Author: George Papaioannou

In a recent article in the NYT, David Brooks called class-based segregation a scourge.  To be precise he used the phrase class self-segregation by which I suppose he meant classes have willingly chosen to live apart from each other.  The truth, however, is that the upper classes of America have pulled themselves away from the lower class of less educated and blue-collar Americans.

Segregation is nothing new in American society.  Its most persistent form has been built on racial differences.  Even after a series of laws brought down the legality of race-based segregation, it continues to persist by other means.  Race-based segregation in housing is one of the most enduring forms.  Even the New Deal did not correct this.  Between 1934 and 1962 White families were allocated 98% of the government-backed loans.  And after the passage of the Fair Housing Act in 1968, red lining continued to impede the integration of Black and White Americans.

Brooks is correct though to point out that over the past three decades we have seen segregation to also grow across social classes.  It has grown in multiple fronts.  In home location; in health conditions; in educational achievement; in incomes and wealth; and in social mobility.

Housing is a major factor in the divergent lives lower- and upper-class Americans experience. Zoning laws are the most common method used to leave lower-income people out of prized city neighborhoods or suburbs.  By preventing construction of multi-family units, zoning laws limit home supply and reduce home affordability.  In their book Abundance Ezra Klein and Derek Thompson write that compared to its European peers America is a home poor country with much fewer dwellings per 1000 residents than, say, France or Italy.  The inconvenient truth is that some of the most restrictive zoning laws that limit home supply can be found in liberal cities.

So, the lucky ones who happen to live in privileged places enjoy better schools and higher quality public amenities from parks to public safety.  Better schools from pre-K to high school give children of these families a leg up in landing in highly ranked colleges.  That then becomes the ticket to better networking, better-paying jobs, and higher social status. 

Studies have shown the negative effects of growing up in communities with uneven means and opportunities for educational, cultural, and social growth and development.  For example, the college premium in income is 70% in the US versus 40% in European countries.  This is so because less educated Americans end up in jobs that by the working of our economy pay considerably less than jobs requiring a college degree.  In other studies, children coming out of poor places are much more likely to get stuck in a lower income class than children out of better-off communities.  Thus, a kid’s place of residence becomes destiny.  Another study has shown that children that move to a better location achieve a lot more in their adult life relative to children that remain behind.  What has been found to matter the most for social mobility is to live in places along-side successful people that can serve as role models and more importantly as mentors.  If zoning laws or poverty separate you location-wise from these opportunities, you end up behind.

As others have pointed out, Brooks agrees that the interaction of Americans across different classes has declined in various areas, like civic organizations, places of worship, recreation (“bowling alone” is a famous phrase in this relation) and I would add serving in the military after the end of the draft in 1973.  To overcome these realities, Brooks suggest that better-off Americans make an effort to interact more with their less fortunate fellow citizens.  Others have proposed a more radical solution.  A one-year national service in the spirit of Americorps for high school graduates, so that they can become better informed about those who live on the other side of the tracks.

As sensible as these suggestions may sound, I am very skeptical they are likely to come to pass in present-day America.  And I don’t believe the reason is the political polarization we live through now.  Our polarization is rather the symptom if not the result of our segregated living experiences.  At the core of our problem, I see a social ethos which emerged in the 1980s and prioritizes individual financial success over social cohesion and building a common sense of belonging.  This makes the opportunity cost of social integration rather high to those with the ambition to climb the economic and social ladder or maintain their upper class status.

This argument suggests that when a home, beyond being a shelter, becomes an investment asset, creating scarcity is one way to raise its value.  The inadvertent result is the clustering of families by affordability which limits class interaction.  Rich families send their children to private schools and elite colleges not necessarily to keep them away from the children of poor families but because that’s where networking with similarly well-placed families increases social exposure and future professional opportunities.  For a similar reason, interacting and socializing with lower income and status people in civic organizations and places of worship is time taken from hobnobbing with influential people that can open-up opportunities for further economic and social gains.  Adopting a national service program or more drastically the return of the draft also represents an unacceptable opportunity cost to upper class families because it would delay the advancement of their children or even worse put them in the line of fire.

So, what I am arguing here is that in present-day America we are incentivized to live and act in ways that increase the advantages that are consistent with the prioritization of individual financial and social success.  What has receded over the past decades is our appreciation of a more egalitarian society in both rights and responsibilities in favor of what the academic Peter Turchin calls the overproduction of elites.

As long as those of us who are successful and more affluent can afford to separate ourselves from the problems faced by those who bear the brunt of governmental policies or economic developments, we will continue to live separate lives.  When consequences and responsibilities are borne more evenly, then we can start developing a more unified sense of the common good.

If we look at political systems, international disputes, or the use of technology, we find that the opportunities and possibilities for people to exercise free choice and free speech and expression have undergone a noticeable decline.  I view this to be the result of moving further away from relying on persuasion and discourse and resorting more to coercive means.

This view is backed up by evidence.  Global violence and war – the main means of hard coercion – are at their worst level since World War II according to Vision of Humanity.  it is a sad and disappointing state for humanity that almost eighty years after the founding of the United Nations neither the inviolability of national borders nor the rules and laws governing the conduct of war and the protection of civilians and human rights seem to carry any sway. 

Conflicts in the Democratic Republic of Kongo, Sudan, Ukraine, and the Middle East have seen disturbing and disastrous patterns of violence against civilians.  But even the core causes of the conflicts themselves betray a lack of willingness to settle country or ethnic grievances through negotiation and dialogue.  In all cases, there is an absence of global cooperation as to how to stop atrocities and bring parties to negotiations.  What we see instead is the opportunistic and most often the selective application of rules as countries coalesce into partisan groups. 

Turning to the global state of the freedom of expression, the Global Expression Report finds that freedom of expression through speech, the press, and the internet, which represent means of persuasion, has experienced a decline in recent years.  As a result, 5.6 billion people live in “crisis” or highly restrictive environments as the Report puts it.  The same Report ranks the US 21^st, whereas a look at One World Data reveals that in freedom of expression the US lags most western democracies. 

