Keith Whittington: The Dream of a Nonpartisan Supreme Court

Since the retirement of Justice Anthony Kennedy, long the pivotal swing justice on the U.S. Supreme Court, we have been hearing a lot once again about the desire for a replacement justice and for a Court that can stand outside of politics and be nonpartisan. Any nominee was likely to disappoint those holding on to that desire, but the nomination of the conventional conservative jurist Brett Kavanaugh did nothing to mollify critics of either this administration or this Court. The dream of a nonpartisan Supreme Court is as old as the republic itself, but it is nothing but a dream. We should demand that the justices behave differently than mere politicians in robes, but we should not ever expect to see a Court that stands completely outside of partisan politics.

The founding generation was deeply distrustful of political parties, and they designed the Constitution on the assumption that American politics would operate without them. They worried that partisans would always put the party interest above the general interest, and they hoped for a republic in which political leaders would seek to advance the general welfare of the people as a whole not the factional interests of a part of the people. They dreamed not only of a nonpartisan Supreme Court, but of a nonpartisan Congress and presidency as well. They were quickly disappointed.

The ink had barely dried on the Constitution before the founders began to organize themselves into political parties. They and their posterity discovered that parties were unavoidable in a democratic political system. Americans eventually learned, often grudgingly, how to accommodate themselves to the persistence of partisan divisions, and the Constitution itself was amended to take into account the fact that presidents and vice-presidents would stand for election together on a party ticket and that the Electoral College could not simply select the two best Americans to occupy the first and second positions in the national executive.

For some of the same reasons that parties have proven unavoidable in electoral politics and in lawmaking, they have influenced the federal courts as well. Americans have rarely disagreed about whether they should continue to live under the U.S. Constitution, but they have often disagreed about what the Constitution means. For over two hundred years, those disagreements have been exploited and organized by political parties. Voters, activists and politicians have hashed out those disagreements at the ballot box, on the streets, and in the halls of political power. Presidents and legislators have won elections advocating for their distinctive constitutional philosophies, and they have placed judges on the bench that have shared those philosophies.

We should hope and expect that judges do not behave in the same way as politicians. We do not expect judges to cater to the whims of public opinion or appeal to the interests of favored constituencies. We do not expect judges to trim the rights of unpopular minorities in order to win favor with popular majorities. We do not expect judges to engage in horse-trading to win votes. Not only do we expect them to put country over party, but we expect them not to be moved by narrow partisan interests. In short, we expect judges to stay out of the low politics of political campaigns, legislative logrolling, and partisan maneuvering for temporary advantage.

We cannot reasonably expect them to stand aloof from the high politics of constitutional debate, however. The Jeffersonians and the Federalists, the Whigs and the Democrats had different understandings of the proper use of government and the scope of government power, and those differences were enshrined in both party platforms and judicial opinions. The upstart Republicans had different ideas about the constitutionality of the extension of slavery, and they battled for those ideas in the courtroom as well as the ballot box. The New Dealers and the old guard conservatives had different hopes about how the country would emerge from the Great Depression, and those differences had implications for the course of American constitutional law.

The political parties today are divided about constitutional questions just as the political parties of the past were. The two parties represent different constitutional philosophies, with implications for a host of questions not only about legislative policy but also about judicial doctrine. If the partisan divisions are unusually visible on the Court today that is due in part to the fact that the two major parties have been locked in close electoral combat for an unusually long period of time and our constitutional differences have remained unresolved in society as well as in law. That does not mean that the justices march in lockstep or take their marching orders from party leaders on the hill, but disagreements in constitutional philosophy that we see expressed on the airwaves and in the newspapers are also going to be expressed in legal briefs and judicial opinions.

The Supreme Court has always been shaped by political forces, and we would not be happy if it were not. When Lincoln asked whether the “policy of government, upon vital questions, affecting the whole people” was to be “irrevocably fixed by the decisions of the Supreme Court” or to be settled by “the people,” he understood that a republic would not tolerate a Court that stood entirely outside of politics and asserted its independence from the people themselves. The justices are not demi-gods; they are just people, who disagree among themselves as other people do. The courts contribute in important ways to the stability, vitality and desirability of our constitutional system, but we need not believe in the illusion of a nonpartisan Court in order to appreciate those contributions.

Keith E. Whittington is the William Nelson Cromwell Professor of Politics at Princeton University and the author, most recently, of Speak Freely: Why Universities Must Defend Free Speech.

Trump’s Assertiveness vs. Rouhani’s Resistance

by Amin Saikal

President Donald Trump has acted to diminish the Iranian Islamic regime over its nuclear program, missile industry and regional influence. He has given Tehran an ultimatum either to succumb to his demands or face unprecedented punishment. Iranian President Hassan Rouhani has rejected Trump’s actions to withdraw from the July 2015 multilateral nuclear agreement (officially known as the Joint Comprehensive Plan of Action – JCPOA), and to reimpose sanctions as “psychological warfare.” The US and Iran are now locked in a diplomatic confrontation that could lead to a confrontation with devastating consequences.

Ironically, this is the first time in the history of US-Iranian hostilities since the advent of the Iranian Islamic regime nearly 40 years ago that Washington, rather than Tehran, is isolated in world politics as a result of an American president’s actions. Not only the other signatories to the JCPOA – Britain, France, Germany, Russia and China – but also most of the other states in the world have sided with Tehran. The European signatories and America’s traditional allies have taken extraordinary steps to salvage the JCPOA. They have gone so far as to invoke an old “blocking statute” to protect their countries’ businesses dealings with Iran and have instructed their companies either to defy American sanctions or run the risk of being sued by European Union member states. They have also opened a mechanism to enable those businesses affected by sanctions to sue the American government in the national courts of member states.

Whatever the European powers’ measures and the degree of sanction defiance by Russia and China as the other two strong supporters of Iran, as well as the Iranian government’s efforts to circumvent the sanctions, as it has in the past, Trump’s actions can still entail serious economic and political implications for Iran. The Iranian economy was in a fragile state prior to the reimposition of sanctions; it is now bound to receive more hard blows. This in turn is likely to increase public disenchantment with and protests against the Islamic regime.

However, the Islamic regime is unlikely to be brought to its knees, for four important reasons. The first is that Iran has endured soft and hard sanctions since the early days of its transformation into an Islamic Republic following the Iranian revolution of 1978-79 that resulted in the overthrow of the Shah’s pro-Western monarchy. The regime has vigorously diversified Iran’s economy and trade. It has succeeded in making the Iranian economy less dependent on oil exports, and has expanded trade relations with friendly powers, including China, which has become Iran’s largest trade partner. It has engaged in processes of self-sufficiency and mastered different methods of sanction-busting, including barter trading, and transactions through third countries where it wields influence, such as Iraq, Afghanistan and Lebanon.

The second is that despite its theocratic and administrative shortcomings and corrupt practices, the regime is well entrenched. It has built sufficient coercive instruments of power to deal with any widespread public uprisings. The clerical forces and their associates that dominate the power structure have done everything possible to guard themselves against a revolution similar to the one that caused the Shah’s downfall and brought them to power.

The third is that the regime has successfully used the “threat” from the United States and its regional allies, Israel in particular, for public legitimation and mobilisation, and this factor remains at its disposal. Many segments of the Iranian society are unhappy with the regime and may well desire a better alternative, but when Iran is threatened by an outside force, a majority of them have rallied behind the government of the day. The more that Trump pressures and threatens Iran, the more he plays into the hands of the regime to invoke a combination of historically fierce nationalism and Shia Islamic devotion among the Iranians.

The fourth is that in the unlikely event of the Islamic regime crumbling through popular uprisings, this will not serve the interests of the United States and its regional allies. It could produce uncontrollable outcomes for not only Iran but also the region. The regime’s removal without a smooth power transition could generate a much worse national and regional situation than did the overthrow of the Shah’s autocracy.

