High
3 Structural Results
3. Winners Losers
Debtors: Can't or Wont Pay as Deflation Kills Wage Growth and Increases Real Debt Value Creditors lost as
Real Value Up
But Some Don't Pay
Populist Nationalist Parties attracted voters with renationalization and
anti-austerity policies

 

Center Left Parties in control lost as lower wages and fighting more over less cartel politics blamed capitalism and globalism

Center right parties in control blamed immigrants and globalism

Winners and Losers

World's Very Poor and Very, Very Rich Win

Vast Middle of Rich Western Nations are Stagnate

Historical Long Run?
Return on Capital Growth R > Growth rate of the Economy G.

90% of Income Gains Went to Top 1% and since 2012,
most of this (70% of that 90%) went to Top 1/10 of 1%.

Credit to consumers, business and governments  expanded
to equate AD with AS.

Mark Blyth explains Competitive Adjustment in European Market Area at one min and
Competitive Adjustment Applied to Trumpism at 4 min 15 sec mark

Short Term Politics Versus Long-Term Returns  Video from Prof. Mark Blyth PhD -

 

Crashed Video and book-review of Crashed:
How a Decade of Financial Crises Changed the World
 
by Adam Tooze
 Part 1-3 author/editor Walter Antoniotti
 

Neo Liberal's Caused Financial Collapse
View Horizontally

I. Free Market Neoliberal Economic Orthodoxies wrong
 

A. Finance does affect real economy.

B. Finance system can falter.

C. Many economist wrong because of politics.

II. Real Economy of trade imbalances did not cause
the 2007-2008 FINANCIAL CRASH

A. The earlier Dotcom Bubble Crash
 did not cause a banking crises because investors took the loss.

B. World trade imbalances, the Balance of Financial Terror
were not the root cause the crash
1. U.S. negative trade balance, as many predicted,
did not cause assets and the dollar to crash.
a. As of 6/18 both have appreciated.
b. See The New Financial Geopolitics: Post-Cold War Geopolitics
 in a World of ‘Long and Low.’ 96 min
 

2. Loans to Greece from Germany's trade surpluses
were not the problem as France and the Benelux nations
controlled the Transatlantic dollar flows needed
 for international trade and Exorbitant Dollar Privilege.
a. France runs a small trade balance.
b. South Korea currency tanked even though she had
a positive trade balance and ample dollar reserves.
C. South Korea and the WEST could not get dollars needed
to fund the substantial daily borrowing needed for international commerce.

II. Almost all banks were very highly leveraged
with substantial short term $ borrowing and
Euro collateral needed for daily operations

A. When Lemans $180 billion
over-nigh funding needs were
not met by the Funding Market, the entire market  crashed.
1. Worldwide credit flows stopped and in a few days
ATM machines would be empty.
2. Bad housing loans were not the problem, rolling over short term
daily funding dollar needs with poor mortgage debt collateral immediately
would quickly crash the system.

B. Credit stopped
1. Europe's banks had become the world's hedge fund for world dollar flows
which were based on highly leveraged borrowed in dollars
and Euro denominated collateral.
2. Thatcher deregulation of London's financial system made it
the hub of dollar denominated European bank debt. into and out of the U.S.
3. The U.S. eventually followed with financing needed Clinton's
Community Reinvestment Ac
t which loosened housing mortgage rules needed
to expand minority housing with Gramm-Leach-Bliley Act,
which repealed the Glass-Steagall Act, a cornerstone of
Depression-era regulation and Commodity Futures Modernization Act
which exempted credit-default swaps from regulation.
4. Result Few banks had dollar reserves to meet the daily needs
of the banking and corporate world.
5. Walls Street's model of an extremely leverage wholesale funding model
running out of NY and London would crash.

 

III. Was Federal Reserve involvement in a geopolitical world appropriate?
A. No, if the crisis was a sovereign debt crisis' as the Euro Central Bank was the appropriate agency.
B. No, if as the Max Plank Institute believes, it was because of dysfunctional Euro participants.
C. Yes if it was a failure in the Transatlantic Dollar Flows as described by Mark Blyth.

