Wednesday, December 27, 2017

Populism as post-fascism

The book written by Federico Finchelstein, "From Fascism to Populism in History," is an excellent account of the movements that have challenged democracy as a result of the successive socio-economic and institutional crises of the last 150 years. It challenges simplistic definitions of populism based on contemporary examples, to give a broader perspective that includes present and past movements not only from Europe and North America, but also from South America (most notably, Argentinian Peronism), Asia and Africa. These broader perspective manages to find elements in common of movements as diverse as the American populists of the XIXth century, the Latin American populisms and the current conservative national-populism of Trump, Le Pen, Putin, Orban, Erdogan and others. These elements are placed in historical context and include the well-known emphasis on the people as opposed to the elites, but also the almost religious role of the leader, the scapegoating of internal and external enemies, and how these features have interacted with different communication technologies such as mass television and Internet-based social networks. A key and illuminating aspect of the book is how it addresses the relationship between fascism and populism. Although one lesson of the book is that one should try to avoid simplistic lessons, perhaps one way to summarize this relationship is that populism is not pre-fascism, as it is sometimes claimed today by critics of Trump, Farage and similar leaders, but it is post-fascism, in the sense that in an evolutionary sense it has learned from the experience of fascism. The movements led by Mussolini, Hitler and Franco were successful attempts to destroy democracy (from within or from without) in which violence and the cult of violence were crucial features. Instead, populism does not attempt to destroy democracy, but to use it, to manipulate it, to erode those democratic institutions that constrain the destabilizing strategies of populist leaders. Finchelstein also argues that traditional political ideologies are secondary in analyzing populism, which is especially clear in the case of Peronism, where the relevant leaders have defended ideologies that go from almost fascism, to neo-liberalism to socialism. Admitting that I am biased, something I missed in the book, which pretends to be a global perspective on populism, is a chapter or a section on the secessionist populisms of Europe and other places. As in other studies of populism, only the Italian Northern League is mentioned among these separatists movements, but Catalan, Scottish, Quebecquoise or Corsican nationalists also share many of the characteristics of the other populist movements described in the book. Some of these movements started as national-populist attempts to manipulate democracies in their starting periods, but ended up in dramatic wars, as was the case in Yugoslavia. But then this would perhaps break the clean distinction between violent fascism and peaceful populism.

Friday, December 22, 2017

That is what referendums do

I liked this article in The Guardian about why a referendum on same sex marriage or on abortion would be a bad idea in Norhtern Ireland. Plebiscites that divide societies are lethal for democracy:
"As in Ireland, the campaigns against same-sex marriage indulged homophobia and exploited homophobic tropes about LGBT people seeking to “recruit” young people. Some insinuated that homosexuality was a gateway to paedophilia. Others did much more than insinuate. In Melbourne, Stop The Fags posters appeared and then went viral with images of children cowering under a rainbow-coloured hand. This is what referendums do. They divide cultures, generations and families. They force LGBT people to come out to gain basic civil rights, not at a time of their choosing. For some it was liberating – for others, the consequences continue. I fear a referendum on abortion would undoubtedly descend quickly into a vicious debate. Having engaged in these debates on university campuses – places that pride themselves on being liberal-minded – I have witnessed first-hand how quickly they can sour, with accusations of “baby killers”, of women using abortion as contraception and other inflaming distortions."

Tuesday, December 19, 2017

Must we choose between corruption and populism?

The dramatic choice in the South African ANC (the party of Mandela) between a politician that was previously married to president Zuma and the key node in the network of political connections of private sector firms, illustrates two of the greatest challenges of democracy today: populism and corruption. Of course, I apologize for addressing a topic about which I have very little expertise. But what reaches this corner of the world is the legacy of one of the best political movements in history being ruined by two of the contemporary viruses in politics. The British magazine The Economist argues that Cyril Ramaphosa, the politician that became a business man to become now again a politician, is the better option, and it is the one that has been finally chosen. Now he is a multi-millionaire, rivalling perhaps with Silvio Berlusconi from Italy or with Sebastián Piñera from Chile as paradigms of vertical integration in politics. The alternative according to The Economist was a member of the Zuma clan, responsible for many allegations of corruption. In the recent past, this clan has tried to hide the allegations by adopting a populist face, attacking business elites, using methods according to some similar to the ones used by Robert Mugabe in Zimbabwe. Although business connections may be seen by some as a way to avoid short term political populism (by which I mean anti-elitist rhetoric to achieve immediate benefits at huge costs in the future), one fears that when these connections are illegitimate what they do is just to transfer any future benefits to an olygarchy. In Chile, the last presidential election was between the billionaire Piñera and a TV star, Guillier. In Italy next year, the choice may be between Berlusconi and a TV clown. Unless we find ways to reform politics and institutions in a serious and robust way, that is perhaps the kind of choices that we will be facing everywhere.

Friday, December 15, 2017

Game Reality in Catalonia

A long time ago, the first teacher that tried to teach me Game Theory was Clara Ponsatí. In those years and at least in that particular class, she was not a very good teacher and I was not a very good student. I had to wait for some years to know the basics of Game Theory when I had more time to be a good student and I had a better instructor in James Dow at the European University Institute (Dow had met Ponsatí in the USA in their formative years). She is now fugitive from Spanish justice in Brussels (she says she is "in exile"), because she was part of the Catalan government that tried to violate the rule of law in October. She had been appointed as Regional Education Minister just months before the failed declaration of independence because she was believed to be a Taliban of Independence, according to media commentators. She published a short article in 2012 (I can only find a version in Spanish here), entitled "Benefits, Costs and Game Theory" where she argued that the only reasonable equilibrium in a game between the Spanish median voter and the Catalan median voter was for the Catalan median voter to declare independence and for the Spanish median voter to accept it, "because the costs of conflict for Spain were not affordable." It is basically the same argument of those in favor of Brexit in the UK: the EU negotiators will have to accept the conditions of the UK negotiators because the costs of a hard Brexit or of no agreement would not be affordable for the European Union. Both in the case of Europe and in the case of Spain, we have seen that the predictions of the nationalists (even the best educated of them) could not be farther away from reality. What was wrong in their analysis? First, probably that decision makers in Spain and Europe do not take only into account the economic costs in the two by two game, but also the overall politico-economic costs of disincentivizing any other separation attempt. Second, the relevant players were not only the representative voters in Spain and Catalonia, but the diverse voters holding different positions in both societies. Finally, Ponsatí assumed that absent the "irrational" opposition of Spain and any veto of the European Union (that would fall under the acceptance of an abiding Spain), the economic benefits of independence were overwhelming. Today, more than 3000 firms (see this article in The Economist) have moved their headquarters out of Catalonia, and hundreds of thousands of small investors moved their savings to other regions, only after the threat of independence. I still believe, after what I learned from James Dow, that Game Theory can be very useful to understand politics and economics (and beyond), and I enjoy teaching it at a basic level in my courses on Microeconomics, Public Economics and Sport Economics. In some rare cases, 2x2 games are not rejected by real data from real interactions (like in soccer's penalty kicks). Most of the times, though, real world games are much more complex than simple blackboard (or power point) 2x2 interactions.

Wednesday, December 13, 2017

Path dependence in sports history

We are finishing another edition of the course on soccer and economics at the Study Abroad program of the Autonomous University of Barcelona. Most students are from the USA and one of the groups just presented their essay about the limits to soccer success in their country. Of course, a key issue is that resources are already being spent on other sports, such as American football, baseball and basketball. Although soccer is increasing its popularity because of the expansion of demographic groups such as hispanics and women's soccer is very successful, most fans still see the NBA, the NFL and the MLB as the most important sports leagues. Although basketball is probably expanding and American football is declining (see an article in The Guardian by the famous former basketball player Kareem Abdul-Jabar), they are still above soccer in the preferences of Americans. According to my students, one possible reason is just history: in the XIXth Century, the USA wanted to re-affirm its identity by distinguishing itself from British sports such as rugby or cricket, and that is how American football and baseball started and expanded. This gave them a starting advantage, and the era of big economic growth of the United States additionally favoured these leagues. When soccer became a global industry at the end of the XXth century, it was perhaps too late to become the leading sport in North America. It can still grow of course, and the elimination from the next World Cup should not be seen as a drama (at least, they will be in the good company of Italy, The Netherlands and Chile). Countries that do not have a strong soccer tradition can easily catch up by importing resources such as managers or veteran players, or by exporting their best players to the best leagues and asking them to come back to play for the national team, as explained by Branko Milanovic in an article published in 2006. But once they achieve a decent level, they find much more difficult to achieve excellence. Like in other industries, imitation is easy but excellence requires innovation and the creation of new styles of doing things, and this probably only comes with role models, cultural environments and strong communities transferring a passion for something from generation to generation. That is what is argued in a recent academic article by Stefan Szymanski and Melanie Krause. Perhaps that is why Messi is Argentinian and not form the USA or China -although many are trying to produce "the new Messi," in some cases with a lot of money.