The Trump leadership, egged on by Iran’s arch enemy, Israel, and backed by another regional rival, Saudi Arabia, has touted the use of force as an ultimate means to change the behaviour of the Iranian regime. However, Tehran has secured a strong deterrence against such an option as well. It has garnered adequate prowess though a combination of hard and soft power within an asymmetrical warfare strategy to make an attack very costly for its perpetrator. It has secured a network of regional protégé forces that includes most importantly the Lebanese Hezbollah, which possesses some 120,000 rockets of all kinds, capable of hitting targets in Israel and across the region. This deterrence factor should make the US and Israel think twice before they resort to the use of force.

Trump has sought to subdue the Iranian regime, but at the cost of America’s isolation from even its traditional European allies. The US has become an oddity in world politics. This had never happened since the rise of the US to globalism following the Second World War.

Amin Saikal is Distinguished Professor and Director of the Centre for Arab and Islamic Studies (the Middle East and Central Asia) at the Australian National University, and author of the forthcoming book Iran Rising: The Survival and Future of the Islamic Republic by Princeton University Press.

Browse our 2018 Politics Catalog

Our new Politics catalog includes an examination of the intertwined lives and writings of a group of prominent twentieth-century Jewish thinkers who experienced exile and migration, a look at the troubling ethics and politics of philanthropy, and an  in-depth account of the 2016 presidential election that explains Donald Trump’s historic victory.

If you’ll be at ASPA 2018 in Boston, stop by Booth 316 to see our full range of political titles.

exile, statelessness, and migration cover

Exile, Statelessness, and Migration explores the intertwined lives, careers, and writings of a group of prominent Jewish intellectuals during the mid-twentieth century—in particular, Theodor Adorno, Hannah Arendt, Walter Benjamin, Isaiah Berlin, Albert Hirschman, and Judith Shklar, as well as Hans Kelsen, Emmanuel Levinas, Gershom Scholem, and Leo Strauss. Informed by their Jewish identity and experiences of being outsiders, these thinkers produced one of the most brilliant and effervescent intellectual movements of modernity.

just giving cover

Is philanthropy, by its very nature, a threat to today’s democracy? Though we may laud wealthy individuals who give away their money for society’s benefit, Just Giving shows how such generosity not only isn’t the unassailable good we think it to be but might also undermine democratic values and set back aspirations of justice. Big philanthropy is often an exercise of power, the conversion of private assets into public influence. And it is a form of power that is largely unaccountable, often perpetual, and lavishly tax-advantaged. The affluent—and their foundations—reap vast benefits even as they influence policy without accountability. And small philanthropy, or ordinary charitable giving, can be problematic as well. Charity, it turns out, does surprisingly little to provide for those in need and sometimes worsens inequality.

Identity Crisis cover

Donald Trump’s election victory stunned the world. How did he pull it off? Was it his appeal to alienated voters in the battleground states? Was it Hillary Clinton and the scandals associated with her long career in politics? Were key factors already in place before the nominees were even chosen? Identity Crisis provides a gripping account of the campaign that appeared to break all the political rules—but in fact didn’t.

Against metrics: how measuring performance by numbers backfires

by Jerry Muller

More and more companies, government agencies, educational institutions and philanthropic organisations are today in the grip of a new phenomenon. I’ve termed it ‘metric fixation’. The key components of metric fixation are the belief that it is possible – and desirable – to replace professional judgment (acquired through personal experience and talent) with numerical indicators of comparative performance based upon standardised data (metrics); and that the best way to motivate people within these organisations is by attaching rewards and penalties to their measured performance. 

The rewards can be monetary, in the form of pay for performance, say, or reputational, in the form of college rankings, hospital ratings, surgical report cards and so on. But the most dramatic negative effect of metric fixation is its propensity to incentivise gaming: that is, encouraging professionals to maximise the metrics in ways that are at odds with the larger purpose of the organisation. If the rate of major crimes in a district becomes the metric according to which police officers are promoted, then some officers will respond by simply not recording crimes or downgrading them from major offences to misdemeanours. Or take the case of surgeons. When the metrics of success and failure are made public – affecting their reputation and income – some surgeons will improve their metric scores by refusing to operate on patients with more complex problems, whose surgical outcomes are more likely to be negative. Who suffers? The patients who don’t get operated upon.

When reward is tied to measured performance, metric fixation invites just this sort of gaming. But metric fixation also leads to a variety of more subtle unintended negative consequences. These include goal displacement, which comes in many varieties: when performance is judged by a few measures, and the stakes are high (keeping one’s job, getting a pay rise or raising the stock price at the time that stock options are vested), people focus on satisfying those measures – often at the expense of other, more important organisational goals that are not measured. The best-known example is ‘teaching to the test’, a widespread phenomenon that has distorted primary and secondary education in the United States since the adoption of the No Child Left Behind Act of 2001.

Short-termism is another negative. Measured performance encourages what the US sociologist Robert K Merton in 1936 called ‘the imperious immediacy of interests … where the actor’s paramount concern with the foreseen immediate consequences excludes consideration of further or other consequences’. In short, advancing short-term goals at the expense of long-range considerations. This problem is endemic to publicly traded corporations that sacrifice long-term research and development, and the development of their staff, to the perceived imperatives of the quarterly report.

To the debit side of the ledger must also be added the transactional costs of metrics: the expenditure of employee time by those tasked with compiling and processing the metrics in the first place – not to mention the time required to actually read them. As the heterodox management consultants Yves Morieux and Peter Tollman note in Six Simple Rules (2014), employees end up working longer and harder at activities that add little to the real productiveness of their organisation, while sapping their enthusiasm. In an attempt to staunch the flow of faulty metrics through gaming, cheating and goal diversion, organisations often institute a cascade of rules, even as complying with them further slows down the institution’s functioning and diminishes its efficiency.

Contrary to commonsense belief, attempts to measure productivity through performance metrics discourage initiative, innovation and risk-taking. The intelligence analysts who ultimately located Osama bin Laden worked on the problem for years. If measured at any point, the productivity of those analysts would have been zero. Month after month, their failure rate was 100 per cent, until they achieved success. From the perspective of the superiors, allowing the analysts to work on the project for years involved a high degree of risk: the investment in time might not pan out. Yet really great achievements often depend on such risks.

The source of the trouble is that when people are judged by performance metrics they are incentivised to do what the metrics measure, and what the metrics measure will be some established goal. But that impedes innovation, which means doing something not yet established, indeed that hasn’t even been tried out. Innovation involves experimentation. And experimentation includes the possibility, perhaps probability, of failure. At the same time, rewarding individuals for measured performance diminishes a sense of common purpose, as well as the social relationships that motivate co-operation and effectiveness. Instead, such rewards promote competition.

Compelling people in an organisation to focus their efforts on a narrow range of measurable features degrades the experience of work. Subject to performance metrics, people are forced to focus on limited goals, imposed by others who might not understand the work that they do. Mental stimulation is dulled when people don’t decide the problems to be solved or how to solve them, and there is no excitement of venturing into the unknown because the unknown is beyond the measureable. The entrepreneurial element of human nature is stifled by metric fixation.

Organisations in thrall to metrics end up motivating those members of staff with greater initiative to move out of the mainstream, where the culture of accountable performance prevails. Teachers move out of public schools to private and charter schools. Engineers move out of large corporations to boutique firms. Enterprising government employees become consultants. There is a healthy element to this, of course. But surely the large-scale organisations of our society are the poorer for driving out staff most likely to innovate and initiate. The more that work becomes a matter of filling in the boxes by which performance is to be measured and rewarded, the more it will repel those who think outside the box.