The good news is that a majority of people still value the right to free expression.  In a survey of 35 countries (all with democratic systems) by the Pew Research Center 61% of respondents consider freedom of the press, speech, and internet very important.  However, only 35% of the respondents believe these freedoms fully exist in their respective countries.  Thus, there is “a freedom gap” between the aspired and realized freedom of expression.

The decline in the perceived loss of freedom of expression is mirrored in the retreat of civil rights, protection from the state, the conduct of free and fair elections, and civic engagement.  According to One World Data, this reality is reflected even in surveys in Europe, the US, and South America, where most people live under democratic governance.

When people realize that basic freedoms and rights are restricted their faith in democracy starts to crack and weaken.  In surveys of 12 western style democracies, including the US, the Pew Research Center had found that in 2017 equal percentages of people (47%) expressed satisfaction and dissatisfaction, respectively, for democracy.  In 2025 the responses had swung decisively, with only 35% of respondents expressing satisfaction while 64% expressed dissatisfaction.  In the US the percentage of dissatisfied respondents was 62% vs 37% of those satisfied with the state of American democracy. 

Very tellingly, the above survey found a strong correlation between dissatisfaction with democratic governance and negative feelings about the economy.  Very likely, the responses concerning democracy are influenced by the feelings of discontent driven by a lopsided distribution of income and wealth that favors a few at the expense of the many.

Economic woes, cultural issues, and feelings of nativism are mostly responsible for the polarization in many western democracies.  Thus, both soft and hard coercion is on the rise as ideological groups resort to it to dominate and silence their opponents.  Filled with grievances fueled by the perceived dominance of liberal and elite groups, conservatives and religious groups have responded by enlisting the force of the state as a way to redress the imbalance.  This pattern has engulfed even the US where free speech and dissent, academic freedom, as well as evidence-based science and medicine have been encroached at the state and the federal level. 

However, the most dangerous and tragic escalation in the use of coercive means is the resort to physical violence against human life.  Regrettably this country has a sad record of politically-motivated assassinations or attempts against the lives of opponents.  From Lincoln, to John Kennedy and Martin Luther King, all the way to the string of violent and fatal incidents of the past five years – Charlie Kirk being the latest victim – American democracy has paid a huge price in blood.

Our world is getting richer, at least at the aggregate, and more technologically advanced than ever before and yet it seems to me the humanistic urges of our species are in retreat.  As we are tested again and again we seem to choose coercion over persuasion.  Even the brilliance behind AI may end up to become one more tool in the service of coercion than of enlightenment and persuasion.

Unless we reexamine our private and political lives, we are likely to let political, social, economic and technological structures make persuasion and freedom impossible to survive.

Let’s assume we really manage to deport all undocumented immigrants from our country.  Will we have solved this problem once and for all?  The historical record as well as global trends show this will not happen.  Resorting to politics of raw emotions and fear, as we do now, cannot provide sustainable solutions.  I am afraid the means used to curb unlawful immigration are more damaging to our personal and national soul and values than the relief we are promised from ridding this country from its millions of undocumented immigrants. 

First, let me say that a state of open borders and the presence of large numbers of undocumented immigrants are legitimate concerns.  But as in all other cases of law enforcement, undocumented immigrants should be treated with the due process mandated by the Constitution and in the spirit of the origin story of this country as a nation of immigrants.  Neither of this is now happening.  In a democratic country the means of enforcing law and order  count as much as the objectives.

To begin with, the festering immigration problem is the result of timidity and political calculations on part of the Congress which has repeatedly abrogated its responsibility to adjust our immigration laws to contemporary realities.  This failure of the political system has removed the immigration issue from the realm of reasoned deliberation to the realm of raw emotions.  Thus, what should be debated as an opportunity and a resource is debated under the emotional fear of Us versus Them.   We know very well that the distance between considering others as We to considering them as They is littered with hateful and dehumanizing language.  It is only when we debase immigrants as human beings and reduce them to an amorphous threat to the nation that we feel justified to deprive them of the protection of the law and due process. 

History shows this is not new in America.  At various times Americans have turned against their compatriots and potential immigrants out of irrational fears.  Thus, we had the Chinese Exclusion Act in 1885 that banned the immigration of Chinese workers, the National Origins Quota System of 1924 that placed restrictions on the immigration of people from Eastern and Southern Europe, and the Japanese American internment during World War II.  Ironically and irrationally, once a group is safely entrenched in this country it tends to view new comers with the same suspicion they faced upon their own arrival here.  The serial spasms of hostile reaction have been directed against Catholics, Jews, Latinos, Asians, Muslims, and other ethnic and religious groups that over time have made their way to America. 

In all cases, however, and after we have been consumed by ethnic and racial fear and debasing language, we discover that each new wave of immigrants brings revitalization and talents as well as new cultural elements – music, dance, and foods – that become part of our national tapestry. Which shows our loss of faith in new immigrants is unwarranted and, worse, embarrassing in its shortsightedness.

It is out of this mosaic of peoples from around the world that we have woven our national narrative of this country as a new experiment in human coexistence and a multi-cultural democracy.  The central piece of this narrative is that people come to America in the pursuit of three basic freedoms.  The freedom to dissent, the freedom to shape a new future, and the freedom to move.  That’s what motivated the Puritans to sail across the Atlantic and that’s what still brings foreigners to our doorstep.  Which suggests that those who come to America flee from countries where these freedoms are in short supply.  Unfortunately, even now there are lots of places around the globe that fit this description thus generating new waves of immigrants headed our way.  That’s why every time we think we have solved our immigration problem we are soon faced with a new one.

The last successful attempt to address immigration was during the administration of Ronald Reagan in 1986 with the passage of the Immigration Reform and Control Act.  This law legalized 2.6 million undocumented residents living in the U.S.  With no laws enacted since then and no further legalization of immigrants – even those who have proven their contributions to this country – the undocumented immigrants now number over 12 million.  In forty years, this nation moved from being pragmatic about immigrants to treating them like miasma. 