Monday, December 11, 2017

Matthew D'Ancona and national-populists re-inventing the wheel

I started reading this article in The Guardian by Matthew D'Ancona believing that it would relate the Isareli-Palestinian conflict with the Brexit controversy about Northern Ireland (something that keeps my analogy-prone mind in good shape), but I found something much better. Actually, two things. First, a great metaphor about the lies of Brexit based on the re-invention of the wheel: "So, here’s an idea: let’s abolish the wheel. Let’s escape the tyranny of the circular device, and spend the money saved on axles, spokes and hubs on – oh, I don’t know – the NHS. Let’s take back control of rotation! But wait a minute. This can’t be done overnight. We shall still need some means of transporting ourselves and our goods until we have formally renounced the wheel, but before we have agreed on a new device. There’ll probably need to be an “implementation period” in which we remain “aligned” with the existing circular format. Then, when we’ve finally got rid of the old system – let freedom ring! – we’ll need a new, bespoke mechanism. What we’ll want is our own round component that rolls around an axis; an independently designed disc that turns reliably to enable easy movement. Something that gyrates smoothly along the ground. I wonder what we should call it." Second, a very useful insight about clarity and ambiguity, which should be read by those in Spain and Catalonia that fell in love with the Clarity Act of Canada: "As so often, it was our old friend “constructive ambiguity” that got May, her party, the Irish government and Brussels over the line. You can read the text as a victory for British sovereignty, a significant retention of power by the EU, a step towards Irish unity or a safeguarding of the union. This kind of ambiguity was essential to the Good Friday agreement, which entrenched an open-ended process founded upon euphemism. In contrast, the Brexit talks assume and depend upon the eventual achievement of clarity – even if, in many cases, that point is not reached until long after the UK’s formal departure on 29 March 2019." And to wrap it up there is a final part of the article that is the perfect illustration of the big topic of behavioral political economy: expressive voting versus rational choice. I leave it to you to enjoy it.

Sunday, December 10, 2017

The biographer's autobiography

James Atlas is the biographer of two American writers, the forgotten poet Delmore Schwartz and the famous Nobel Prize winner Saul Bellow. I have never had the opportunity to read these two biographies but now I will try to buy and read them. What I have read is the wonderful autobiography of Atlas himself, where he explains how he became a biographer, and he tells us some of the secrets of his speciality, starting with what he learned at Oxford (a place he didn't particularly enjoy) in the beginnings of his career. I knew about the book after reading a positive review by a Spanish writer in a newspaper. The book, entitled "The Shadow in the Garden. A Biographer's Tale," is a love letter to books and book writers and critics in general. Atlas tells us about his emotions and physical sensations in those moments where he lived through experiences such as finding some special document or meeting some important character. He is also very open about his tension with Bellow and the many flaws of this author as a human being. The difference between Bellow and Schwartz from the point of view of Atlas is that he never met the latter (although he shared with him the problem of depression) but he interacted frequently with the former. The last chapters of the book discuss the future of biography. In the past, writing a biography was about collecting documents such as letters, personal journals and objects, unpublished manuscripts, and interviewing people who had interacted with the subject of the book. With the Internet, email, social networks, blogs and you tube, the lives of famous authors are very much in the public domain. Perhaps it will not be about writing a biography any more, but about putting together materials in a web site. But then many of the emotions associated with the old art of a biography will not be there any longer.The footnotes are not to be missed, full of irony and interesting insights to complement the general text. I really enjoyed reading this book.

Thursday, December 7, 2017

Peace agreements are incompatible with national-populism

For anyone who has been paying attention, it should be no surprise that detailed and nevertheless fragile peace agreements that were reached in the 1990s are today in danger because of the rhetoric, the actions and the events unleashed by national-populist forces. Brexit threatens the results of the Good Friday agreement reached almost twenty years ago after decades of violence in Northern Ireland. That agreement was not perfect, it was complex and multilateral. It had even some disturbing elements, like the obligation to "share" a government between religious parties, accepting de facto the "tagging" of organizations and voters, instead of promoting that one day the province could be dominated by a secular multicultural political force or several of them. More importantly, the agreement was made possible by the existence of the European Union, which facilitated a legal and economic framework that produced the dilution of the border between Northern Ireland and the Republic of Ireland, as it happend for example between Spain and Portugal (I still laugh when someone wants to seem modern by asking for an Iberian federation -we already have it! It's called European Union). The two parts of the island can share today a common economic and trading area and even an electricity system. Each part probably believes that it is sovereign, but the border disappeared twenty years ago, which means that even unconsciously they have been sharing the same territory. And it has been good for them, as the island has probably lived through the most prosperous and peaceful period of its contemporary history. Now Brexit threatens this, because British voters by a small margin decided to leave the EU in a simplistic referendum by a very small majority, even if the voters in the Northern Ireland province voted to remain, as they voted in favor of the Good Friday agreement almost twenty years ago together with the voters of the Republic of Ireland. That was a complex and patient agreement, the result of multilateral negotiations. The extremists in the British conservative party and the extremists among the Northern Irish unionists have a hard time trying to make compatible Brexit with the Good Friday Agreement. In fact, they are incompatible, and probably the only solution is either to acknowledge that Brexit as it has been imagined by its proponents is impossible, or to construct a special regime in Northern Ireland without saying it to save the face of the Unionist and the British government. In the Middle East, the Oslo peace accords were also fragile and imperfect. In a perfect world, instead of a two state solution we would have a plurinational federal state as suggested by the late historian Tony Judt. But it was also a multilateral agreement that laid the foundation of future peace negotiations. Donald Trump does not want any of it and is willing to sacrifice decades of good will and slow progress to demonstrate that his rhetoric must prevail. Our world is interconnected and the decisions of British or American voters have effects on third parties. But a characteristic of national-populists is that they do not have time for complex agreements or institutional constraints. The problem is that some of these constraints keep the world in relative peace.

Sunday, December 3, 2017

It is the moral compass, not the academic credentials

The weeks that surrounded the illegal and suspended declaration of independence in Catalonia coincided with a 4% reduction of the retail sales in the region, the exodus of the headquarters of 2800 firms (among them, the two largest banks and some of the most important companies), the fall or postponement of tourist reservations and investment plans, and the transfer of savings to accounts in other regions. It is tempting to conclude that pro-secession leaders lack any knowledge of the economy or any knowledge of the mechanisms of the rule of law in a European member-state of the XXI Century. We could easily blame bad selection mechanisms in political elites or even the poor educational system in general in Spain and Catalonia. However, the Catalan pro-secession movement and the regional government that has represented it in the recent past have been supported by first-rate intellectuals, among them several economists with a PhD from US universities, philosophers fluent in Germany and experts in Wittgenstein, or legal scholars with previous high reputations among their peers. On October 10th, the day in which the now sadly famous Catalan former president Carles Puigdemont said that he acknowledged the results of the illegal referendum of October 1st and then added that he suspended the declaration of independence temporarily, his cabinet met in the morning prior to that Parliamentary speech to decide on the strategy. In that meeting, all the members of the regional government agreed that it was better to suspend the declaration and try to offer a more moderate face, given the hundreds of companies that were already announcing that they were leaving the region and given the zero prospects of international recognition. Only one member of the regional government disagreed from her by then scared colleagues by proposing to go all the way down and declare independence immediately without fear of any consequences. That was the regional Minister of Education, an economist with a PhD from Minnesota University in the USA. Today Paul Krugman has written in his blog about the betrayal of many intellectuals of the US Republican Party, their refusal to apply scientific or moral standards when they evaluate the policies of their party. Krugman alludes to the title of a famous book ("La Trahison des Clercs") by a French intellectual in the first half of the XXth Century, where he denounced the many intellectuals that supported nationalism or stalinism. We could similarly refer to the betrayal of many intellectuals, Catalan edition (incidentally, one of the Republican intellectuals mentioned by Krugman is a co-author of one of the most radical Catalan economists). In the blog of the LSE there is a review of a recent book on how European governments are these days more and not less crowded with academics. The regional Minister of Finance and Economy of Catalonia was in October a Historian with a PhD, like Gordon Brown. The difference does not lie in the academic credentials (although I suspect that the PhD dissertation of Mr. Brown was much better than the one written by Mr. Junqueras). The difference lies in the moral compass, which in the case of Brown made him give that famous speech against nationalism ("the silent majority will be silent no more") that most probably decided the 2014 Scottish referendum.