Economists such as Dale Jorgenson of Harvard University, who specialise in measuring economic productivity, report that in recent years the only increase in total-factor productivity in the US economy has been in the information technology-producing industries. The question that ought to be asked next, then, is to what extent the culture of metrics – with its costs in employee time, morale and initiative, and its promotion of short-termism – has itself contributed to economic stagnation?Aeon counter – do not remove

Jerry Z. Muller is the author of many books, including The Tyranny of Metrics. His writing has appeared in the New York Times, the Wall Street Journal, the Times Literary Supplement, and Foreign Affairs, among other publications. He is professor of history at the Catholic University of America in Washington, D.C., and lives in Silver Spring, Maryland.

 

This article was originally published at Aeon and has been republished under Creative Commons.

Eric Posner & Glen Weyl on Radical Markets: Uprooting Capitalism and Democracy for a Just Society

Radical MarketsMany blame today’s economic inequality, stagnation, and political instability on the free market. The solution is to rein in the market, right? Radical Markets turns this thinking—and pretty much all conventional thinking about markets, both for and against—on its head. The book reveals bold new ways to organize markets for the good of everyone. It shows how the emancipatory force of genuinely open, free, and competitive markets can reawaken the dormant nineteenth-century spirit of liberal reform and lead to greater equality, prosperity, and cooperation. Only by radically expanding the scope of markets can we reduce inequality, restore robust economic growth, and resolve political conflicts. But to do that, we must replace our most sacred institutions with truly free and open competition—Radical Markets shows how. Read on for an interview between the two authors. 

Eric: I’ve never thought of myself as a radical, yet our book is called Radical Markets. Is this a marketing gimmick or are the ideas really radical?

Glen: Our proposals seem pretty radical to me. In our scheme, private property turns into a kind of an auction, so there would be a price on most property all the time and the benefits would flow equally to all citizens, eliminating most inequality of wealth.  The conventional system of democracy—one-person-one-vote and judicial protection of most minority rights—would turn into a market-based system of trading voice credits and using them to buy votes. The current immigration bureaucracy would be radically decentralized, as ordinary people would take over sponsorship of migrant workers. There are certainly ideas more radical than these, but not many that you hear discussed seriously by our academic colleagues.

Eric: Yet, unlike true radicals, we urge a go-slow approach. Test things out, we say. Things could go wrong, we warn. And then we claim to be in favor of markets. That doesn’t sound like Saint-Simon or Marx. Sure, enough our book is #1 on Amazon in the category of libertarianism, though neither of us think of ourselves as libertarians.

Glen: True revolutions occur in slow motion; they begin with ideas. Democracy is a revolutionary idea in a world of kingdoms; it did not happen overnight. Unions began as working men’s associations and only gradually gained power and state sanction. Even Saint-Simon inspired small-scale utopian communities. Revolutions that move rapidly to take over a whole society, like the French or Russian, usually quickly determine they didn’t have their plans fleshed out and end in chaos or greater tyranny than the system they replaced. We have radical, even revolutionary, aims, but we want the changes we propose to stick and that will only happen if they are fully developed, their weaknesses exposed by experimentation.

Eric. I’m still not sure. I like the title because I’m a sucker for word play. The root of the word radical is, well, root. Being radical means getting to the root of things. I think we do that. A radical in math is the root of a number, and several of the ideas in the book have their origin in quadratic equations. And then there is the idea of radical as left-wing. Here, I’m not so sure. In fact, one of our goals is to appeal to people with different political views.

Glen: Well, radical doesn’t necessarily mean left wing, though I guess it depends how you define it.  In fact, The Economist defines its ideology as the “radical center.” To me, that sense of radical is more about favoring fundamental changes to the social order rather than, say, putting the government in charge of everything or redistributing wealth. In that sense, I think we are very much radicals

Eric: We even appeal to Adam Smith and Milton Friedman. What could be less radical than that?

Glen: Adam Smith has an unfair reputation as a “conservative” these days only because his ideas were so successful. He put the finishing touches, intellectually at least, on the unthinking feudalism of the day. In fact, Smith helped found the first major political movement to identify itself as “Radical,” the Philosophical Radicals who are our inspiration. Not surprisingly, ideas that were radical in the eighteenth century can be reactionary in the twentieth, when Friedman wrote. But we give Friedman credit for seeing that central planning and a certain kind of bureaucratic mindset leads to a dead end.

Eric: And for market thinking: Friedman was right to emphasize the value of competition and exchange—essential features of market system—but, like many economists, took our system of property rights and politics for granted, as if thinking on these topics had stopped centuries ago. One way you can tell that you are being radical in an intellectual sense—the sense I care about—is that you find yourself being criticized by people with different political views. If you’re radical enough, people will get angry. We’ve already seen a bit of this. Immigrant advocates and alt-right types don’t agree on much, but they seem to be scandalized by our foreign worker proposal. I’ll be curious to see how people react to our other proposals.

Eric A. Posner is the Kirkland and Ellis Distinguished Service Professor at the University of Chicago Law School. His many books include Climate Change Justice. He lives in Chicago. E. Glen Weyl is principal researcher at Microsoft and visiting senior research scholar in economics and law at Yale University. He lives in Boston.

W. Kip Viscusi on Pricing Lives: Guideposts for a Safer Society

ViscusiLike it or not, sometimes we need to put a monetary value on people’s lives. In the past, government agencies used the financial “cost of death” to monetize the mortality risks of regulatory policies, but this method vastly undervalued life. Pricing Lives tells the story of how the government came to adopt an altogether different approach—the value of a statistical life, or VSL—and persuasively shows how its more widespread use could create a safer and more equitable society for everyone. In this book, Kip Viscusi provides a comprehensive look at all aspects of economic and policy efforts to price lives. Pricing Lives proposes sensible economic guideposts to foster more protective policies and greater levels of safety in the United States and throughout the world.

What do you mean by “pricing lives,” and where does this occur?

What we mean by pricing lives depends on the context. For the government’s risk and environmental regulation policies, the challenge is to determine how much we are willing to spend to prevent each expected fatality. The principal measure used to set this price is known as the value of a statistical life (VSL), or the amount society is willing to pay to prevent the risk of each statistical death. Companies also set an implicit price on life every time they make products that are not risk-free. Sometimes companies have assigned numerical amounts to the value of the fatalities that are prevented, though how they have done so is seriously flawed and has greatly undervalued life. There is also a role for pricing lives after fatalities have occurred. Regulatory agencies set the penalties that firms must pay for regulatory violations that led to the fatalities. The courts also set a price on lives in wrongful death cases in terms of the amount of compensation that must be paid to the decedent’s family after the death.

Why should there be any limit at all on what the government spends to save lives?

So long as resources are limited, we cannot make an unbounded commitment to a risk-free society. The practical issue is where to set these limits. In the 1980s, I was asked to settle a dispute between OMB and OSHA over the proposed hazard communication regulation. OMB had rejected the proposal, concluding that the costs exceeded the benefits. In my analysis of this debate, I introduced the VSL concept to government agencies. Doing so made the calculation of the benefits of risk regulations ten times more valuable than they were under the previous cost of death approach. It also led to the issuance of a regulation that previously had been rejected because it was viewed as being too costly. Although some government agencies were slow to adopt the higher VSL numbers, this approach is now the norm in government agencies. The VSL is the most important single number used in the evaluation of government regulatory policies.

Where can we get these values of a statistical life numbers?

The most reliable evidence is based on U.S. labor studies of the extra pay workers get for extra risk.  Suppose, for example, that a worker was paid $900 extra per year to face a risk of 1/10,000. Then, for a group of 10,000 workers, they would be paid $9 million (10,000 × $900) for the one expected death to their group. My current estimates of the VSL in the U.S. place this value at $10 million. Once people understand that the VSL greatly exceeds people’s earnings, the criticism that the approach is immoral generally diminishes. Instead, people wonder how people can value their lives by more than what they make. The reason for this surprisingly large value is that they are not buying out of the prospect of certain death. Instead, the VSL only pertains to very small risks of death that are much less costly to prevent.