Right now, we have two problems and we are failing in both.  First, we have failed to take a pragmatic approach and start addressing the immigration issue as a resource for our economy and a way of reversing our demographic decline as our population keeps getting older.  Second, we are walking away from initiatives that can improve economic, health, and public safety conditions in the parts of the world that generate the waves of immigrants.  These areas include our continental neighbors to the south and most importantly Africa.

Africa, in particular, is projected to experience the biggest population growth, doubling its size to about two billion people by the end of the century.  If economic and human development  conditions do not keep pace with population growth where do we think Africa’s poor, unsafe, and destitute people will go?  They will head for Europe and the US.  Which means, it is in the interest of the developed West to assist Africa to create jobs, improve security, and settle into a continent of stable countries.  Regrettably, the Trump administration has chosen to go the opposite way.  The closing of the USAID programs and other helpful engagement with Africa will neither help with its development nor with stanching the flows of outward migration.  The same applies to our southern neighbors.  We should be doing a lot more to help them escape poverty, joblessness, and lack of public safety. 

So, the real costs of how we handle immigration can be summed up like this.  By criminalizing and debasing all undocumented immigrants we scar our humanity and betray our origin story.  By militarizing law enforcement to handle immigrants and their supporters we risk staining our democratic credentials.  By choosing to act with emotion and no reason we lose sight of immigration as part of the solution to important domestic issues, like labor shortages and an aging population.  And finally, by choosing short-term solutions we lose sight of the longer-term prospects and the need to handle the immigration problem at its roots through engagement and a development agenda in the countries most likely to be the origins of new immigrants.

This post marks the end of seven seasons for the blog.  I want to thank everybody for reading my posts or for just opening my emails.  After the customary summer break, I look forward to returning to the blog in September.  Have a nice summer. 

The political battles between right and left often leave out the two elephants in the room: markets and technology and their combined effects.  Two hundred fifty years after their ascendancy in human lives, markets and technology have become too complex and dominant, thus making their management too demanding and confounding for both conservatives and liberals.  What I mean by that is that the respective basic tenets of conservativism and liberalism, preservation of tradition and expanding personal freedom, are challenged and even undermined by the way markets and technology work if left unchecked. 

Consider first the challenges posed by markets.  They move goods around with great efficiency based on trust and reputation developed across buyers and sellers.  At the same time, markets have no loyalty.  A seller is happy to find a buyer anywhere in the world.  But this diminishes the bonds among the members of local communities.  Markets can produce the best combinations of price and quality but they can also be left to degenerate into greedy and wasteful monopolies or monopsonies.  Markets allow capital owners to move their capital with little geographical constraint motivated only by the prospect of profit.  But when the capital moves so must the labor.  If labor does not move it becomes unemployed.  That’s what happened to the deindustrialized American Midwest.  But then, labor mobility also leads to the decline of communities and the erosion of traditions.

So, we can see the conundrum for conservatives and liberals.  To protect traditional and closely-knit societies the market must be somehow restrained; to let the individual and entrepreneurial spirit flourish the local must give way to the cosmopolitan.

Technology makes markets more complex and difficult to manage.  The reason for this is that technology creates products that are more intangible and cognitively more difficult to understand, especially when it comes to their potential risks.  The information, and more specifically the digital, markets are a good example.  As we navigate the digital space we are constantly invited to buy or subscribe to myriads of products with just a click of the keyboard.  Do we really know what we buy into?  Or when governments and private business digitize every piece of information, do we really know how this information about our private lives will be used?  

The speed of technological innovations and their transformation into consumer products also contributes to our difficulty to appreciate the consequences of what we are offered.  Thus, an asymmetrical informational gap concerning the consequences of innovations starts to grow between their creators and the consuming public.  In the markets of the past, we bought a product and that was it.  In the digital economy, every transaction opens up a deeper and more lasting interaction with the vendor, which usually translates into a one-way flow of information from the consumer to the digital seller. 

But if the public is faced with a veil that obscures the consequences of market transactions or how technology works in the hands of the state, then a society can be driven willy-nilly down a path to a new order of things without the informed consent of its members.  That is, an informational gap concerning the products we consume and the means our governments adopt to organize our societies creates a deficit in democracy.  

The growing complexity of markets and technology and the lack of serious democratic input from the public explains, I believe, a great part of the anxiety and the political repercussions we now observe in western societies.  As more and more people feel that they lose agency in shaping the future, they start to mistrust mainstream politicians and the drivers of change, that is, science, research, and experts.  That leads many people to a wholesale rejection of fact-based policies.  We see this in the populist movement in the US.

This broad sentiment of disenfranchisement can also explain the polarization between those who have greater difficulty positioning themselves in the driving seat of the new global digital ecosystem and those who by virtue of knowledge and adaptability feel comfortable in it.  In the context of American politics this usually correlates with differences in educational attainment and geographically describes the chasm between the coastal “elites” and the middle of the country.

Unfortunately, the politicians that represent the American populist movement are not actually honest with their constituencies.  Republicans talk about communal bonds, traditional families, and individual freedoms but they keep adopting policies that favor unregulated markets, keep child rearing unaffordable to less privileged parents, dislocate communities, weaken government support for civic initiatives, silence dissenting voices and let digital behemoths operate with little restraint and accountability. 

Democrats on their part, though historically the party of the common man and woman, they have let their exuberance about the pathbreaking benefits of technology to drive them into an alliance with a bipartisan cadre of technocrats and globalism enthusiasts, often failing to appreciate any negative effects on social and economic structures.

In short, I believe, the forces of the market and technology are left to be mediated by politicians who are unprepared or unwilling to grasp the full extent of the inherent risks and by experts who are not trusted by a large segment of the population.  Meanwhile tech companies continue to expand their accumulation of private data, to grow their monopolistic power, to expand their political influence and, thus, to shape our future guided only by profit seeking and their vision while the rest of us are reduced to passive watchers and consumers.  