Wednesday, November 29, 2017

Second generation commitment devices

As argued in a recent article written by a former central banker of Argentina and a co-author:
“We call for amending the design of some of democracy’s existing commitment devices. These relate to the judiciary, media, central bank, regulators – the elite’s expertise and the experts themselves. The current commitment devices and institutions don’t seem to be fully sufficient nor entirely credible (depending, of course, on the country and its institutional history). These institutions should be improved immediately by introducing what we call a ‘second generation’ of commitment devices. These are specifically designed to materially improve existing structures through stronger and more credible accountability elements, for both the institutions and the elite. They can reduce the populist’s incentives and ability to introduce measures that would quickly and disproportionally favour him and allow him to enhance his grip over the initial benefits.”
These “second generation commitment devices” require a careful study of the biases of regulators and a careful study of the behavioral issues that surround the political arena in which they work, because the forces of populism do play with these tools. Before embarking on the specific or generic reforms suggested by Mario Blejer and Piroska Nagy-Mohacsi in that article, such as periodic reviews of regulatory institutions or focusing more on fair process than outcomes (as well as “allocate resources to improving the public’s understanding of the long term costs of unsustainable policies”), it would be useful to have a better knowledge of the characteristics of the decision-making process of the individuals that participate in regulatory decisions.
Mainstream political operators respect the existing institutional constraints and functioning of politics, but these are often under criticism. As another  recent article on the supply and demand of populism suggests, new leaders are then very tempted to break away from one form or another of existing constraints. These constraints can be formal or informal, and it is not unusual that national-populist leaders, at the same time that they propose walls or exits, they also depart from inherited conventions and use strong rhetoric or ride the waves of the mob rule. The answer should be serious institutional reforms.

Sunday, November 26, 2017

Blaming others after wasting resources in a conflict

As Catalan former president Carles Puigdemont blames "Madrid" and now even the EU for all his problems, I find this paragraph in a new article about populism very suitable, especially where it says that when he finally fails to deliver, the populist finds someone else to blame for spoiling the party: "The populist wants, of course, to complete his takeover of the system before the negative consequences of his policies start to bite. But if he cannot achieve this objective he ‘doubles up’, raising his populist bets. Policies that benefit his constituencies gain priority while deficits, inflation, debt, and/or state intervention, price control, and protectionism increase as democratic institutions crumble. Again, the populist leader is ‘time consistent’ – he expected these results and never intended to pay for those costs, financed through the use of financial and physical repression, default, institutional destruction, expropriation, etc. He continues to promise massive gains in output, employment, trade, and so on, and when he finally fails to deliver, he finds someone else to blame for spoiling the party. He starts resorting to extreme policies (undue pressure on business leaders, state interventions in various forms, nationalisation, and so on) particularly before each election cycle. He also goes after individual freedoms, and institutions whose remit is to protect them." The academic literature about populism will learn a lot from the Catalan case and the neo-populist tricks of the secessionists, which can also be illuminated with the academic literature about conflict (violent or not). Ethnic conflict (ethnic in a very general sense, as based on a marker different from income) is more sustainable than income conflict because ethnic groups include rich individuals that have the resources to sustain conflict over time. As Esteban, Mayoral and Ray argue in an article in Science, "such markers can profitably be exploited for economic and political ends, even when the markers themselves have nothing to do with economics. A study of this requires an extension of the theory to include the economic characteristics of ethnic groups and how such characteristics influence the supply of resources to conflict."

Tuesday, November 21, 2017

After the Spanish crisis, should the academic literature about populism be re-written?

Until very recently, it was usual among political scientists and commentators to say that Spain was relatively free of populist parties. That was before the constitutional crisis triggered by the attempts by Catalan secessionists to unilaterally declare independence. Of course, for those who had been witnessing the sustained pro-independence campaign in the recent past, the crisis and its populists features were no surprise. For example, an otherwise very interesting article by Inglehart and Norris based on empirical evidence that includes Spain, has no mention of the Catalan issue. It argues that one of the characteristics of populism, beyond nativism, is the rejection of representative democracy and the checks and balances that accompany it, and a preference for pebiscitarian mechanims. This is clearly present in Catalonia. It has to be said that it also mentions as usually accompanying populism some characteristics that accompany populism in some countries, but probably not in Spain and Catalonia: the cultural rejection by relatively old and not highly educated white males of the values of cosmopolitism. The authors of this article chacraterize populism as a dimension (endogenously obtained using factor analysis, which depends on the original variables being used) that goes from liberal cosmopolitism to racist reactionarism. This makes it difficult to analyze the Catalan/Spanish case. For example, when they plot parties from all European countries in a two dimensional graph with left to right in the horizontal axis and reactionary to cosmopolitan in the vertical one, the Spanish parties are in an almost perfect diagonal, with Podemos in the bottom left and the Popular Party in the top right. That is, in Spain, it would seem that populism is correlated with being right-wing. According to this, Spain would have only one dimension in practice. In the article they say that they classify as populists all those parties that score higher than a threshold as cultural reactionaries, but then in the list of populist parties in Europe they include Podemos, which if I read correctly, in the two-dimensional graph scores very low as reactionary (actually, it is the Spanish party with a lowest score). However, Podemos clearly satisfy the condition of favouring direct instead of representative democracy, and other features of populism such as neglecting the long run impact of their policy proposals. Moreover, in the two-dimensional graph, two centrist parties that were created to raise the flag of Spanish nationalism against Catalan nationalism, UPyD and Ciudadanos, score just average in terms of populism (precisely because populism is defined according to variables that are probably irrelevant in Spain). In this two-dimensional graph there are two Catalan political parties, ERC and CiU, the first close to Podemos and the second close to the Popular Party in the graph. However, these two parties have governed in coalition in the Catalan government and have been those in charge of the unilateral attempt to declare independence. There is a lot of work to be done to include the Catalan case in the analysis of populism. There will be no shortage of useful material.

Saturday, November 18, 2017

Academics or activists

Academics are professionals whose job is teaching and doing research. Their teaching and their research is evaluated ideally using objective high standards. Of course, academics, as well as citizens in other professions or without a clear profession, are entitled to their political opinions, like the author of this blog. However, academics in the field of social sciences are often in demand to produce opinions that are sold as scientific truths. There are some problems with this. Quite often, the same individual that uses very qualified and careful terms in a scholarly article on some topic, exudes self-confidence and even arrogance when addressing the same topic in some format addressed to the political arena. Probably the most well-known case in history, at least in economics, is the support of many members of the Chicago School to the Pinochet military dictatorship in Chile. Authors who had top scientific articles on macroeconomics and microeconomics gave their full support to a bloody regime that violated all basic human rights. Of course, they could not publish any article defending the Pinochet regime with the same clarity as they supported it in real life. The problem arises when academic institutions create debate platforms where they encourage academics to express their political opinions. This has been made easier with the Internet and social networks. For example, a few days ago, an on-line platform of a well known higher education international institution contained an opinion piece by a Catalan pro-independence academic where he defended the argument that the current problems in Catalonia and Spain where caused by the "failure of Spanish federalism". Of course, the very imperfect quasi-federal system of Spain has many problems. Actually, many people like myself defend reforming it not to become less, but more federal. But it seems difficult to attribute responsibility for the current constitutional crisis to federalism, when the instability and aggressivity of the attack to the democratic rule of law by a pro-secession regional government has triggered the decision of more than 2000 large firms to move their headquarters, the opposition of all European leaders and institutions, and a serious threat to social cohesion. The period of quasi-federalism and decentralization between 1980 and at least 2006, although it could have been managed much better, has been the period of higher freedom, welfare and self-government in the history of Catalonia. It is impossible that the same author would have published a similar article in a scholarly journal. This is his opinion, which he holds not because he has reached it by using the scientific method, but just because his identity politics and ideology determines that he has this opinion. The same mechanism affects academics, sports players, clowns and anyone else.

