From the Mashreq to Tony Blair’s Gaza—and Back?

When I explain my support for a one-state solution in Israel/Palestine, reasonable people often respond that it is an interesting yet entirely infeasible idea. Those same reasonable people, especially when they hold political office, tend to fall back on the officially endorsed two-state solution, despite its demonstrable unfeasibility. Of course, the one-state solution is not my invention. It has been defended by thinkers such as Hannah Arendt and Tony Judt in the past, and more recently by Shlomo Sand, Omri Boehm, and many young Palestinians and Israeli Jews.

The Arab-Jewish historian Ilan Pappé argues in Israel on the Brink that the one-state solution is not only feasible but likely to emerge from the collapse of the current Israeli state under Netanyahu and the far-right theocratic forces supporting him. According to Pappé, this collapse will be driven by three forces: the deepening internal divisions within Israeli society, growing international pressure in response to apartheid and genocide, and the ideological estrangement of American Jews from the present incarnation of the Israeli state. New generations—eager to forge a different kind of politics and deeply skeptical of old nation-states—may seize this moment to move beyond the failed “peace orthodoxy” of the two-state solution.

In Pappé’s account, the existing state would be replaced by a decolonized Palestine: a democratic polity in which different ethnicities, languages, and religions coexist, and in which Palestinians expelled in 1948 and afterward can return to their land. Such a decolonized Palestine could also, in theory, emerge not only from collapse but from deep reform of the Israeli state—or from a process somewhere between reform and collapse. The final chapters of Pappé’s book offer an optimistic vision of Palestine in 2048, a century after the Nakba, where peace and coexistence have taken root.

The failure of the peace orthodoxy, combined with Israel’s ongoing internal and moral collapse, is what makes the one-state solution not merely desirable but feasible. An egalitarian state would reconcile the right of return with the right to stay. What Pappé calls “Historical Palestine” would acquire a new name and coexist with its neighbors in a renewed Mashreq for the twenty-first century. The Mashreq—the eastern Mediterranean region of the Ottoman Empire—was, according to Pappé, once a vast space of coexistence and relative tolerance among ethnic and religious communities, before victorious imperial powers imposed rigid nation-states that divided populations along ethnic lines.

Whether Pappé’s optimistic vision can emerge from the current reality of a single apartheid state remains an open question. It is unclear whether the alliance of Netanyahu and Trump represents the final attempt to impose a colonial mindset—or merely the opening phase of an even more dystopian future. The dismal spectacle of Tony Blair serving on an executive committee tasked with “rebuilding” Gaza—alongside Donald Trump’s son-in-law, and without meaningful participation by Palestinian communities or the United Nations—suggests that what was once known as the peace orthodoxy has mutated into something far darker.

The contrast with the Good Friday Agreement in Northern Ireland could not be more striking. There, the international community and all local parties worked together to craft an agreement that relativized the nation-state in order to build something better—not a vast private condominium. What has happened since to the mindset of one of the architects of that agreement remains a mystery to me.

Global Federalism as Part of the Resistance

In Rodrik’s trilemma, we must choose two of the following three: hyperglobalization, national sovereignty, and democracy. Rodrik himself opts for national sovereignty and democracy, with some qualifications—he allows for limited forms of international coordination, what he calls “global traffic lights.” In his latest book, "Shared Prosperity in a Fractured World"—a brilliant work offering compelling proposals for modern industrial policy—he insists that the fight against the insurgent far right will not be won through new forms of global governance, but through national and local policy experimentation.

Rodrik’s ideal is the Keynesian world of Bretton Woods, which paved the way for shared prosperity in the developed world after the Second World War. Yet we now live in a profoundly different context.

Rodrik acknowledges that climate change represents a crucial departure from the postwar world, but he maintains that more should be expected from national initiatives than from ambitious global agreements such as Kyoto or Paris. Indeed, much progress has been achieved at the local and national levels. Still, the scale of what remains to be done is vast, and it is difficult to imagine meeting this challenge without some form of global federalism.

We also face a new technological landscape dominated by global multinationals wielding immense political power—companies increasingly intertwined with an aggressive, transnational neo-fascism led, at present, from the White House. It is hard to see how such forces can be resisted without coordinated global action.