The reality faced by democracies is that those who control the markets for the most consequential technologies will shape our future without adequate representation by the people.  Under these circumstances neither the principles of classical conservativism nor those of classical liberalism will survive.

When posterity draws a more definitive profile of Pope Francis, I believe five words he uttered in relation to gay priests will be his seminal gift to religious faith and our humanity.  “Who am I to judge?”  In these words, Pope Francis echoed more the skeptical approach of secular thought than the certainty of religious doctrine.  He had the courage to set aside papal adherence and trust to the infallibility of church dogma and admit the limits of human judgment.  The hubris that makes people speak for God gave way to the sense of finitude of the human capacity for moral and intellectual judgment. 

By uttering these words, Pope Francis first reminded everybody that humanity, that is, the essential qualities of human nature should not be judged with prejudice or hostility.  It was in that regard that Pope Francis spoke with compassion about marginalized people: immigrants, the poor and homeless, the weak, persons with disabilities, and LGBTQ people.  Thus, he told the world these people are not Them, they are Us.

Those words were also, no matter how small, a step away from strict theological dogma.  They reflected a sense of doubt about a long-standing doctrinal position of the Church.  History teaches us that humanity (in both its meanings as our human qualities and as masses of people) has suffered under religious and secular visions of what the absolute truth is that we should all follow.  Christianity itself did not manage to escape from this tendency to cling to an absolute truth.

Almost 2000 years ago the winning side of Christianity chose to turn Jesus’s ethical teachings into a canon of dogmatic theological beliefs and doctrinal positions that became the only “true” (orthodox) version of Christianity.  That was, of course, the reaction to the circulation of a multitude of alternative beliefs about the nature of Christ Himself, that were eventually declared as heresies by the winning side.  Thus, what became mainstream Christianity was the product of an early display of intolerance to different interpretations of the Christian faith. 

However, this forced consolidation of mainstream Christian faith in the Nicene Creed (following the Council of Nicaea in 325 CE) on what was deemed to be the only true belief proved to be ephemeral.  First the Roman Catholic Church split from the Eastern Orthodox Church in the 11^th century over whether the Holly Spirit derives from the Father and the Son or only from the Father.  And then several centuries later the Western Church itself split as a result of the Protestant Reformation.  That shows that eternal truths are anything but that.

Tragically, these partings of ways were not done in amicable terms.  They entailed wars, persecutions, and untold human suffering.  Adherence to dogmatic positions had generations of the faithful believe that the sun revolves around the earth and that scientific and philosophical thought ought to be handmaidens of the faith.  Of course, we have seen the same intolerance to different religious viewpoints within other religions.  The Islamic world is still at war between its two branches of Shia and Sunnis.  And secular dogma as to what the superior political order is gave us the millions of deaths under Hitler, Stalin and Mao.

So, when a religious leader of the stature of a Pope, questions the power endowed to him to stick to a particular dogma and condemn some people; and when the same leader declares that diversity of faiths is good since people understand God in different ways, we should welcome it as a sign of human progress.

And yet, this pope of compassion and self-introspection was not popular with all his flock, especially here in America.  Many Catholics as well as Christians of other denominations disapproved of his stances on immigration, poverty, materialism, climate change and environmental sustainability.  This happens to epitomize the painful conundrum of people of faith who must reconcile religious teachings and political views in a world of political and social tensions.  How can an American Christian square his or her political views that immigrants are a national threat and that social programs promote laziness with the Christian message of treating your enemy like yourself and tending to the weak and those left behind?  How can an American Christian live a life of modesty and humility as Jesus taught in a supercharged consumerist society where wealth-seeking and accumulation are celebrated as tokens of noble aspirations and success?  And how can Christians accept to live with moderation for the sake of the environment and our planet when every message around them calls for more consumption?  In fact, these questions hold for all humanity, both religious and secular. 

Our modern world is one of abundance and scarcity, of uneven prosperity and poverty, of ease of doing things and yet of growing complexity, and one of expanding rights for those who were repressed in the past.  Religions were established many centuries ago in a much simpler world with different conditions and social hierarchies and norms, many of them violating human dignity as we understand it now.  Standing by past moral and ethical precepts while our understanding evolves with knowledge and appreciation of human rights is what inevitably creates the tension between religious beliefs and modern attitudes.

If we are going to ease this tension without insufferable confrontations, we need healthy skepticism and doubt, guided by a more universal understanding of what the enduring values of humanity are before we fall victims of runaway material and scientific excesses. 

In pursuing this march toward a more peaceful and benevolent species, the words “Who Am I to judge?” as a call for measured and compassionate action are words worth listening to.

What price are we willing to pay for peace and democracy?  I am raising this question because I have the sense our collective commitment for both is waning as waves of misinformation and ahistorical opinions confound our sense of responsibility to ourselves and the world.  This comes to my mind as I recall a book I read a few years ago, The Price of Peace.  Its message was that to preserve peace and democracy, nations, especially those in a leadership role, have to see beyond their narrow interests.  In the years between the two World Wars nobody seemed to comprehend this better than John Maynard Keynes.  I am afraid, that, to our great peril, we, here in America, are forgetting this and we are now moving in the opposite direction.    

There have been a lot of comparisons made between that interwar period and the present.  Back then there was a collective failure among the winners of the war in establishing the foundations of a lasting peaceful order.  First, preoccupied with restoring the wealth they had lost during the war Britain and France imposed extreme reparations on Germany.  Then, when the main world economies started to go south country after country resorted in rounds of punishing tariffs paying little attention to the growing unemployment.  Neither Britain nor the United States stepped forward to provide economic leadership.  Instead, the default position became one of sovereigntism, a term used by historian Jennifer Mittelstadt (NYT, Feb. 4, 2025) to describe the pursuit of narrow national interests without concern for the broader consequences.  Well, we all know how that fixation ended back then. 

