Posted on

GEOGRAPHIES OF REFERENCE

My young friend (and nephew) Florian Pellet recently posted a 1997 article from the Cato Institute (Boaz, David. Creating a Framework for Utopia, Vol. 31, No. 6, November/December 1997) as an interrogation on what it means to be a libertarian. The article coincides with a number of my own preoccupations regarding the management and care of public spaces. As I am into my 18th year living in France and it has been 15 years since the article appeared, I believe this article is ready for commentary: the key insights concern not only time and historical context, but essentially geography. Here’s why.

The article, “Creating a Framework for Utopia” offers an enticing view of the Libertarian philosophy as a philosophy of individual liberty and community self-determination. It makes a strong argument for the freedom to innovate and the right to self-determination. But, as the author implies clearly in his title, “Creating a Framework for Utopia”, he is not concerned with practicalities but with daydreaming about a world in which we are free to pursue our dreams unfettered by practical consideration.

As a plea for a libertarian Utopia, a number of major fallacies very quickly become evident. The first, and the least forgivable of the author’s intellectual shortcuts is his very obvious anti-government bias. For Boaz (and writers published by the Hudsun and Cato institutes generally) “that government is best that governs least”.

How often have we heard this platitude? And how often must we hear it more before we learn to question such simple mindedness?

To paraphrase the United States’ founding fathers, gathered in Philadelphia and prepared to risk all for “Life, Liberty and the pursuit of Happiness”, governments are instituted among men to secure these rights. After a bloody and ill-financed seven year war of independence and after a six-year experiment in confederation politics, many of the same founding fathers agreed to a centralized union governed by a membership charter, the United States Constitution. The preamble to that document reads:

We the people of the United States, in order to form a more perfect union, establish justice, ensure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

It was understood then that a government (by the people and for the people, if you will) was necessary to ensure the public good.

What is missing from the Boaz article is not only that governments are necessary, but any mention of the values that such governments serve: the public good defined by a majority of citizens through their representatives met in Congress. Indeed, such governments are necessary and even to be hoped for because of their capacity to create and promote “public values”.

These ideas are so fundamental as to be pointless in repetition. And yet, if we do not repeat these truths we are likely to miss the fact that these truths assume the existence of a public good, that there is a greater public good in well organized (and governed) collective living than in individual selfish organization.

The second fallacy in the Boaz approach is the implicit assumption of market efficiency and the author’s failure to so much as acknowledge market failure. Fifteen years down the road from Boaz’ original work, the evidence of market failure is all too evident: the 1999 reform of United States banking laws (the Gramm-Leach-Bliley Act) which created banks “too big to fail” led to the 2008 world financial markets meltdown; Increased concentration of media power and the relaxation of media ownership rules in 2003 led to complacency in following the Neoconservatives as they manipulated public opinion and a weak president; Merger and acquisition approvals from the Department of Justice far too numerous to count have resulted in anticompetitive markets where high barriers to entry encourage the creation of economic power at the expense of innovation. Absent responsible regulation, the “market approach” to regulating public spaces consistently fail to produce “socially desirable” outcomes.

Why the quotes around “socially desirable”?

Because social desirability is the quality expected and the end result of a political process and public policy.

Competitive and accessible education for the brightest and the best is a socially desirable outcome, public healthcare and a confident, healthy workforce are socially desirable outcomes for their benefit to worker productivity, a vibrant and competitive media landscape is a socially desirable outcome when you consider the importance of an informed citizenry. And yet, for each of these examples (and there are others) we Americans have accepted mediocrity: in education we have accepted that a liberal arts education should be an exercise in a student’s ability-to-pay, or at least, mortgage his/her future (although to be fair, localized and community based alternatives exist). With respect to health care it remains to be seen whether Public Health Care as it is now conceived will deliver on its public policy potential. Concentrated and monopolistic media ownership have led to complacency on critical national issues – the matter of public safety and security, the right of privacy, global warming and the depletion of major national aquifers.

Markets do fail and the social ills which confront America today are largely a reflection of those failures.

The third and perhaps most important fallacy in the Boaz argument, is the author’s failure to account for the practical aspects of geography in his Utopia. Boaz develops as a central premise the idea that historically there is tension (and competition) between centralizing and decentralizing views of authority. He notes that for any “country larger than a city, local conditions vary greatly and no national plan can make sense everywhere”. But, rather than develop the attractiveness of local scale for market economies, Boaz launches into a discussion of “economies of scale”, a traditional and well documented approach to the creation of wealth.