IV. Stability requires dollar supremacy

A. World trade is stable because the world, through Europe's banks, completes the circular flow of dollars back
to the US by investing in U.S. companies

B. Dollar investments dependent on high Intellectual Property generated corporate profits and U.S. economic growth.
1. Substantial portion is in monopoly power companies Apple, Google, Facebook, Pfizer and Johnson/Johnson.
2. These profits are politically dependent on intellectual property rights which are dependent on trade treaties,

C. Distribution of these profits has resulted into an increase inequality of income.

D. Trump's disrupting this process has many academics apprehensive

E Source The New Financial Geopolitics ─ Europe: Helper, Spoiler, Risk Generator? 86 min video

See Documentary Of The Week: Steve Bannon At Oxford  2 hr video

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Part 5 Democracy Failures Caused Latest Popularism
summarized from Francis Fukuyama: Democracy's Failure to Perform

I. Development of Illiberal Democracy
     
A. Causes
          1. Foreign Policy Failures of Developed Democracy
            
 enhanced by U.S. foreign policy failures i.e. Middle East  wars
          2. Non-Liberal Democracy success, especially China
          3. Poor Liberal Democracy Performance i.e. economic
              slowness, immigration, wealth accumulation
     B. Definitions, nominal
         1. States:
 monopoly on the legitimate use of force.
                from Max Weber States are about Power!        
         2. Rule by Law: sovereignty sets the law i.e. China
         3. Rule of Law: sovereignty responsible to same laws
             as the governed. Laws limit power.
         4. Democratic Accountability requires free multiple
             political parties with guarantee substantive accounting
             and a government that serves the entire population,
             not just the elite.
    C. Modern Political System
         1. A modern miracle that generate tremendous power limited
             by the rule of law and is democratically accountable
         2. Patrimonial state: rulers own political system, resources
             and distribute gain production Who You Know
        
3. Neo-Illiberal States: look like a democracy,
             limited representation, leaders follow the money

  
D. U.S. Failures at State Building
        
1. Focus: building a Liberal Democracy
         2. Required focus: moving from Patrimonial State
             to Modern Political System
             a. Iraq and Afghanistan: got the liberal democracy but
                 did not move from a patriarchal to modern state
                 Both state moved to
Oligarchy where a few wealthy
                 people form a 
Plutocracy.
                 Neither can protect citizens and provide services
                 to much of the population.
             b. Ukraine: got a liberal democracy from the
                 Orange Revolution
of 2004-5, but could not keep
                 it as a second revolution needed to avoid a strong
                 connection to Russia.
             c. India: Very democratic but can't progress to a modern
                 state because it can't fix serious problems
                 Elected strong leader but he to is failing.
             d. Greece: got a democracy in 1974 but developed
                 into a Clientelism where every election brings a
                 new set of party connected bureaucratic.
                 Strong unions kept jobs for previous bureaucrats.
                 Eventually, she had seven times the bureaucrats
                 per person as did England.
                 Problem: Greece does not want to change.

 

II. Three main forces are blowing up global politics
by Axios 
by author/editor Walter Antoniotti      antonw@ix.netcom.co

A Trio of independent disruptions
Opposition to
immigrants, globalization, and establishment Leaders/institutions
created disruptions.
America's 1990 dissatisfaction
Spread to Europe causing two years of volatile pubic fury.

Unpredictable disruption to
Europe and Western Culture possible

Status and Social Cultural Apprehensions contributed to these disruptions. 
This caused  effected groups to lash out in a tribal like response.
An end to a post WWII US led moderation is seem by some to be causing
1.
Great power conflict returning to early Cold War levels
2  Declining world wide economic prosperity, including the west

All three disruptions could last years Axion reported here, here and here.
Optimistic leaders thought and even hoped Trump, Brexit, or something else
would help moderate our disruptions.

Disruption modification related to Trump, and Brexit, power immigrants are difficult.
1. No opposing stability force seems forthcoming
2.
An aging and shrinking developed world's population reinforces disruptive forces.
3.
AI is increasing worker employment anxiety.
3. Climate change is increasing leader constitution.