In the turmoil that followed the end of World War I, Keynes tried in vain to convince his own government as well as other leaders to adjust their national interests to the common good of world peace.  In the process of his endeavors, though, he provided the economic theory and design (what we call macroeconomics) that would eventually enable governments, starting with the Roosevelt administration, to jumpstart their moribund economies and put people back to work. 

The upshot of the Keynesian revolution was to debunk the false belief of classical economics that markets adjust on their own and thus they can solve problems of insufficient investment and unemployment.  Keynes showed that government had a useful (sometimes indispensable) role to play in economic management. 

What is, however, more important for the common good and relevant to our times, was Keynes’s conviction that well-run economies were critical in maintaining social harmony and keeping countries away from aggressive (including military) policies against other nations.  In the words of Zachary Carter, author of The Price of Peace, Keynes believed that competent and humane economic management could protect democracies from the siren songs of authoritarian demagogues and spread peace and prosperity around the globe.  In that respect, Carter writes Keynes was the last Enlightenment intellectual who pursued political theory, economics, and aesthetics as a unified design.

In the post-war decades the policies and narratives of successive US administrations, both in the domestic and international arena, were imbued with Keynes’s prescriptions.  The social contract among government, big business, and labor unions produced a period of unparalleled shared prosperity in the US.  The generous assistance extended to both allies and losers in the form of direct aid (Marshall Plan) and favorable trade terms restored battered economies, strengthened democracy in Europe, Japan and S. Korea, ended colonialism, and gave us a long period of peace and progress. 

Things started to unravel, though, as a new economic order, driven mostly by hostility to the role of government, took hold in the US and the West in general in the 1980s.  Anti-government conservative thinking managed to restore the supremacy of private markets as envisioned in classical economics as the only panacea of all economic problems.  The new version, called neoclassical or neoliberal economics pushed aside the government as a complementary and beneficial agent in the design and execution of economic policy and relied on the supposed “rational” individual acting in supposedly “free” markets to take care of common affairs.  Thus, preserving the primacy of markets became more important than the goal of achieving a better and more humane social order.      

This explains why we paid little or no attention to the stagnation of wages, higher than normal unemployment, market monopolies, and growing inequality.  Under the misguided belief that markets know best governments were convinced to set aside sensible regulations of the financial system and entrust its guardianship to banks.  When the Great Recession of 2008-2009 almost knocked the global economy out, there was no accountability for its perpetrators while millions of households were financially burnt.  The most corrosive effect on the public’s trust in the system was that after each crisis the rich became richer and inequality reached new heights.

Eventually, decades after governments had stopped managing their economies in the interest of shared prosperity and social harmony as Keynes had counselled, America and the rest of the West got exactly what he feared.  That is, the rise of nationalism, authoritarianism, and the retreat of liberal ideals through the erosion of the public’s confidence in democracy.

Tragically, although the neoliberal order is out, the misuse and underutilization of the state are becoming features of the current administration.  The power of the state is now exhausted in relentless culture wars against institutions perceived to be carriers of the liberal standard.  Even worse, the resources of the state are now relegated to underuse and idleness, when they are needed the most.

Public health policy, climate change, and advances in AI require research and knowledge-based policies that only the state can provide as public goods.  If the frontiers for saving peace and democracy in the aftermath of the Second WW were in the allied countries of Europe and Asia, the new frontiers are now in the Global South where millions suffer from malnutrition, illnesses, and political turmoil.  That’s where American leadership is not only desperately needed but it can also bear immense geopolitical benefits to this country.  And yet, we are withdrawing our assistance because our leaders tell us the price is too high.  I wonder for whom.  The ranks of the wealthy who are averse to paying their fair share of taxes?

As our government retreats from its obligation to advance the public good and from seeking common ground with other nations, our country and the world are exposed more to mistakes of ignorance, disruption, and disorder.

Note: For those who have the patience to read books on economic theories and history, I recommend Robert Skidelsky’s Money and Government for an illuminating account of how views about the state shaped economic theories over the past one hundred years and what explains the causes of our present economic state. 

When the history of the first quarter of the 21^st century is written, I believe the verdict will be that America won the cold war and lost the post-cold war.  At the end of the cold war, America emerged as the sole super-power and more importantly with a more compelling narrative for its success.  Both the collapse of the Soviet Union and the engagement of China in the global capitalist system were taken to mean the superiority of open liberal societies with market-based economies. 

Thus, at that time, thirty-five years ago, America was left practically unchallenged to advance an international order that itself had underwritten after the end of the Second World War.  That order aimed in the avoidance of major conflicts, the furtherance of liberal political and economic systems, and the creation of a global market economy.  Today this order lies in ruins in both its political and economic dimensions.  The Middle East continues to convulse in wars since the American invasion of Iraq, Russia has shattered the illusion of peaceful coexistence in Europe, and China is aggressively vying for influence in its own region.  Liberal democracy is in retreat and critically tested even within the US, while strongmen have risen to power around the globe.  Finally, the global economic system is crumbling under the weight of President Trump’s tariffs and his retreat from humanitarian and development assistance to poor countries. 

So, what went wrong?  I will argue here that this American-inspired and supported international order has fallen victim to economic mismanagement which is the usual curse of great powers.  In their book Balance: The Economics of Great Powers From Ancient Rome To Modern America (published some thirteen years ago) Glenn Hubbard and Tim Kane show how great powers like the Roman, British, and Ottoman empires, eventually collapsed because they failed to match their fiscal resources to the demands of their geopolitical interests.  In all cases, the collapse did not come from outside enemies but from dangers within, the biggest being economic mismanagement.

More specifically, what I believe happened during the post-cold war years is that the US overreached abroad and underreached at home.  By that I mean the US contributed to geopolitical developments that kept it overreaching abroad, thus overstretching its resources, while falling short in keeping its economy in balance at home.

