Margaret Peters: Trump wants to restrict trade and immigration. Here’s why he can’t do both.

Why have countries increasingly restricted immigration even when they have opened their markets to foreign competition through trade or allowed their firms to move jobs overseas? In Trading Barriers, Margaret Peters argues that the increased ability of firms to produce anywhere in the world combined with growing international competition due to lowered trade barriers has led to greater limits on immigration. She explores the ideas in her book within the context of the current administration in a new post on the Washington Post Monkey Cage blog.

Immigration and free trade are connected—but they point in opposite directions

Immigration policy often seems a long way off from trade policy, but the two are intimately connected through their impact on U.S. businesses. When trade is restricted, which is what Trump is proposing to do by renegotiating NAFTA and ending KORUS, businesses that rely on a lot of labor will produce more of their goods—and employ more people—here in the United States.

So far, so good for Trump’s promise to bring back manufacturing jobs.

Here’s the big catch: Native labor in the United States is expensive

Increasing the number of jobs for U.S. workers will lead (eventually) to higher wages across the U.S. economy. Businesses may then find that the protection they get from these trade barriers is wiped away by the increase in wages they have to pay — they can’t produce goods at a low-enough price to be competitive.

Read the full article on the Washington Post’s website.

Margaret E. Peters is assistant professor of political science at the University of California, Los Angeles.

Peters

Women, Interrupted

Tuesday saw an Uber board member wisecracking about women talking too much (he later resigned), while democratic senator Kamala Harris found herself interrupted for the second time that week by her male colleagues. 

Coincidence? Not at all, say the experts. Yesterday the New York Times called out the all too frequent experience of women interrupted by male colleagues, noting that anecdote and academic studies alike confirm that “being interrupted, talked over, shut down or penalized for speaking out is nearly a universal experience for women when they are outnumbered by men.” Cited in the piece is Princeton University Press author Tali Mendelberg, co-author of The Silent Sex: Gender, Deliberations and Institutions which examines what happens when more women join decision-making groups:

[Mendelberg] and Christopher F. Karpowitz, associate professor of political science at Brigham Young University, found that, at school board meetings, men and women did not speak as long until women made up 80 percent of the school board. When men were in the minority, however, they did not speak up less.

During the past week, women from a range of sectors have offered up their own personal experiences and frustrations on social media. According to Deborah Gillis, president and chief executive of Catalyst, which works for women’s advancement in business, the situation is plagued by what is by now a familiar irony. She is quoted in the New York Times piece:

“The fact that women are outnumbered in every room puts them in a position where they’re often coming up against gender-based stereotypes,…Women are too hard, too soft, but never just right. What that means is that women are seen as either competent or liked but not both.”

The Daily Show was quick to make hay about the sheer irony of a sexist remark finding its way to a meeting that was actually aimed at addressing sexism. The clip cites research by Karpowitz and Mendelberg:

 

Elizabeth Anderson: Is your workplace a dictatorship?

AndersonOne in four American workers says their workplace is a “dictatorship.” Yet that number probably would be even higher if we recognized most employers for what they are—private governments with sweeping authoritarian power over our lives, on duty and off. We normally think of government as something only the state does, yet many of us are governed far more—and far more obtrusively—by the private government of the workplace. In Private Government, Elizabeth Anderson argues that the failure to see this stems from long-standing confusions. These confusions explain why, despite all evidence to the contrary, we still talk as if free markets make workers free—and why so many employers advocate less government even while they act as dictators in their businesses. Recently she took time to answer some questions about her new book.

Most contemporary discussions of work focus on wages, benefits, and unemployment.  You want to focus on the power of employers over workers.  How does that matter for workers today?

EA: Millions of workers in the United States labor under humiliating and abusive conditions. Most poultry workers, for example, aren’t allowed to use the bathroom during their shift, and are told to wear diapers to work. The vast majority of restaurant workers suffer from sexual harassment. Managers scream at warehouse workers when they can’t keep up with the grueling pace, or get injured on the job. They search workers’ bodies and personal property, and listen in on their conversations with co-workers. These conditions aren’t inherent in these types of work. The aren’t like the dangers that firefighters unavoidably face. They are imposed by employers. Employers can do this because they have power over workers and can threaten their livelihoods if they don’t submit. This kind of unaccountable power is objectionable even when workers are paid decently. Many professional and managerial workers who enjoy good pay are pressured by their bosses to contribute to political candidates their bosses prefer, and know that their contributions are being monitored. Workers up and down the organization chart are bullied by their bosses. It’s high time that we drew attention to these problems.  Work doesn’t have to be this way.

You claim that current political discussions confuse government with the state.  Why is that a point of confusion, and why is it important to distinguish the two?