The great Italian economist and political scientist Massimo Morelli, in joint work with Eugenio Peluso, argues that current realities go beyond the simplified logic of Rodrik’s trilemma. The rise of nationalist populism, they contend, poses a fundamental threat to liberal democracy:

“The limitation of Rodrik’s trilemma lies in its narrow conceptualization of democracy, defined solely through the lens of ‘mass politics,’ while overlooking the crucial pillars of liberal democracy, such as the protection of rights, checks and balances, and the separation of powers. When we consider this broader notion of democracy, the three trends—deglobalization, democratic crisis, and nationalism—appear interdependent and mutually reinforcing, thereby undermining the trilemma framework.”

Morelli and Peluso conclude that their analysis “challenges the idea that sacrificing globalization alone can preserve democracy. The commitments made by populist leaders go far beyond trade protectionism and include a broader agenda that erodes the institutional safeguards of democracy itself.”

In the closing pages of his book, Rodrik suggests that the left should reclaim patriotism—distinguished from nationalism. I accept that some words are less dangerous than others. Still, it would be far better to restore dignity and identity to vulnerable groups through stronger public services and robust re- and pre-distributive institutions—including transnational mechanisms such as fiscal harmonization, starting in Europe through the EU—than by pandering to their prejudices.

Amartya Sen, who experienced the destructive power of identity politics in his childhood in India and explored these issues through social choice theory, issued a powerful warning in "Identity and Violence: The Illusion of Destiny" (great subtitle!)  about the dangers of succumbing to the “us versus them” temptation in democratic societies.

These are undeniably difficult times for global federalism. Yet Rodrik himself argues that hyperglobalization is a form of neoliberalism—and he is firmly opposed to neoliberalism. Sometimes progress against neoliberalism takes the form of positive reform; at other times it takes the form of resistance. National social democracy once preserved markets while expanding welfare states. Today, we need a transnational version of social democracy: a form of global federalism that retains the benefits of global markets and institutions—none of which are going to disappear—while embedding them within a system of global safeguards and protections.

Retreating into the comfort of local identities or nation-states is not a viable option.

A New Balance Between Technocracy and Progressive Politics

As the historian Timothy Snyder has argued, post-truth is pre-fascism. It follows that resisting neo-fascism requires a commitment to truth. This struggle must involve scientists—the professionals of truth—including, crucially, the best social scientists. Social science is complex, and its debates are often shaped by vested interests. That is why the emphasis must be on the best research, conducted with transparency and supported by intelligent political leadership.

Prophets of the so-called “dark enlightenment,” such as Peter Thiel, insist that capitalism and democracy are incompatible. Thiel has stated explicitly: “I no longer think that freedom and democracy are compatible.” In his vocabulary, however, “freedom” effectively means capitalism—a usage reminiscent of Pinochet and his supporters, including Chicago School economists, who spoke of freedom while disregarding democracy.

Thiel may be right about the tension between capitalism and democracy. Many would therefore argue that we must choose democracy and constrain capitalism accordingly. There is little doubt, however, that Trumpists have chosen capitalism—“freedom,” in their terms—over democracy.

This reality pushes science and scientists into the front lines of resistance against the dark enlightenment: telling the truth about migration, climate change, vaccines, human rights, and universal justice, while militantly opposing conspiracy theories and scapegoating.

In the past, technocracy was seen as an ally of the right—a means of protecting investments and “sound policy” from left-wing populism. Today, however, the social groups that support the right appear to place more trust in illiberal democracy than in technocrats, many of whom—especially in the social sciences—have shifted leftward. Hence the Wall Street Journal editorial board’s endorsement of the unitary executive theory during Trump’s second administration.

In this context, it is significant that the center-left economists behind the so-called London Consensus now advocate a new balance between politics and technocracy. Diane Coyle, for example, argues that in the current geopolitical environment competition policy must become more politicized. Given network externalities and scale economies in new technologies, governments may increasingly be forced to choose among potential monopolists.

At the same time, the current wave of neo-fascist movements directly threatens several bastions of liberal and progressive media—CNN, major French and Italian outlets, and the BBC, among others. Consistent with their broader agenda of dismantling pluralistic democracy, the so-called “broligarchy” is working to seize control of both traditional and social media.

This organized attack on democracy is also an organized attack on truth and rational debate. Those who defend truth and open discourse must respond with the coordinated support of the best available talent. And this support must be explicitly political if we are to win the battle for public opinion.

"Things happen" in the White House

Female journalists have been the target of Donald Trump this past week—hardly for the first time. One of them dared to ask about the murder of U.S. journalist Jamal Khashoggi in front of Trump and Saudi Arabia’s strongman, Mohammed bin Salman (whom the CIA holds responsible for Khashoggi’s death). Trump called her “a terrible person, a terrible reporter.” He then added, referring to Khashoggi’s killing, that “things happen.”

