Economics

政治动荡时期的经济学

Mar 23, 2016 Michael Spence and David W. Brady

米兰—过去35年，西方民主郭嘉政治动荡急速加剧，其特征是执政党及其计划和哲学更迭频仍，部分原因是经济转型和困难。现在的问题是如何在政治动荡制约有效决策的情况下改善经济表现。

在一篇最新文章中，本文作者之一（大卫·布雷迪）发现政治动荡加剧与经济表现下滑之间存在相关性，指出经济表现低于平均水平的国家，选举波动性最大。更具体地说，政治动荡对应着发达国家工业和制造业就业比例的下降。尽管下降程度各有各的不同——比如德国的下降程度小于美国——但这一模式是相当普遍的。

特别是过去15年来，日益强大的数字技术带来了“常规”白领和蓝领岗位的自动化和脱媒。机器人、材料、3D打印和人工智能方面的进步让我们能够期待可以自动化的“常规”就业岗位范畴还会继续扩大。

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Michael Spence

Writing for PS since 2008
167 Commentaries

Michael Spence, a Nobel laureate in economics, is Professor of Economics Emeritus and a former dean of the Graduate School of Business at Stanford University. He is Senior Fellow at the Hoover Institution, Senior Adviser to General Atlantic, and Chairman of the firm’s Global Growth Institute. He is Chair of the Advisory Board of the Asia Global Institute and serves on the Academic Committee at Luohan Academy. He is a former chair of the Commission on Growth and Development and the author of The Next Convergence: The Future of Economic Growth in a Multispeed World (Macmillan Publishers, 2012).

David W. Brady

Writing for PS since 2012
8 Commentaries

David W. Brady is Professor of Political Science and Leadership Values at Stanford University and Senior Fellow at the Hoover Institution.

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Michael Parsons Mar 23, 2017

All this article amounts to telling us is that it is not political instability that impedes policy-making, but that poor policy-making is causing political instability!
So the task is not to restore 'stability of mismanagement' but find a better way of doing things than a parliamentary party democracy run by the financial backers of the big parties in their immediate own interest. Which is to say putting an end to our failing 'liberal democracy' of the West. Will Trump's demagoguic plutocracy be the model for a new success? He is making a promising start slaughtering the liberal sacred cows.
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Dean Raz Mar 28, 2016

A company's CEO has to account to his shareholders every quarter so he has long term plans but also make sure that he is delivering in the short term. A government is elected for a period of 4-5 years with no calling to account at any time (usually) during this period. With digital technologies is it not possible to hasten the reckoning?
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harry wilkinson Mar 28, 2016

One can always comment negatively about any situation, be it political or economical, but the fact is that governments have rushed pell mell into international trade agreements without setting in place programs to offset the damage done through unemployment to their own economies. In many cases, this damage is sometimes offset by a government promising to subsidize an industry , but this does little to offset the job losses sustained, and therefore the lost support for the economy by the loss of income to workers who are spenders.

Perhaps the way to go would be for a guaranteed annual income for all, as well as the support for industry.
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E Walker Mar 28, 2016

TL;DR.
The rich take all the money. They subvert government so they can get even more. People get mad because they are getting hurt and it isn't their fault.
We economists barely can write in English. How can we possibly offer a sensible solution?
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j. von Hettlingen Mar 28, 2016

