Political Economy of Relative Gains

Realist IR scholars reject the possibility of meaningful international cooperation on the idea that not all states can benefit from such cooperation. That's wrong, liberal institutionalists retort, because classic trade theory demonstrates that cooperation can promote mutual "absolute" gain.

Realists counter with the point that mutual gains rarely result in equal distribution. Some states will benefit more from cooperation and these relative advantages mitigate against cooperation. Why would a state partake in an agreement that helps competitors more than it helps itself? Essentially, because realists see international politics as a struggle for power, states can prevent a redistribution of power by refusing to partake in meaningful cooperation.

Plus, on many truly difficult issues, there are going to be costs to cooperation -- similar to the dues union members pay for the benefit of membership. States have an incentive to free ride, rather than to pay costs to create gains. Thus, on many global issues that require genuine multilateral cooperation -- Kenneth Waltz mentioned “poverty, population, pollution, and proliferation” (209) -- states won't work together because they lack incentives.

Realists do not think much of existing international cooperation. Believe it or not, a prominent realist view of past trade practices suggests that they reflect typical interstate competition rather than real cooperation. Realists recognize that states form alliances when confronted by potential hegemons, but this is basically because their survival is potentially at stake. In lesser circumstances, a strong state might set up sham institutions to promote forms of cooperation that are in their individual interest and essentially coerce others to participate. This could include institutions that serve multiple purposes, promoting selfish security cooperation with small economic bribes.

Some empirical evidence supports the pessimistic view of international economic cooperation.

This is a quick and simplified account of a complex debate, of course, but I mention it because of this study result I read in The Atlantic last October.** Individual Americans apparently embrace this vision and reject the prospect of mutual benefit if the benefits provides relative gains to "competitors." IOW, people see other people as competitors:

In a survey of faculty, students, and staff at the Harvard School of Public Health, nearly half of the respondents said they’d prefer to live in a world where the average salary was $25,000 and they earned $50,000 than one where they earned $100,000 but the average was $200,000. Similarly, a majority favored relative over absolute advantage when it came to their own intelligence and attractiveness, their child’s intelligence and attractiveness, or praise from a superior. Apparently the survey respondents would rather the planet be filled with stupid, ugly children than have their own child left behind [1].

There are apparent lessons in this about the rise of Donald Trump and the populist/nationalist concerns of his supporters. Trump wants to build a wall along the southern US border, deport millions of undocumented immigrants, and impose new tariffs on major trading partners such as China and Mexico. Many economists predict that his policies would hurt the white working class more than others. However, their analysis is generally framed in terms of utility theory.

What if his voters don't care about utility as much as they do about perceived relative gains -- for them personally as well as for the US? Perhaps they are willing to be additionally impoverished so long as their competitors do worse -- whether that is undocumented Mexican workers or China.

The danger, of course, is that Trump voters are likely very wrong in how his presidency might influence the outcomes they desire. His tax policies, for example, basically continue long-term Republican plans to benefit the richest Americans -- and this link is from The Economist, not some lefty politician or organization. Would the U.S. win a trade war with China?


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** Yes, I'm cleaning out my office and have a stack of clippings.

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Tech check

Obviously, these past few weeks and months, members of the media have filed numerous stories about the important role of Facebook, Twitter, cell phones, and other technologies in empowering democratic activists around the world.

This is not fundamentally new. I've been in meetings about the Grawemeyer Award when serious people suggested and discussed the prospect of Twitter (its founders, I suppose) winning the prize because it was such a useful tool during the (failed) Iranian Green uprising. Similarly, a number of former students have contacted me electronically during the past few months to discuss the role of technology in coordinating demonstrations in Egypt and other middle eastern states.

This is a topic I've been thinking, writing, and teaching about for many years. In many respects, I have been a technological optimist and my former students recall the pre-9/11 discussions we had about information technologies and the Chiapas rebellion in Mexico in 1994 (remember Subcomandante Marcos?) and the democratic movement in Indonesia in 1998.

However, it now seems obvious that information technology can be used effectively by non-progressive forces as well. As Chris Lehman wrote recently in The Nation:

plenty of equally unsavory nonstate actors have also adapted to the new networked web—most notoriously in the cellphone-enabled Mumbai terrorist attacks, in which jihadists used Google maps to identify their targets. Mexican crime gangs have used Facebook to compile lists of kidnapping targets, while Indonesians can use a Craigslist-style service to arrange the sale of children’s organs. While Kenya has played host to a vital and influential site called Ushahidi, which helped modernize accurate citizen reporting of violence during the disputed 2007 elections, in that same episode ethnic leaders on both sides of the dispute used text messaging to spread violent attacks on their enemies.