Another female journalist asked about Trump’s ties to the convicted pedophile Jeffrey Epstein aboard Air Force One—and was called “piggy” in response.

All this occurred in the same week that members of Congress received death threats after stating that soldiers should not obey illegal orders. It was also the week when political scientist Daniel Treisman suggested on CNN that Trump’s Ukraine “peace proposal” is written so awkwardly that it may even be a translation from Russian.

Some adopt an analytical framing that sees Trump as part of a broader “wave of populism” or “wave of backsliding.” From this perspective, we are told not to worry too much: this is not Hitler, and no one is about to be exterminated. This, they say, is more akin to Orban, Bolsonaro, AMLO, or Maduro. Relax—it’s not the same.

Viewing Trump—especially Trump 2.0—through this lens pushes us to focus on similarities with other populists, including those on the left. These other populists certainly exist and have their own pathologies. But focusing too narrowly on this comparison obscures the class dimension of Trumpism, and the immense social and economic power behind what The Economist has called a corrupt, autocratic force.

There is another perspective, of course. Trump may be a unique figure, yet also the product of a long historical trajectory—of deep-rooted social conflicts within the United States. These may resemble dynamics elsewhere, but the American case remains distinctly singular. The U.S., after all, is the most powerful country in the world and, while its history includes bright moments such as the Progressive Era, the New Deal, its role in the Second World War, and the Marshall Plan, it also includes darker chapters: what Margaret Atwood has described as an eighteenth-century theocracy, slavery, post-slavery discrimination against Black Americans, McCarthyism, and support for dictators such as Franco—still defended today in the pages of The Wall Street Journal—and Pinochet.

The opportunity costs of violence have so far kept Trump from using overt force against the American population. But selective violence persists: abroad, and against immigrants at home. Even under Hitler, violence was selective; killings of Jews were more frequent outside Germany’s borders than within them.

There are effective populists and there are efficient politicians, but we have yet to see someone who is both an efficient politician and an effective populist. Trump is neither. Instead, he is immensely powerful, he is not alone, and he is extremely dangerous. Efforts to appease him may be understandable—after all, who does not want to avoid a third world war?—but we should not delude ourselves about the true nature of the threat.

Is the London Consensus Just Wishful Thinking?

In The London Consensus, a group of economists bring together contributions presented at an event held at the London School of Economics in 2023. Some of the contributors are affiliated with the LSE, while others come from different institutions. All share a desire to help shape a new paradigm to replace the now-obsolete Washington Consensus.

Although the contributions do not yet amount to a fully coherent paradigm, they offer a valuable set of principles and policy proposals that could form the basis of a new “consensus.” Today, however, such a consensus may seem over-ambitious, given our era of polarization and the fragmentation of public opinion. We appear far from a context in which broad majorities might embrace a shared set of economic ideas.

Still, the mainstream of the economics profession has shifted toward more egalitarian and progressive positions in recent years. The authors of The London Consensus (Aghion, Van Reenen, Rodrik, Besley, Velasco, among others) combine support for a New Industrial Policy (or “productive development policies”) with a Schumpeterian view of economic growth—one that links innovation (driven by entry and competition) with social protection.

Yet the trajectories of some of the authors illustrate the limits of the project. Many were on the intellectual front line of the failed fight against Brexit, or advised center-left politicians such as François Hollande, Michelle Bachelet, or Joe Biden, none of whom managed to build lasting coalitions. A new paradigm—like the Keynesian or neoliberal did in the past—must strive for hegemony. Today, that means having the ambition to defeat the authoritarian national-populism that seeks to dominate global politics.

Something more will be required. That includes a new vernacular, as Bowles and Carlin argue. Or a new (beyond national) dimension of the welfare state, as proposed by Morelli or Piketty. But also a strategy for forging national and international majorities and for consolidating or creating institutions for collective action—institutions that include political parties and trade unions, but also extend beyond them through think tanks and online platforms.

The London Consensus offers a reasonable set of principles and policies—a minimum standard of decency that authoritarian populism will never provide, and that may even rival well-organized authoritarian regimes (such as Xi’s China) in effectiveness. But if it is to help defeat Trumpism in the democracies we seek to preserve, it must be paired with a political strategy.

Piketty after some tough book reviews

In one of his most recent articles, Thomas Piketty states that he considers his book A Brief History of Equality the best expression of his thinking on inequality. It is shorter than his previous works, offers a broader—indeed, global—perspective, and is more optimistic and forward-looking.