See European Threats  8/18

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A New Normal is in the Making?

'America First' has won, by Robert Kagan at NYT.

Saving liberal democracy from the extremes,
by the FT's Martin Wolf

 

Part 6 Understanding Left Right Populism
Summarized of Understanding Right and Left Populism By Samir Gandesha,
an Associate Professor in the Department of the Humanities
and the Director of the Institute for the Humanities at Simon Fraser University.
posted on  by 

History

1. Growth of Populism

Right-wing populist parties throughout Europe in Austria, Hungary,
and Poland  Also in Erdogan's Turkey 2003, Modi's India 2014, 
Trump's American 2016, Batten's United Kingdom 2016.

Left-wing populism

The Arab Spring in 2011 Tahrir Square [Egypt] 2011 was short lived, 
Zuccotti Park [NYNY] 2011
, was felt five years later in the rising support
for Bernie Sanders and Jeremy Corbyn.

Latin America Bolivarian, Venezuela Bolivia and Argentina.

Focus on two populism accounts
to understand the difference between right and left forms of populism
in the context of neo-liberal globalization.

Empirical study by Norris and
Inglehart (2016) emphasized
1) anti-establishment
2) authoritarian
3) nativism

Theoretical account by Ernesto Laclau (decades) saw an  “equivalential chain” of different demands
democratic, horizontal and egalitarian discourse.

2. Populism Explained:
    Economic Insecurity or Cultural Backlash?

Three distinct elements
1) anti-establishmentism  
vs.
1) representative democracy;
2) authoritarianism           
vs.
2) liberalism  
3) nativism
                        vs. 3)osmopolitanism.

Two distinct axes: economic and cultural.
1)evel of state economic management
2) conservative” vs. “progressive” values.

Three approaches

1) the rules of the game
2) the “supply-side” party politics
3) the “demand-side” of party politics.

Two causes.
1) response to economic insecurity
2) backlash by older white males

Norris and Inglehart argue that the latter is the most convincing argument:
“We believe that these are the groups most likely to feel that they have become
strangers from the predominant values in their own country
,
left behind by progressive tides of cultural change which they do not share…
The silent revolution of the 1970s appears to have spawned an angry and
resentful counter-revolutionary backlash today.”

One wonders whether the authors don’t seriously underestimate the threat right-wing
 populism  poses to the institutions of liberal-democracy in the United States
.
A worrying inference that the authors explicitly draw from their
progressivist premises is that populism will eventually die
out.
The study therefore fails to sufficiently appreciate the ways in which populist governments
seek to institutionalize their agendas, thereby changing the rules of the game.
This has become most drastically evident in the case of Poland, for example,
in which Andrzej Duda (leader of the right-populist Law and Justice party) has significantly
limited the autonomy of the judicial branch of government.  Other such examples abound.

3. Neoliberal globalization is
    comprised of four processes:

1) accumulation by dispossession  
2) de-regulation
3) privatization  
4) upward re-distribution of wealth

Together they have increased economic insecurity
 and cultural anxiety by
1) the creation of surplus peoples  


2) rising global inequality
3)  threats to identity.

Anxiety from neoliberal globalization has ammunition right and left populists.

Neither Norris and Inglehart nor Laclau adequately account for such insecurity in their theorization of populism.

“the people” are differentially deployed by right and left and they themselves must be understood in terms of
the respective enemies through which “the people” is constructed. And this is the decisive dimension of populism.

Right populism defines "the people"
as those confronting an external enemy.
1) Islamic terrorism 
2) refugees
3) the European Commission,
4) International Jewish conspiracy ...

Left populism defines “the people”
as social structures/institutions
1) state and capital that thwart its aspirations for self-determination
2) allows hospitality towards the other

Right populism defines the enemy
in personalized terms

Insecurity and anxiety are necessary, unavoidable, even a favorable product of capitalist social relations.
generates acceptable fear of the stranger and a punitive state

Left populism defines the enemy in terms of socio-economic structures
insecurity and anxiety are caused by a dismantling of the welfare state and workforce casualisation.
These egalitarian solutions that can also turn authoritarian.