What do other countries do? Does this U.S. labor market evidence have any pertinence to them?

Many other countries have also adopted the VSL approach, usually based on studies in which people are asked in interviews how much they are willing to pay for safety. Unfortunately, the VSL estimates that are used outside of the U.S. are very low—far lower than is warranted based on the income levels relative to the U.S. Even countries such as the United Kingdom and Australia greatly undervalue lives, with far greater disparities observed for many low-income countries. In this book, I present an approach for transferring the U.S. estimates to other countries, along with appropriate adjustments for income level differences. The estimates I provide for a wide range of countries will greatly increase the value placed on safety throughout the world.

Are there other factors, like age, that can affect the VSL?

What matters is people’s own willingness to pay to reduce risk. Unlike purported economic measures, such as the cost of death approach, people can still have a high VSL even if they are retired. As it turns out, the VSL rises over people’s lifetime, and then does decline somewhat, but it does not plummet with age. The VSL for those age 65 and over is very similar to that of people in their early 20s. There was a public outcry against the Environmental Protection Agency when it attempted an age adjustment that put “seniors on sale, 37% off.” Unfortunately, this age adjustment was not based on any U.S. labor market evidence but on a more speculative interview study from the United Kingdom. Typically, government policies have impacts across the entire population so that in most instances, relying on an average VSL is all that is needed. 

This whole idea of pricing lives sounds similar what businesses do when they decide how much to spend on product safety improvements. Do they get it right?

Unfortunately, companies historically have underpriced lives as well, as they have focused on how much they have to pay in court after a fatality rather than on how much it is worth to consumers to reduce the risk of death. Companies fell prey to the same cost of death approach that government agencies used to use. Jurors have expressed alarm after reviewing these corporate practices, sometimes levying punitive damages of $100 million or more against companies that have valued lives in this way. The result has been that most companies have abandoned such risk analyses altogether and now keep such deliberations secret, for fear of liability. In my book, I propose that companies adopt the VSL in their product safety decisions and that they be given legal protections to encourage responsible corporate risk analyses.

How is it that setting a finite price on life can provide “guideposts for a safer society?”

A properly set VSL raises rather than reduces the amounts that government agencies throughout the world assign to the prevention of fatality risks. Adoption of this approach for corporate risk decisions likewise would lead to safer products. In this book, I also advocate that the VSL be used to set penalties for regulatory violations leading to fatalities. Doing so would lead to an enormous increase in penalties by, for example, boosting penalties for job safety violations by a factor of 1,000. The courts similarly can use the VSL in both assessing product safety and setting damages in situations where deterring risky behavior is the concern. My proposed expansion of the application of the VSL will provide greater incentives for safety in all these contexts. What is particularly striking is that the single VSL number can serve multiple purposes and set the price on life in so many different situations.

W. Kip Viscusi is the University Distinguished Professor of Law, Economics, and Management at Vanderbilt University. His many books include Economics of Regulation and Antitrust and Fatal Tradeoffs: Public and Private Responsibilities for Risk.

David Vogel on California Greenin’

VogelOver the course of its 150-year history, California has successfully protected its scenic wilderness areas, restricted coastal oil drilling, regulated automobile emissions, preserved coastal access, improved energy efficiency, and, most recently, addressed global climate change. How has this state, more than any other, enacted so many innovative and stringent environmental regulations over such a long period of time? The first comprehensive look at California’s history of environmental leadership, California Greenin’ shows why the Golden State has been at the forefront in setting new environmental standards, often leading the rest of the nation. As environmental policy debates continue to grow more heated, California Greenin’ demonstrates that the Golden State’s impressive record of environmental accomplishments holds lessons not just for the country but for the world.

Why did you decide to focus your book on California?

Much has been written on every aspect of California’s environmental history. Books have been written on the state’s forests and wilderness areas, cars and air pollution in Los Angeles, oil drilling in southern California, the protection of the coast and the San Francisco Bay Area and, most recently, the state’s regulations to improve energy efficiency and stem the risks of global climate change. But no one had ever sought to answer what struck me as a central question, namely why has California long been the nation’s “greenest” state? I wrote this book to answer that question.

What are some important examples of California’s environmental leadership?

California enacted the world’s first emissions controls on automobiles and established the nation’s first coastal protection authority. Yosemite was the first protected wilderness in the United States and by 1890 three of nation’s four national parks were located in the state. California issued the nation’s first energy efficiency standards for appliances and buildings. Its greenhouse gas reduction targets are the most ambitious in the United States. Half of the nation’s rooftop solar installations are in California.

How do you account for the state’s long record of environmental innovation?

It traces back to California’s geography. The “Golden State” has an unusually beautiful natural environment. Its coastal area encompasses the best weather in the United States. It has a long and scenic coastline, miles of sand beaches, and inland there are the granite formations, rivers, lakes and valleys of the Sierra Nevada Mountains. The state’s forests contain the spectacular redwoods and sequoias, the largest and oldest living species on the planet. But every aspect of this attractive environment has been continually threatened by rapid economic development and population growth. It is in response to these threats that Californians have mobilized to protect the environmental amenities that they valued.

What is the “California effect?”

The “California effect” refers to the impact California has had in strengthening environmental protection outside its borders. The most important example is automotive emissions standards These were first introduced in California and then subsequently adopted by the federal government. Virtually all of the important innovations in emissions controls, such unleaded gasoline and the two-way catalytic convertor, originated in California and were then nationally mandated. California’s innovative greenhouse gas emission standards for vehicles were subsequently adopted by the Obama Administration. Significantly, California is the only state permitted by the federal government to issue its own automotive regulations. Other states then have the option of adapting California’s more stringent standards and several states have chosen to do so.

What most surprised you in writing this book?

I was most struck by the role business has played in supporting environmental protection. Business has been traditionally viewed as the main opponent of stronger environmental standards. But in the case of California influential business interests have often actively backed stronger regulations  For example, during the late 19th and early 20th centuries the Southern Pacific Railroad lobbied to protect the sequoias in the Sierra Nevada mountains, while during the mid 20th century, the Los Angeles real estate community led the political struggle to reduce air pollution. Southern California’s shoreline property developers were the main opponents of coastal oil drilling. California’s renewable energy industry and clean tech investors have benefited from and been strong supporters of the state’s climate change initiatives. In sum, many business interests have recognized the economic benefits of placing the state on a greener growth trajectory.   

What practical lessons can other states learn from California?

The United States is a federal system in which states can play important policy roles. They have enormous potential to improve environmental quality. What other states can also learn from California is that regulations are more likely to be supported if they directly improve the quality of life of local communities, provide economic as well as environmental benefits, receive some business 6backing, and are administrated by competent public authorities. California’s example of regulatory leadership can and hopefully should be followed by other states.

What do you hope readers will take away from the book? 

That protecting the environment and growing economically can go hand in hand. Since the 1860s California has consistently enacted the nation’s most stringent, comprehensive and innovative environmental standards and its economy is now the sixth largest in the worlds. Had it not made such vigorous efforts to protect its fragile natural environment, California would now be a much less desirable place to visit, to live to work, and to invest. California’s economy has benefited substantially from its environmental regulations. This can be true for all states as well.

David Vogel is professor emeritus in the Haas School of Business and the Department of Political Science at the University of California, Berkeley. His many books include The Politics of Precaution and The Market for Virtue.

Paul Tucker on Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State

TuckerCentral bankers have emerged from the financial crisis as the third great pillar of unelected power alongside the judiciary and the military. They pull the regulatory and financial levers of our economic well-being, yet unlike democratically elected leaders, their power does not come directly from the people. Unelected Power lays out the principles needed to ensure that central bankers, technocrats, regulators, and other agents of the administrative state remain stewards of the common good and do not become overmighty citizens. Like it or not, unelected power has become a hallmark of modern government. This critically important book shows how to harness it to the people’s purposes.