The issue is not the creation of wealth, but the scale at which wealth is created and redistributed as a matter of fairness and equity.

Boaz writes in his section of a “Framework for Utopia”

What we need is not utopia, but a free society in which people can design their own communities.

I couldn’t agree more.

But it is not enough to agree; one must understand that community is first and foremost geographic. It is rooted in place. It exists and is viable because of water resources or fertile land or access to some special ingredient that gives its inhabitants and the inhabitants of its trading area a competitive advantage in producing a tradable surplus.

Wealth creation is a matter of trade and tradable surpluses. And it is here that market theory becomes relevant. One cannot trade if one does not have producers of goods or buyers willing to exchange for those goods.

Trade and comparative advantage are central to the economic functioning of the community and geography is the sole criterion for sustainable development. But geography is not of itself sufficient to explain community development. Communities exist within hierarchies of communities and share specific values by treaty or by acknowledgement of suzerainty.

For instance, cities that participate in the hierarchy of French cities share a language, a set of laws, ideals about social justice and the meaning of life. They acknowledge a shared history in terms of a succession of events. By the same token, the cities that participate in the Mediterranean hierarchy of cities share a water resource and acknowledge a shared history of rivalries and outcomes as do the cities and communities on the North Sea and of the Baltic and Black seas.

It is these stories that create sustainable human relations, not the pursuit of riches or the accumulation of wealth. It is shared stories such as these that create the conditions for sustainable redistribution of wealth and for cooperative development, in short, the conditions for creating a utopia of cooperating and prospering communities.

Posted on

COMPROMISING NATIONAL AUTHORITY

This post was originally written and shared with an old friend, Bud Oakey (see Thoughts from Bud
). As I write, the run-off candidates, Nicolas Sarkozy (who received 27.18% of first round votes) and François Hollande (28.63%) are maneuvering for the second round  scheduled for Sunday, May 6. The rhetoric of the second round has been of very high quality and a real national debate is actually taking place on issues such as the social responsibility of the financial industries, resident migrant rights and citizenship as well as the issues raised in this article. With feed back and encouragement I will be pleased to continue sharing.

The problem posed by the French election is how to reconcile French national ambitions and perceived global responsibility as a nuclear power and the world’s fifth economy with diminishing expectations at home and the difficult sustainability of the French social model.

First though, we should take a moment to understand what the French understand as their “social model”. The French government does what it does in the international sphere to promote French industry and create national wealth. It sells Rafale jets, negotiates treaties, builds nuclear reactors and high speed trains and signaling systems. The fruit of this work is national income or the “common wealth” which is captured through income taxes (a regressive tax which produces a relatively small percentage of fiscal revenues), value-added taxes (a consumption tax paid by everybody across the board and representing the bulk of French government revenues) and property taxes which are collected by the national government but essentially redistributed to local authorities. (You should note that education, health services, fire and police protection are organized and financed nationally.)
The question is, what should be done with excess wealth? In other words, how should it be distributed?
Some say the excess wealth should be kept at home and used to “ensure the domestic tranquility”, i.e. support a 35-hour work week, retirement at 60 years and a high minimum wage, saying, “after all, we earned it”. These people do not generally concern themselves with paying down sovereign debt or the competitivity of French industry. The other side argues that this national wealth should be reinvested in promoting the productivity of French industry, and that the French labor, despite apparent productivity, has not worked hard enough (they are overpaid) or long enough (retirement should be postponed to 65 or 70 to reflect longer life expectancies).

I have no doubt about where I stand on these issues, except that Sarkozy’s flamboyance, his in-your-face style sends a message that quite understandably offends French sensibilities. (We should note that the threshold for being considered “flamboyant” in France is much, much, much lower than it is in Italy, for instance, where Berlusconi flaunted his money and virility to make a mockery of virtue and traditional Italian values.)

So what we have on the one hand is a socialist party organization that smells the blood of a wounded adversary and positions its candidate as the “mild mannered, nice guy next door” devoted to his party, best-in-his-class public servant and scorned husband to boot. (It does not hurt him that many French find his former wife, Ségolène Royal to be an ambitious woman who lost patience with her plodding husband and ran for president herself.) Here we have a first reflection on how the social model is broken, or at least, “exposed” in an unwelcome way. The French genuinely believe in women’s liberation but found (in 2006/2007) the public behavior of the outgoing and rhetorically brilliant wife of the Socialist Party First Secretary (at the time, François Hollande) pushy and somewhat misplaced. Even so, the Socialist Party today is not offering anything new. It is merely offering old wine in new bottles.

