Let's Reason

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.

Some time ago, as I was reflecting on the effects of technology, I realized that the ability to work, learn, and spend leisure time without much of human interaction is not a recent phenomenon.  Or, more precisely, it did not start with the digital age.  Instead, the trend has been there since humans started to invent and use technology.  Since the invention of the first tools (like a sharp stone to cut meat) or the first weapon (like a pointed stick to use as spear) humans discovered they could do things with less or no in-person interaction with fellow humans.

So, I started to write down the list of activities that needed less human in-person interaction and collaboration.  Agriculture, transportation, recreation, entertainment, manufacturing, war, education, health care, socialization, and more.  It is true, though, that not every invention pushed us apart – not right away at least.  For example, agriculture, for millennia, drew people together to till the ground, sow it, and harvest the crops.  But then two hundred years ago agricultural work started to become mechanized.  Today, one person operating a combine can do work that before brought many farm workers together.  Or take the invention of movies.  It brought us into cinemas enjoying together the magic of the moving image.  But then television came and later yet streaming.  Now many cinemas have closed and others hardly survive.  Technologies can bring us together but, as they advance, they eventually push us into silos of solitary life.

The invention of the internet, the smart phone, streaming, social media, and more came with the expectation that they would connect us on a global scale.  Thomas Friedman captured the promises of this new wondrous potential in his book The World Is Flat.  Twenty years later, we are finding that humanity is not coming together the way we would like.  Instead, we are drifting away from each other.  The social, psychological, and political effects are already documented in many books and essays.  So, I was not surprised when I saw the feature article of the February 2025 issue of The Atlantic to be titled The Anti-Social Century. 

Its author, Derek Thompson, cites a number of statistics that describe the dramatic changes in socialization.  In-person socialization has declined 20% between 2003 and 2023.  Among unmarried men and individuals below 25 it has decline 35%.  Meetings among school-age boys and girls outside school fell by 50% between the 1990’s and 2010.  Other more usual outlets of socialization, like church attendance, membership in civic societies or book clubs, and joining others in volunteer work are also down.  What is worrisome to Thompson is that people, especially young men, deliberately seek solitude.  But solitude can turn to loneliness which can negatively affect one’s health, physical and mental.  In fact, the Surgeon General, Dr. Vivek Murphy, has declared the “epidemic of loneliness” as a major public health issue.

Robert Putnum, author of Bowling Alone and The Upswing, had documented this withdrawal from the social marketplace years ago and even before the advent of digital technology.  He had estimated that socialization in general had declined 45% from the 1970’s to the 1990’s; and then it declined again another 32% as we moved into the 21^st century.  Obviously, whatever factors had triggered the pre-digital decline in socialization, they were turbocharged by digital technologies.

Innovations powered by Artificial Intelligence have the potential to push us further into solitude.  Whether it is through software or physical robots, we will soon be able to have our own personal assistants.  The more the algorithms in these assistants are trained with our personal data the more they will be able to interact with us as human-like creatures. 

However, withdrawing ourselves from the “town square” and interacting through emails, texting, Facebook, Instagram, and other means we deprive ourselves the opportunity to experience the presence of others up-close.  Thus, our guards against rudeness, aggressiveness, hostility, and disregard for truthfulness fade and so do our emotions of empathy and compassion, and our sense of respecting other people’s feelings.  We all know that we display more restraint and thoughtfulness when we interact with others in person than digitally.  Thompson warns that abandoning the social space of the “village” for that of a tribe is a dangerous development for our social fabric.

This on-going breakdown of social spaces into atomistic spaces reminded me of the concept of entropy.  In plain terms, entropy rises when a very orderly and concentrated system (think of a box of matches) becomes disorderly and scuttered (like the matches strewn on the floor).  Well, as I discovered, sociologists have used entropy to develop theories of social disintegration.  Thus, societies that display this tendency, that is, moving from tight and concentrated relations to less concentrated and eventually entirely individualistic, are called entropic societies.  So, another name for this century would be the socially entropic century.

Social entropy, however, differs from entropy in physics.  In the universe entropy constantly increases and cannot be reversed.  On the contrary, social entropy is reversible.  But to reverse social entropy (i.e., disintegration) we need to apply energy.  This means if I want to interact with others, I must pick up myself from the couch, make phone calls, and arrange venues and types of social interaction.  This has a sobering implication.  As new technologies facilitate non-human interactions and the more we fall into the mood of solitude, the more energy we need to return to socialization.  As we saw in the aforementioned statistics, the trends do not bode well for reversing social entropy.

