9 ms·

How a Quest by Elites Is Driving ‘Brexit’ and Trump

87 points by Cadsby 10y ago

wrong_variable 10y ago
The person does not seem to draw to anything actionable, and his conclusion is vague. I am not sure what he even means by 'optimizing for efficiency' If your business depends on the happiness of your employees then optimizing for their happiness increases your bottom line. If your business will be shut down if you commit fraud then optimizing for transparency is in your interest. Is this person blaming economists for something that they do not have much control over - and that is thinking about individual lives. Its mathematically not possible for economists to worry about each person. The reason why people are angry is that employment is closely linked to your ability to feed yourself and be a consumer of the global economy. So when politicians talk about employment - what they mean is a person's ability to survive.
- cmarschner 10y ago
  For economists, efficiency is simply that goods should be created where the surroundings are best suited for it - first described by David Ricardo in the 19th century. E.g. Cotton should be planted where there is the most fertile soil etc. This works best in a globalized economy where production can move around freely and where there are no trade restrictions. As a result, productivity is higher, meaning that goods are cheaper (if there is competition), meaning that - provided the result is used for consumption - that everybody is better off. This doesn't take into account that a) labor doesn't move freely, meaning the change process creates winners and losers, and uncertainty (locals are in constant danger that their job is reallocated to some other place), b) it gives an incentive to move production to places with lowest priced-in externalities (labor market frictions like unions, environmental damage).
  - rahimnathwani 10y ago
    "Cotton should be planted where there is the most fertile soil etc." Nitpick: this statement is about absolute advantage, whereas Ricardo emphasised comparative advantage: https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo.27s_example https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo.... Imagine that you're better than me at everything (both programming and needlework). You can program three times as fast, and sew twice as fast as I can. Does that mean you should do all your own programming and sewing? No. However small my contribution, I can save you some time by doing some sewing for you. In that saved time, you can do more programming than I could have achieved in the time I spent sewing. So in sum we're better off. So, there are potential gains from trade.
    - reddytowns 10y ago
      Yes, but at a certain threshold that is no longer true due to logistics. For instance, I could try to sell back all the plastic bags I got at the grocery store, and even if I folded them flat, made sure they were clean and ready to reuse, no matter the price, the grocery store owner would with all likelihood refuse to buy them from me. Because, regardless of how much money would be saved from buying my bags over the ones fresh from the factory, it wouldn't be able to cover the logistical cost to the company's workflow.
      - rahimnathwani 10y ago
        My simplified example was designed to demonstrate the difference between absolute advantage and comparative advantage, and show that there are gains from trade, even when one party has absolute advantage for all output goods. There is no doubt that transactions costs and other friction make some potential exchanges uneconomical. So, what you say is true. But it doesn't help or hinder my explanation, and is irrelevant to the point I was trying to make.
    - deleted 10y ago
      [deleted]
  - thaumasiotes 10y ago
elgabogringo 10y ago
I don't think the distinguishing characteristic of bankers is their desire for economic efficiency. It's their desire for self-enrichment. Maybe the author doesn't mean actual bankers, but is instead referring to central bankers, in which case I'd argue that the meager GDP growth achieved from an unprecedented expansion of central banking assets has been anything but efficient. Regardless, the fact that the author can look back the past 10 years of economic policy and find among all the mad and destructive monetary actions a "quest for efficiency" just shows that the author is as out of touch as the bankers. What's happening is that the public at large is figuring this out (and this part the author gets right) using the imperfect vehicles of Trump and Brexit to try and stop it.
- misja111 10y ago
  I don't think the average banker has a greater desire for self-enrichment than say, the average lawyer or the average sales manager. And anyway, there's nothing wrong with a certain amount of greediness in a capitalist system, this is what drives innovation and efficiency. The problem with banking has been that the system is broken. Unlike other companies, mismanaged banks cannot go bankrupt because they drag the entire system with them.
  - pyrale 10y ago
    > And anyway, there's nothing wrong with a certain amount of greediness in a capitalist system, this is what drives innovation and efficiency. I wonder how many years will pass before people realize this mantra is an article of faith.
    - dredmorbius 10y ago
      The one example of innovation mentioned in Adam Smith's Wealth of Nations came from a boy who wanted to go out and play with his friends. (His job was to activate the release valve on an early steam engine. He rigged up a string to do that so he could play. James Watt incorporated this into his design.) (Watt and Smith were contemporaries in Edinburgh. Not only that, but Smith arranged for Watt, who'd been driven from business by the blacksmith's union (the Hammermen), to have an appointment and facilities at the University of Edinburgh. I'm fairly convinced they shared drinks at the local pub and swapped war stories.)