In this book, the French economist argues that the past two centuries, and especially the twentieth, have been marked by overall progress in reducing income and wealth inequality. This progress has certainly not been linear, but it demonstrates that social mobilization and the power of ideas can foster policies and institutions that promote both economic and political equality. Yet this progress remains incomplete, as current levels of inequality are still morally indefensible.

Over the course of his intellectual journey—from Capital in the Twenty-First Century to A Brief History of Equality—Piketty has moved from pessimistic laws to optimistic ideas. In my habit of reading book reviews after finishing books I enjoy, I revisited the tough review written by Blume and Durlauf on Capital in the Twenty-First Century, in which they criticized Piketty’s use of macroeconomic theory—never his strongest field.

After reading A Brief History of Equality, I then turned to Paul Seabright’s review, which is perhaps even harsher than that of Blume and Durlauf. Although Piketty avoids delving into the technicalities of macroeconomic theory in this shorter work, Seabright challenges, among other things, some of Piketty’s empirical claims about slavery and colonialism.

There exists a continuum between a scientific book and a political manifesto. One could draw an analogy between Marx’s Capital and the Communist Manifesto: A Brief History of Equality stands closer to the latter. Perhaps it should even have been marketed as such—as Piketty’s political program.

The ongoing debate about Piketty’s contribution can also be followed in the chapter that John Cassidy devotes to him in Capitalism and Its Critics, which includes several interesting biographical details. Cassidy, however, does not mention the reviews by Blume and Durlauf or by Seabright.

I find myself sympathetic to many of Piketty’s political ideas, which I do not think are undermined by the reviewers’ criticisms. The French author defends a genuinely democratic and decentralized socialism—based on shared ownership—which stands in complete opposition to Soviet communism. He also advocates what he calls a “federal welfare state” rather than a “national welfare state,” arguing that pursuing social objectives solely at the national level is wholly inadequate.

The weakest part of his political platform, in my view, is his notion of “universalist sovereignism,” which sounds like an oxymoron—a rhetorical attempt to balance the pro-European and communitarian-nationalist wings of the French left. There is still work to be done on that front. Piketty reportedly collaborated some years ago with U.S. Senator Elizabeth Warren (as noted by Cassidy), and there can be little doubt about the democratic and internationalist credentials of the progressive wing of the Democratic Party. The broad progressive coalition recently endorsed by Alexandria Ocasio-Cortez, following Mamdani’s victory, might well have room for Piketty and other European intellectual activists.

The federalist proposals of Morelli and Piketty

I was recently invited to a dinner in Barcelona where I met Massimo Morelli, Professor of Economics and Political Science at Bocconi University. I was deeply impressed by his ideas on populism and federalism, and in the following days I downloaded and read several of his most recent academic papers.

In his research, Morelli analyzes both the demand and supply sides of populism. The demand side stems from public dissatisfaction with the unequal outcomes of globalization, economic crises, and technological change. The supply side arises from the strategies of political actors who seek to exploit these grievances, often combining them with established or newly constructed narratives.

The vicious circle of populism becomes reality when the economic costs of failed populist governments make it increasingly difficult for conventional parties to repair the damage (as seen with Starmer’s challenges in the UK). The scope for genuine reform is extremely limited in national democracies with little fiscal space—at least within the current context of free capital movement.

Morelli argues that Dani Rodrik’s Trilemma has been overtaken by reality: authoritarian populists have shown that protectionism, authoritarianism, and a smaller state can coexist. The prospect of a democratic nation-state that restricts globalization has effectively vanished. According to Morelli, the only real hope for Europe—his “dream”—is a federal United States of Europe that pools resources to create a common defense, coordinated policies, and a genuine European budget and fiscal policy.

He also contends that earlier work by Italian economists such as Alberto Alesina and Enrico Spolaore—who argued that small nations could thrive in a globalized world—has become obsolete. Today, only deeper European integration can offer hope to a working majority and break the vicious circle of populism.

Morelli’s originality lies in his attention to the dynamic effects of policies designed to counter populism. A strategy aimed at discrediting populist leaders may succeed in the short term, but in the long run it can also foster an anti-politics climate that benefits new populist movements.

While Morelli does not propose an ambitious progressive platform like Thomas Piketty does in A Brief History of Equality, he shares with the French economist the conviction that a federal (instead of national) welfare state is a key ingredient in building an egalitarian coalition.