If that’s where we are, we should then ask how we can arrest our social drifting.  One solution is to build up our social infrastructure.  That means restoring the “town square” in our neighborhoods, that is, public libraries, pools, art venues, clubs and so on.  Another response is to check technology.  A social researcher has even proposed that we adopt the Amish approach toward the use of technology.  As we know, the Amish have forsaken the use of modern technologies in order to maintain a traditional way of life commensurate with what was available in the 17^th century. 

We do not need, of course, to be as extreme.  But if we value social cohesion and human interaction, we need to think hard how to balance economic efficiency and technological progress with the very human need for in-person cooperation and socialization. *

* A good example of how economic and technological efficiency can harm social interaction is the case of the huge retail chains.  Each time a Home Depot or Target moves into an area, hundreds of mom-and-pop stores close down.  Likewise, Amazon has mostly eliminated the neighborhood bookstore.  All these local stores were the places where local people met neighbors and town folk.  We have gained in price and delivery efficiency but we have drifted away from each other.  

Even before his passing, Jimmy Carter had garnered much praise for his unprecedented post-presidency contribution to the common good here and abroad.  In fact, his presidency itself did not lack accomplishments either, notwithstanding the hostage crisis after the Iranian Revolution.  There is one particular, albeit less mentioned, area where the Carter presidency played an important role in the transition between two economic orders.  In this respect, the Carter presidency shares something common with the presidencies of Donald Trump and Joe Biden. 

Carter was elected at a time when the luster of Keynesian economics was fading and the appeal of the progressive ideals embedded in the New Deal and the Great Society was dimming.  Thus, the Carter presidency occupied the transitional phase between the progressive economic and social policies of FDR and Lyndon Johnson and the “government is the problem” politics of Ronald Reagan and the ushering in of neoliberalism.  Similarly, Donald Trump was first elected by capitalizing on the discontents of the neoliberal order that had unsettled ordinary Americans.  His assault on free trade and his support of America-first economic policies shook the foundations of neoliberalism.  His successor, president Joseph Biden, further bolstered the notion that national interests rise over those of free markets, thus extending the distance of the American economy from the neoliberal economic model.

The Carter presidency became consequential for the transition from progressiveness to neoliberalism by the force of several factors.  First, the opponents of the New Deal had started to built considerable intellectual capital.  Their center was the Mont Pelerin Society founded by the Austrian economist and enthusiast of unfettered markets Friedrich Hayek in the late 1940’s.  It soon became the hub of advocates of laissez-faire capitalism, the most prominent of them being Milton Friedman.  A second factor was the influence of Ralph Nader who although not a neoliberal, disdained the power of big corporations over consumers.  The solution to this problem was to curtail corporate power by either enhancing competition or imposing consumer protection regulations.  The result was a re-centering of the government’s attention from workers to consumers.  Finally, Carter surrounded himself with an economic team that was more open to free market ideas.  Thus, the New Dealers found themselves outside the centers of power.

The cumulative result of these forces was a push for deregulation that included the airline, trucking, and railroad industries.  At the same time, new legislation aggressively supported by the Business Roundtable started to erode the power of labor unions.  The oil price shock caused by the Iranian Revolution and the inflation that followed led to the appointment at the helm of the Federal Reserve Board of Paul Volcker who was determined to fight inflation at all costs.  In the closing years of the Carter administration and during Reagan’s first term, the anti-inflation fight led to a severe recession that raised unemployment, weakened labor unions, and drove wages down.  Labor unions and wages never recovered from this retreat.

It is not certain whether Carter intended to change the structure of the American economy or just tinker at the edges.  However, he was less attuned than previous Democratic presidents to the idea that the state was an important force for positive change.  Emblematic of this sense is the following quote from his 1978 State of the Union: “Government cannot eliminate poverty, or provide a bountiful economy, or reduce inflation, or save our cities, or cure illiteracy, or provide energy.”  According to Gary Gerstle (The Rise and Fall of the Neoliberal Order”) this was a shocking rupture from the core principle of progressive economics that government can do good. *

This brief account shows that Jimmy Carter by his own decisions and by the influence of the surrounding intellectual and political forces opened the door to a new economic model, one more fully articulated and put in place by Ronald Reagan.  This, of course, was the neoliberal model, which matured and survived through the presidencies of two Republicans (George H. W. Bush and George W. Bush) and two Democrats (Bill Clinton and Barack Obama). 