avivo 10y ago
An interpretation: - Many people want to be able to have agency in what their future is like. - A quest for economic and technological growth makes the future unknowable, and makes predictions about what skills (and capital) will provide a livelihood to support your family as tricky as predictions about how much a startups equity will be worth. Many (most?) people can't effectively make these predictions and they suffer pretty badly.
keithpeter 10y ago
Quote from OA "Voters in large numbers have been rejecting much of the underlying logic behind a dynamic globalized economy that on paper seems to make the world much richer." In the UK, we don't actually know why 17+ million chose to tick the leave box. My conversations with a handful of people who did vote leave suggest a range of reasons from immigration, through to 'loss of control'. Macroeconomic policy does not seem to figure prominently. The government of Mrs May is further to the right of that of Mr Cameron. Her published statement does mention a softer approach to social factors and a desire to spread the rewards around more evenly... https://www.gov.uk/government/speeches/statement-from-the-new-prime-minister-theresa-may https://www.gov.uk/government/speeches/statement-from-the-ne... ...we shall see how that actually goes over the next few years in terms of actual law (look out for 'red tape' discussions - your red tape may be my employment rights) and policy (look out for some systematic way to replace the EU grant system that has recycled tax income from London/South to North).
- nugget 10y ago
  Do you think millenials being priced out of London as it became a global money laundering hub had anything to do with it? That's what I hear from my friends there.
  - jwblackwell 10y ago
    London largely voted remain so not really. However I think youth are rightly frustrated about London prices
    - flukus 10y ago
      40% of London voted to leave, that's enough to change the outcome. I don't think pretending there is a huge geographical divide is particularly helpful.
      - tonyedgecombe 10y ago
        If you ignore the protests of some regions how can you address their problems (real or perceived).
panic 10y ago
Perhaps the pursuit of ever higher gross domestic product misses a fundamental understanding of what makes most people tick. Against that backdrop, support for Mr. Trump and for the British withdrawal known as Brexit are just imperfect vehicles through which someone can yell, “Stop.” Did the author communicate at all with Trump supporters and leave voters, or is this just speculation? The support given in the article seems pretty weak: an unrelated abstract experiment about efficiency versus equality and a reference to another newspaper article about a BMW worker.
jkot 10y ago
Is there some source that elites want "hyper-efficient global economy"? From what I see, there is a push towards bigger government spending and higher taxes. A lot of that actually decreases efficiency, to the point it suffocates some industries.
- collyw 10y ago
  The American health care system seems to be way less efficient than the state run systems in Europe.
ZenoArrow 10y ago
> "Voters in large numbers have been rejecting much of the underlying logic behind a dynamic globalized economy that on paper seems to make the world much richer." That's a very different narrative than the one I recognise. From what I've seen the main effects of globalisation have been twofold: 1. Lowering prices by getting the working classes of all countries to compete with each other. 2. Giving multinational companies greater leeway in tax avoidance. The narrative that either benefits us all is somewhat misleading. Furthermore, with increased automation we'll see an even more rapid concentration of wealth in the hands of the few. On a semi-related note, if you have the time to watch it (it's roughly 2 hours long, but it stays interesting throughout IMO), I can recommend this video, it's a conversation between Yanis Varoufakis and Noam Chomsky, it helped me develop a further understanding of the problems in the EU, and the issues that come from unelected bodies taking over our democracies: https://m.youtube.com/watch?v=2WG-uEND74E https://m.youtube.com/watch?v=2WG-uEND74E
- yAnonymous 10y ago
  Exactly. The average citizen doesn't see much of the benefits of globalization. It mostly helps governments and companies.
  - rospaya 10y ago
    Tell that to my cheap phone made in China running an OS made by developers from around the world. My Turkish t-shirt, the Spanish tomatoes I ate this morning or the server I'm remotely setting up on the other side of the planet, so my company can sell their services there.
    - ZenoArrow 10y ago
      Are you in the lower/working class of your country? If not, then you're not necessarily amongst those that the system works against.
    - pjc50 10y ago
      You benefit as a consumer, but you may lose as a worker. We end up in this strange environment where manufactured goods are very cheap compared to housing and professional non-importable services like health and education.
caconym_ 10y ago
I may be reading this too late at night, but the theory seems to be that our benevolent, perfectly logical Ivy League-educated overlords regrettably have to break a few eggs to make a delicious omelette of economic prosperity for all, and those broken eggs are enough to make people throw up their hands and vote for Trump/Brexit/whatever just for a chance to cling to the present, the good old days, at the expense of that shining, golden future. I have a feeling that people are actually pissed off because they don't think the established elite are generally benevolent, but rather that they act in their own interests at the expense of the prosperity of the middle and lower classes. Whether this is true is beyond the scope of this comment, but any discussion of this seemingly relevant alternate theory is conspicuously absent from the article.