Wednesday, November 15, 2017

Thomas Piketty and Simon Kuper write about Catalonia

Two authors I follow have recently written interesting pieces about Catalonia. Simon Kuper, the sports (and more) journalist of the Financial Times, writes about "Us and them: Catalonia and the problem with separatism." I am afraid it is not always easy to access an article at the FT, so here it goes an extensive quote (I hope this is not illegal...): "I’m a fan of Catalonia but Catalan separatists are separating people. Their slogans say, “Spain steals from us!” or “Catalonia is not Spain”. Rhetoric like this divides people into opposite groups, each with a single identity: us (Catalans) and them (Spaniards). You must be one thing or the other. The government in Madrid unintentionally sharpens this divide by imposing direct rule on Catalonia.Someone else who thinks in terms of single identity is Donald Trump. As he tells it, you’re American or Muslim; you’re a real American or a liberal elitist. There’s an uncomplicated joy to single identity: find your essence, then taunt an enemy who doesn’t share it. And along with your identity comes a free set of opinions that you never need to test against reality (...)." After arguing in favour of the diversity of identities promoted by economist Amartya Sen in his book on this topic, Kuper finishes his article like this: "If you want to persuade people who don’t share your one particular identity, you need to appeal to some of our shared identities. Lilla writes: “I am not a black male motorist . . . All the more reason, then, that I need some way to identify with one if I am going to be affected by his experience . . . The more the differences between us are emphasised, the less likely I will be to feel outrage at his mistreatment.”The economist Branko Milanovic recently described what he learnt from the bloody break-up of his native Yugoslavia: “Be considerate. Think of people as persons. And do not impute to them opinions just because of their nationality.” It’s handy advice for today’s fragile societies such as India, the US and Spain." Thomas Piketty has a blog post where he brilliantly addresses the taxation implications of separatism in the context of the process of European integration: "Europe also bears a great deal of responsibility in this crisis. Apart from the catastrophic management of the crisis in the Euro zone, in particular at the expense of Spain, for decades now Europe has been promoting a model of civilisation based on the idea that it is possible to have everything at the same time: integration in a large European and world market, without any real obligation for ensuring fiscal solidarity and the financing of the public good. In these circumstances, why not try one’s luck by making Catalonia a tax haven along the lines of Luxembourg? To be sure, there is a federal European budget but it is very small. Above all, it should logically be based on those who benefit most from economic integration, with a common European tax on corporate profits and the highest incomes, as is the case in the United States (one could also endeavour to do better, but we are far from this). It is only by ensuring that solidarity and fiscal justice are at long last central to its practices that Europe will successfully tackle separatisms."

Sunday, November 12, 2017

The British federalists deserve more attention

While the UK is slowly declining and under the risk of isolation after a hard Brexit, many realise that they should have paid more attention to their own federalist tradition. One of the heirs of this tradition, Brendan Donnelly, recently published an article arguing that Brexit will be an absolute disaster. Here's what he says:
"It would be a bold person who would predict with certainty whether Brexit will occur on its appointed date in March 2019. Much has been made of issues relating to the revocability or otherwise of the Article 50 notification, to the desirability or otherwise of a second British referendum on the terms of Brexit and to possible reconfiguration of the British party political system. Whether Brexit occurs or not resolves itself in the last analysis into a simple question. As the negative consequences of Brexit unfold and become more manifest, will there be enough MPs from a range of parties with the courage and conviction to stop it?
So far, this is emphatically not the case. Despite its spectacular incompetence and bad faith, the present Conservative government still determines the Brexit discussion in the UK. It is however entirely possible that changing public opinion will interact over the coming months with latent (and not so latent) concerns among many MPs to produce a substantial majority hostile to the only kind of Brexit which can realistically be achieved. If that is so, questions about the revocation of Article 50, a second referendum and new political parties will fall into their as yet unpredictable place. It would be a stupendous but entirely conceivable irony if next year’s robust assertion of British Parliamentary sovereignty was not to embrace Brexit as a resumption of “control” but rather roundly to reject the whole Brexit chimaera."
Brendan Donnelly belongs to the Think Tank The Federal Trust and to a tradition that was pioneered decades ago by Lionel Robbins, William Beveridge and other great British personalities of different ideologies. This British tradition is unfortunately not known enough, but it was very influential in European federalism, for example through the Italian communist Altiero Spinelli. Their ideas are today being promoted among others by Will Hutton, Timothy Garton Ash and many centrist and labour individuals that believe that citizen control can only be exercised when it is effectively shared with others.

Saturday, November 11, 2017

A taxonomy of "good and bad" regulatory biases

In the context of the holdup problem in regulation (the regulator facing incentives to hold up the sunk assets of the firm), I can see from my current research that potential departures from the traditional assumption of rationality in regulators of network industries (or other similar) can be classified in three categories:
-Satisficing behavior or similar departures from standard preference or social welfare maximization: regulators have been observed to try to avoid problems and keep a low profile (minimal sqwak behavior, omission bias). Similarly, their behavior seems to differ depending on age or professional background. There is also a literature on the impact on decision-makers of apparently irrelevant factors such as mood, hunger or similar.
-Expert Bias: regulators are not immune from some psychological biases like availability bias or confirmation bias or herd behavior (for example, in sports referees). There is a corresponding literature on de-biasing mechanisms or factors that contribute to diminish the influence of behavioral anomalies (like technology or monetary incentives).
-Process: one of the findings of behavioral economics is that individuals care not only about outcomes, but also about processes. That opens up a new set of policy tools for regulators and regulatory institutions. Reforms or policies are better accepted when they are “owned” by citizens, rather than imposed from external forces, as shown in experiments. The Acceptability/Legitimacy of regulatory decisions that may be vulnerable to populist pressure depends then on narratives or “stories,” as argued by Akerlof. The endogeneity of preferences and social norms matters for the success of efficient reforms and policies.
Knowing better and taking into account these phenomena may help design or nudge institutions to make them more effective and robust.

Sunday, November 5, 2017

The illusion of control

The pro-business center-right Catalan leader who started the current drive for independence, Artur Mas, expected to extract an electoral gain from a snap election in 2012 just by hinting at a possible and ambiguous call for an independent state. He did not obtain as many gains as expected in that snap election, but five years from then, the campaign he started has created instability in a European democracy, which now has even been exported to another one, Belgium. In the meantime, more than 2000 companies have moved their legal headquarters out of Catalonia, and the region has lost temporarily its institutions of self-government. What better exemple of the illusion of control can we find? This illusion is frequent when we believe we can choose outcomes, instead of strategies or actions, and when we neglect the influence of chance events and the decisions taken by others on our own decisions. National-populists accompany their illusion of control with the claim that they want to take back control, only to realize that in a globalized world this is not completely in their hands. In nationalist conflicts, what initially seems nice and even fun, can very soon follow a slippery slope. A video by Stephen Colbert in a US TV network has shown to many the potential for simplification of nationalist controversies. I wonder if Colbert had so much fun with the problems of the former Yugslavia before the eruption of the Balkan wars. The video repeats many of the post-truths (taking part of the truth and manipulating it) of nationalism:
-It is true that an elected government is partly in jail, but that is because a judge has ruled that before a trial where they will be judged for breaking the law there is a risk of evasion (the president has gone to Belgium) and they may destroy evidence. I would have preferred that they were not arrested, but I guess that if Trump or a state governor in the US breaks the law something will have to be done with them.
-Actually Catalonia is not overtaxed as Colbert says, any more than California is overtaxed (they are rich societies that contribute into an improvable progressive tax system).
-Comparing Catalonia in 2017 with the US in the late XVIII century...
-Franco did suppress the Catalan language, but also many other things in the whole Spain, like other languages and freedoms. Many Catalans, like my grandfather, fought with Franco. The Civil War and Francoism were not Spain vs Catalonia, but fascists Spaniards and Catalans against democratic Spaniards and Catalans.
-Catalans do not pronounce Barcelona in one way and Spaniards in another, but more than half of Catalans have Spanish as first language (not my case) and pronounce Barcelona the same way as people in Madrid.
As you reader can see, things are more complex than TV talk shows would like, and we Catalan federalists have a very hard battle...
I know that some people in the US know much better than this, like Roger Cohen of the New York Times. It is not me, it is American historian Timothy Snyder who says that post-truth is pre-fascism.