On the other hand, Sarkozy has governed well but the rashness and impetuosity of youth. In my opinion he gambled his political capital on reform. Also in my opinion, he won his bets. France is better and stronger for his first term (five years) and for his management of the sovereign debt and Euro crisis. But how much of this success is due to the man and UMP party faithful, and how much of this is the result of the inevitable, of bureaucratic (in the noble sense) continuity?

Unfortunately, the Sarkozy camp are discouraged, and two days out from the first round of the general election, don’t see their way to a clear-cut victory. And also unfortunately, the left has fielded two excellent candidates (in the sense of competitive politicians) who between them stand a chance winning over 50% of the popular vote on the first round. (Because they are two candidates there will still be a run-off. But if the left remains united that does not augur well for Sarkozy.)

The “financial” versus the “real” economy
Any analysis is necessarily a simplification, a reduction of complex processes to a single snapshot in time, and that, a snapshot described through the eye of the beholder, in this case your friend and humble servant, moi.

Since 1984 France has been reforming its institutions to provide greater autonomy and freedom of action to its territorial administrations. By order of size, these are, from largest to smallest, 27 regions corresponding more or less to the feudal divisions annexed to create modern France, 83 departments (sometimes compared to counties) set up following the Revolution of 1789 as the administrative units for implementation of public policy. And finally, there are some 36,000 cities, villages and towns, of which only 255 are “cities” of more than 30,000 inhabitants. It is in these cities that the “real economy” takes place.

The gutting of French industry by low-cost producers (read, low labor-cost producers) has a deep effect of the viability of these local economies in a globalized and globalizing world.
With the advent of consumerism (an economic layer predicated on the need to consume to ensure full employment and productivity), the disappearance of physical barriers (both transport and telecommunications) village and town communities are threatened with transformation as supply territories, destined for rural impoverishment by big city “consumption machines” that monopolize energy and concentrate resources to accumulate ever more wealth. We are talking here, about megacities and urban centers, as well countries and ideologies.

Some on the left maintain that our troubles are produced by globalization and the blurring of traditional barriers. Others, mostly on the right, argue that the French are not sufficiently globalized, that France must defend itself from cultural and economic colonization, not by protectionism and introspection, but by offering new models of social organization, renewing the national capacity for empathy as a means to resolve persistent (and growing) inequalities, not only at home, but as humans. There is no turning back. If we are to survive as a species, to retain stewardship of the blue planet, with its oceans, forests, atmosphere and soils rich in diversity and teaming with life, we much propose new models of growth and social authority.

What does all this mean for the choice of candidates in 2012?
The 2012 general election presents a choice between those who slow the pace of globalization and if that were to prove impossible, erect barriers to ensure that for them at least, the world would not go too fast and those who consider that liberal democracy is the way forward: On the one hand, reactionaries and would oppose modernization by obstructing, and on the other hand those who believe that for France and indeed, the world, the only way forward is through closer integration and improved stewardship.

Stated this way, the choice is obvious. But from a French perspective, looking at Sarkozy the flamboyant, man of power head of state, the choice is somehow transformed into a choice between consumerism and family values, between the local economy which the French left has fairly successfully coopted, and the globalized economy and progressive colonization by financial, political and industrial elites.

The candidate who most engaging is Jean-Luc Melenchon. I think this is because he is an effective speaker, a performer with a populist socialist message. He is to the far left of the socially acceptable socialists and he is dangerous, like a bad-boy lover. One of the articles of his platform is constitutional reform, a 6th Republic. I cannot imagine that this would benefit France in anyway, but it is useful to think that the alternative to another five-year term with Sarkozy would be constitutional reform. And that is not an option!

Finally, and to his credit, it should be mentioned that Sarkozy has been open to shared sovereignty in areas that can no longer be successfully managed as national domain; the seas, the atmosphere and carbon entitlements, food security and water. Europe needs effective institutions, and the way forward clearly lies in strengthening these. The direction offered by the Sarkozy camp is the only way forward if you would live in the Star Trek utopia proposed by Jacques Cheminade (currently polling less than ½ of one percent) while avoiding the disaster of the shy, teddy-bear-like anticapitalist, Philippe Poutou (currently polling less than 1% of first round voting intentions).