- majewsky 10y ago
  Indeed. I can understand that a lot of economic policies can be viewed in the way the author describes (a relentless pursuit of efficiency), but Ivy League overlords are also doing a lot of stuff that's just plain greed and can't be explained away with efficiency. For example high-frequency trading. Or (here in Germany) renting ruinous hotels to the government as refugee centers at bizarre rates because there was literally no other big-enough accommodation available.
  - gpvos 10y ago
    High-frequency trading is usually justified by pointing at increased market fluidity, which is a positive thing in principle. Whether that is enough justification for the problems it causes is clearly something that should be discussed more.
    - majewsky 10y ago
      Ah right, market fluidity was their cover-up story. I'm absolutely not convinced, seeing how billions of dollars and euros are pumped into the market to increase fluidity, with questionable success.
    - patrickg_zill 10y ago
perfunctory 10y ago
> favored equality over efficiency I think this is the wrong trade off. More equality does not necessarily mean less efficiency.
yummyfajitas 10y ago
I'm a little amazed at the tone of this article. People rent a home, and then exploit the democratic process in a beggar-thy-potential-neighbors strategy. They use things like rent control and other anti-migrant policies (e.g. anti-Google bus policies in SF, anti-Hijab laws in France) to enrich themselves at the expense of others. Because her wealthy uncles lost their job, and had a small drop in their standard of living, "Andrea" wants to screw over a bunch of desperately poor people a world away. Unlike "Andrea", our elites behave far better. Populists try to protect their favored ethnic groups - witness Shiv Sena trying to pass laws preventing non-Marathis from driving taxis, or "tech bros" entering SF. In contrast, I've never heard a white banker complaining about allowing a Marathi to be the CEO of Citi. Elite institutions - think of banking or tech - tend to be truly global enterprises, open to anyone who can demonstrate the requisite ability. Somehow the author doesn't draw the obvious conclusion: that our elites are honest, moral and principled individuals, while our masses are selfish, tribal and greedy people out to beggar their neighbors. For good policy making the conclusion is that we should try and increase the power of the elite.
- majewsky 10y ago
  > Elite institutions - think of banking or tech - tend to be truly global enterprises, open to anyone who can demonstrate the requisite ability. So you're saying that people of color and women just aren't fit to rule the world? The ethnic and gender distribution among elite managers etc. is certainly not representative.
  - yummyfajitas 10y ago
    The top 5 tech companies according to a quick Google search -> fortune article are apple, HP, IBM, Amazon and Microsoft. 2 CEOs are people of color (bezos and nacelle) one is gay and one a woman. It's true that Asians are overrepresented in tech. I believe this is, in fact, because more Asians are fit for the job. Do you disagree? Why do you think Asians are overrepresented, and what do you think should be done about it?
    - icebraining 10y ago
dools 10y ago
The issue he's talking about here is financialisation of the economy. It's an economy that's efficient at delivering large profits for an increasingly concentrated number of businesses and people. Jobless recoveries, debt deflation, etc. The answer of course is a reversal of the trend of neoliberalism over the past 40 years, to re-regulate banking and finance, increase government spending and return to full employment as a policy priority. This is all achievable through understanding Modern Monetary Theory. If anyone is interested in finding out more check out this Facebook group[1]. If anyone in Australia is interested I'm also starting a political party based on these principles.[2] [1] https://www.facebook.com/groups/introductiontommt/ https://www.facebook.com/groups/introductiontommt/ [2] http://www.australianemploymentparty.org/ http://www.australianemploymentparty.org/
didibus 10y ago
I recall a study that showed that above average income workers supported Trump at a higher percentage. If that's true, it seems to contradict the whole premise of this article. They should have asked those same Yale grads if they were voting Trump or not.
- monk_e_boy 10y ago
  People also have friends or relatives who would be better off under Brexit or Trump. I know a lot of rich people who want better for other people and adjust their vote accordingly.
- ZeroGravitas 10y ago
  You're probably thinking of this: http://fivethirtyeight.com/features/the-mythology-of-trumps-working-class-support/ http://fivethirtyeight.com/features/the-mythology-of-trumps-... One thing that confounds it is that Hispanic and African-American voters avoid Trump due to his appeals to white supremacy, and they are poorer than average. So if you only count "real Americans" then there may still be some truth in it.
objectivistbrit 10y ago