Wednesday, November 1, 2017

The problems of national-populism with justice

It has been a coincidence that more or less the same days that the Mueller's investigation gets closer to Donald Trump's inner circle, the Spanish justice has called former Catalan president Puigdemont for interrogation. In normal times, with normal political leaders, politicians do not have problems with justice, except perhaps for sexual scandals or corruption allegations. But the problems of Trump and Puigdemont are of a different nature, they have to do with the lack of respect of these leaders for the regular democratic process. A characteristic they share with other national-populists is their institutional relativism. They seem uncomfortable with the division of powers between the judiciary, the executive and the legislative branches of government. They do not seem to understand that democracy requires rules, constraints, checks and balances. The Catalan secessionist movement had planned to declare independence after a referendum organized by themselves, without bothering first to reform the Spanish Constitution that prohibits it (as these things are prohibited in almost all democracies in the world). In the pretend legislation that accompanied their fake self-determination attempt, they had passed a provisional Constitution (with the votes of half of the members of a regional Parliament representing less than half of the regional voters) that subordinated the judicial branch to the executive branch, in practice trying to eliminate the independence of justice. As the circus of Mr. Puigdemont has moved to Brussels (let's leave the word exile for those who really suffered it under tragic circumstances), the international media have now a clearer idea of the conception of justice of the Catalan national-populists. As an expert has told The Guardian in a useful article, “you have two competing visions of democracy that we see replicated across the west. One is a so-called plebiscite, people’s will democracy against a pluralistic, institutional and rule of law democracy. The current leaders of the secessionist camp have been arguing that they represent the people of Catalonia but they only represent a part of it.”

Sunday, October 29, 2017

Federalism by mistake?

Political scientist Daniel Tresiman argues in a new academic article that in transitions to democracy "influential theories contend that incumbents deliberately choose to share or surrender power. They do so to prevent revolution, motivate citizens to fight wars, incentivize governments to provide public goods, outbid elite rivals, or limit factional violence." Examining the history of all democratizations since 1800, however, he shows that such deliberate choice arguments may help explain only up to one third of cases. "In about two thirds, democratization occurred not because incumbent elites chose it but because, in trying to prevent it, they made mistakes that weakened their hold on power. Common mistakes include: calling elections or starting military conflicts, only to lose them; ignoring popular unrest and being overthrown; initiating limited reforms that get out of hand; and selecting a covert democrat as leader. These mistakes reflect well-known cognitive biases such as overconfidence and the illusion of control." Although the methodology used by Treisman is open to discussion (trying to put into conceptual boxes more than one hundred stories), the conclusions are suggestive and surely at least part of the explanation. The same explanations might be applied to attempts to change the course of history through sovereignty conflicts. Both in the Brexit process and in the Catalan independence movement we have seen a lot of hubrys from leaders. Overconfidence and the illusion of control from David Cameron or Artur Mas have led their societies to be guided by movements that escaped from their hands. They called referenda or elections that went not as expected. Other leaders or the same ones made overoptimistic claims (from their perspective) that were not confirmed by experience. Nationalist leaders claimed that they would take back control (what better example of the "illusion of control"). The book "The Ostrich Paradox" explains how badly we are prepared for disasters due to among other psychological biases, overoptimism. Many that are not nationalists (myself included) have also behaved like ostriches, by not acknowledging the seriousness of what was happening around us. However, the world, or at least Europe, will evolve with all our mistakes in a reality that is globalized and interconnected. This world will select those governing institutions that are fitter for survival. Will we stumble into federalism?

Wednesday, October 25, 2017

The federalist voice in Catalonia

As it is usually the case in many sovereignty conflicts, the federalist perspective emerges as a reference point for solutions based on dialogue, negotiation and respect for the rule of law and democracy. This is not surprising, as most people who live in democracy in the world do so in federations, and some of the richest and most stable societies are federal in nature. In the case of Catalonia and Spain, it has been not only local scholars or politicians who have suggested this way forward, but also prestigious journalists or writers in the international media such as Roger Cohen in the New York Times or Will Hutton in The Guardian. In a recent debate in the European Parliament, the current leader of the European liberals, Guy Verhofstat, made a passionate defense of the federal principles as a guide to leave behind the current conflict in Catalonia.
In the local political arena, the federalist positions are defended by a number of organized groups, among which the association Federalistes d'Esquerres based in Barcelona is the strongest one, although there are also federalist groups of the civil society in Andalusia, Aragon, Cantabria and Madrid. The Spanish Socialist Party, encouraged by its Catalan branch, is officially in favor of a federalist solution, and several representatives of other parties, including Ciudadanos, Podemos and the Popular Party have spoken in favor of federalist reforms. The current leaders of the Basque Nationalist Party have also spoken of a pluri-national Spain in a federal Europe. A documentary is currently being produced by award-winning film director Albert Solé that collects many of these voices.
Spain is already a very decentralized country, but some federalist reforms would make it closer to more stable and consolidated federations. These reforms would include:
-The full support of the Spanish Constitution to the European Project of integration and transfer of sovereignty in a number of areas to the European Union and the Eurozone.
-A reform of the Senate, so that the current autonomous communities (federal units in a future federal state) can participate in solutions to common problems. This reformed institution could then decide on the allocation of funds for large infrastructures or similar common problems.
-A clarification of the responsabilities and financing mechanisms of the different government levels. This is now scarcely transparent. A good suggestion is to clarify in a self-contained list the responsibilities of the Spanish federal level and leave all the others (by default) that do not belong to the European level, to the federal units and municipalities.
-Accept the multi-lingual nature of the Spanish society and adopt a language regime similar to that of Canada, Switzerland or Belgium, instead of the current one where languages other than Spanish-Castillian are relegated to the autonomous regions.
-Locate some services and headquarters now based in only one capital, Madrid, in several other cities, as it is done for example in Germany and other federal countries. The Senate itself, for example, could be in Barcelona or in another big city.
Both Spain and the European Union should converge to a flexible multi-level federal democracy. Spain should evolve in this direction from its origins in a centralized unitary country. And Europe should evolve in this direction from its origins in a set of powerful sovereign nation-states. The nation-state is an obsolete institution, and our increasingly global problems (climate change, inequalities, migrations) require new institutions adapted to the new realities.
Those above are some concrete proposals, but in the case of Spain they could be adapted to the results of a necessary dialogue and negotiation among different political parties and governments. The federalist positions have a wide support. For example in a recent GESOP poll, 46.1% of Catalans defended that the outcome of the current secessionist conflict should be an agreement with Spain to increase self-government, whereas only 36% defended a secessionist outcome. When asked about this option, it is usually the most preferred by Spaniards and Catalans, above secession, status-quo or re-centralization. But it would also be the most natural outcome of a negotiation if all parties (including Spanish and Catalan nationalists) were somehow forced to reach an agreement instead of incentivized to cultivate conflict as they are now. The federalists are often characterized as "unionists" by separatists, but this is a word that is absent from Catalan political traditions, and it is used to try to associate those opposing independence to radicals such as the late Rev. Paisley in Northern Ireland. In fact, what we should learn from Northern Ireland is not the style of this leader, but their method to reach a very broad agreement in the context of the European Union that was finally voted in a referendum to facilitate peace and stability now for twenty years. Since the XIXth century there have been very strong federalist movements in Catalonia and Spain, and their voice is more and more heard today as citizens try to find light at the end of the tunnel in which the conflict is dangerously paralized at the moment.