The new order, especially through its openness to international trade and business, turned out to be disastrous for working class Americans who lost jobs to cheaper labor countries.  The lack of an adequate safety net to absorb the shock of lost jobs or a systematic plan to retool American workers for the new global economic order can account, among other reasons, for the general sense of disenchantment and populism that brought Donald Trump twice to the presidency.

While the neoliberal order is on the way out crushed by the weight of its severe crises and undelivered promises, no one can know what will follow it.  The expectation that the pendulum could again swing toward an era of progressive economic policies cannot be justified as a historical necessity.  For one reason, the progressive forces within the Democratic party have yet to gain dominance.  Although the legislative victories of the Biden Administration have had elements of a progressive agenda in the areas of fighting climate change, promoting green energy, and improving access to health care and social services, the essential pillars of a progressive agenda were not put in place. 

Such an agenda would start with first restoring the ideal of the common good.  It would also include: rebalancing the influence of capital and labor so that working people can claim their fair share of economic rewards; return competitiveness to markets so that new firms can survive and continue to innovate before they are taken up by huge corporations; bring democracy into corporate governance so that single individuals do not run enormous and highly influential enterprises all by themselves; and admit the state as a partner in the production of goods, like education, health, housing, and basic research, where private markets are not as efficient.

As things stands now, the neoliberal order has degenerated into a plutocratic and oligarchic capitalism that fails the tests of market competitiveness and social mobility.  It is unclear how the incoming Trump administration plans to reverse this state of affairs.  If anything, we seem to be headed into an oligarchic, feudal economic order where super-rich and super-powerful actors (like the barons and counts of past centuries) challenge the state in order to extract more economic benefits for themselves.

My sense is that only after we have experienced enough of this corruptive version of capitalism, we may master the will to design a new sustainable and hopefully fairer economic order.

* Besides Gary Gerstle, my other source was Zachary Carter’s The Price of Peace.

I often come across an opinion piece that assertively proclaims something like “Not Like Europe.”  By that the author means that the US should not run its business like Europe does.  And by business they mean economic and social welfare policies, health policy and so on.  Europe, of course, has its own fair share of maladies and crises, but it is also a relatively young political entity.  Its life as a single market is just over thirty years old and its smaller version under a single currency is 25 years old. 

And yet, in spite of its young life and a much more fragmented authority across independent and sovereign states, Europe stands out as a viable alternative model in economic and social policy.  This is of particular importance now as the world stands at the crossroads of challenged national priorities, intensifying international rivalries, and the search for a new course.  If we have learned anything from recent events, it is that the model of liberal democracy loses its appeal when it fails to deliver to all citizens.  In the context of global competition for political and economic systems, the beneficiaries are the Chinese one-party rule model, and the one-man rule best exemplified by authoritarianism and crony capitalism as in Putin’s Russia.

Western liberal democracy itself is not a monolithic entity.  Although the core of political and civil liberties is basically the same, there are distinct differences in economic and social policy between the US and Europe.  If we want to summarize these differences it comes down to this: whereas the US prioritizes production over distribution of the aggregate economic output, Europe is more willing to prioritize distribution even at the expense of production.

Americans’ focus on aggregate output is usually behind our scolding of Europeans for their poorer performance in this connection.  But success in aggregate numbers can blind us from noticing failures at the level of the individual citizen.  Eventually, political systems are judged by whether they can meet the needs and aspirations of their citizens.  We have just seen in the US that a plurality of voters set aside concerns about threats to democratic rules and norms in favor of their economic anxieties.

The similarity in the political and economic organization of the US and Europe offers us the advantage of what researchers call a natural experiment.  That is, we can judge the validity of the aphorism “Not Like Europe” by checking how well we do in comparison to European nations.  To that end we can turn to a slew of international comparisons.  This approach is not without flaws but it is not worse than the one taken by those who postulate the superiority of the American model.  In fact, I would argue, raw international comparisons offer a good amount of food for thought.