I'm pro-economic liberty and voted for Brexit. Every analysis like this has tunnel vision: yes, the free trade opened up by the EU brought prosperity to an entire continent. Had we been voting for the 1970s era EEC, I'd have gladly voted Remain. But in 40 years the EEC has evolved into the EU, with a constitution, a parliament, a president, a national anthem, a flag, supreme law-making powers and a currency. Maybe the Merckel anti-integration faction will remain dominant and they'll stop there. Given the Juncker faction pushes further integration as the solution to every crisis, and given the EU is in constant crisis, the next 10 years should be interesting. The EU is a world-historical experiment in social democracy - free markets + state regulation + the welfare state. The consensus is that this system represents the current pinnacle of political evolution. (Both 'progressive' Scandinavia and 'capitalist' America implement variants of it). An alternative perspective is that it's simply a compromise system which emerged after WWII and is already showing severe cracks. Maybe the EU will create prosperity by such actions as forcing Google to break up, throwing state money at impoverished regions, etc. Maybe the populations of France, Spain, Italy et al will accept that they can't fund welfare states by borrowing in perpetuity and stop voting in radical left-wing governments. Maybe they'll find an alternative solution to the ever growing debt-burden, over Piketty's proposal for seizing 15% of all bank accounts. https://en.m.wikipedia.org/wiki/Proposed_long-term_solutions_for_the_Eurozone_crisis https://en.m.wikipedia.org/wiki/Proposed_long-term_solutions... I have no idea. I would like to see pro-EU articles which actually address these issues, and not simply assume that the only reason to be against the EU is that you're an ignorant racist, deluded by propaganda and lies.
- madaxe_again 10y ago
  What's wrong with integration? You clearly think it's bad but don't say why. Ah, downvote me for replying with a question. Mature. I guess you don't have a reason that doesn't boil down to "I don't want foreigners next door"?
  - objectivistbrit 10y ago
    Downvote wasn't mine. I upvoted you to cancel it out. But thanks for dishonestly implying I'm racist (thereby proving my point), when my entire comment was on economic issues. By integration I mean political integration. I think very large states have scale problems, large democracies in particular. (Look at India or the US). You either end up with populist parties who need to appeal to the lowest common denominator of hundreds of millions of people, or technocratic elites who ignore the people. The EU has 500 million citizens from 27 ancient nations, with wildly different cultures and economies. There's no way you can fuse them into one giant country, and the inevitable outcome is fuelling nationalism and populism centred around anti-EU resentment.
tmaly 10y ago
I think this idea that Trump is anti-establishment is a play right out of the Game of Cards show. Look at Obama, he had the Hope and Change rhetoric going, they even gave him a Nobel Peace Prize. What did he actually accomplish? Medical costs are 5x what they were in some cases. The middle east is still in disarray. Police and protesters are clashing. They talk a big game before getting elected, but the reality is that they have very little power once they are elected. They would be better off reading Economics in One Lesson by Henry Hazlitt then working off improving minor things.
- ZeroGravitas 10y ago
  Even trying to fix your three examples is fairly impressive for a US politician. Particularly as his opposite numbers (Trump included) run on a platform of intentionally making these things worse.
_yosefk 10y ago
Rent control and protectionism are different, and immigration for instance, a hot subject in today's politics, is another thing altogether. Supporting rent control doesn't make you stupid/uninformed, but the only other option is evil. Protectionism is a complex topic in a world with currency manipulation, labor laws variability and geopolitical conflicts; it's only simple (and evil/stupid) in a world without these things. And immigration is not just about economics, it's about who you want to live next door and vote. Here, people can disagree regardless of economic views.
summarite 10y ago
People voted for change (Brexit?) in order to keep things unchanging? Not sure the theory fully checks out, but it seems very clear indeed that the policy narrative that's all about economics is not something normal people can feel connected to. It's just that it's easy (?) to measure and thus has taken over the debate. But if I'm a German or Dutch worried that TTIP will bring America's 'chlorine-soaked chicken' on my plate you can tell me as much about job gains as you want and i won't hear it - statistics and numbers don't feel real. Policy has to find the reconnect with reality, that means probably to purge the lawyer and economist thinking that pretty much dominates all ministries and government.
summarite 10y ago
People voted for change (Brexit?) in order to keep things unchanging? Not sure the theory fully checks out, but it seems very clear indeed that the policy narrative that's all about economics is not something normal people can feel connected to. It's just that it's easy (?) to measure and thus has taken over the debate. But if I'm a German or Dutch worried that TTIP will bring America's 'chlorine-soaked chicken' on my plate you can tell me as much about job gains as you want and i won't hear it - statistics and numbers don't feel real. Policy has to find the reconnect with reality, that means probably to purge the lawyer and economist thinking that pretty much dominates all ministries and government.
codingmyway 10y ago
It might have something to do with the fact that the weaker the economy gets the more the rich get rich and people know it. Whether they recognize that it through inflating of the stock market, bonds and real estate with cheap credit or not. Central bankers can't seem to get it into their thick heads that their 'wealth effect' is a 'poverty effect' for those who didn't get the chance to own those assets before they pumped them up out of reach. The fact that the central banks of Japan and Switzerland own most of the companies that we are employed by and pay money to thanks to their ability to create money out of nothing should make people angry.