Saturday, October 21, 2017

Open letter to the BBC: don't buy the narrative of hate

I am a viewer and admirer of BBC World. I have received these days a WhatsApp message that apparently media firm Mediapro has been circulating. This media company is, according to the message, producing a debate for the BBC that will be conducted by the prestigious journalist Stephen Sackur. In the message, the producers are saying that they are looking for 100 independentists, 100 "unionists" and 100 neutral/undecided individuals. I have no doubt that a rigorous program conducted by Mr. Sackur can be a very interesting and helpful contribution to the events that we are experiencing in Catalonia. However, I believe there are reasons to question the choice of partner and the framing of the debate. Mediapro is a company that has strong links to the secessionist groups. Beyond this, it is a company that has been or is still being investigated by the FBI for the involvement of its subsidiary Imagina in the FIFA corruption scandal (you can check this by googling Imagina, FBI and FIFA or replacing Imagina by Mediapro). The role of this media company in Catalonia is not very different from the role of the British public relations company Bell Pottinger in Southafrica that was recently denounced by the Newsnight programme of the BBC for profiting from the promotion of social division. The full story of the relationship between Mediapro and the secessionist movement in Catalonia is explained in the "serious" pages of the satiric magazine Mongolia (the Spanish "Charlie Hebdo") last summer (unfortunately, not available online). Beyond this, the binary narrative that these producers are using to promote the debate, is very unfortunate. The word "unionist" does not belong to the very rich history of political movements in Catalonia or Spain. Instead, it was introduced in Catalonia by the organized pro-independence movement to associate those who oppose independence (who have very different views among themselves) with a radical unpopular movement. I can assure you that there are no followers of the late reverend Paisley in Catalonia. There has never been a so-called "unionist" movement in Catalonia. People like myself are neither independentists, nor unionists, nor neutral. We are federalists, like at least 40% of the population according to surveys. Why not frame the debate between federalists, non-federalists and neutral? Why not frame the debate in terms of pro-European, anti-European or neutral? Because that does not play into the hands of those that have used the self-government institutions of Catalonia to promote a nationalist agenda leaving aside the rule of law. Please make sure that this message reaches Stephen Sackur.

Sunday, October 15, 2017

Magical Thinking and the Catalan Fox News

The "Prodi doctrine" of the European Union (EU) says that any region that breaks away from an EU member state will automatically leave the club and have to reapply under the usual rules, a lengthy process. This is what The Economist says this week about the argument made by Catalan secessionists that instead the EU is no obstacle to create an independent country: "This tips some Catalans into magical thinking. The Prodi doctrine was a throwaway remark with no legal standing, they argue. Should Catalonia win its freedom, Europe’s leaders will put pragmatism before principle and ensure its place in the EU remains unmolested. Independence-minded business groups even suggest that worried German investors in Catalonia would lean on Mrs Merkel to shield it from ejection. (Brexit-watchers will recognise this questionable line of thinking.) It is hard for dreamers to swallow, but the existence of the EU has become the best guarantee of its members’ territorial integrity. For separatists, the EU once looked like the net that would guarantee their safety as they leapt into freedom. Instead, it has become their cage." This begs the question of why so many Catalans have been deluded by magical thinking. The answer may lie in another piece of the British press, in this case in an article in The Guardian by Peter Preston: "Catalonia has had its own television and radio services since 1983, delivering Catalan-only language programmes and – guess what? – paid for by the same government that declared quasi independence a few days ago. Bias comes naturally, perhaps inevitably, in the reporting of poor anti-separatist demonstrations, in the constant flashbacks to civil guard police wielding batons and throughout the hours of political discussion (...)" Many people living in inland Catalonia "have lived in a media cocoon of settled opinion, convinced that the EU will welcome their new nation into its midst, that the economic outlook is untroubled, that “taking control” will solve all problems. Passion becomes ingrained. No need to draw parallel conclusions closer to home, but this mingling of fact and conviction crosses many borders. If you can make the rest of the world go away, then doubt becomes a stranger (...). How did Catalonia wander so close to the edge of a cliff? Because – on screen, on the airwaves, in cosseted print – there was no real debate. Because (think Fox News) the semblance of real debate was quite enough, thank you." 

Thursday, October 12, 2017

A legal self-determination referendum is not a good idea either

It is a contradiction that many, but not all, well-meaning commentators on the Catalan issue advocate for dialogue and reforms (in a federalist direction) and also advocate for a legal and agreed self-determination referendum, "like the Scottish one." It sounds nice, but it is not. A referendum like the Scottish one does nothing to promote a dialogue that favours federalist reforms. Actually, the federalist option was not even in the ballot in the Scottish 2014 referendum. Most democracies in the world, that unlike the British do have a written Constitution (except Ethiopia, Liechstenstein and Saint Kitts and Nevis) either do not allow or explicitly prohibit a self-determination referendum of part of the country. That is, the best democracies in the world, like France, Germany, the USA, etc., would never allow this in their countries.The United Nations only approves of them for colonies or countries with human rights violations. The Council of Europe argues that any referendum about sovereignty must take place under full compliance with the constitution when this is democratic. The Spanish constitution does not allow it, but it could be changed, which takes time and convincing many people like me that are unconvinced. Some people, including the Catalan president and leader of the independence movement, argue that such a legal and agreed referendum should take place because the majority (of Catalans) want it. Probably the majority, which by the way does not favor independence (a myth demolished in an article in the Washington Post) compares this option with the reference point of a regional government trying to organize a vote out of the democratic rule of law. But to do something just because it is consistent with something people say they want when asked is not a good justification in a mature democratic society with high institutional quality, with checks and balances, and honest leadership. A self-determination referendum is what has plunged the UK into political chaos and economic uncertainty, but it is what parties like the Front National in France or the Northern League in Italy want to do once in power, either to leave the EU or to seggregate a part of their country to escape solidarity mechanisms. A referendum is also the preferred tool of Wilders, Orban, Erdogan and Putin. In some historical junctures they can be useful if they can unite all those in favor of peace and democracy, like in Spain in 1978, in Chile in 1988 and in Northern Ireland in 1997. But in the hands of leaders who want to play games with the rule of law, it is a tool that does little to preserve reasoned debate and the expression of political preferences in a way that fits with the collective will of neighbours and people with whom sovereignty is shared, in this case both in Spain and in Europe. A self-determination referendum is an instrument to institutionalize conflict, and conflict favours nationalism, as argued by the article in the Washington Post. Doing well a bad thing is worse than doing it badly.

Tuesday, October 10, 2017

Another behavioral Nobel prize

Richard Thaler was yesterday awarded with the Nobel Prize in Economics. After the Nobel prize to psychologist Daniel Kahneman some years ago, it is the second direct recognition of this institution to the merits of behavioral economics, the discipline in the intersection between economics and psychology. Before Kahneman, and before people used the concept "behavioral economics," Herbert Simon, who coined the concept "bounded rationality" and worked on it, also received the prize, as a student of mine reminded me in class. It is debatable whether Thaler has more merits as a generic promoter of the idea in books for the general public (like "Nudge," written with the celebrity legal scholar Cass Sunstein), or as a deep social scientist with frontier contributions. But the prize is a recognition that behavioral economics is already part of the mainstream. Other scholars that have received the Nobel prize, like Jean Tirole, George Akerlof, Robert Fogel, Robert Shiller and Elinor Ostrom have also been influenced by these ideas. The Economist says that "From a renegade offshoot within economics departments just a few decades ago, behavioural economics has gained an established place not only within academia, but also within government departments around the world. From Australia to America, as well as within organisations like the World Bank and UN, the “nudging” approach has been copied. The Nobel Committee’s decision to honour Mr Thaler is of course a recognition of his personal achievements. But it is also a testament to the newfound importance of his discipline." The New York Times has a nice collection of some of Thaler's columns, which I recommend.