What is the regulatory state?

It’s a term that has come to be used to describe a host of government bodies that regulate particular economic sectors or the public more generally to protect, say, investors, the environment, consumers, workers, and so on. In a rudimentary form it has existed for a long time, going back to the 19th century and beyond. Going wider, Americans sometimes refer to the administrative state, meaning the evolution of government beyond a world of legislators and courts to one in which the executive branch makes policy and is divided up into departments, agencies, bureaus, commissions, and so on.

What are Independent agencies, and why do they matter?

They are government organizations that are not under the day-to-day control of elected politicians, whether in the executive branch or the legislature. Obvious examples today are the central banks, such as the Federal Reserve, European Central Bank, and the Bank of England, but also various regulators insulated from ongoing political control. By no means all agencies in the administrative state are independent. On both sides of the Atlantic, many are under the control of cabinet ministers or subject to annual budget approvals from the legislature, which makes them sensitive to politicians’ sentiments and whims. Independent agencies are distinctive in that politicians can control them only by amending or repealing legislation.

That sounds problematic in a democracy. Is it?

That’s the point of the book. The way I’ve just described them it could be a hell of a problem. Imagine an independent agency that had lots of powers but only the vaguest purpose and objective. Who would be able to tell whether it had succeeded in its mission if it set its own goal posts?! That’s at odds with some of our deepest values: just as “no taxation without representation” was a rallying cry a couple of centuries’ ago, we might just as well demand “no regulation without representation.”

Are central banks a particular problem?

They have become the poster boys and girls of today’s unelected power. Compared with what happened after the Great Depression in the 1930s, when it was politicians who did the heavy lifting, this time it has been central banks that have led the way in reviving the economy and redesigning the financial system. They have used their balance sheets on a truly gigantic scale to influence credit conditions in lots of markets, and have been given lots of new regulatory powers. They are more powerful than ever before, ranking with the judiciary and military as a third core pillar of unelected power.

Do people object to all this?

Yes, but in rather different ways in different countries. In the US, since the New Deal there have been critics who object that regulatory agencies violate the values associated with the separation of powers or even the Constitution itself. In France, not long ago the parliament passed legislation to put more structure around such agencies. In the UK, there is episodic antagonism to government by ‘experts.’

And on central bank independence, there have been challenges in the German constitutional court and attempts to pass reforming legislation in the US Congress.

So what is the solution?

Our democracies need norms for whether and how to delegate to independent agencies that measure up to the deep political values of our democratic, liberal republics: the various values of democracy, rule of law, constitutionalism. My book proposes and defends just such a set of Principles for Delegation, as I call them. They come in two broad parts: criteria for whether to delegate, and precepts for how to delegate.

Criteria for whether to delegate: I argue that a policy function should not be delegated to a truly independent agency unless (1) society has settled preferences; (2) the objective is capable of being framed in a reasonably clear way; (3) delegation would materially mitigate a problem of credible commitment; and (4) the policymaker would not have to make big choices on society’s values or the distribution of its resources.

Precepts for how to delegate: (1) the agency’s purposes, objectives and powers should be clear and set by elected legislators; (2) its decision-making procedures should be set largely by legislators and should accord with the values of the rule of law; (3) the agency itself should publish the operating principles that will guide its exercise of discretion within the delegated domain; (4) there should be transparency sufficient to permit accountability to the legislature for the agency’s stewardship of the regime and, separately, for politicians’ framing of the regime; and (5) it should be clear what (if anything) will happen, procedurally and/or substantively, when the edges of the regime are reached but the agency could do more to avert or contain a crisis. 

Perhaps the biggest thing is that elected legislators should set a monitorable objective. Independent agencies really can improve the credibility of commitments made by government, but only if we know what we want them to do and can track whether or not they are doing it.

Would those Principles affect anything much?

Yes. Here are just three examples.

They would challenge the acceptability of judges completely having completely overhauled the principles of competition policy a few decades ago. The legislation was vague and the views of economists had moved on, so the courts had room and reason to act. But, given our democratic values, this should have been work for elected politicians.

They suggest that role of some financial-market regulators in preserving a stable financial system needs either to be better insulated from politics (such as the SEC in the US) or subject to much clearer objectives (UK).

And they would restrict the roles and activities of central banks rather more than we have seen in recent years.  

Is any of this realistic in actual democratic states?

Well, that’s the point of the book. There are no deep constitutional blockages, so it’s a question of whether we want to be governed in a way that’s consistent with our values. I’m hoping that people who see merit in my Principles for Delegation (or something like them) will cite many more examples than I can (or even know about), generating the kind of debate that is badly needed about how state power is allocated.

Anyway, surely something has to be done to bring the role of experts in government in line with our democratic commitments.

Why did you write the book?

I spent a good part of my central banking career helping to design regulatory and monetary regimes, none more important than the expansion of the Bank of England’s powers after the Great Financial Crisis. We resisted some powers, wanted others constrained, and had strong views on how the different responsibilities should be assigned to distinct committees so as to disperse power and focus incentives. I wanted to try to write down the values and considerations lying behind that. When I moved to Harvard in late-2013, I had the opportunity to do so.

Paul Tucker is a fellow at the Harvard Kennedy School and chair of the Systemic Risk Council. For more than thirty years, he was a central banker and regulator at the Bank of England and the Bank for International Settlements. He lives in London.

Dr. John C. Hulsman: The Ten Commandments of Political Risk

Disturb us, Lord, when we are too well pleased with ourselves
When our dreams have come true because we have dreamed too little
When we arrive safely because we sailed too close to the shore.

Disturb us, Lord, to dare more boldly, to venture on wider seas
Where storms will show your mastery
Where losing sight of land, we shall find the stars.

—Excerpts from Sir Francis Drake’s prayer, 1577 (apocryphal)

HulsmanThe great goal, the Everest of my book, has been to identify the historical elements that comprise the rules of the road for mastering political risk analysis and to holistically put our ten commandments to use in explaining the baffling world we presently live in. Having discovered these commandments—and illuminated them through the use of historical story-telling, deriving them from real-world policy situations throughout the ages—we can get to the Holy Grail of actual understanding.

Here at the end of our story, through the use of this unique heuristic method, we have delineated the long and neglected history of political risk analysis, linking this important tale to the broader efforts of both business and political leaders to master risk in general. Confident in what geopolitical risk analysis has been, is, and can be, it is clear that the Delphic dream of soothsaying—in a limited way, over limited issues, for a limited period of time—can be partially fulfilled.

  • “We are the risk.” As the history surrounding Sejanus and the decline and fall of the Roman Empire makes clear (alongside the corroborating tale of present-day Europe’s decadent decline), geopolitical analysts have a terrible time looking in the mirror and seeing that the society they are part of can itself be the major geopolitical risk problem.

 

  • Gaming out “lunatics.” Far too often geopolitical risk analysts let those with very different belief systems off the hook by lazily assuming that they must be crazy, rather than looking for the method to their madness. As the story of “The Old Man of the Mountain” and the Third Crusade (with inter-chapters on both Charles Manson and ISIS) makes clear, there is almost always an internal logic to any seemingly mad geopolitical interlocutor that can be followed and assessed.

 

  • Gaming out “chess players.” Amidst the daily tumult of a constant barrage of information, it is easy to lose sight of the intellectual needle in the haystack: the assessment of “chess players,” those geopolitical decision-makers who have stable, rational, coherent, long-term strategies in place to further their geopolitical goals. As reviewing the history of Niccolo Machiavelli and Pope Julius II (with an inter-chapter on George Washington and Alexander Hamilton) illuminates, finding these rare geostrategic birds is well worth the effort, as once they are identified (which is difficult), their future actions can rather easily be predicted.