87 points by Cadsby 10y ago

The person does not seem to draw to anything actionable, and his conclusion is vague. I am not sure what he even means by 'optimizing for efficiency' If your business depends on the happiness of your employees then optimizing for their happiness increases your bottom line. If your business will be shut down if you commit fraud then optimizing for transparency is in your interest. Is this person blaming economists for something that they do not have much control over - and that is thinking about individual lives. Its mathematically not possible for economists to worry about each person. The reason why people are angry is that employment is closely linked to your ability to feed yourself and be a consumer of the global economy. So when politicians talk about employment - what they mean is a person's ability to survive.

cmarschner 10y ago
For economists, efficiency is simply that goods should be created where the surroundings are best suited for it - first described by David Ricardo in the 19th century. E.g. Cotton should be planted where there is the most fertile soil etc. This works best in a globalized economy where production can move around freely and where there are no trade restrictions. As a result, productivity is higher, meaning that goods are cheaper (if there is competition), meaning that - provided the result is used for consumption - that everybody is better off. This doesn't take into account that a) labor doesn't move freely, meaning the change process creates winners and losers, and uncertainty (locals are in constant danger that their job is reallocated to some other place), b) it gives an incentive to move production to places with lowest priced-in externalities (labor market frictions like unions, environmental damage).
- rahimnathwani 10y ago
  "Cotton should be planted where there is the most fertile soil etc." Nitpick: this statement is about absolute advantage, whereas Ricardo emphasised comparative advantage: https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo.27s_example https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo.... Imagine that you're better than me at everything (both programming and needlework). You can program three times as fast, and sew twice as fast as I can. Does that mean you should do all your own programming and sewing? No. However small my contribution, I can save you some time by doing some sewing for you. In that saved time, you can do more programming than I could have achieved in the time I spent sewing. So in sum we're better off. So, there are potential gains from trade.
  - reddytowns 10y ago
    Yes, but at a certain threshold that is no longer true due to logistics. For instance, I could try to sell back all the plastic bags I got at the grocery store, and even if I folded them flat, made sure they were clean and ready to reuse, no matter the price, the grocery store owner would with all likelihood refuse to buy them from me. Because, regardless of how much money would be saved from buying my bags over the ones fresh from the factory, it wouldn't be able to cover the logistical cost to the company's workflow.
    - rahimnathwani 10y ago
      My simplified example was designed to demonstrate the difference between absolute advantage and comparative advantage, and show that there are gains from trade, even when one party has absolute advantage for all output goods. There is no doubt that transactions costs and other friction make some potential exchanges uneconomical. So, what you say is true. But it doesn't help or hinder my explanation, and is irrelevant to the point I was trying to make.
  - deleted 10y ago
    [deleted]
- thaumasiotes 10y ago

elgabogringo 10y ago

I don't think the distinguishing characteristic of bankers is their desire for economic efficiency. It's their desire for self-enrichment. Maybe the author doesn't mean actual bankers, but is instead referring to central bankers, in which case I'd argue that the meager GDP growth achieved from an unprecedented expansion of central banking assets has been anything but efficient. Regardless, the fact that the author can look back the past 10 years of economic policy and find among all the mad and destructive monetary actions a "quest for efficiency" just shows that the author is as out of touch as the bankers. What's happening is that the public at large is figuring this out (and this part the author gets right) using the imperfect vehicles of Trump and Brexit to try and stop it.

misja111 10y ago
I don't think the average banker has a greater desire for self-enrichment than say, the average lawyer or the average sales manager. And anyway, there's nothing wrong with a certain amount of greediness in a capitalist system, this is what drives innovation and efficiency. The problem with banking has been that the system is broken. Unlike other companies, mismanaged banks cannot go bankrupt because they drag the entire system with them.
- pyrale 10y ago
  > And anyway, there's nothing wrong with a certain amount of greediness in a capitalist system, this is what drives innovation and efficiency. I wonder how many years will pass before people realize this mantra is an article of faith.
  - dredmorbius 10y ago
    The one example of innovation mentioned in Adam Smith's Wealth of Nations came from a boy who wanted to go out and play with his friends. (His job was to activate the release valve on an early steam engine. He rigged up a string to do that so he could play. James Watt incorporated this into his design.) (Watt and Smith were contemporaries in Edinburgh. Not only that, but Smith arranged for Watt, who'd been driven from business by the blacksmith's union (the Hammermen), to have an appointment and facilities at the University of Edinburgh. I'm fairly convinced they shared drinks at the local pub and swapped war stories.)