This fall the OECD (Organization for Economic Cooperation and Development) issued its Better Life Report that ranks its members according to various economic, social, and human development indicators.  As expected, the US ranks very high in economic indicators, like income, jobs, and housing.  Not so high though in indicators related to social conditions and human development.  Thus, in health and quality of environment we rank 8th and 9^th.  Despite being second among OECD countries in expenditures per student at all three levels, we rank 20^th in terms of student skills and educational attainment.  In indicators related to overall quality of life, like safety, community and relationships, life satisfaction, and work-life balance, we rank 28^th, 17^th, 14^th, and 29th, respectively.

Community and work-life balance deserve special mention.  Recent studies have provided ample evidence that a significant percentage of Americans suffer from loneliness and lack of meaningful friendships and relationships.  Despite the intense engagement with social media Americans feel more isolated now than in the past.  Could this be due to an overload of work?  In fact, Americans allocate to work a lot more hours than Europeans.  Thus, in 2023 Americans worked on average 1705 hours, a lot more than the 1342 hours worked by Germans or the 1487 by French.  This significant disparity in hours worked also explains the bigger GDP produced by the US relative to the European Union.  However, despite working fewer hours, Europeans in West and North Europe are able to achieve better results in overall quality of life because of a more efficient mix of public and private markets.

Besides the OECD report there are other international comparisons that tell us how we measure against other countries.  For example, in the UN comprehensive Human Development Index we rank 20^th.   Compared to European countries we have the highest income inequality and despite our greater aggregate wealth we have inexplicably high poverty levels.  In life expectancy we are 48^th.  Our infant mortality rate is a multiple of what it is in countries like Norway, France, and the UK.  The same is true in relation to maternal mortality rate.

The above findings show that our stellar performance as measured in GDP does not buy us top health, top education, or top quality of life.  This does not mean that a large number of Americans does not enjoy the best of all things in all these categories.  But this implies that our subpar overall performance as a nation is due to the fact that an equal if not bigger number of fellow Americans enjoy so much less of the things that make life better, safer, and healthier.

The fault lines of this uneven enjoyment of quality of life run across race, class, and states.  Still to this day, Black and Latino Americans lag their fellow White Americans in education, health, employment, income, and wealth.  The two-thirds of non-college educated Americans also lag college-educated Americans in health, mortality rates, as well as jobs and income.  After all, their disillusionment with the efficacy of the political system to deliver a better life has contributed to the recent realignment of constituencies in the country. 

Of course, not all European nations compare favorably to the US.  But not all states in the US are at par with each other either.  Instead, there are stark differences.  In educational attainment, income level, quality of health and medical care, drug abuse, opioid-related deaths as well as marriage and divorce rates and births out of wed lock we do not have one but multiple Americas.

There is an interesting pattern in the outcomes we see across countries and US states when it comes to indicators that proxy for overall quality of life.  Countries and states that achieve better outcomes are more likely to have governments, and in many cases national policies, that seek to alleviate gaps in opportunities, eliminate discrimination, and achieve a better distribution of economic output.  This latter objective is achieved either through pre-distribution, that is, by ensuring better wages from work, or redistribution, that is, by providing a safety net that shields their citizens from the vagaries of life, like illness and unemployment or just bad breaks in their lives. No matter how we choose to look at the data, we realize that if there is such a thing as American exceptionalism, it is only found in the fact that the richest country of the world is not fairly delivering to all its citizens the necessities of a good life.  I don’t want to sound so naïve as to advocate that we can achieve absolute equity.  But when we see that our extraordinary wealth leaves so many of our fellow Americans behind, we owe to do better.  Which means that the path forward ought to be the reform of our zero-sum paradigm to one of a more inclusive and fairer system where success is measured at the level of the citizen not of the aggregate output.

About four years ago, I wrote a post about the first twenty years of this and the last two centuries.  Unlike the 19^th and 20^th centuries when the Napoleonic Wars and World War I laid waste to Europe, the first twenty years of this century were free of major military confrontations, and they held the promise of a more peaceful and prosperous future.

Now as we approach the mi-2020s, it starts to feel this decade may be the prelude to worse things just like the 1920s was a hundred years ago.  In the case of the 1920s we do know that they ended with the Great Depression, and eventually with the rise of fascism and a global conflagration in World War II.  What is in store for our own 2020s is difficult to predict but its first four years are full of ominous signs.

