"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.