First, the mismanagement of the West’s relations with the newly founded Russian Federation was an early cause for overreaching abroad.  Unlike the cautious approach of Bush Sr., the Clinton administration and Western Europe moved far too aggressively to consolidate the West’s gains from the collapse of the Soviet Block at a time the new Russian state was still reeling from its geographical losses and the dramatic transformation to a market economy.  Losing Russia as a partner in the design of the new order of European integration can account for the eventual backlash from a nationalist leader like Putin.

Second, despite an emerging world without big power rivalry, the US continued to follow a foreign policy that to this day is oriented more toward the application of hard (military) power than soft (developmental) power.  Kept at bay from any meaningful influence in the western hemisphere, Russia and China have resented the continued American influence in what they consider to be their own spheres of influence.  Despite its flagrant violation of Ukraine’s sovereignty, Russia’s hostile posturing against the West must be understood within this context of spheres of influence.  The same applies to China as it expands its incursions into the Pacific.

The third piece of overstretching abroad was the “endless” wars in Afghanistan and Iraq which despite the enormous losses in treasury and blood failed to produce the hoped for results.

The US also overreached abroad as it tried to create a global economic order.  The intended goal was commendable: bring countries together through a web of trade and economic relationships that would compel them to greater cooperation and less nationalist rivalries.  That could have been sustainable for the US if it had a strategy how to balance the benefits of globalization with the costs to its own economy.  Since the global competition for factories and jobs would have primarily hit high-production cost countries, like the US, there should have been in place a strategy to absorb the costs.  It is in regards to the need for such a strategy that I believe America underreached to mitigate the costs of globalization.

This domestic underreach took many forms.  First, there was no effective plan to protect the sectors of labor that were losing jobs to overseas production.  Neither was there a coherent strategy to reorient the labor force toward the knowledge economy that required better, more analytically, educated workers.  Left alone, the market proved to be a poor instrument to preserve well-paying jobs.  The result was the creation of enormous wealth for the winners and social and economic decline for the losers of globalization.  The increasing inequality of incomes and wealth was not unrelated to the gradual erosion of the balance of power between labor and capital in favor of the latter. 

The question is why US governments did not take action to offset the costs of globalization. My answer to that question is, first, US governments were stuck to the myth that GDP growth is good for everybody.  Second, to secure the funds to support its geopolitical as well as domestic needs the US would have to resort to higher taxation.  However, years of preaching that a good government is a small one, had morphed into a bias against taxes.  Furthermore, the doctrine that wealth is created from the top through favorable taxation of capital left successive US administrations averse to the idea of using the riches of the few to remedy the plight of the many.  Thus, while the US was posing as the guardian of a costly international order, its appetite for more fiscal resources remained suppressed and fiscal deficits as well debt exploded.

Those who favor the global leadership of the US go as far as to call America under President Trump a “renegade” power (Hal Brands, Foreign Affairs, 2/25/25).  The reality may be though that the failure over the last thirty years to manage the US economy to the needs of its hegemonic role is what has likely brought us to this point.  Overreach abroad and underreach at home created the conditions that have fueled the populist backlash against the application of fiscal resources abroad when so many domestic ills fester at home.

This does not mean that Trump 2.0 is the right response.  The impending legislation to extend previous tax cuts on top of enacting new ones will further undermine the fiscal capacity of the country.  And the draconian tariffs imposed on friends and foes are unlikely to remedy the domestic economic inequalities and grievances.  At the same time antagonizing traditional allies will erode the projection of American power beyond its immediate zone of influence.

As the US retreats from international cooperation and embraces the zero-sum game of this administration, Hal Brands (above) predicts the US will resort more to aggressive, unilateral, and illiberal foreign policy tactics.  That, of course, will be the end of America’s international order that came out of its victory against fascism and Nazism.

In 1943 referring to free speech, Supreme Court justice Robert H. Jackson wrote “Compulsory unification of opinion achieves only the unanimity of the graveyard.” He could have used the word quiet instead of unanimity because lack of free speech and dissent has the same effect.

The unanimity of opinion comes under the boot of an authoritarian state or under the need not to offend anyone.  The last thirty years, and especially now, the United States has started to experience a taste of both.  Not that the country has not gone through periods when illiberal forces tried to cancel and persecute “objectionable” speech and ideas.  We thought the McCarthy era would be the last such period.  But as the culture wars and national politics became less liberal, our collective commitment to preserving free speech started to fray.

Perhaps, not surprisingly, the educational institutions and instruction have emerged as ground zero of the battles about free speech.  From elementary to higher education, race, sex, gender, and history have become topics of contested speech.  Since 2021, 175 different bills in 40 states have targeted what teachers and academics can teach and many of them have become laws (New York Times editorial, 3/20/2022).

But before we consider the assault on free speech by state actors, we need to reckon how speech started to be viewed as an uncomfortable condition of an open and pluralistic society.  The story goes back a few decades when leftist student groups started to object to campus visits by speakers harboring odious ideas, like white supremacy, holocaust denial, racism, and homophobia.  Deemed as provocateurs and purveyors of hate and bigotry, these speakers were banned or disrupted on college campuses.  Regrettably, some university administrations acquiesced to this type of speech cancelling.  Even worse, they sought cover by claiming that racist, pro-Nazi and anti-gay speech was mentally and emotionally upsetting to some students.  Thus, they started to establish “safe” spaces where like-minded students would discuss issues without opposition.  Jonathan Haidt of NYU described this insular approach to free speech as “safetyism.”

Now let’s move forward to the last couple of years.  The cancelling tactics that leftist students had used in past years against speakers whose ideology they opposed were now applied to students demonstrating against Israel for how it prosecuted its war against Gaza.  In many instances, peaceful student demonstrations as well as pro-Palestinian speakers and intellectuals were cancelled to placate pro-Israel students, powerful donors, and meddling politicians. 