What followed the 1920s can be traced in the extremely onerous reparations imposed on the defeated Germans, followed by nationalist policies of economic antagonism that culminated in outright warfare.  In a similar way, we can trace the current unraveling of world affairs in the mismanagement of the Post Cold War period.  For many, this period is over but nobody can predict what comes next.  The reckoning is especially painful to the Western democracies which, in the ruins of the Soviet Block, saw the triumph of liberal democracy and capitalism – all that captured in Francis Fukuyama’s famous 1989 article “The End of History.”

In fact, people have come to distrust both liberalism and capitalism.  By the second decade of the 21^st century, it had become clear that the neo-liberal order (unrestrained markets, trade, and finance) was falling short of producing shared prosperity and global peace.  Deindustrialization in the U.S. and much of Europe had decimated blue color communities and the Covid 19 pandemic generated fears of supply chain dependence on foreign, often rival countries, like China.  Those left behind, mostly the blue-color working class, came to blame liberals for their faith in technology and globalization. 

It is an irony that an international economic order that was heralded as the catalyst for global prosperity and peace has led us back to the 1920s world when national priorities became an impediment to international cooperation.  Although private companies reaped enormous profits from the globalization of markets and production, the execution of this grand design turned out to work against the interest of workers and national security.  Thus, as in the 1920s, Western countries, starting with the U.S., have already begun to adopt the defensive tactics of tariffs and trade restrictions that a hundred years ago pushed the world into the Great Depression.

A global economic order cannot be sustained outside a stable international environment.  That was what Pax Britannica provided for most of the 19^th century.  In the post WW II years, the U.S. became the de facto enforcer of the so called “rules based international order.”  But now in the opinion of many, this order seems to be slipping away.  The blows to this order have come in various fronts during the Post-Cold War era.  Here are some questions that beg for answers.   Why did the West fail to engage the post-Soviet Russia in a way that would align it with the West?  Why was the Arab spring left to fray and revert to authoritarianism?  Why is the Middle East a cluster of dysfunctional or autocratic Arab regimes, despite intense U.S. involvement, both military and diplomatic, in the area?  Why has America failed to contain the wars in Gaza and Lebanon despite huge civilian and infrastructure losses?  What will the end of the war in Ukraine mean for the inviolability of national borders?  Can we afford to turn China from a capitalist comrade to a mercantilist foe?

In his recent Foreign Affairs article “A Foreign Policy for the World as It Is” Ben Rhodes, a former Deputy National Security Adviser to President Obama, offers a highly critical view of the current state of the “rules-based international order.”  Rhodes writes that our professed commitment to human rights sounds hollow when we keep cozy relations with illiberal and oppressive regimes.  And our tendency to turn a blind eye to the violations of international law by our allies while we castigate our enemies for the same has undermined American credibility, especially across the Global South.  In short, Ben Rhodes concludes the “rules-based international order” is gone and we have to accept the world as it is, with multiple nations from China and Russia to Brazil and India challenging American hegemony in world affairs.

As the international order in economic and security matters is collapsing people feel less secure and look for simple answers to complicated problems.  This is a fertile ground for strong men to rise and lead populists and nationalist movements.   We know from the 1920s and 1930s that when a climate, real or due to misinformation, of insecurity and frustration overtakes a nation, people seek radical solutions, even if grounded in authoritarian tactics.   And this is what we see in the U.S., Russia, Europe, India and elsewhere. 

The challenges liberal democracy is facing in Western countries, does not bode well for the state and future of democracy in the rest of the world.  There is a reason for that.  Although the neo-liberal economic order is on its way out, liberal parties have yet to develop a compelling vision to convince their citizens that democracy can work for all.  Nor have they developed ideas how to reorient their economic models toward the goal of shared prosperity. 

While democracy and international cooperation flail, critical issues of universal concern, like climate, Artificial Intelligence, and international economic relations, are pushed to the back burner.  All three issues require international cooperation if we have a chance to come to peaceful and constructive solutions.

If the U.S. withdraws its cooperation and involvement from these critical areas of global concern, then its leadership role will diminish further and the odds of global instability will rise as others will certainly try to transplant the U.S. as world leaders.