Michael Spence and David Brady point out that economic growth and political stability go hand in hand, citing the "political instability" that has plagued the West in the past 35 years. The "frequent shifts in governing parties and their programs and philosophies" reflect the challenges it faces. On the one hand elected leaders have to meet their voters' demand and deliver on "economic performance." On the other hand they grapple with "economic transformation and hardship..... at a time when political instability is impeding effective policymaking." Consensus is badly needed to "restore growth, reduce unemployment, reestablish a pattern of inclusiveness" etc.
Indeed, "the correlation between rising political instability and declining economic performance" in developed countries is nothing new, but its pace and scale in recent years are unprecedented. Economic growth boosts political stability and a sluggish economy increases "electoral volatilaty," which in turn hurts the policy-making process. Leaders are under pressure to resort to myopic solutions to appease their disaffected voters, while investors sit tight, putting "industrial or manufacturing employment" on hold. For this reason many citizens resent the financial and political establishment, saying "powerful forces are operating outside the control of existing governance structures."
There is also a development in the "last 15 years" that raises concerns in the industrialised world - low birth-rates and the automation in manufacturing. While technologies and globalisation had brought huge benefits to many, "in the form of lower costs for goods and an expanded array of services," they are also seen as the curse of our modern society, cutting "white- and blue-collar jobs" and diminishing the living standards of the middle class. Manufacturers take advantage of cheap labour in low-cost countries abroad, while unemployment among the unskilled is high at home. An ageing population poses an enormous burden on the "social-security systems."
Until the 2008 global financial crisis Western democracies had been able to keep their electorates happy by means of "supporting household consumption and propping up growth and employment." When reckless government spending, coupled with external factors, sparked an economic breakdown, the political climate "deteriorated rapidly." In Europe we see the emergence of far-left and far-right parties, who put the blame on mainstream parties for their economic grievances, and the humiliation of austerity measures. These resentments foster nationalism and xenophobia, making such a toxic brew an economic poison.
Indeed, the economic development in recent decades is being seen as a disappointment, especially by the Generation Y. Given the achievements in the "post-war industrial era, one could reasonably expect to earn a decent living, support a family, and contribute in a visible way to the country’s overall prosperity." The first two decades following World War II were stable and prosperous - "growth patterns were largely benign from a distributional perspective, and political parties were largely organized around the interests of labor and capital."
Today income inequality and the lack of opportunities lead to "instability in electoral outcomes." Popular unrest causes "political paralysis, and frequent changes in policy frameworks and direction." The authors say "these trends may actually be healthy, as they bring concerns about globalization, structural transformation, and governance – which have so far been expressed mainly in the streets – into the political process. This kind of direct connection between citizens’ concerns and governance is, after all, a core strength of democracy." The authors hope that "leaders understand it and will adhere to it, thereby putting their creative energies to work on a new vision that places their countries on a path to greater prosperity and equity."
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jagjeet sinha Mar 25, 2016

History provides enough examples of how successful templates that emerge after meltdowns, invariably OPENS rather than CLOSES.
The 1945-2015 era created this new narrative best described as THE WEST - where The Anglosphere combined with West Europe.
Just like post The US Civil War, 1870 - 1945 The British Empire combined with USA to create The Anglosphere.
And before that, Britain escaped Europe to combine with India - and create The British Empire to begin with.
So, The Trump Template needs to keep America OPEN and find the New Alliances that lead to a winning combination.

There are never any permanent enemies - only permanent interests.
Migration has been the greatest macroeconomic motor - in Europe, America, China.
By allowing cross border migration - America created perhaps the best testament for OPEN society.
By allowing unbridled internal migration - China created the Macroeconomic model base on Urban migration.
By allowing unbridled European migration - Europe sought to enable South + East Europe to succeed along with its West + North.

So, The Trump Template needs a better comprehension of The DNA that enables successful positioning.
Remaining engaged is essential, remaining the unquestioned leader in technology is essential.
Race Religion Region - the three eternal constituents - is best eschewed to keep INCLUSIVENESS paramount.
Inequality can be neutralized - but neutralizing entrepreneurship itself, has grave consequences.
Fortunately Nobel minds are available to assist in this effort - and their contributions must be respected.
There is enough BIG DATA available to precision guide the Economics of sustainable success.
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Vincent Catalano Mar 25, 2016

The potentially positive conclusion must be tempered with an even greater destructive outcome of societal decision-making that puts the wrong person(s) in charge. Witness the US presidential race and what has become known as Trumpism - a world where "building a consensus on a forward-looking vision for inclusive growth" does not come before chaos.
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Zsolt Hermann Mar 24, 2016

I am afraid the article portrays the usual upside down worldview which is causing all our problems.
Life cannot be measured through economic performance, our "pulsating" heart is not the production/consumption paradigm.
Biological and human societal life depends on connections, circulation, communication.