 

  • Recognizing game changers. As the stirring story of John Adams in the sultry summer of 1776 makes clear, seeing the bigger picture—discerning how specific contemporaneous events fit into the larger historical pattern—is a mighty tool in political risk analysis. Separating the wheat from the chaff and intellectually drilling down on what really matters and its historical meaning (as we see both Adams and inter-chapter hero Winston Churchill doing in very different historical contexts) allows the political risk analyst as well as the foreign policy practitioner to see the world as it actually is.

 

  • Balance is the key to foreign policy. Having discovered the secrets of one major driver of geopolitics—be it macroeconomics, geopolitics, or cultural power—far too often analysts quickly forget that there are others and that it is the mix that explains everything. The twin stories of a beleaguered Venetian Republic and a seemingly all-conquering Napoleon in 1797 allow a dual critique of both an economics-only and overly militaristic policies and the doom to which both one-sided initiatives inevitably lead.

 

  • If you are digging yourself an intellectual hole in foreign policy analysis—stop. The “losing gambler in Vegas” syndrome affects both policy-makers and analysts. As the legendary Robert E. Lee found to his supreme peril at Gettysburg (and also “the best and the brightest” of the Kennedy and Johnson administrations as they met their nemesis in Indochina), pushing ahead with an already failed policy in a desperate effort to recoup past losses leads to calamity.

 

  • Know your country’s place in the world. The singular case of the late Victorian titan Lord Salisbury—who bravely and correctly righted Britain’s foreign policy to fit the paradox of its relatively declining but still dominant place in the world of the 1890s—highlights this vital requirement for both policy-makers and analysts alike. Only by fearlessly and correctly assessing your country’s true place in the world (as the inter-chapter on the Genro of Japan makes clear happened across the globe from Salisbury a generation earlier) can you pursue successful political risk analysis.

 

  • Do not put all your eggs in one strategic basket. Distantly related to the “losing gambler in Vegas” syndrome, the “promised land fallacy” besets decision-makers and analysts who ruinously rely on one overall strategy to magically attempt to alter their country’s overall geopolitical position in the world. In the case of Wilhelmine Germany, Admiral Von Tirpitz’s disastrous plan to challenge British naval might (echoing the inter-chapter on Soviet leader Nikita Khrushchev’s equally ruinous “Wars of National Liberation” gambit) helped lead to the Great War and Germany’s destruction.

 

  • Know the nature of the world you are living in. The trials and tribulations of Beatle George Harrison (with the inter-chapter focusing on the diametrically opposed case of the fall of Brian Jones and the rise of the Rolling Stones) and the stunning, lightning-quick dismemberment of his band dramatically underline that successful systems can collapse in the blink of an eye if their underlying power realities change, failing to any longer reflect the systemic power facts on the ground that created such a system in the first place. Policy-makers as well as political risk analysts must know both the nature of the global system they are living in (is it characterized by one great power, two, or many?) as well as if that system is durable, fragile, or evolving.

 

  • Prepare for the “butterfly effect.” The telling present-day case of Deng Xiaoping and the colossal success he made of both Chinese foreign and economic policy must not obscure the reality that East Asia today sits on a powder keg, a single random event away from 1914; just one drunken Chinese sea captain could quite plausibly upset the strategic equilibrium in Asia. The best policy-makers and political risk analysts (as the inter-chapter example of Harold Macmillan also makes clear) see the weaknesses in even the most successful foreign policies, having resilient initiatives at the ready to stave off seemingly unexpected disasters.

 

In traveling far from home, as Sir Francis Drake bid us to do in the swashbuckling, mesmerizing prayer that opens this article and To Dare More Boldly, our journey through history has been bountifully rewarded. For yes, within limits, the future can be foretold through the use of political risk analysis. Truly venturing far from our intellectual shore, in daring more boldly, we have come to see the stars. 

Dr. John C. Hulsman is the president and cofounder of John C. Hulsman Enterprises, a successful global political risk consulting firm. For three years, Hulsman was the Senior Columnist for City AM, the newspaper of the city of London. Hulsman is a Life Member of the Council on Foreign Relations, the preeminent foreign policy organization. The author of all or part of 14 books, Hulsman has given over 1520 interviews, written over 650 articles, prepared over 1290 briefings, and delivered more than 510 speeches on foreign policy around the world. His most recent work is To Dare More Boldly: The Audacious Story of Political Risk.

The Promised Land Fallacy: Von Tirpitz Disastrously Builds a Navy

by Dr. John C. Hulsman
Hulsman

The Dangerous Mirage of the Promised Land Fallacy

Distantly related to the losing gambler’s syndrome is the promised land fallacy, the naïve view that one attribute of power or one strategy is sufficient to overcome the complexity of the world and—in silver bullet-like fashion—change the terms of the geopolitical game. In essence, it’s the very human effort to falsely manufacture a game-changing strategy rather than recognising that game-changing events generally happen organically.

Political risk analysts throughout the ages, frustrated by the constraints of living in the world as they have found it, are often highly susceptible to dreaming up analysis designed to liberate them from the shackles of reality. Ruinously, reality always wins.

In the years following the innovative genius of British Prime Minister Lord Robert Salisbury’s foreign policy, Anglo-German relations nevertheless spiraled out of control. No one was more responsible for this than Admiral Alfred von Tirpitz, whose wrong-headed promised land strategy to supersede the British navy instead led Germany directly over the cliff into the charnel house of the Great War.

For Wilhelmine Germany, the building of a fleet from scratch to challenge the mighty Royal Navy was meant to be the country’s ticket to its place in the sun. The German political and military elite, frustrated that the world (especially haughty Great Britain) failed to recognise the ascension of Germany to Great Power status, set about rushing the forces of history, rather than merely waiting for their yearly relative gains in global power to become apparent over time. Already possessing the greatest army in the world, the Kaiser became intent on building a threatening navy.

Instead of heralding an era of German dominance, the elite in Berlin unwittingly started a process that led to its doom. The naval race awoke an alarmed London to the coming German threat to its position as the single greatest power in the world (though one in relative decline), a fact that helped directly lead to war and ruinous German defeat. Far from leading to the promised land, this approach puts political risk analysts forever at the mercy of the latest intellectual fad, often leading to simplistic analysis that doesn’t stand up to the realities of a complicated world.

Von Tirpitz Recklessly Challenges British Naval Dominance

Grand Admiral Alfred von Tirpitz became the living embodiment of the Kaiser’s drive to build a world-class navy, almost from scratch. Born March 19, 1849, pictures of von Tirpitz show a man looking like nothing so much as an enraged walrus, with his long, flowing beard, fierce eyes, and stern countenance.

Yet von Tirpitz was much more than this caricature of a stiff-necked Prussian. For one thing, he knew the English personally and well, spoke the language fluently, and even sent his two daughters to the prestigious Cheltenham Ladies’ College. For another, von Tirpitz rose through the German navy’s ranks largely through his own merits, something unheard of at the time. Tirpitz, for all the Prussian glowering, was essentially a creative, outward-looking, self-made man.

In 1897, von Tirpitz was made head of the powerful Imperial Navy Office, an unassailable bureaucratic perch that allowed him to relentlessly focus on making the German navy a force to be reckoned with; he was to remain central to German naval thinking until 1916. His primary strategic recommendation was that Germany must build as many battleships as possible and challenge British naval hegemony. Initially, von Tirpitz advocated the creation of two squadrons of eight battleships, plus a fleet flagship and two reserves.

Between 1898 and 1912, von Tirpitz managed to get four naval acts through the German Parliament, greatly expanding the size of the country’s High Seas Fleet. Over time, his clearly stated strategic goal became to construct a navy that two-thirds of the size of the dominant British Fleet. In the narrowest of terms, von Tirpitz was successful, in that he took the very meagre German navy he had inherited in the 1890s and transformed it into a world-class force.