Part 7 Populism is the Reset Mechanism

Populism is not an economic distribution complaint, it is driven by 3 decades of market driven globalization.
It is not just about wage stagnation and loss of jobs, it is about disempowerment, social exclusion, unfairness, and humiliation.
Many Trump Populists seek recognition, having a meaning say in shaping the forces that govern their collective lives.

from Michael Sandel: Populism, Trump, and the Future of Democracy

Important Question, is Kantian Morality Enough for the Public Sector,
especially since some think it is too much!
Should public discussion go beyond safe and delimiting morality and moral duty, beyond the legality of rights and human dignity.
Should respect for work and be part of the discourse?
Should competing conceptions of the "good life" be on the table of public discussion?

Editor's Note: Michael wants more that Kant. Kant is enough.
Michael Aandel is a lot of Charles Murray who is basically correct,
but wants too much control of what constitutes correct morals and ethics.
Extreme conservatives want too much control, extreme liberals want no control

Summary of Summary

Neoliberal globalization has increased both  economic insecurity and cultural anxiety.

Have theories of populism taken adequate account of such insecurity?

Such accounting is key to understanding the difference between right and left forms of populism

 Related Studies Nazism And Neoliberal Mythmaking

German Reconstruction As State-Phobia      

The State As Killer   

Europe and the Centre-Left Fall under Hayek’s Spell

A Map of Hayek's Delusion

 

 

The Bad and Soon to Be Ugly
 

1. Cold War to 1980 AD > AS

2. Neo Liberal Reset 1980- 2008 AS > AD 3) Reactions to Neo Liberalism
Full Employment Goal = Inflation, Debtors Paradise

Business Responded to Inflation Led to
Deflation and a Creditors Paradise

 Sustained Deflation has 
Winners and Losers

Globalization Failed 3Pickett's R > G
and Back to Equilibrium
Structural Causes Structural Causes Winners Losers    Winners and Losers Historical Long Run?
Return on Capital Growth R > Growth rate of the Economy G. 90% of Income Gains Went to Top 1% and since 2012, most of this (70% of that 90%) went to Top 1/10 of 1%. Credit to consumers, business and governments  expanded to equate AD with AS.
Strong Unions
Restricted, Rigid Labor Markets
Central Government Strong
Central Bank Weak
Finance Weak
Weak Unions
Open Flexible Globalized Labor Markets
Government Less Economic Responsibility
Central Bank More Economic Responsibility
Finance Strong
Debtors: Can't or Wont Pay as Deflation Kills Wage Growth and Increases Real Debt Value Creditors lost as
Real Value Up
But Some Don't Pay
World's Very Poor and
Very, Very Rich Win

Vast Middle of Rich Western Nations are Stagnate
Economic Results
Sustained Inflation
Wages Share All Time High
Corporate Profits All Time Low
Inequality Low
Economic Results
Secular Deflation
Wages Share All Time Low
Corporate Profits All Time High
Inequality High
Populist Nationalist Parties attracted voters with renationalization and anti-austerity policies

 

Center Left Parties in control lost as lower wages and fighting more over less cartel politics blamed capitalism and globalism

Center right parties in control blamed immigrants and globalism

Francis Fukuyama may yet prove to be right in predicting the end of history. But there is no doubt that he was premature. The idea that people have reached an "end point" of "ideological evolution and the universalization of Western liberal democracy as the final form of human government" quite obviously seems out-of-step with our political reality in 2018. It could still happen one day. But it surely hasn't happened yet.

Fukuyama knows this. However, to ensure that this is only a temporary setback — not a permanent blow — for his thesis, he has penned Identity: The Demand for Dignity and the Politics of Resentment.

Collapse of Soviet communism, Western liberal democracy and the free market had triumphed and history had reached its "end" — Humans had finally formed a political organization in harmony with their inner nature. Though nations still on the other side of history could certainly cause trouble for liberal democracies, they could not offer a serious alternative.

America and populist right wing "identarian" movements all around Europe have jolted Fukuyama out of his Hegelian certitude. And so he has hurriedly written Identity: The Demand for Dignity and the Politics of Resentment, a book that goes back to the beginning of Western thought and retraces its evolution to see where it took a wrong turn.