Although universities have been right to respond to acts of violence and harassment against pro-Israel Jewish students, their overall handling of past and current incidents related to free speech have left American universities vulnerable to severe criticism as to whether they can remain citadels of free inquiry and ideas.  Michael Roth, president of Wesleyan University, is one of the few university leaders that has raised alarms in this connection.  He made his support for free speech on campuses very clear in the title of his NYT opinion piece “I Hope My Campus Is Even More Political This Year” at the start of the academic year in September.

It is important to realize that the culture and foreign policy confrontations that have taken place on campuses and within academic disciplines have involved private actors and institutions.  Thus, they have been played out in the marketplace of competing ideas and politics.  A lot more insidious for our rights to free speech and expression is, however, the insertion of the state as it attempts to define the permissible content and conduct that citizens must adopt as they exercise their constitutional right to free speech.

What we have witnessed the last few weeks should alarm everyone who understands and believes that democracy and free speech are inextricably necessary for their mutual survival.  Apprehending a permanent resident for organizing pro-Palestinian demonstrations without evidence of violent conduct, cutting federal funding of scientific research unless a university capitulates to the demand of the government as to how it should organize its internal affairs, threatening scores of universities with the same potential penalty for the same objective, threatening private businesses, including law firms, with legal action unless they cancel or modify their language and commitment to diversity, inclusion, and equity are unprecedented and naked attempts to influence free speech and expression. 

Before we go too far into the dismantling of our right to free speech, we need to keep in mind the following.  First, squabbles among private parties about the boundaries between free speech and unacceptable conduct are fundamentally distinct from the full force of the state when it attempts to dictate what is permissible speech and conduct in its expression.  Second, once a country falls in the practice of tampering with constitutionally protected free speech the door opens for future administrations to apply rules that work against the interests of those who sympathize with the tactics of the present administration.  In the long-run none of us is protected.  Third, our commitment to free speech is truly tested when we have to tolerate speech we abhor.

Finally, we need to realize that the argument that it’s not the content but the conduct that is prosecuted is the typical justification of illiberal and authoritarian regimes.  When autocratic governments crack down on news outlets, or the internet, or demonstrations – even peaceful ones, it’s not because the conduct or medium of expression is violent.  It is the content of the speech they are after.  It is the message that they try to prevent from going out.  So, what autocratic regimes do is either to expand the scope of impermissible speech – often by means of vague language, or to narrow the scope of permissible conduct.  I am afraid this is what is happening right now in this country.

As one commentator wrote, the protection under the First Amendment is a signal component of America’s national identity.  When dissenting opinions are suppressed by the state or by intolerant groups of citizens the eerie quiet of the graveyard will come from the tombstone of our democracy.

Blaming the elites, and especially the intellectual elites that reside in academia, the arts, and the professional ranks, is very fashionable these days.  They are accused of playing the meritocracy card too much, for being condescending on people with less education, and failing to recognize the contributions of blue-collar Americans.  This is the usual litany of arguments that focus on attitudes and cultural divides.  Even liberals who are members of the educated elites like to contribute to this critique.   

I do not doubt that educated people may appear to be smug given their justified or not sense of personal endeavor to acquire knowledge and skills, nor do I doubt that the overemphasis on college education has ignored other pathways to productive and rewarding careers.  The plight of many members of the working class is not, however, the result of wrong attitudes and the valorization of college education.  It is rather the result of political choices and corporate policies.  Apart from academia, the educated professional class found itself on the right side of the tracks only because these choices and policies favored people with knowledge and creativity.

So, what developments left blue-collar people behind?  The answer, of course, is globalization, technological advances, and the decline of unions.  Those behind these developments were corporate leaders, politicians from both parties, and that part of academia that professed confidence in the power of free markets to bring prosperity to the masses here and abroad. 

But not all intellectuals and politicians sided with this conviction.  Even more importantly, the credit of eventually documenting and publicizing the negative effects of that prevailing model came from academics.  It was that part of academia that brought our attention to the deaths of despair in the deindustrialized part of the country, the growing inequality of incomes and wealth, the buildup of an oligarchic capitalism, and the danger of the rising plutocracy.

How do we explain then that working-class Americans seem to side more with economic elites than educated elites?  After all, the members of the educated elites (professionals and academics) are also members of the working class.  Isn’t it curious that many populist Americans feel comfortable with a Trump administration full of members of the economic elite, the most prominent being Elon Musk? 

The late David Graeber, an anthropologist and co-author of “The Dawn of Everything,” offers a simple, yet reasonable, explanation on this subject in his posthumously published book “The Ultimate Hidden Truth of the World.”  The answer may be in the fact that most populists are found within the ranks of people that lack college education.  For this segment of the population, the path to social mobility and status runs more through engagement with the world of business than with the world of academia or that of the educated professionals.  After all, the dream of the self-made individual is associated more with business success than with conducting top research.  No wonder, therefore, that rich politicians exert a greater appeal to members of the working class.

Not only we have different elites, more importantly, their respective interests may often collide.  Whereas economic elites dominate the production of things, academic, cultural, and artistic elites dominate the production of ideas and creative interpretations of the human condition.  Academic research, ideas, and art often cast a critical eye on the conduct of business and its effects on society.  Understandably, economic elites feel uncomfortable under the scrutiny of the academic and creative elites to the point they sometimes try to muzzle their voice and influence.  Or, alternatively, the apologists of the economic elites turn the focus on the culture wars.

Thus, an often-heard criticism directed against educated elites is that they appear to look down on the members of the working class.  In the words of Nicholas Kristof (NYT, 2/23/2025) “…elites too often have lectured them (meaning the working-class individuals), patronized them or dismissed them as bigots.”  As I wrote above, educated people may come across as smug.  But is this enough to explain the resentment of working-class Americans?  Here is a thought:  why didn’t working-class Americans feel unrecognized and underappreciated in the decades between the 1940s and 1970s?  The most obvious answer to me is that these were years of solidarity and pride among blue collar Americans.  They had unions with bargaining power; union halls for social nurturing; a much fairer participation in the American dream; and the pride they were building a strong American economy.  They had a self-sustained confidence in their social status and labor’s worth.  Who shuttered all that?  The academic elites?  Not really.  All that sustained the social and economic status of the American working class was blown away by corporate policies enabled by a new allegiance of the political class to a model of unfettered capitalism. 

