Martin Wolf

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Donald Trump, the political offspring of Mayor McCheese and Benito Mussolini, isn’t so singular among Republican politicians for the things he thinks but for saying them in such a brazen manner. The Gingrich-Atwater-Rove soft, coded language of bigotry helped GOP politicians to victory in a whiter America, but it never returned the nation to a mythical past as it had promised. The party leaders never intended to. Family values and the other hokum they were selling wasn’t important to the power brokers. It was just a useful means to fire up the base and gain control for the financial good of a sliver of the country.

Tired of being disappointed, the bedrock of the party has turned to a vulgar clown reluctant to disavow the KKK. But Trump stands on the shoulders of many of those very conservatives who express shock and disbelief at his rise. They were the ones who’ve spent decades cultivating anti-government attitudes and racial divisiveness and obstructionism and conspiracy theories. The question now is whether the hideous hotelier’s rise will be the party’s comeuppance or all of America’s.

From Martin Wolf at the Financial Times:

What is one to make of the rise of Donald Trump? It is natural to think of comparisons with populist demagogues past and present. It is natural, too, to ask why the Republican party might choose a narcissistic bully as its candidate for president. But this is not just about a party, but about a great country. The US is the greatest republic since Rome, the bastion of democracy, the guarantor of the liberal global order. It would be a global disaster if Mr Trump were to become president. Even if he fails, he has rendered the unthinkable sayable.

Mr Trump is a promoter of paranoid fantasies, a xenophobe and an ignoramus. His business consists of the erection of ugly monuments to his own vanity. He has no experience of political office. Some compare him to Latin American populists. He might also be considered an American Silvio Berlusconi, albeit without the charm or business acumen. But Mr Berlusconi, unlike Mr Trump, never threatened to round up and expel millions of people. Mr Trump is grossly unqualified for the world’s most important political office.

Yet, as Robert Kagan, a neoconservative intellectual, argues in a powerful column in The Washington Post, Mr Trump is also “the GOP’s Frankenstein monster.” He is, says Mr Kagan, the monstrous result of the party’s “wild obstructionism,” its demonisation of political institutions, its flirtation with bigotry and its “racially tinged derangement syndrome” over President Barack Obama. He continues: “We are supposed to believe that Trump’s legion of ‘angry’ people are angry about wage stagnation. No, they are angry about all the things Republicans have told them to be angry about these past seven-and-a-half years”.

Mr Kagan is right, but does not go far enough.•

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In a Foreign Affairs essay, Martin Wolf has a retort for techno-optimists, contending that wearables are merely the emperor’s new clothes. One of his arguments I’m curious about concerns the statistical evidence that output per worker has recently decreased. How, exactly, does automation fit into that equation? Technology would seem to only improve productivity among workers if it’s complementing, not replacing, them. I do think Wolf makes a great case that “unmeasured value” has been a big part of life long before the Internet. The phonograph, after all, couldn’t be any more fully measured than the iPod. An excerpt:

…the pace of economic and social transformation has slowed in recent decades, not accelerated. This is most clearly shown in the rate of growth of output per worker. The economist Robert Gordon, doyen of the skeptics, has noted that the average growth of U.S. output per worker was 2.3 percent a year between 1891 and 1972. Thereafter, it only matched that rate briefly, between 1996 and 2004. It was just 1.4 percent a year between 1972 and 1996 and 1.3 percent between 2004 and 2012.

On the basis of these data, the age of rapid productivity growth in the world’s frontier economy is firmly in the past, with only a brief upward blip when the Internet, e-mail, and e-commerce made their initial impact.

Those whom Gordon calls “techno-optimists”—Erik Brynjolfsson and Andrew McAfee of the Massachusetts Institute of Technology, for example—respond that the GDP statistics omit the enormous unmeasured value provided by the free entertainment and information available on the Internet. They emphasize the plethora of cheap or free services (Skype, Wikipedia), the scale of do-it-yourself entertainment (Facebook), and the failure to account fully for all the new products and services. Techno-optimists point out that before June 2007, an iPhone was out of reach for even the richest man on earth. Its price was infinite. The fall from an infinite to a definite price is not reflected in the price indexes. Moreover, say the techno-optimists, the “consumer surplus” in digital products and services—the difference between the price and the value to consumers—is huge. Finally, they argue, measures of GDP underestimate investment in intangible assets.