What emerges from it, however, is not a new way forward but an old and beaten path of income redistribution and a national unity program. Basically, Fukuyama's solution is to redirect the ethnic identity politics of the left and the right into a renewed "creedal identity" that satisfies the natural human need for dignity and recognition that Hegel said was the main driver of history. Such a Big Government roadmap will actually work or make matters worse.

Hegel postulated that as human consciousness evolved so would human institutions or social organizations until all the internal contradictions of the psyche were resolved in a final rational polity. Hunter-gathering and tribal societies developed into slave-owning ones that morphed into monarchies or theocracies that finally modernized into liberal democratic polities.

So why are liberal democracies in trouble? Because, notes Fukuyama, they have ignored a core psychic need.

Plato and other ancient Greek philosophers believed that thymos, or pride, was as essential as desire and reason. And it craved satisfaction just like the others. But they also believed that this part was in tension with itself. On the one hand, individuals wanted equal recognition of the fundamental worth or inner dignity of human beings (isothymia). On the other hand, they also wanted to be recognized as better than everyone else (megalothymia). Megalothymia results in constant jockeying for power and domination in every facet of human life, especially politics.

Hegel's great insight was that recognition achieved through domination is self-defeating because people crave the recognition not of their inferiors (slaves) but superiors (masters). The minute they succeed in dominating someone, that person's recognition becomes worthless. The quest for recognition can thus only be satisfied in a society of equals. For Hegel, the quest for dignity and recognition — or identity politics, in our parlance — has been the ultimate driver of history, and will end in an egalitarian liberal democracy with a commitment to individual rights and justice.

Two developments have prevented liberal democracies from delivering on Hegel's utopia, as Fukuyama explains.

First, the rise of income inequality. Thanks to globalization and productivity growth between 1988 and 2008, the world has become immensely richer. However, the lion's share has gone into the pockets of the rich, hollowing out the middle class. Fukuyama does not claim that this growth has necessarily hurt anyone. To the contrary, he admits that those in the 20th to 70th percentile experienced bigger income increases than those in the 95th. However, the global population around the 80th percentile — which corresponds with the working middle class in the West — experienced only marginal gains. These trends were most pronounced in Britain and the United States, the two countries at the forefront of the "neoliberal revolution" that Margaret Thatcher and Ronald Reagan spearheaded.

 

 

Middle-class stagnation, in Fukuyama's telling, is more problematic from a thymotic standpoint than an economic standpoint because the real purpose of income, once you reach a certain point at least, isn't to feed material needs but positional ones. So even if the middle class in the West has suffered no absolute loss of income, the relative loss of status makes these people feel ignored and invisible.

The other factor is the rise of the wrong kind of dignity or identity politics.

Some identity politics seek to honor the inner "dignity" of individuals by extending basic state protections to all citizens irrespective of race, caste, creed, or religion. This is noble, but in practice has transmogrified into a "therapeutic state" whose main aim became to rescue what the French philosopher Jean Jacques Rousseau called the innate "goodness of man" from the corrupting demands and conventions of society. Self-actualization rather than social cohesion became the political project. As but one example: California formed a task force to "Promote Self-Esteem and Personal Social Responsibility." The 1990 manifesto could have been plucked out of the Esalen Institute. (Sample statement: "The point is not to become acceptable and worthy, but to acknowledge the worthiness that already exists.")

This type of identity politics has uncorked personal pathologies that religion had kept in check, particularly an unquenchable narcissism that social critic Christopher Lasch famously called out because it sought external social validation from the very society it constantly undermined.

Another kind of identity politics seeks the dignity of "collectives," essentially rejecting the idea of some generic inner dignity of individuals while disrespecting the sense that their particular racial, cultural, religious, linguistic, and other connections could satisfy the thymotic needs of marginalized groups. Fukuyama acknowledges that this sort of identity politics has done some good. After all, blacks couldn't launch their struggle to end the atrocities of the Jim Crow era without building black pride. Similarly, women couldn't dislodge engrained social "discrimination, prejudice, disrespect, and simple invisibility" without a feminist movement that celebrated womanhood.

