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Harold James
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This week, Project Syndicate catches up with Harold James, Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation.

Project Syndicate: The UK Supreme Court’s ruling that Prime Minister Boris Johnson’s suspension of Parliament was unlawful seems to give you hope that “genuine conservativism” is “poised to stage a comeback against the nihilistic imposters who have been acting in its name.” Yet Johnson seems determined to purge the Conservative Party of all members who do not support the populist Brexit revolution. Without a political party to call their own, how could “true conservatives” stage a comeback?

Harold James: Politics are being recast in almost every industrial country (with Japan as the only obvious exception). In Italy, the Christian Democrats collapsed in the early 1990s. In France, the old two-party system, comprising center-right and center-left forces, was upended in the 2017 presidential election. And in the United Kingdom, Brexit has caused deep political fragmentation, particularly in the Conservative Party.

French President Emmanuel Macron, who created his party La République En Marche ! shortly before the 2017 election, offers the best modern example of how politics can be remade in the twenty-first century. It would have been impossible to predict the party’s emergence even in late 2016.

In the UK, the first-past-the-post electoral system makes launching such a political movement much more difficult. But that does not mean it is impossible for new parties to emerge, let alone for old parties to be reenergized and transformed. The Liberal Democrats, for example, now stand as a beacon of hope and rationality.

If voters learn to make tactical coalitions within individual parliamentary constituencies, the Liberal Democrats could potentially stand in the tradition of the nineteenth-century Whigs or Liberals – a movement that, paradoxically, represented the “true conservatism” of cautious reform and incremental change. Its worldview was memorably depicted in Anthony Trollope’s political novels of the Victorian era.

In those novels, Trollope describes Plantagenet Palliser – a reluctant, painfully shy, and highly self-conscious politician, with a strong sense of patriotism and a deep-seated affinity for public duty. According to Palliser, “what we all desire is to improve the condition of the people by whom we are employed, and to advance our country, or at any rate, to save it from retrogression.” He adds that “the idea that political virtue is all on one side is both mischievous and absurd.”

“Planty Pall” has an enduring appeal. In the 1970s – when the UK was roiled by another constitutional crisis, though not as acute as the current one – a BBC television series based on the Palliser novels helped to fuel a significant rise in the Liberal Party’s opinion poll ratings and even election performance. It helped that the actor portraying Palliser resembled the Liberal leader, Jeremy Thorpe.

Planty Pall’s attractiveness is rooted not in charisma, but in competence – a quality that is sorely lacking in many countries’ political establishments today. With competent political leadership – underpinned by a holistic vision of “one nation,” instead of a polarizing competition between opposing political tribes – the UK’s situation would prove not to be hopeless.

PS: Likewise, while you argue that Brexit and US President Donald Trump have destroyed traditional conservatism “in remarkably similar ways,” you view the impeachment inquiry launched against Trump as a possible turning point. But, with some 80-90% of the GOP’s base firmly behind Trump, very few congressional Republicans are willing to criticize him. On the contrary, they have supported his radical vision on matters like taxation and the need to appoint ideologically “pure” judges. Why should anyone believe that will change?

HJ: Many political commentators have been surprised by the extent to which support for Trump, as measured in opinion polls, has held up. The surprise is not that he is causing long-term damage to both US and international institutions; he was elected on the promise of doing just that.

But perceptions more broadly have often favored Trump. When he took over the presidency, the US was in the later phases of a long economic recovery. His initial tax measures delivered a short-term stimulus (while posing a longer-term threat to fiscal sustainability), and even the trade war appeared to many like an appropriately tough strategy for pushing China to make concessions regarding the protection of foreign intellectual property. Some of the trade war’s domestic losers even reported that they were willing to pay a small price for the national good.

We are, however, nearing a tipping point. Trump’s sudden withdrawal of US troops from Syria is already having disastrous consequences. The impeachment inquiry is gathering momentum, as revelations about Trump, his lawyer Rudy Giuliani, and their associates in Ukraine multiply. And consumers may be badly hit by the planned December 15 tariff increases (just in time for Christmas!). In this context, it is hard to believe that public sentiment will not soon turn against Trump.

Trump has bulldozed the old Republican Party. In his wake, the Republicans will need to rebuild from the ground up, developing an all-encompassing new framework for a center-right movement that considers both social policy and financial responsibility. Such a movement would aim to foster a system in which social arrangements (most fundamentally, the family unit, though not necessarily conventionally conceived) make its members stronger, more energetic, and more engaged participants in broader communities.