These points are correct. But they are nothing new: all of this has repeatedly been true since the nineteenth century. Indeed, past innovations generated vastly greater unmeasured value than the relatively trivial innovations of today. Just consider the shift from a world without telephones to one with them, or from a world of oil lamps to one with electric light. Next to that, who cares about Facebook or the iPad? Indeed, who really cares about the Internet when one considers clean water and flushing toilets?•


It would cost less to offer guaranteed paid work to unemployed Americans than to finance a social safety net, but there’s really no movement on either side of the aisle in Washington to aid the long-time unemployed, those left behind by the 2008 financial collapse and the growth of robotics. The problem has just been permitted to percolate.

In a Financial Times piece, Martin Wolf looks at two new titles about the haves and have-nots, Inequality: What Can be Done? by Anthony Atkinson and The Globalization of Inequality by François Bourguignon. Interesting that the acceleration of inequality is most marked in the U.S. and U.K. and has not been shared by all other industrialized nations. France, in fact, has seen disparity decrease during the same timeframe. An excerpt: 

Both authors agree that something should be done about inequality. Atkinson provides a number of arguments for concern over rising inequality within rich countries. Some argue, for example, that only equality of opportunity matters. To this he responds that successful personal outcomes are often merely a matter of luck, that the structure of rewards is often grossly unfair and that, with sufficient inequality of outcome, equality of opportunity must be mirage.

Beyond this, argues Atkinson, unequal societies do not function well. The need to protect personal security or to incarcerate ever more people is likely to become a drag on economic performance and inimical to civilised life. If inequality becomes extreme, many will be unable to participate fully in their society. In any case, argues Atkinson, a pound in the hands of someone living on £10,000 a year must be worth more than it is to someone living on £1m. This does not justify complete equality, since the attempt to achieve it will impose costs. But it does mean that high inequality needs to be justified.

Atkinson goes far further, offering a programme of radical reform for the UK. It is not merely radical, but precise and (to the extent such a programme can be) costed. It starts from the argument that rising inequality “is not solely the product of forces outside our control. There are steps that can be taken by governments, acting individually or collectively, by firms, by trade union and consumer organisations, and by us as individuals to reduce the present levels of inequality.”What about policy? At the global level, both authors recommend improved and more generous aid. Bourguignon adds that properly managed trade has much to offer developing countries. Within countries, both authors call for higher taxes on wealth and incomes, and for better regulation, particularly of finance. Also important, they agree, will be policies directly addressed at improving educational outcomes for the disadvantaged.

Thus policy makers should develop a national pay policy, including a statutory minimum wage set at the “living wage,” and should also offer guaranteed public employment at that rate.•

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In a review of Martin Wolf’s The Shifts and the Shocks in the New York Review of Books, Paul Krugman argues that the financial bubble may not have led to the 2008 crash but merely briefly masked an economy that has stalled in a long-term way. An excerpt:

“Emphasizing the need to reduce financial fragility makes sense if you believe that the legacy of past financial excess is the reason we’re in so much trouble now. But are we sure about that? Let me offer two reasons to be skeptical.

First, while the depression that overtook the Western world in 2008 clearly came after the collapse of a vast financial bubble, that doesn’t mean that the bubble caused the depression. Late in The Shifts and the Shocks Wolf mentions the reemergence of the ‘secular stagnation’ hypothesis, most famously in the speeches and writing of Lawrence Summers (Lord Adair Turner independently made similar points, as did I). But I’m not sure whether readers will grasp the full implications. If the secular stagnationists are right, advanced economies now suffer from persistently inadequate demand, so that depression is their normal state, except when spending is supported by bubbles. If that’s true, bubbles aren’t the root of the problem; they’re actually a good thing while they last, because they prop up demand. Unfortunately, they’re not sustainable—so what we need urgently are policies to support demand on a continuing basis, which is an issue very different from questions of financial regulation.

Wolf actually does address this issue briefly, suggesting that the answer might lie in deficit spending financed by the government’s printing press. But this radical suggestion is, as I said, overshadowed by his calls for more financial regulation. It’s the morality play aspect again: the idea that we need to don a hairshirt and repent our sins resonates with many people, while the idea that we may need to abandon conventional notions of fiscal and monetary virtue has few takers.”

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Here, in no particular order, are this year’s 20 selections. These pieces, which made me think or reconsider my opinions or just delighted me, are limited to ungated material that’s only a click away. (I included work from publications such as the New York Times which allow a certain amount of free articles per month.)

