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Opening Room to Negotiate?

Everyone would like a world of perpetual peace. Well, not everyone, and that is precisely why it will require more than attention to just our economic but also our political natures. Ironically, one of the least political of all our presidents may have just hit on the formula to achieve what has eluded practically every one of our recent administrations. We have exhibited a pattern of military restraint and a retreat from the Washington Consensus on free trade: and this may have opened up a surprising space for negotiating a new way forward.

Few people can accuse me of optimism and not a few have noticed how discouraging my sense of our current national political scene has been over the last few years. So please excuse me if suddenly I seem to evince the opposite inclination. For the sake of those who might think I have lost my mind, my principles or my senses, let me assure you, I am as much in favor of free trade and free enterprise as ever. Now, taking a deep breath, let me try out the following thought experiment.

Friedrich List was fond of saying that political economy must have as much politics in it as economy. With that he launched upon a critique of Adam Smith and free trade ideas that would inspire a significant portion of that line of thinking that would become the German Historical School of Political Economy. List’s assertion has garnered no end of opposition from classical liberals and libertarians ever since. But as Gustav Schmoller, a later member of that school, was always eager to insist, everything is always so very complicated.

What is now transpiring with the appointment of John Bolton and the concurrent opportunity to negotiate with North Korea is a staggering illustration of just such complexity. Either President Trump is a wildly brilliant strategist or he has stumbled into a mode of action that has inadvertently opened up enough space to bring the world back from what appears to have been the brink of ever expanding militarization, with all of its attendant threat of endless regional conflicts.

For the sake of argument, let me make the case for the first scenario, and risk the scorn of friends and associates.

In a world of zero-sum thinking, the economist typically contends that steady instruction in first principles and the experience of the long-run benefits of free trade, afford the best means to inculcate the fundamentals of sound policy. A major weakness in this approach though is that it assumes that people ultimately care so deeply about their personal well being that they will be open to learning from such instruction and such experience.

But the reality is quite otherwise. And it is not even that people who are inclined to think in zero-sum terms don’t understand the argument. It is just that they understand “well being” in a very different way from the rest of us. Indeed, I would be quite willing to bet that most of them in fact do understand quite well the proposition that rests at the heart of the notion of mutual gains from exchange. It is simply that they do not care, and are, in fact, quite willing to forego those benefits in pursuit of something else, something political.

Now lest you think by this that I mean simply nationalism, not so fast! It certainly plays a part in such a person’s indifference curves, to use the economist’s jargon, but it isn’t just that.

Every “great leader” whoever he might be, not only discounts the benefits of those outside of his particular country, but a good many within it!

Indeed, such a person very often positively wants to harm and directly handicap large numbers of people within his own country, people he regards as subversive or “enemies of the state.” Such a person might well understand the economist’s arguments about the long run, but he is not at all interested, as the economist is, in the benefits that accrue to persons in general, but only to the relative position of himself and his group. In such a world as this, prior to Trump, we were rapidly losing space within which to act or negotiate politically, other than through the military option. And we were doing so because of our unwavering attachment to global humanitarianism and free trade.

The same sort of ethical universalism that informs the calculations of our economists, was also fueling the reformist agendas of our past globalist policies. On that basis, we entered into other countries to protect their human rights, to ensure truth, justice and the American way. As much as we might like to liberate all people everywhere from evil, notice what that does: it inadvertently provides a handy rationale for resistance by all those who resent our intrusions.

Liberalization of any sort, whether it be human rights, free trade, limited government, environmental regulation etc., etc. becomes simply our imposition, the American way, and not their own way. Such association draws every malcontent everywhere like moths to a flame to take up arms and fight, which aids and abets the zero-sum group-think of would be strongmen everywhere. They need only point to the presence of our troops to say, “this is not natural, this is not ours, but is rather an imposed order.”

And all those whom we have helped? They become the perpetual enemy within to anti-liberal authoritarians everywhere. They are the handy-dandy universal reason for every possible obstacle to the great leader’s plans for greatness, a convenient pretense to back up every excuse to poor performance. It is, moreover, very difficult to speak of your movement if it is obviously backed by the armed forces of others.

In this world, the logic of our past policies, however much we insisted they were the result of higher universal law, invariably directed us to more and not less military adventurism and all the overreach that that entailed. We need only recall just how disappointed the non-interventionists were in Obama. But most of the fault probably lay with the implicit logic to which he was heir. Now comes Trump.

Whatever you may think about the benefits of protectionism (and please note, I am in no way a protectionist), what Trump’s language on trade has done, however inadvertently, is open up space for policies other than military intervention. How is that possible?

Because it strikes directly at groups, including the in-group of every political strong man. “Great leaders” do not care about total utility. They care about relative status, and usually that has much more to do with matters of symbolism than any kind of generalized philanthropy. Now comes the appointment of John Bolton. My first reaction was…train wreck!

But my second thought is a more hopeful scenario.

Bolton might well be the proverbial Rottweiler on a leash. As long as Trump has him there, he has the chained beast of past militarism firmly in hand for all to see. But in the other, he has now the carrots of trade. If played right, Trump need never let go of Bolton, because now he can step back from the brink to which past military intervention has led us. If this is correct, whether intentional or unintentional, it could well herald an important step in the direction of peace, and if that is correct, then the foundations of true reform and progress will have been well served.

But this scenario will require two things more from us and the president if the opportunity is not to be squandered, and these will require real skills of political negotiation: Patience and a steady resolve to abjure the use of force. I am not at all convinced that we can achieve these points, but I am willing to hope.

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