The Germans miscalculate

The irony was that, for both von Tirpitz and the Kaiser, the German naval build-up was essentially defensive in nature. They did not wish to overwhelm Britain as a revolutionary power, but merely to be taken seriously by it as a valued guarantor of the status quo. The von Tirpitz strategic plan was to build the world’s second-largest navy after Britain’s, announcing Germany’s arrival on the world stage as an undisputed great power.

In this vision, the naval build-up would get the Germans to the promised land, making the British see sense and accommodate Germany’s rise to great power status. Yet, as so often has proven the case for those whose political risk analysis leads them to adopt the promised land strategy, unintended consequences overwhelmed these initial goals.

In direct reaction to von Tirpitz’s naval programme, Britain (between 1902-1910) embarked on its own massive naval build-up, with the express purpose of safeguarding its naval dominance and seeing off the perceived German strategic threat. As such, von Tirpitz’s build-up, far from cowing Britain into supporting Germany’s overall strategic rise, instead came to be seen as a mortal threat in London.

Conclusion: The promised land strategy and unintended consequences

The unintended result of the von Tirpitz plan was to leave Germany in the worst of all possible strategic worlds. Its efforts to catch up with the dominant British navy narrowed, but did not eliminate, Britain’s maritime advantage. In an immediate, limited sense, the Germans won the naval arms race by whittling down British dominance. But the cost of this pyrrhic victory was exorbitant.

For the change in strategic circumstances was enough to alarm Britain into fundamentally changing its foreign and strategic policies, but did not alter the overriding fact that in 1914 it still possessed by a long way the most powerful naval force in the world. It was the naval arms race that persuaded Britain to wholly adopt Lord Salisbury’s evolving policy and instead look for allies to deal with what was seen—as the result of the von Tirpitz plan—as an increasingly malevolent German threat.

Unwittingly the promised land fallacy unleashed by von Tirpitz directly led to the closer Anglo-French ties that were to form the basis of the resistance to Germany in World War I. With Britain pressed to withdraw its Mediterranean fleet to its home waters to fend off the impending German naval threat, much closer ties with Paris became an absolute strategic imperative so as to safeguard (through the French navy taking London’s place in the Mediterranean) the Suez Canal, the jugular of the British Empire.

Britain, turning its back decisively on its nineteenth-century post-Napoleonic foreign policy heritage, formally allied itself with European powers France in 1904, and Russia, in 1907. Incredibly, the Germans—in pursuing their promised land strategy to secure in von Tirpitz’s words German ‘political independence’ from England—had instead forced the British into their eternal enemy France’s waiting arms, the worst possible strategic thing Berlin could have done. World War I was not far away.

Dr. John C. Hulsman is the president and cofounder of John C. Hulsman Enterprises, a successful global political risk consulting firm. For three years, Hulsman was the Senior Columnist for City AM, the newspaper of the city of London. Hulsman is a Life Member of the Council on Foreign Relations, the preeminent foreign policy organization. The author of all or part of 14 books, Hulsman has given over 1520 interviews, written over 650 articles, prepared over 1290 briefings, and delivered more than 510 speeches on foreign policy around the world. His most recent work is To Dare More Boldly: The Audacious Story of Political Risk.

John Hulsman on To Dare More Boldly

HulsmanOur baffling new multipolar world grows ever more complex, desperately calling for new ways of thinking, particularly when it comes to political risk. To Dare More Boldly provides those ways, telling the story of the rise of political risk analysis, both as a discipline and a lucrative high-stakes industry that guides the strategic decisions of corporations and governments around the world. It assesses why recent predictions have gone so wrong and boldly puts forward ten analytical commandments that can stand the test of time. To Dare More Boldly creatively explains why political risk analysis is vital for business and political leaders alike, and authoritatively establishes the analytical rules of thumb that practitioners need to do it effectively.

What’s audacious about political risk?
It’s a great and arresting word, isn’t it? It’s also entirely accurate. After the Cold War (though you can actually date it back to the Pythia of Ancient Greece as I do), the political risk industry seemed to spring fully formed out of nowhere, with leading businesses, multinational corporations, and even governments hanging on the words of erudite soothsayers, who in the tradition of the Pythia or Merlin seemed to promise the magic of uniquely understanding the present and the future. As a member of this select fraternity, I wanted to tell the true story of what is actually going on here, in all of our audacity.

Why did the notion of audacity inspire you to write To Dare More Boldly?
The curse of our present age is that despite the omnipresence of communication, no one seems to have very much to say. Certainly I have found this true in my field of global geopolitical analysis, of political risk. Instead, people with precious little to say describe rather than analyze, ape other ‘right-thinking people’ clustering around one safe opinion, so that even if they are wrong, everyone is incorrect together, and there is no accountability, no price to be paid for analytical mediocrity.

I was inspired to do exactly the opposite, due to my impatience with the present very poor state of imagination in the political risk analysis field, and empathy for creative figures like Brian Wilson of the Beach Boys, who in Pet Sounds bravely and audaciously swung for the fences, and in doing so re-made popular music. I want to do nothing less than the same for the global analysis of political risk.

What’s audacious about the book?
As was true of Brian Wilson’s work, it is baroque in structure, with inter-chapters pointing out the principles—our ten commandments of political risk—that apply across time and space and are truly universal, rather than artificially cherry-picked to suit my argument. For example, there is a chapter on the need to know the nature of the world you actually live in, where the power resides, and if such a system is politically stable. I look at the rapid, shocking decline of the Beatles (epitomized by the increasing creative frustrations of George Harrison) as my main example of what I mean. But there is also a fascinating inter-chapter on the rise and surprising durability of the Rolling Stones, a band who in the mid-1960s seemed on their last legs—as another example of how systems can determine outcomes. Emulating Brian Wilson’s baroque structure allows for a creativity, a timelessness, and a richness that a straightforward analysis would not have made possible.

Examples of pop groups are not the usual fare for books focused on political risk analysis or about practical analytical insights for businesses. Is this another example of the book’s audacity?
Absolutely. Along the way, and it is part of the cult of mediocrity which so pervades modern thinking, we have falsely equated being boring with being profound. I have the opposite approach, that Shakespeare is for everyone, that murky writing and thinking are indicative of bad writing and thinking, that the novelist E.M Forster was right and that the key to life as he said at the beginning of Howard’s End is only to connect.

I use examples across all of history, but ones that fascinated me and I hope my audience. The Greco-Persian Wars, the fall of Rome, the Assassins and the Third Crusade, Machiavelli and the Borgias, John Adams and July 4, Napoleon and Venice, Robert E. Lee and Gettysburg, Lord Salisbury and the British Empire, the fall of the Kaiser’s Germany, the Beatles and the Stones, and Harold Macmillan’s friendship with Jack Kennedy are all covered. But so are more immediate topics like Charles Manson, ISIS, Europe’s present crisis, the rise and rise of China, and power ebbing away from the west as the world becomes truly one of many poles of power. We have forgotten the powerful intellectual pull of Homeric storytelling, which this book is entirely based on. I hope my analysis is profound. But I also hope it is fun.

What does To Dare More Boldly put forward to creatively improve this intellectual wasteland you describe?
That’s exactly the right question. For if you are going to tear down the present, you must put something in its place, or otherwise what you are doing is just nihilism. To Dare More Boldly puts forward ten analytical precepts derived from the real world of history—our ten commandments—a ‘do’s’ and ‘don’ts’ list across all of recorded history that makes an analytical understanding of how to master political risk in the world possible. Rather than saying nothing or being laughably wrong (how many of my colleagues called Brexit correctly?) the book underlines that the present and the future in terms of political risk can be mastered for businesses by the following of such principles that have stood the test of time throughout and across history, the real world laboratory we all live in. I hope the book is creative and valuable both for businesses that need to master the confusing new era we find ourselves in, and for the general reader who rightly also wants to understand the times they live in.