As the importance of the blue-collar workers waned and that of educated workers rose as a result of the transformation of the economic model and the type of skills needed to succeed, American society also started to drift into socio-economic silos and become more segregated by class.  Wealthy people retreated inside gated communities or exclusive urban and suburban enclaves.  The shrinking middle class of professionals and proprietors retreated behind zoning rules that kept worse off Americans out.  And the rest of the working class toiling in manufacturing, services, and farming were left in places lacking in public infrastructure and opportunities to take advantage of the digital age and share the benefits of a growing economy. 

And that was not all.  Just like shared prosperity became elusive for most people, shared responsibility in bearing the consequences of our national path also receded in our collective consciousness.  Immigration, quality of education and public goods, homelessness and poverty no longer affected all of us equally.  Home location became destiny in enjoying or not the good life.  Thus, home location became a mark of class distinction.

So, instead of fighting wars about cultural choices and attitudes, let’s go to the heart of the matter, which is to build a collective consciousness rooted in the imperatives of shared prosperity and shared responsibility. 

In recent posts I have written how the neo-liberal order came to an end and that we had entered a transition phase toward economic policies favored by the state, or more precisely by the party in government.  The use of tariffs in the first Trump administration and the enactment of industrial policy laws by the Biden administration to promote green energy and the tech industry set the pace to this transition.

Now, the speed with which the second Trump administration announced steep tariffs against Mexico, Canada and China and the strongest yet articulation of the America First doctrine are a clear signal that we are moving toward a new economic order, that of economic nationalism.  Economic nationalism is the ideology that subordinates the economy to serve nationalist goals.  In practice, economic nationalism disfavors unrestricted international commerce and investments and favors state intervention in the economy to achieve nationalist priorities.

The tension between free economic activity and nationalist priorities has a long history.  Alexander Hamilton was one of the Founding Fathers that supported the use of protectionist policies, like tariffs and import restrictions, to give the new nation enough time to develop its own industrial base.  This approach was subsequently developed further by others and came to be called the developmentalist theory.  On the opposite side, Marxism-Leninism subordinated nationalism to the imperative of uniting workers on the base of their class status.  And, interestingly, free market ideologues like Fredrich Hayek also saw a lesser role for strict nationalist interests that would impede consumers and entrepreneurs from coming together in supra-national markets. *

Economic nationalism rises out of the realization that left unchecked an economic system may not promote the interests of the nation as understood by a governing regime.  But it goes beyond the need to intervene in the economy to boost its growth or influence the distribution of economic output across labor and capital.  Economic nationalism aims more specifically in achieving economic and by extension military superiority over other nations. 

Economic nationalism is not mutually exclusive with capitalism.  It only means that a capitalist economy is allowed to function within the confines of a nationalist agenda.  A good example of that is China.  However, whereas capitalism at some level recognizes the benefits of win-win economic cooperation and trade, nationalism views relationships between countries as a zero-sum game.  Therefore, to a nationalist, success is dominance and supremacy over other nations.  This implies that nationalism can fuel inter-country antagonisms that, if unchecked, can lead to open warfare.

Nationalism should not be confused with patriotism.  Yascha Mounk (The Great Experiment: Why Diverse Democracies Fall Apart and How They Can Endure) writes that healthy patriotism inspires citizens to do their best to improve their country and the well-being of all its citizens.  Nationalism is more about prevailing over other countries.  Therefore, nationalism is preoccupied more with success at the country level and less with promoting the common good at the level of individual citizens. 

To be more specific, an economic nationalist agenda can be satisfied with the built-up of powerful firms that dominate their markets domestically and internationally.  Similarly, economic nationalism prioritizes the maximization of the country’s GDP.  Large corporations and high GDP enable the state to pursue diplomacy by military and economic means, which, however, by themselves do not necessarily improve the living standards of the citizens.  Prioritizing economic size and strength does not guarantee fair distribution of economic gains or social progress.  In fact, American workers without college education that had been left behind by the neo-liberal order are at great risk of being left behind again by economic nationalism.    

Furthermore, prioritizing dominance over co-existence, economic nationalism is loath to placing constraints to curtail environmental and climate degradation or put checks on dangerous technologies, like AI.  In addition, if goals to serve domestic and foreign priorities of the state shift in an unpredictable way, both firms and consumers are exposed to uncertainty that can upend consumption patterns and investment plans.  All these downside possibilities ought to be a serious cautionary note for those who are ready to praise the current turn toward economic nationalism.  

Economic nationalism also carries serious risks affecting the global order, and in the case of the US, its leadership position.  Writing in Foreign Affairs, Michael Brenes and Van Jackson argue that the broad nationalist streak that runs through the second Trump administration will further erode if not irreparably damage the international order set up by the United States at the end of WW II.  Withdrawing from the institutions and initiatives of this order will diminish the leadership role of the US and incentivize other countries (China primarily) to fill the gap or coalesce into their own blocks, like the BRICS.  Antagonizing its traditional allies will diminish not strengthen the position of the US and its ability to negotiate a new set of global rules with other rising powers, like China and India.  Nor will it help to win over the Global South where most of the global population and economic growth will take place.

The American people have made it clear that they desire a reset of the economic order.  However, placing already dominant firms, especially in the tech sector, at the helm of the new order and giving them the advantage of protection from foreign competition is not what by itself will make American workers and consumers better off.  Instead, it will further embolden these firms to quash competition, stifle innovation, and extract economic rents from workers and consumers in the form of unfair wages and higher prices.

*From the site Nationalism and Capitalism run by Karlo Basta, a lecturer at the University of Edinburgh.