For an organism to stay alive, survive and develop it needs positive, mutually complementing cooperation, perfect multi-dimensional communication aimed at the wellbeing of the whole collective.
Humanity from nature's point of view is a single, interconnected and inter-dependent organism whether we like it, accept it or not.
The global, integral world we live in shows us this fact very clearly.

Trade and economy is simply the external representation of the mutual interconnections in between people.
Governing, political structure is simply an external tool for safeguarding the prevalent trade and economy system within society.
Thus the basic foundation is the interconnections in between people. Trade, economy and the political system is simply the derivatives of those connections.
Nothing can be changed from "top down", any change has to start from below, from within the human interconnections.

Today our interconnections are corrupt, they are selfish, egocentric and greedy. We build our economic and trade relations on ruthless, exclusive and exploitative competition, on the success at the expense of others.
This is why we are on crisis and this is why economy and the political systems above are collapsing.
It is our interconnections that we have to change. They have to become mutually complementing aimed towards the benefit of the whole collective exactly like any living system in nature.
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Tonu Pavel Mar 24, 2016

First workers were forced to compete with eachother untill they learn to organise themselves, later globalisation came and workers were forced to compete with other workers outside of theyt comuninity untill the wages in the developing countries started to grow. Now a new trend is emerging where workers will be forced to compete with machines they are creating. There is no posibility to win because the wealth created in form of capital and technologies is always used against the people who are creating it. it's good to reinvent old fashioned concept of citizen and move away from view of human as replaceble RESOURCE on a liberal market.
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Michael Public Mar 24, 2016

My suggestion is to retain the best of the right wing - the power of individuals and entrepreneurs should be set free and supported - with the best of the left wing - redistribution of money to where it is needed most. One way to do this is to increase death taxes to 100% of everything over $10M while keeping income tax rates low.
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Jose araujo Mar 24, 2016

I despise this idea that automation is pushing total wages down, its total rubbish and biased.

Capital is plentiful, interest rates are near zero so the same argument made in favor of lowering the wage contribution can be made to capital contributions... or does it only work against the workers?

We are at this stage because we forgot that if we want something, we have to fight for it. So we workers slacked and allowed for the diminishing of our rights, yes our rights, and now we are paying for it.

We has economists slacked and allowed for the re-emergence of absurd economic theories that were disproved decades ago, we allowed for the ones like Fama, Lucas and many that share Ricardian Vision of the world, a world where wages are at subsistence level and we are in permanent war with each other.
- Howard Johnson Mar 28, 2016
  
  It is less in the robots than it is companies with Billion $ valuations but only a few hundred or less employees (Tech companies are uninterested in problems that will not scale because that would involves labor), Finance that is less about investing than extracting, companies that forgo investment for stock buy-backs, all of it driving down what once passed for a thriving economy. The invisible hand has been reaching into our pockets
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- Howard Johnson Mar 28, 2016
  
  It's not just one thing but a perfect storm. A agree there is less
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- Michael Public Mar 24, 2016
  
  Capital is only plentiful when you speak to economists. When you ask the bank for a loan it is in massive short supply. Bank are lending their capital to central bank. It is round tripping. This is why QE did stimulate a new era of prosperity.
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Curtis Carpenter Mar 24, 2016

To my view, an excellent analysis. My only criticism would be that it attributes too much of the current effects on technology.

The authors write "Our best hope is that today’s leaders understand it and will adhere to it, thereby putting their creative energies to work on a new vision that places their countries on a path to greater prosperity and equity." I agree. But our worst nighmare is that today's leaders will simply choose to exploit the situation in a hard turn to the right -- regardless of any understanding or lack of it.
- Michael Public Mar 24, 2016
  
  Agreed - the technology effect will be mostly for the next generation - unless you a taxi driver or fill orders in warehouses. The real issue is of economics - our current theories were great for getting us from the the great depression to 2008 and exactly no further.
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- yw yap Mar 24, 2016
  
  Agreed with CC: most political leaders are short-termists and will exploit the situation just to hold onto to their seats; sad but true.
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William Spence Mar 23, 2016

Canada may provide clues on how this can he done.
- Michael Public Mar 24, 2016
  
  More info please.
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Carl Gercke Mar 23, 2016

Very interesting and timely article. Can you provide examples of when policy-based uncertainty resolved into consensus. Or, on the contrary, when it devolved into...whatever?
I would note that negative campaigning, having proved its effectiveness, is unlikely to go away, even though it makes consensus more difficult. I would note also that the media appears now fully invested in the profit potential of polarization and negative discourse, and that will be difficult to dislodge as well.
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dan baur Mar 23, 2016

Low growth and high unemployment are much more EU that US problems. Obviously socialism doesn't work.