John C. Hulsman is president of John C. Hulsman Enterprises, a prominent global political-risk consulting firm. His books include Ethical Realism: A Vision for America’s Role in the World (Pantheon), The Godfather Doctrine: A Foreign Policy Parable (Princeton), and To Begin the World Over Again: Lawrence of Arabia from Damascus to Baghdad (St. Martin’s). He lives in Painswick, England.

Getting to Goldilocks: Napoleon, the Venetian Republic and Balance in Political Risk Analysis

by Dr. John C. Hulsman
Hulsman

Introduction: The Self-Inflicted Haplessness of Venice

The Most Serene Republic of Venice, one of the most consequential states of the European Renaissance, ended the 1,100 years of its existence not with a bang but with a pathetic whimper. At its height and for hundreds of years, the Venetian maritime empire dominated the Adriatic and eastern Mediterranean, as well as possessing a central land base in the Veneto on the northern Italian mainland. However, by the time the great Napoleon had fixed his sights on what he rightly called ‘the drawing room of Europe’ and determined that the Venetian pearl would be his, the city-state was but a shadow of its former self, largely because of a simple failure of political risk analysis.

Why was this former great power so utterly defenceless before Napoleon’s hordes? The simple, overriding answer to this question is that the Venetians had learned an important lesson down the centuries—war is often folly and always expensive—while entirely forgetting that they might need to keep other important—and countervailing—truisms about international relations in mind as well.

First amongst these is that having merely carrots (economic power) as an instrument on the global stage only works in a world populated entirely by rabbits; military power is sometimes required too. And whatever else you might say of him, the young Napoleon was hardly a rabbit.

Because of this fundamental misreading of human nature, the Venetian Republic responded with a reckless strategy of disarmament over the centuries that erased its mighty position in the world. By the latter days of the eighteenth century, the city-state was so divorced from the reality of power politics that when threatened by the French, it had absolutely no choice but to surrender.

Political risk analysts often exhibit a similar lack of balance, dooming their assessments. The holy grail of analysis is getting to Goldilocks—making policy assessments that are neither too hard nor too soft, by eschewing extremes and mono-causal answers and actually balancing the numerous important factors determining outcomes.

Venice’s Slow Castration

From the early sixteenth century on, the oligarchs who ran the Republic preferred to avoid the hard economic choices and belt-tightening that could have corrected their dangerous military decline (much like today’s modern European states). But as Venice was still a very rich city, and as its elite’s cosseted life of masked balls and opulence were hard to part with, it was far easier to do nothing about what seemed at the time to be merely a theoretical problem. It was only when Napoleon showed up at Venice’s doorstep that theory became all too real.

And to a point, of course, the Venetians were absolutely right. Often wars explode in the faces of those who engage in them, and almost always they are ruinously expensive. Peace in general is a better alternative for both the health of any state and the welfare of its people. No one is arguing that in general the Venetians were onto something with their peace-first strategy.

The problem was that over the centuries it became a peace-only strategy. For having grasped one essential reality of the world, the Venetian Republic wholly ignored other, darker, but no less important lessons about the nature of human beings and international relations. By 1796, on the eve of Napoleon’s brilliant Italian campaign, the Republic could no longer defend itself. Of its pathetic fleet of thirteen ships of the line, only a handful of even these proved to be seaworthy. The army was in even worse shape, consisting of only a few brigades of Croatian mercenaries.

The fundamental problem was that in policy terms the oligarchs had forgotten about balance in both foreign policy and political risk analysis, not being prepared to pay the steep price that would have been necessary to upgrade the Venetian fleet with the latest technology of eighteenth-century warfare. Through this intellectual failure of balance, Venice had castrated itself long before Napoleon came thundering out of the mountains, sealing its own doom.

Napoleon’s France as a Country on Military Steroids 

In his bedazzled, gilded youth, Napoleon Bonaparte shown like the sun. Beyond Alexander the Great, it is difficult to think of any leader in the history of the world to whom fame and glory came so early, and so overwhelmingly. Supremely competent, decisive, preternaturally driven, eloquent, quick-witted, and far-seeing, Bonaparte was capable of inspiring almost religious devotion in both his marshals and his men.

In 1797, Napoleon could uncannily see the inherent defencelessness of the Venetian Republic, a government that had chosen to simply ignore the basic imperative any state has to defend itself. However, Napoleon was to make a diametrically opposed analytical misjudgement himself.

The Venetians were undoubtedly lotus-eaters, basking in their tranquil apathy, as the forces of the real world slowly and ominously gathered around them. But in worshipping the god Mars, Napoleon was to make an equally disastrous political risk mistake. For behind all his highly impressive domestic reforms was an effort to increasingly militarise French society, to make it fit for purpose to take on the rest of Continental Europe for almost a generation. This imbalanced over-reliance on war was to doom the glorious Bonaparte. In always seeing the need for war, he was as out of kilter as were the Venetians, who never saw the need for it.

For in reality, it was the overly militaristic, self-perpetuating expansionism of Napoleon’s France that led to his greatest strategic setbacks in both Spain and Russia. Both the Spanish and Russian disasters arose out of Napoleon fighting wars of choice, conflicts that a less martial status quo power would have entirely avoided.

Of course, Napoleon paid the ultimate price for his utopian, overly militaristic, unbalanced folly, ironically much as the Venetian oligarchs had done. On May 5, 1821, the great man died in exile on the obscure island of St. Helena, far from the trappings of his once-supreme power, an unwitting victim of having legendarily used the military lever of politics without ever learning that there are other motive forces of history as well.

Conclusion: The Benefits of Balance

Two great powers, the Venetian Republic and its vanquisher, the great Napoleon, were laid waste to when they could not overcome a fundamental political risk analytical error. Commercial Venice forgot along the way that a state’s paramount need is always to defend itself, that there will always be creatures in the foreign policy jungle to be fought off. Evil and aggression in the world cannot be wished away just because it is far more pleasant to attend glittering seaside parties and to produce breath-taking works of art.

Some sort of balance is called for. Over the centuries, Venice’s abdication of responsibility for seeing the world as it is left it entirely at the mercy of the young, covetous Napoleon when he made his way over the Alps. But given the Venetians’ fundamental misreading of the world, it hardly mattered that it was Napoleon who brought the Venetian Republic down. Someone would have.

But Napoleon, in his diametrically opposed way, made the same fundamental error as the Italian oligarchs he so effortlessly conquered. The sword had made Napoleon the most famous man in the world and given him, a minor Corsican aristocrat, first a throne and then the dominant position in Europe.

It is human and understandable that even a man of Bonaparte’s first-rate intellect, having personally experienced how far the military component of power could take both a genius and a country, failed to see that his over-reliance on the military instrument of power was highly skewed, to the exclusion of a more balanced strategy, such as that pursued by Pitt’s England throughout the period. It is understandable, but Napoleon’s sad end makes it clear that his failure of balance was absolutely toxic.

Modern political risk analysts would do well to take note of both the historical examples of Venice and Napoleon. There are many motive forces of history and analysis, and all the major ones must be taken into account altogether if political risk analysis is to get anywhere. To forget the absolute need for getting to Goldilocks—the essential political risk commandment of the imperative of finding analytical balance—is to get every big thing wrong, no matter how right analysts are about the detail. For both analysis and policy require more than one basic insight into how our complicated world works.

Dr. John C. Hulsman is the president and cofounder of John C. Hulsman Enterprises, a successful global political risk consulting firm. For three years, Hulsman was the Senior Columnist for City AM, the newspaper of the city of London. Hulsman is a Life Member of the Council on Foreign Relations, the preeminent foreign policy organization. The author of all or part of 14 books, Hulsman has given over 1520 interviews, written over 650 articles, prepared over 1290 briefings, and delivered more than 510 speeches on foreign policy around the world. His most recent work is To Dare More Boldly: The Audacious Story of Political Risk.