Posted on

Economic Misinformation and the French Election

Mark Weisbrot, co-director of the Center for Economic Policy Research (CEPR) recently produced a convincing analysis and alternative view of the stakes in France’s run-off elections. You will find the article, “Economic Misinformation plays a Major Role in French Election” on-line at www.cepr.net.

I have long felt that there was little sense in comparing U.S. and French income figures, largely because French productivity is higher for the most part. His employment analysis for males in the 15-24 age bracket however, had escaped me and of course, makes perfect sense. I wondered how Mark’s mathematics-of-unemployment calculation would hold for other segments of the population…?

I wonder whether Mark Weisbrot’s evaluation of the Sarkozy measures were correct, or even, if correct, whether they fairly represent the economic issues currently debated here in France.

What Sarkozy is promoting is labor market flexibility, not a redistribution of wealth as claimed by Mr. Weisbrot. (While the difference may be semantic, no French politician would get very far on a platform of “wealth redistribution”.) But the difference is important. Despite having created a viable society in which an educated population aggressively defends and promotes their social and economic rights, France sufferes from “immobilisme”, a self-inflicted inertia.

The Socialists (a better characterization of Ségolène Royal’s “left of center” group) preach “job security” and “redistribution” through job guarantees. Consumer stimulus may be well and good except they do not say how they would create such jobs or even what self-financing “public service” such employees could provide. In the process, the Socialists manage to avoid meaningful discussion of just how they would address the main cause of labor market inertia: the high cost of job creation (45% employer social security contributions) and labor laws that favor employment security over measures to increase disposable income.

There are other issues, to be sure, including important matters of public finance and community empowerment, of the reduction and redeployment of a civil service that continues to have a very high level of redundancy and functional overlap, and finally, the reform of higher education.

In my own opinion, and, I think, in the opinion of a majority of French voters, society needs a good shaking. The Youth riots of 2005 are not at the center of national debate, and the threat of force to contain and redress what are fundamentally social issues troubles me (and the French electorate) considerably, but these are not at issue here. Rather, the culture of social entitlements mixed with a profoundly cautious national ethos produce a deadly mix which stifles private initiative and places a unreasonably high cost on innovation.

Posted on

World Citizenship

Is there a contradiction in the term “world citizenship”?

The key is what one understands by “citizenship”. Is citizenship a behaviour, an active engagement and participation in a membership organization, or is it merely a descriptor of one’s values, a passport to entitlement, carrying with it certain rights and privileges?

To be a citizen means to be engaged in a public space, whether a neighborhood, a village, a state or a federation. Citizenship is also ultimately about the locus of authority on matters of self-sufficiency.

The first problem with the concept of “world citizenship” is institutional: we are 6 billion+ people distributed randomly across some 200 governmental organizations, and we sorely lack a shared vocabulary adequate to comprehend the world as a “public space”. There is no overarching, unifying idea as to what such a “world space” might be. The only idea widely shared is that we inhabit a fragile planet of limited capacity.

Fear of resource depletion (hunger?) is hardly effective as a motivator for consensus, and should not be confused with a teleological vision of the glory of colonizing Mankind.

The second problem, a matter of semantics, is what one means by “engagement”?

How can a corporation aspire to world citizenship if its entire existence is spent in the pursuit, accumulation and cultivation of financial liquidities? How can it consider itself a citizen of anywhere when such liquidities, are, by definition, the antithesis of rooted attachment?

Any defender of capitalism will argue that capitalists are attached to and defend values just like local manufacturing enterprises. The difference is that global capitalists unlike “local manufacturers” are not limited by the grazing opportunities afforded by the local economy, their exposure to local production risks are hedged by being able to graze elsewhere. Where then is their engagement?

Such “citizenship” is a “fat of the land” citizenship, a citizenship by attachment while the pickings are good, a “meta-citizenship”.

Am I saying then, that the ultimate test of citizenship is the willingness to risk failure for a cause? Perhaps.

What I am saying though, is that no matter how grand the capitalistic vision, “world citizenship” cannot be considered citizenship so long as it remains linked to opportunistic, capitalistic behaviour practiced without regard to local context.