Sunday, October 8, 2017

Hutton: the choice between federalism and an orgy of unforgiving remembrance

Dear reader, if I don't convince you, please read Will Hutton today in The Observer. And by the way, he doesn't need to finish his article with a call for another referendum (a typical concession to secessionism by lazy commentators). He knows better than that, because he interviewed Amartya Sen about it. It is the best article about Catalonia that I have seen, perhaps together with the one by Roger Cohen of the New York Times, "Damage to Catalonia." This is what Hutton, probably the best progressive writer in the UK, has to say:
"Europe is plunging ever deeper into an orgy of unforgiving remembrance. A collective curse has settled over our continent, in which past triumphs are contrasted with present grievances. Only independence, taking back control and avenging a continuum of injustice can restore justice, prosperity and lost glory, even if, in Catalonia, there could be a slide to civil war, as EU commissioner Günther Oettinger warns. It is not that the rest of the world is immune from this contagion: witness the passions over the Confederate flag in Charlottesville, Japanese politicians genuflecting at their war shrine or jihadists avenging the Crusades. But Europe, with so many tribes boasting so much history in so many countries, is the memory capital of the globe, where too many states are so vulnerable to the agonies of secession and fragmentation.
The best justification for what is happening is that these inflated memories are but froth on a deeper and natural yearning of every subnational, culturally united minority to enjoy civic self-determination. The worst interpretation is to see Catalonia as an expression of a destructive populist appeal to its citizens’ worst instincts – puffed-up hatred of the other, driven by false grievances and impossible hopes – while cloaking those unappetising instincts in the language of self-government and democracy.
The right response, as Catalonia’s Socialist party argues, is for Spain to recreate itself as a republican, federal state rather than attempt to sustain itself as a monarchially legitimised unitary state. The only way to avoid disaster and give the mainstream parties in Catalonia the political ammunition to argue against secession, which neither they nor the majority of Catalans want, is to offer the prospect of an autonomous Catalonia within a federal Spain. It is through political creativity that historical myth can be relegated to where it belongs, along with much more determined and imaginative activism to address inequalities and neglect.
Similarly in Britain. If the unfolding disaster of Brexit is to be stopped in its tracks, and the over-remembered, over-deified past restored to its proper place, we need parallel creativity – a constitutional settlement with Europe and, at home, a real assault on the injustices that fed what was at bottom a protest vote against a status quo too many found intolerable. Too much remembering has become toxic. It is time to forget and move on."

Friday, October 6, 2017

Gerard Piqué is no Colin Kaepernick

Colin Kaepernick is an American football player that put at risk his professional career to express his solidarity with African Americans who had been victims of police brutality. He lost his contract and he had to endure the hate of radical nationalists, including the current president of the USA, Donald Trump.  Some recent comments by the first authority of the country have pushed other American football players to join the protest. According to Wikipedia "Before a preseason game in 2016, Kaepernick sat down, as opposed to the tradition of standing, during the playing of "The Star-Spangled Banner". During a post-game interview, he explained his position stating, "I am not going to stand up to show pride in a flag for a country that oppresses black people and people of color. To me, this is bigger than football and it would be selfish on my part to look the other way. There are bodies in the street and people getting paid leave and getting away with murder", referencing a series of events that led to the Black Lives Matter movement and adding that he would continue to protest until he feels like "[the American flag] represents what it's supposed to represent". In the 49ers' final 2016 preseason game on September 1, 2016, Kaepernick opted to kneel during the U.S. national anthem rather than sit as he did in their previous games. He explained his decision to switch was an attempt to show more respect to former and current U.S. military members while still protesting during the anthem after having a conversation with former NFL player and U.S. military veteran Nate Boyer. After the September 2016 police shootings of Terence Crutcher and Keith Lamont Scott, Kaepernick commented publicly on the shootings saying, "this is a perfect example of what this is about."
This video explains how much he cares about the victims of police brutality in the US, in some cases killed by the actions of abusive agents.  I discussed recently with my students at the Study Abroad program at UAB the parallelisms between American football players taking a political position and some sports stars in Catalonia also taking a position in the independence debate, like soccer player Gerard Piqué or manager Pep Guardiola. Last Sunday Piqué echoed Kaepernick by complaining about the brutality of Spanish police in trying to prevent some voters from participating in an illegal referendum called by the Catalan regional government. There is little doubt that the Spanish police used excess brutality, but only one person suffered a major injury (a rubber bullet in the eye). I do not need to hide that I have much more sympathy for the cause of Mr. Kaepernick than for the cause of Mr. Piqué, which is also the cause of many upper and middle class people of the community where I live, but very far away from the sympathies of most poor and working class citizens. It is nice that Piqué, a multimillionaire descendant of a family of the Catalan bourgeoisie (his grandfather sat in FC Barcelona's board of directors) now for the first time cares about police brutality. Some years ago a Catalan woman lost an eye because of a rubber bullet of the Catalan police and he didn't say anything as far as I can remember. Piqué has never been seen expressing his solidarity with poor people for the dramatic budget cuts of the recent years (decided both by Catalan and Spanish governments), nor for the loss of money for the welfare state derived from the tax fraud of several of his colleagues and team mates. So far, he has not put at risk his career at all (like his colleague Arda Turan, who supported Erdogan in his last referendum to introduce autocratic elements in Turkey), nor he has started any controversy with the officials at his club. He is in the celebrity market, his partner is the Colombian singer Shakira, and he is most probably benefiting from his increased celebrity as a result of the controversy. Although he says he would understand that the Spanish national team stops calling him, he has not taken the step of refusing to go when called by the national coach, as the 2018 World Cup in Russia is approaching. I am sure that Vladimir Putin will welcome him with open arms.

Tuesday, October 3, 2017

Soccer secession, much more acceptable than political secession

FC Barcelona and R. Madrid (both) should leave the Spanish soccer League and join the English Premier League, perhaps at the beginning at least together with Glasgow Rangers and Celtic Glasgow. This would be the embryo of a true European superleague, which would exponentially increase the number of interesting soccer games every week. Now we have to endure many boring games in the Spanish league, which could recover some degree of competitive balance in the absence of the two big clubs. Now soccer leagues compete for attention, for managers and for players. Why couldn't they compete also for teams? Most of the audiences, and most of the best players and the best managers, find the EPL the best league. At the same time, there is an untapped demand for better games. Soccer fans have to wait until the end of the season to watch truly big games in Europe, or wait until the finals of the World Cup every four years. This move would contribute to preventing a hard Brexit, by highlighting the benefits of the UK remaining in the single market. It would cause no great problem to the Spanish or European economy because we would still enjoy two "Clásicos" every season. The Spanish Cup and the Champions League would remain in their current format. National teams would survive, but hopefully would be like tourist attractions deprived of political significance (more or less like the "calcio storico" in Florence and Siena). Instead, political secession to create or consolidate even more nation-states (with their package of flag, anthem and radical nationalism) creates instability and endangers investments and prosperity, as it is apparent in the case of Brexit. The poor would suffer the most with more political secessionism, because they don't have tax havens to send anything. A world of small nations competing for capital thereatens the welfare state. A world of soccer leagues competing for teams in a united Europe doesn't threaten anything and may be great for consumer welfare.

Saturday, September 30, 2017

Macron's Sorbonne speech for a sovereign, united and democratic Europe

French President Emmannuel Macron gave an important speech on September 26th at Sorbonne University. He proposed to refound the European Project on the basis of a more sovereign Euro-zone, with a stronger budget, a finance minister and a parliamentary control. His project includes some important key aspects in the form of much stronger common policies:
-A common Security and Defence policy that puts together information and resources to fight terrorism.
-A common Foreign policy and development, especially in the Mediterranean and Africa, to better deal with immigration in a human and forward looking way.
-A common policy of ecologic transition, to protect the environment and promote a common and integrated energy system.
-The digital revolution will require a common approach to regulate the digital economy, to protect intellectual property and to train workers in the skills of new technologies and artificial intelligence.
-The European Union and the euro-zone should commit to joint industrial and economic development and to fighting umployment, especially among the youth, in a context of fiscal and social harmonization.
My only problem with the speech is that somehow paradoxically with the objective of an integrated an multilingual Europe, it has been very difficult to me (in fact, so far impossible) to find the English version.
The speech gives more emphasis to objectives than to instruments. But he proposes at least one instrument to achieve this higher integration: the creation of pan-European lists in the next European election, starting with the seats that the UK abandons, but expanding the number of pan-European seats in the next two European Parliament election.
Macron condemns all forms of nationalism and hate, and expresses clearly his ambition to fight them with concrete and strong proposals to accelerate the transfer of sovereignty of all member states to the European level.