A very important series of books and studies (including a new book by Branko Milanović, which I recommend below) have shown that in advanced modern societies, inequality is driven partly by marriage preferences and social bonding among the “elites,” who pass on non-pecuniary advantages in education. The logical conclusion is that functioning families should not be a privilege reserved for an educated upper class. That is the path to social collapse – a path along which we are well advanced.

PS: You take a more positive view than many toward Facebook’s plans to launch its own digital currency, Libra. “Were an alternative currency based on multiple assets broadly adopted,” you wrote, “it would not be as destabilizing as its critics claim.” How would you balance the concerns of critics – related, for example, to how a private entity would handle a global run on the currency it issues – with the benefits of a “truly universal currency”?

HJ: Issuing a currency on the promise of convertibility into a set of other currencies raises obvious regulatory issues. And, indeed, such initiatives triggered a good deal of skepticism in the past. In the 1980s, when Europeans pushed for a private European Currency Unit, they had only limited success. The International Monetary Fund has always resisted the idea of widespread private use of its reserve asset, the Special Drawing Right.

But, in Libra’s case, asset-backing becomes an issue only if the currency is used for banking operations or maturity transformations. If it is used purely for payments, it is no more or less problematic than existing currencies. In short, the regulatory problem lies in banking operations, not in the payments system.

Here, it is important to draw on historical experience. Before the nineteenth century, a large share of economic interactions involved multiple competing currencies. Before the pocket calculator or the PC, that obviously created enormous calculation challenges. In the age of mobile Internet, however, there is no reason why different currencies cannot be used for different sorts of economic activity.

And, in fact, “dollarization” is already widespread, with transactions carried out in a major trading area’s currency – not only US dollars, but also renminbi or euros. When it comes to pricing goods or services, there are many reasons why currency baskets might be preferable. Moreover, it is likely that new and different sorts of currencies will emerge.

Of course, new currencies raise some potential issues – most notably, as in the case of Libra, that controlling the means of exchange is a way to access commercially or politically valuable payments information. But that concern also applies in the case of state-organized payment systems. If platforms like Facebook want to encourage users to surrender their privacy, they might consider incentive schemes. Other platforms, with more privacy guarantees, would then provide fewer paybacks or bonuses.

Residents of small countries with problematic governance structures are most likely to lead the way in adopting one – and probably more – of the many digital and alternative currencies. That competition will pose a real threat to monetary authorities and central banks everywhere. But the solution is not to try to ban or hamper the alternative currencies, just as it didn’t do any good when some countries required a human to walk in front of a new-fangled automobile carrying a warning flag.

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James recommends

We ask all our Say More contributors to tell our readers about a few books that have impressed them recently. Here are James's picks:

  • The Prime Minister

    The Prime Minister

    Trollope depicts a political system that operates on the basis not of extraordinary charisma or talent, but of simple honesty and decency.

  • Transylvanian Trilogy

    Transylvanian Trilogy

    This work frames the history of the Habsburg monarchy as a warning for elites at risk of squandering their legitimacy. Bánffy is thus the opposite side of the coin to Trollope.

  • Capitalism Alone: The Future of the System That Rules the World

    Capitalism Alone: The Future of the System That Rules the World

    We tend to think about inequality as a country-specific problem. But Milanovic looks at it as a global issue. Back in 2012, he presented his now-famous “elephant curve,” which captures the twin pressures that the new middle class of the developing world (specifically, China) and the elites of the developed world (specifically, America’s 1%) place on the rest. His latest effort forces us to look at capitalism through a very critical lens: Is it truly the best system to address such profound global inequalities?
  • Liberalism at Large: The World According to the Economist

    Liberalism at Large: The World According to the Economist

    Through the lens of The Economist, Zevin provides a brilliant, critical history of the classic liberal tradition and its problems, including its responses to the challenges of globalization, world war, depression, and renewed globalization.

From the PS Archive

2018
James urged all democracies to learn from the political, economic, and social conditions of the early 1930s. Read the commentary.

2016
In the wake of the Brexit vote and Trump’s victory in the US, James asked whether the populist political revolt could be contained. Read the commentary.

Around the web

To mark the opening of an exhibition exploring the state-sponsored “Aryanization” and plundering of Berlin’s central district, Mitte, James discussed the methods, impact, and aftermath of the Nazi expropriation of Jews. Watch the video.

In a Centre for International Governance policy paper, James explored the “deglobalization” trend, and considers how international governance might best work in the current circumstances. Read the paper.

At a conference focused on a ten-year review of the 2008 economic crisis, James discussed the backlash against globalization and the rise of “disembedded unilateralism.” Watch the video.

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