  • The Reality Show” (Mike Jay, Aeon) Brilliant essay that points out that the manifestations of mental illness are heavily influenced by the prevailing culture. In our case: ubiquitous technology.
  • Invisible Child–Girl in the Shadows: Dasani’s Homeless Life (Andrea Elliott, New York Times) A tale of two cities in present-day New York told through the story of a talented grade-school girl trying to make it through the hard knocks of class divisions. What’s expressed tacitly is that if the best and brightest homeless children only have a so-so shot at success, those less gifted have almost none. 
  • The Robots Are Here” (Tyler Cowen, Politico Magazine): The best distillation yet of the economist’s ideas about where the technological disruption will lead us as a society. I’m not completely on board with his forecasting, but this article is smart and provocative.
  • In Conversation: Antonin Scalia(Jennifer Senior, New York) Amazing interview with the Supreme Court Justice which reveals him to a stunning, and frightening, extent.
  • Return of the Oppressed (Peter Turchin, Aeon) The father of Cliodynanics forecasts a dark future for humanity thanks to spiraling wealth inequality.
  • Omens (Ross Andersen, Aeon) With a focus on philosopher Nick Bostrom, the writer wonders whether humans will survive into the deep future.
  • Thanksgiving in Mongolia(Ariel Levy, The New Yorker) Heartrending story of a reporter’s loss in a far-flung place is personal journalism at its finest.
  • Blockbuster Video: 1985-2013 (Alex Pappademas, Grantland): A master of the postmortem lays to rest not a person but a way of life which is disappearing brick by brick and mortar by mortar. 
  • The Corporate Mystique” (Judith Shulevitz, The New Republic) A reminder that a female CEO is not a replacement for a women’s movement.
  • The Global Swarm” (P.W. Singer, Foreign Policy) The author considers privacy as drones get smaller, smarter and seemingly unstoppable.
  • The Master” (Marc Fisher, The New Yorker) A profile of a predatory teacher is most interesting as an extreme psychological portrait of the cult mentality.
  • Why the World Faces Climate Chaos” (Martin Wolf, Financial Times) An attempt to understand why we cling to systems that doom us, that could make us the new dinosaurs.
  • The Hollywood Fast Life of Stalker Sarah” (Molly Knight, New York Times Magazine) Thoughtful article about celebrity in our age of decentralized media, in which fame has entered its long-tail phase, seemingly available to everyone and worth less than ever. 
  • Academy Fight Song(Thomas Frank, The Baffler) The author plays the role of designated mourner for common sense in U.S. higher education, which costs more now and returns less.
  • The Wastefulness of Automation(Frances Coppola, Pieria) A smart consideration of the disconnect of free-market societies that are also highly automated ones.

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Why didn’t Microsoft, the most powerful technology company in the world in 1995, own the Internet? Why was Barnes & Noble toppled by Amazon when B&N initially had so many more advantages? Because power and advantages and size are also barriers to adaptation. The dinosaur is large but unwieldy. There is a natural inclination to protect what has succeeded in the past even if it dooms the future. But these are mere corporations and it matters only to stockholders which one wins. But what about more important losses? Have we failed to counteract climate change for so long for these same reasons? Are we now the dinosaurs? From Martin Wolf at the Financial Times:

In brief, humanity is conducting a huge, uncontrolled and almost certainly irreversible climate experiment with the only home it is likely to have. Moreover, if one judges by the basic science and the opinions of the vast majority of qualified scientists, risk of calamitous change is large.

What makes the inaction more remarkable is that we have been hearing so much hysteria about the dire consequences of piling up a big burden of public debt on our children and grandchildren. But all that is being bequeathed is financial claims of some people on other people. If the worst comes to the worst, a default will occur. Some people will be unhappy. But life will go on. Bequeathing a planet in climatic chaos is a rather bigger concern. There is nowhere else for people to go and no way to reset the planet’s climate system. If we are to take a prudential view of public finances, we should surely take a prudential view of something irreversible and much costlier.

So why are we behaving like this?

The first and deepest reason is that, as the civilization of ancient Rome was built on slaves, ours is built on fossil fuels. What happened in the beginning of the 19th century was not an ‘industrial revolution’ but an ‘energy revolution.’ Putting carbon into the atmosphere is what we do.” (Thanks Browser.)