Tuesday, September 26, 2017

Talking with students about these interesting times

The Study Abroad programme at my university, in which I teach a course on soccer and economics to foreign students, has sent this wise message to our overseas partners:

"Dear Colleagues,
I am writing to you to keep you informed and to respond to enquiries we have received about the situation in Catalonia.
As you will have seen in the news there is a political dispute between the Spanish and Catalan governments and there has been a lot of activity, meetings and demonstrations. These have developed in a peaceful way and while there is debate and discussion there is no reason to fear violence.
The UAB officially inaugurated the course yesterday (news ítem here) and the Study Abroad programme is running as normal. We have reminded the students to be aware and make sure they are safe when they are out and about in the city.
We are also encouraging students and staff to talk about events to understand and learn from this aspect of  their Study Abroad experience. These are interesting times!
We will keep you informed. Please do not hesitate to contact us if you have any questions.
Best regards..."

I will do my best to encourage my students to talk about events and learn from these interesting times. I am very open to talk about everything related to what is happening in Catalonia in my classes and out of them. Since my course is about soccer and economics in a very general sense, there are actually some specific questions that I would like to discuss with my students:
-FC Barcelona officially promotes the idea that it is "more than a club" because the club has been linked to Catalan nationalism. Is the club in favor of Catalan independence?
-There is some debate about the league in which Barça would play in case of independence. However, Barça officials say they would play in the Spanish league anyway. Does that make sense?
-The Brexit referendum also raised some controversies about the English Premier League and the future of the UK, to which the economist Stefan Szymanski contributed with a blog post? Are there any lessons for Catalonia from the Brexit debate and experience?
-A few Catalan players and managers (Piqué, Guardiola) have expressed their opinions in the Catalan independence debate. These days some sports players in the US are also expressing their political opinions. Are there any similarities? What should be the behavior of sports stars in the political debate?

Friday, September 22, 2017

Reading "Corruption," by Fisman and Golden

Economist Ray Fisman and political scientist Miriam Golden have written a very useful book that summarizes a lot of recent research on corruption. It is one of those books that is meant for a general readership, but that ends up mostly being read by other academics because it gives a very efficient overview of recent frontier research. It touches on many angles of research on corruption. There are probably three main ideas. First, corruption is a coordination problem: one doesn't stop contributing to it unless others do the same. Second, in this coordination problem, common knowledge plays a very important role. This is probably the strongest part of the book, with very interesting examples on how not only actions that speak against corruption are important, but it is also important that information and participation become well known by many people. And third, there are no panaceas to fight corruption, although there are examples of societies leaving corruption behind, or at least some forms of corruption. Unfortunately, the book was written before Donald Trump becoming the US president. Seeing Trump every day on TV it would have been difficult to mostly forget, as the authors do in my view, about vertically integrated corruption, that is, moguls buying a political party or a political system to benefit from it. There were previous examples, either ignored or minimized in the book, like Piñera in Chile or Berlusconi in Italy, but now the problem also affects the first economy in the world. Although there are many examples in the book, one misses a more qualified approach to some cases of success, such as Chile or Sweden. The Latin American country has experienced recently important corruption scandals, addressed by a commission chaired by an economist, Eduardo Engel. Now the favourite candidate to win the next presidential election is again Piñera, one of the wealthiest capitalists of the country with interests in several regulated industries. Sweden escaped corruption, but it wasn't easy, as explained by Rothstein and Teorell. In my modest opinion, some dichotomies are a bit exaggerated in the book, like the big bang or nothing idea. Clearly, Sweden or the US cities escaped corruption after some decades of trial and error. As the authors say, there are no panaceas, and there have been many failed reforms. Then there is no way forward without learning from past experiences and try again. In multi-level democracies with checks and balances, in addition, centralized big bangs are just impossible. It is also in my view a false dichotomy as the authors seem to implicitly suggest at the end that we should go either for great leaders or bottom up efforts. Surely elites and organizations can do a lot to reform. Most people who get involved in political parties and other organizations are honest and well-meaning. I missed making a little bit more the connection between powerful transnational corporations and the concentration of fortune and corruption, and in general the connection between inequality and corruption. Sometimes in the book the idea is given that it is politicians who have most of the bargaining power. FIFA, Putin's olygarchs, corruption scandals in public-private partnerships and other examples show that the public-private frontier is fuzzy at best in corruption. Transnational implications of corruption are very relevant. Something is said on the importance of external pressure and coordinated international efforts, but the enormity of the problem is perhaps not exposed. In spite of all these comments, it is a great book that I recommend. Perhaps it should be read together with the book by Putterman on why humans CAN be angels, under the right environment of course. Democratic quality is a public good, and sometimes humans manage to provide public goods. The book finishes with a list of suggestions on what ordinary people can do. The list is taken from Transparency International. I fully support these suggestions. I would add two: if you are an angel, become a politician, and if you know any other angel, convince her or him to become a politician, or to get involved and active in politics.

Tuesday, September 19, 2017

Preference formation following autocratic regimes

Yesterday I attended the thesis defence of a student I have supervised. The dissertation is a collection of empirical essays in political economy that I hope will make their way to the publication circuits in the near future. One of the chapters was about how the memories of economic management in previous military regimes affected the support for democracy in Latin America. The main finding is that this benchmark does significantly affect perceptions of democracy, showing that reference points are important in political preferences, as we know from behavioral economics that they are in other fields. Another apparently very different chapter was about how the Catalan public TV channel had affected preferences for nationalism in the voting population. This influence is difficult to identify, as causality may go in different directions and there may not be enough variation to find statistical significance. However, by exploiting the fact that some territories started the channel before others probably for exogenous reasons, the author found that this channel, in the early periods (the only ones that can be analyzed using this technique) had an effect on preferences that was double in size than the effect in other similar studies. Finally, the third chapter was an event study about how the Catalan secession campaign of the last years had affected the stock returns of firms with interests in the region. In this case, the effects are very small and non-significant. I found very interesting that one of the very thorough members of the evaluation committee thought that the three studies were related because all of them analyzed preference formation following autocratic regimes. It was humbling to realize that many things that happen in Catalonia and Spain are the result of a country that just experienced a 40 year military dictatorship that finished just 40 years ago. Many of those who lived under that regime, in favour and against it, are still with us. The dark shadow of the Franco period still influences us in many ways, not always in the expected direction.

Sunday, September 17, 2017

Paying attention to the US debate from Europe

In Spain, Catalan nationalists are teeming up with a part of the radical left to take advantage of a weak an unpopular government to organize an illegal and revolutionary self-determination referendum. To hold a self-determination referendum is a legitimate proposal, but those who endorse it should do so with a minimum of rigour and some arguments that weigh the difficulties and contradictions of the proposal in XXI Century Europe. Of course, the weak and unpopular government of Mr. Rajoy in Madrid is not only a problem for the Catalans, but also for all the Spaniards. A secession campaign accompanied by the typical nationalist ingredients of hate, intolerance and demagoguery, will do nothing to improve democracy or democratic quality. The campaign is being suported by Julian Assange and congressman Dana Rohrabacher from the US, an ally of Trump and Putin. Watching yesterday an interview with Steve Bannon (former alt-right and ultra-nationalist advisor of Donald Trump) in Bloomberg TV, I see that the convergence of interests between nationalists and a part of the radical left does not only happen here. Some aspects of their tactics and their style of doing things is also similar in Europe and the US. Now in Europe we are more relaxed about national-populism after the defeat of Marine Le Pen against Macron, but we should not be relaxed about the dangers ahead. In that interview, Bannon predicted (as if wishing it) that the future will be a battle between left-wing populism and right-wing populism, and that the Americans will become united behind economic nationalism. Paul Krugman recently predicted that with the fall of Bannon in the White House, Trump would abandon economic nationalism and just spouse a traditional conservative agenda. Bannon predicts the opposite.