But the advent of multiculturalism took things too far, Fukuyama believes. It encouraged an ever-proliferating panoply of micro-identities to seek not equal treatment from society but separation from it because, ostensibly, each group's "lived experience" of victimization — another concept borrowed from Rousseau, Fukuyama points out — was different and inaccessible to outsiders. Multiculturalism built silos instead of bridges with broader society.

Multiculturalism also prodded the left to abandon its traditional emphasis on economic inequality precisely when the dignity and status of the Western middle class was taking a beating from globalization. This left many ordinary people without a political home to voice their insecurities, paving the way for right-wing demagogues to launch their own brand of reactionary blood-and-soil identity politics — using the language and tactics of their leftist fellow travelers.

"That the demand for dignity should somehow disappear is neither possible nor desirable," notes Fukuyama. That's why Western countries need an aggressive program of domestic nation building that subsumes narro

This is a charmingly old-fashioned idea. There is much to like about it. But the Big Government roadmap that Fukuyama lays out is problematic to say the least.

Fukuyama admits that he has no use for limited government libertarianism and, in fact, believes that it was unfortunate that the right's critique of the unintended consequences of ambitious social programs unnerved the left. It's high time, he thinks, to stop being shy about using government to achieve national unity.

The Netherlands, for example, must end its age-old acceptance of "pillarization," or letting different religious groups establish their own schools, newspapers, and political parties. It was one thing to go along with this arrangement when it meant buying social peace among Catholics, Protestants, and secularists. But it has ghettoized Muslim immigrants and prevented them from assimilating, claims Fukuyama.

This sounds good on its face. But America's relatively limited experiment with state-enforced busing to end segregation was a disaster. White families who didn't want their children to have to spend hours being transported to another school district put their kids in private or parochial schools or fled from inner cities to distant suburbs outside of the busing zone. All of this exacerbated segregation and racial tensions. But Fukuyama seems so determined to ignore the danger of unintended consequences that he doesn't entertain any downside to his proposal, much less question its feasibility.

In America, Fukuyama believes, the left needs to return to a class-based politics that unites various marginalized groups around pocketbook concerns. At the electoral level that means that Democrats should quit playing identity politics and nominate a younger version of Joe Biden who can connect with the working class, regardless of race, sex, or religion. At the programmatic level, it means a renewed embrace of redistribution programs on the scale of the New Deal and the Great Society. He also wants a "national service" program that replicates the military's stellar success in assimilating recruits of diverse backgrounds.

The primary point of returning to a redistributive politics is not so much to expand the social safety net as to even out envy-inducing social hierarchies. In other words, make the rich poorer and the poor richer to make the working class feel better about itself. That such policies would be fiscally unaffordable and economically deleterious, Fukuyama doesn't consider. But the bigger problem from his own standpoint is that giving government more control over more wealth is likely to deepen existing social fissures by triggering a fiercer race for the spoils, especially in the post-Trump era where whites are emboldened.

Fukuyama's call for national service is perhaps more innocuous, but it's hard to see how it'll accomplish much. The military is united around a clear mission — protecting the nation — that helps overcome other divides. What would be the unifying passion of national service? Digging sewers in poor neighborhoods might appeal to congenital do-gooders but it's not the kind of thing that brings people together like the enemy at the gate.

What's befuddling about Fukuyama's recommended agenda is that it ultimately departs from his own Hegelianism. Hegel, contra Marx, believed that ideas shaped the material — economic — world, not vice versa. That means that the political battle is ultimately an ideological battle. Victory depends on winning hearts and minds, not economic appeasement. If that's the case, Fukuyama would have been better off exposing what's false, contradictory, and self-negating about the new and pernicious identity politics of the left and right and leaving it at that.

Nevertheless, Fukuyama has written an intricate account of this peculiar phenomenon. It is a must-read for anyone interested in understanding our bewildering political times in a broader historical and philosophical context.

 

w identities of both the left and the right under a broad creedal one. What's needed now is a renewed commitment to "e pluribusunum," Fukuyama says.