The inequality is between the older generation that has jobs with benefits and don't want any adjustment, and the young generation of unemployed. There are no rich that you can milk.

EU will fail for the same reason USSR failed - to much government sclerosis.
- Michael Public Mar 24, 2016
  
  edit: ...has nothing to do with unemployed people taking from wealth from employed people...
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- Michael Public Mar 24, 2016
  
  You obviously don't know the statistics. In the US about 35% of all wealth is owned by the top 1%. Inequality has nothing to do with unemployed people employed people's jobs. I can see now why you feel so threatened - you simply have the wrong end of the stick of this inequality thing. Unless you are worth a billion dollars upwards you should not feel threatened.
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- Jose araujo Mar 24, 2016
  
  Have you ever been to Europe?
  
  Do you actually understand that the standard of living in Europe is higher than on the US?
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stephan Edwards Mar 23, 2016

If you think these trends are healthy your smoking something awfully funny. Citizens concerns have become totally irrelevant to the political process. The people in a position to actually push for change aren't interested their doing quiet well as things are. So why change. Their is no consensus and there isn't going to be. Neither party has the power to force through changes but they do have enough power to keep the other party from doing so. Vision our beloved "Elites" only vision is how can I get richer. We have the finest government the rich can own. The so called "Elites" don't give a damn for anyone who works for a wage and it shows. The banks and the rich got a bail out a FED policy that made them even richer. The poor we got a lecture on "Moral Hazard" apparently helping us would be bad for us Tough shit. This will end one of two ways. One: With a man on horseback fascism most likely. Second: Anarchy people get so frustrated they smash a system that by and large would prefer they just die and cease making a nuisance. My money is on the losers of "Globalization" smashing the system in frustration they have nothing to lose. The "benefits" of Globalization have pretty much gone to the rich. The poor's hand is so bad we have little to nothing to lose. Has for vision the US hasn't had leader with vision in nearly 70 years. I'm not holding my breath.
- stephan Edwards Mar 24, 2016
  
  Now that my temper is under control a little better. Some realities of the the State of labor in the US for you. Half the jobs were I work have gone to the 3rd world or just gone. The unemployment level in my state is well above 5% if they bother to replace me it wouldn't be hard. There is no protection if I walk out on strike single handed I am fired for walking off my job. I live in a right to work state. Walking off my job means I can't even collect unemployment. Unions are very very dead in this country. Striking would gain WHAT? A faster trip to the unemployment line?
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- stephan Edwards Mar 24, 2016
  
  On strike ? Let me give you a hint about the labor market. I go on strike I am unemployed PERIOD Unions are very very dead. Welcome to the world of at will employment
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- Jose araujo Mar 24, 2016
  
  Stop blaming politicians, if you don't fight for your rights,why would someone else do it?
  
  When was the last time you were on strike?
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Steve Hurst Mar 23, 2016

A significant proportion of the public consider guvnt has capitulated to raw capitalism and guvnt has done little to ameliorate that situation. If you dont believe your elected leader is acting on your behalf why should you believe in them

'Our best hope is that today’s leaders understand it and will adhere to it, thereby putting their creative energies to work on a new vision that places their countries on a path to greater prosperity and equity.'

Why should this happen, following the largest financial disaster in history there still has been no effective reform in the financial system
- Michael Public Mar 24, 2016
  
  It takes time for change - if Trump or Sanders wins - tell me there will not be changes? And if Cruz or Clinton wins the frustration will continue and the next election will be even closer. There is a new political line being drawn here - nothing to do with left and right - everything to do with the elites and their candidates (Clinton/Crux) and the people and theirs (Trump/sanders).
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