avivo 10y ago

An interpretation: - Many people want to be able to have agency in what their future is like. - A quest for economic and technological growth makes the future unknowable, and makes predictions about what skills (and capital) will provide a livelihood to support your family as tricky as predictions about how much a startups equity will be worth. Many (most?) people can't effectively make these predictions and they suffer pretty badly.

keithpeter 10y ago

Quote from OA "Voters in large numbers have been rejecting much of the underlying logic behind a dynamic globalized economy that on paper seems to make the world much richer." In the UK, we don't actually know why 17+ million chose to tick the leave box. My conversations with a handful of people who did vote leave suggest a range of reasons from immigration, through to 'loss of control'. Macroeconomic policy does not seem to figure prominently. The government of Mrs May is further to the right of that of Mr Cameron. Her published statement does mention a softer approach to social factors and a desire to spread the rewards around more evenly... https://www.gov.uk/government/speeches/statement-from-the-new-prime-minister-theresa-may https://www.gov.uk/government/speeches/statement-from-the-ne... ...we shall see how that actually goes over the next few years in terms of actual law (look out for 'red tape' discussions - your red tape may be my employment rights) and policy (look out for some systematic way to replace the EU grant system that has recycled tax income from London/South to North).

nugget 10y ago
Do you think millenials being priced out of London as it became a global money laundering hub had anything to do with it? That's what I hear from my friends there.
- jwblackwell 10y ago
  London largely voted remain so not really. However I think youth are rightly frustrated about London prices
  - flukus 10y ago
    40% of London voted to leave, that's enough to change the outcome. I don't think pretending there is a huge geographical divide is particularly helpful.
    - tonyedgecombe 10y ago
      If you ignore the protests of some regions how can you address their problems (real or perceived).

panic 10y ago

Perhaps the pursuit of ever higher gross domestic product misses a fundamental understanding of what makes most people tick. Against that backdrop, support for Mr. Trump and for the British withdrawal known as Brexit are just imperfect vehicles through which someone can yell, “Stop.” Did the author communicate at all with Trump supporters and leave voters, or is this just speculation? The support given in the article seems pretty weak: an unrelated abstract experiment about efficiency versus equality and a reference to another newspaper article about a BMW worker.

jkot 10y ago

Is there some source that elites want "hyper-efficient global economy"? From what I see, there is a push towards bigger government spending and higher taxes. A lot of that actually decreases efficiency, to the point it suffocates some industries.

collyw 10y ago
The American health care system seems to be way less efficient than the state run systems in Europe.

ZenoArrow 10y ago

> "Voters in large numbers have been rejecting much of the underlying logic behind a dynamic globalized economy that on paper seems to make the world much richer." That's a very different narrative than the one I recognise. From what I've seen the main effects of globalisation have been twofold: 1. Lowering prices by getting the working classes of all countries to compete with each other. 2. Giving multinational companies greater leeway in tax avoidance. The narrative that either benefits us all is somewhat misleading. Furthermore, with increased automation we'll see an even more rapid concentration of wealth in the hands of the few. On a semi-related note, if you have the time to watch it (it's roughly 2 hours long, but it stays interesting throughout IMO), I can recommend this video, it's a conversation between Yanis Varoufakis and Noam Chomsky, it helped me develop a further understanding of the problems in the EU, and the issues that come from unelected bodies taking over our democracies: https://m.youtube.com/watch?v=2WG-uEND74E https://m.youtube.com/watch?v=2WG-uEND74E

yAnonymous 10y ago
Exactly. The average citizen doesn't see much of the benefits of globalization. It mostly helps governments and companies.
- rospaya 10y ago
  Tell that to my cheap phone made in China running an OS made by developers from around the world. My Turkish t-shirt, the Spanish tomatoes I ate this morning or the server I'm remotely setting up on the other side of the planet, so my company can sell their services there.
  - ZenoArrow 10y ago
    Are you in the lower/working class of your country? If not, then you're not necessarily amongst those that the system works against.
  - pjc50 10y ago
    You benefit as a consumer, but you may lose as a worker. We end up in this strange environment where manufactured goods are very cheap compared to housing and professional non-importable services like health and education.