Lehman also discusses the ability of governments to censor the internet and the willingness of western corporations to help them deny access to their populations.

Other pundits are also taking this position. This week, for instance, Harvard's Niall Ferguson's Newsweek piece argues that social networks can "empower the enemies of freedom." "Our most dangerous foes," he writes "are the Islamists who understand how to post fatwas on Facebook, email the holy Quran, and tweet the call to jihad.:

While critics and skeptics like Lehman and Ferguson make some good points, I continue to argue that decentralized information technology is bound to have progressive consequences. Wikileaks demonstrates that it is very difficult even for a powerful national security state to censor sensitive information. Useful technologies are cheap and getting cheaper, making them quite widely available around the globe. Given that participation in open discussion is a recipe for democracy in the public sphere, I do not see how some undesirable users can outweigh the communicative potential of everyone else. Sure, criminals and terrorists can foment hate in their niches of the world wide web, but that's certainly no reason to censor the rest of us. What's Ferguson's take home point?



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Breaking Bad

Since the holilday break in December, I've been watching the first three seasons of "Breaking Bad." Thanks to his naïveté, Walter White, the blue methamphetamine-producing chemistry teacher from Albuquerque played by actor Bryan Cranston, regularly runs afoul of various drug cartels -- including some from across the border.

Thanks to the show's multiple story-lines, the audience knows that White is taking even more life-threatening risks than he knows about. Moreover, his brother-in-law DEA agent also has good reason to exhibit fear.

These drug cartels will stop at nothing to have their way.

In the stack of materials I've meant to blog, I found a December 2009 Atlantic article by Philip Caputo that provides real-life background for the power of the Mexican drug cartels:

Dr. Edgardo Buscaglia, a law professor at the Autonomous Technological Institute in Mexico City and a senior legal and economic adviser to the UN and the World Bank, concluded in a recent report that 17 of Mexico’s 31 states have become virtual narco-republics, where organized crime has infiltrated government, the courts, and the police so extensively that there is almost no way they can be cleaned up. The drug gangs have acquired a “military capacity” that enables them to confront the army on an almost equal footing.

“This in itself does not prove that we are in a situation of a failed state today,” Buscaglia wrote. He seemed to be suggesting that the situation could change tomorrow—and not for the better.

While narco-republics on the southern U.S. border pose a very big problem, Caputo cites experts who believe that Mexico could become a failed state and thus pose an Af-Pak-like security problem::

In the past year, experts like General Barry McCaffrey (the drug czar in the Clinton administration) and political figures have warned that if the cartels are not contained, Mexico could become a failed state and the U.S. could find itself with an Afghanistan or a Pakistan on its southern border. Such forecasts are hyperbole, but the fact is that drug trafficking and its attendant corruption are a malignancy that has spread into Mexico’s lymph system.

** I'm only partway through season 3 -- AMC will run episodes 5 and 6 later this week, which my DVR will record -- as the network prepares to debut season 4 in July.


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Packing for a vacation in Mexico

The AP, April 16:

Mexicans spent a whopping $2.58 billion in bribes in 2007, some 42 percent more than they doled out just two years ago, according to a poll released Wednesday.

The survey, conducted by the nonprofit group Transparency Mexico, showed that 197 million bribes were paid nationwide in 2007 — compared to 115 million in 2005.

By these numbers, people in Mexico spent 8% of their incomes on bribes!

When does a traveler pay a bribe?

Smaller bribes include those shelled out to avoid traffic tickets or pay off informal "parking attendants," private citizens who block off sections of public streets and force drivers to "tip" them for giving them a space. The attendants, in turn, pay police for the right to operate...

Bribes move about 10 percent of all government transactions — including those to obtain construction licenses, vehicle inspection stickers and street-vending permits.

Among the top 10 most frequent bribes people reported paying were to city tanker trucks that deliver drinking water to homes in poorer neighborhoods. Others paid to get their trash collected, their goods passed through customs and their cars out of police lots after they were towed.

The good news? It works out to only $13 per bribe.


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