caconym_ 10y ago

I may be reading this too late at night, but the theory seems to be that our benevolent, perfectly logical Ivy League-educated overlords regrettably have to break a few eggs to make a delicious omelette of economic prosperity for all, and those broken eggs are enough to make people throw up their hands and vote for Trump/Brexit/whatever just for a chance to cling to the present, the good old days, at the expense of that shining, golden future. I have a feeling that people are actually pissed off because they don't think the established elite are generally benevolent, but rather that they act in their own interests at the expense of the prosperity of the middle and lower classes. Whether this is true is beyond the scope of this comment, but any discussion of this seemingly relevant alternate theory is conspicuously absent from the article.

majewsky 10y ago
Indeed. I can understand that a lot of economic policies can be viewed in the way the author describes (a relentless pursuit of efficiency), but Ivy League overlords are also doing a lot of stuff that's just plain greed and can't be explained away with efficiency. For example high-frequency trading. Or (here in Germany) renting ruinous hotels to the government as refugee centers at bizarre rates because there was literally no other big-enough accommodation available.
- gpvos 10y ago
  High-frequency trading is usually justified by pointing at increased market fluidity, which is a positive thing in principle. Whether that is enough justification for the problems it causes is clearly something that should be discussed more.
  - majewsky 10y ago
    Ah right, market fluidity was their cover-up story. I'm absolutely not convinced, seeing how billions of dollars and euros are pumped into the market to increase fluidity, with questionable success.
  - patrickg_zill 10y ago

perfunctory 10y ago

> favored equality over efficiency I think this is the wrong trade off. More equality does not necessarily mean less efficiency.

yummyfajitas 10y ago

I'm a little amazed at the tone of this article. People rent a home, and then exploit the democratic process in a beggar-thy-potential-neighbors strategy. They use things like rent control and other anti-migrant policies (e.g. anti-Google bus policies in SF, anti-Hijab laws in France) to enrich themselves at the expense of others. Because her wealthy uncles lost their job, and had a small drop in their standard of living, "Andrea" wants to screw over a bunch of desperately poor people a world away. Unlike "Andrea", our elites behave far better. Populists try to protect their favored ethnic groups - witness Shiv Sena trying to pass laws preventing non-Marathis from driving taxis, or "tech bros" entering SF. In contrast, I've never heard a white banker complaining about allowing a Marathi to be the CEO of Citi. Elite institutions - think of banking or tech - tend to be truly global enterprises, open to anyone who can demonstrate the requisite ability. Somehow the author doesn't draw the obvious conclusion: that our elites are honest, moral and principled individuals, while our masses are selfish, tribal and greedy people out to beggar their neighbors. For good policy making the conclusion is that we should try and increase the power of the elite.

majewsky 10y ago
> Elite institutions - think of banking or tech - tend to be truly global enterprises, open to anyone who can demonstrate the requisite ability. So you're saying that people of color and women just aren't fit to rule the world? The ethnic and gender distribution among elite managers etc. is certainly not representative.
- yummyfajitas 10y ago
  The top 5 tech companies according to a quick Google search -> fortune article are apple, HP, IBM, Amazon and Microsoft. 2 CEOs are people of color (bezos and nacelle) one is gay and one a woman. It's true that Asians are overrepresented in tech. I believe this is, in fact, because more Asians are fit for the job. Do you disagree? Why do you think Asians are overrepresented, and what do you think should be done about it?
  - icebraining 10y ago

dools 10y ago

The issue he's talking about here is financialisation of the economy. It's an economy that's efficient at delivering large profits for an increasingly concentrated number of businesses and people. Jobless recoveries, debt deflation, etc. The answer of course is a reversal of the trend of neoliberalism over the past 40 years, to re-regulate banking and finance, increase government spending and return to full employment as a policy priority. This is all achievable through understanding Modern Monetary Theory. If anyone is interested in finding out more check out this Facebook group[1]. If anyone in Australia is interested I'm also starting a political party based on these principles.[2] [1] https://www.facebook.com/groups/introductiontommt/ https://www.facebook.com/groups/introductiontommt/ [2] http://www.australianemploymentparty.org/ http://www.australianemploymentparty.org/

didibus 10y ago

I recall a study that showed that above average income workers supported Trump at a higher percentage. If that's true, it seems to contradict the whole premise of this article. They should have asked those same Yale grads if they were voting Trump or not.

monk_e_boy 10y ago
People also have friends or relatives who would be better off under Brexit or Trump. I know a lot of rich people who want better for other people and adjust their vote accordingly.
ZeroGravitas 10y ago
You're probably thinking of this: http://fivethirtyeight.com/features/the-mythology-of-trumps-working-class-support/ http://fivethirtyeight.com/features/the-mythology-of-trumps-... One thing that confounds it is that Hispanic and African-American voters avoid Trump due to his appeals to white supremacy, and they are poorer than average. So if you only count "real Americans" then there may still be some truth in it.

objectivistbrit 10y ago

I'm pro-economic liberty and voted for Brexit. Every analysis like this has tunnel vision: yes, the free trade opened up by the EU brought prosperity to an entire continent. Had we been voting for the 1970s era EEC, I'd have gladly voted Remain. But in 40 years the EEC has evolved into the EU, with a constitution, a parliament, a president, a national anthem, a flag, supreme law-making powers and a currency. Maybe the Merckel anti-integration faction will remain dominant and they'll stop there. Given the Juncker faction pushes further integration as the solution to every crisis, and given the EU is in constant crisis, the next 10 years should be interesting. The EU is a world-historical experiment in social democracy - free markets + state regulation + the welfare state. The consensus is that this system represents the current pinnacle of political evolution. (Both 'progressive' Scandinavia and 'capitalist' America implement variants of it). An alternative perspective is that it's simply a compromise system which emerged after WWII and is already showing severe cracks. Maybe the EU will create prosperity by such actions as forcing Google to break up, throwing state money at impoverished regions, etc. Maybe the populations of France, Spain, Italy et al will accept that they can't fund welfare states by borrowing in perpetuity and stop voting in radical left-wing governments. Maybe they'll find an alternative solution to the ever growing debt-burden, over Piketty's proposal for seizing 15% of all bank accounts. https://en.m.wikipedia.org/wiki/Proposed_long-term_solutions_for_the_Eurozone_crisis https://en.m.wikipedia.org/wiki/Proposed_long-term_solutions... I have no idea. I would like to see pro-EU articles which actually address these issues, and not simply assume that the only reason to be against the EU is that you're an ignorant racist, deluded by propaganda and lies.

madaxe_again 10y ago
What's wrong with integration? You clearly think it's bad but don't say why. Ah, downvote me for replying with a question. Mature. I guess you don't have a reason that doesn't boil down to "I don't want foreigners next door"?
- objectivistbrit 10y ago
  Downvote wasn't mine. I upvoted you to cancel it out. But thanks for dishonestly implying I'm racist (thereby proving my point), when my entire comment was on economic issues. By integration I mean political integration. I think very large states have scale problems, large democracies in particular. (Look at India or the US). You either end up with populist parties who need to appeal to the lowest common denominator of hundreds of millions of people, or technocratic elites who ignore the people. The EU has 500 million citizens from 27 ancient nations, with wildly different cultures and economies. There's no way you can fuse them into one giant country, and the inevitable outcome is fuelling nationalism and populism centred around anti-EU resentment.

tmaly 10y ago

I think this idea that Trump is anti-establishment is a play right out of the Game of Cards show. Look at Obama, he had the Hope and Change rhetoric going, they even gave him a Nobel Peace Prize. What did he actually accomplish? Medical costs are 5x what they were in some cases. The middle east is still in disarray. Police and protesters are clashing. They talk a big game before getting elected, but the reality is that they have very little power once they are elected. They would be better off reading Economics in One Lesson by Henry Hazlitt then working off improving minor things.

ZeroGravitas 10y ago
Even trying to fix your three examples is fairly impressive for a US politician. Particularly as his opposite numbers (Trump included) run on a platform of intentionally making these things worse.

_yosefk 10y ago

Rent control and protectionism are different, and immigration for instance, a hot subject in today's politics, is another thing altogether. Supporting rent control doesn't make you stupid/uninformed, but the only other option is evil. Protectionism is a complex topic in a world with currency manipulation, labor laws variability and geopolitical conflicts; it's only simple (and evil/stupid) in a world without these things. And immigration is not just about economics, it's about who you want to live next door and vote. Here, people can disagree regardless of economic views.

summarite 10y ago

People voted for change (Brexit?) in order to keep things unchanging? Not sure the theory fully checks out, but it seems very clear indeed that the policy narrative that's all about economics is not something normal people can feel connected to. It's just that it's easy (?) to measure and thus has taken over the debate. But if I'm a German or Dutch worried that TTIP will bring America's 'chlorine-soaked chicken' on my plate you can tell me as much about job gains as you want and i won't hear it - statistics and numbers don't feel real. Policy has to find the reconnect with reality, that means probably to purge the lawyer and economist thinking that pretty much dominates all ministries and government.

summarite 10y ago

codingmyway 10y ago

It might have something to do with the fact that the weaker the economy gets the more the rich get rich and people know it. Whether they recognize that it through inflating of the stock market, bonds and real estate with cheap credit or not. Central bankers can't seem to get it into their thick heads that their 'wealth effect' is a 'poverty effect' for those who didn't get the chance to own those assets before they pumped them up out of reach. The fact that the central banks of Japan and Switzerland own most of the companies that we are employed by and pay money to thanks to their ability to create money out of nothing should make people angry.