EA: Politicians are constantly telling people that “the government” is interfering with their freedom.  What they mean by “government” is the organs of the state—the Federal government, or agencies of the 50 states. This way of talking misleadingly suggests that if we only got the state out of our hair, we’d be perfectly free to lead our lives as we choose.  It masks the fact that other kinds of governments, with unelected leaders, also rule our lives. The workplace is a type of government, and bosses are the rulers of this government. It’s important to recognize this reality, because managers often regulate workers’ lives far more intrusively and minutely than state governments regulate the lives of ordinary citizens. Most workers are not free under the government of the workplace, because they have no voice, no representation in that government. State regulation of workplaces can actually make them more free by setting constraints on what their bosses can do to them—for example, barring harassment and discriminatory treatment.

You’re concerned about the conditions for workers today.  Yet you begin your discussion with the Levellers of the mid-17th century.  What can we learn from them?

EA: The Levellers were a group of egalitarian activists in mid-17th century England. They advanced a way of talking about free market society as liberating for workers. They saw that the state was not the only government that ruled their lives. As small craftsmen, they were also governed by the monopolistic guilds. Freeing up markets meant ending monopoly control, which would enable craft workers like themselves to be their own bosses, and expand the ranks of the self-employed. Other 17th and 18th century figures, including Adam Smith and Tom Paine, similarly believed that freeing up markets would open the way to nearly universal self-employment. Lincoln carried that vision into the mid-19th century. The Industrial Revolution destroyed their ideas of how free markets would make workers free. It bankrupted self-employed craftsmen and forced them to submit to bosses in big factories. We still talk today as if markets make workers free, forgetting that this idea depended on pre-industrial conditions. The originators of free market ideas were vividly aware that wage workers were subjected to the arbitrary rule of their employers, and thought that free markets would make workers free by enabling them to escape rule by bosses. Today, talk of how markets make workers free is magical thinking, masking the reality that bosses govern their lives.

How do you think the governance of the workplace can be improved?

EA: I argue that workers need a voice in how the workplace is governed.  Other measures, such as making it easier for workers to quit, and laws protecting workers’ privacy and off-duty activities from employer meddling, can certainly help. But these can’t substitute for workers having a say in how the workplace is governed. Labor unions once gave voice to more than a third of American workers. These days, outside the state sector, few workers are represented by a union. Yet unions are not the only way that workers can have a say in workplace governance. In Europe, so-called co-determination, in which workplaces are jointly managed by owners and workers, is common. I make the case for exploring different ways workers could have a say, to open up a topic that is hard to frame in today’s impoverished political discourse.

What inspired you to write this book?

EA: I have long been interested in the lived experience of workers, particularly those at the bottom of the labor market. Their experiences are unjustly neglected in today’s public discourse. It should be a major public outrage that so many workers today are denied bathroom breaks, and suffer innumerable other indignities that almost no politicians talk about! Instead, a common response of politicians and the managerial class is: if you don’t like it, then why don’t you quit? The freedom of workers is just the freedom to quit. The inadequacy of this response should be glaring. But today’s public discourse doesn’t help us see why. My research on the history of egalitarianism uncovered the reasons why public discourse is so inadequate, and motivates alternative ways of talking about workers’ complaints, so they can be taken seriously. In the United States, it’s normal to complain about government regulation interfering with our freedom. Once we recognize that employers subject workers to their own dictatorial government, it’s easier to sympathize with workers’ complaints, and think about remedies.

Elizabeth Anderson is the Arthur F. Thurnau Professor and John Dewey Distinguished University Professor of Philosophy and Women’s Studies at the University of Michigan, Ann Arbor. She is the author of Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It).

Robert Rotberg: What’s the cure for corruption?

RotbergCorruption corrodes all facets of the world’s political and corporate life, yet until now there was no one book that explained how best to battle it. The Corruption Cure provides many of the required solutions and ranges widely across continents and diverse cultures—putting some thirty-five countries under an anticorruption microscope—to show exactly how to beat back the forces of sleaze and graft. Recently, Robert Rotberg took the time to answer a few questions about his new book:

Can corruption be cured?

RR: This book says that corruption can be reduced sharply if not eliminated entirely. It shows that once wildly corrupt places like Hong Kong, Singapore, and Rwanda have suppressed corruption effectively thanks to determined leadership, that Botswana did so as well, that China may be shifting a huge country away from graft (again because of leadership actions), and that Nigeria and Brazil could follow.

The “cure” sometimes takes decades and centuries, as in Scandinavia, New Zealand, and Canada (a subject of a chapter in this book), or much shorter periods of time as in Singapore and Hong Kong (and perhaps India’s Delhi State).

But there are real remedies, and opportunities for civic as well as political and bureaucratic leadership in the battle against corruption. This book is the anti-corruption primer, with a “how to” approach.

What is corruption?

RR: Strictly speaking, corruption is the taking advantage of a public elected or appointed position for private gain. But corruption also is the abuse of any position of trust for personal profit, or to benefit one’s own family, lineage, or cohort. To be non-corrupt is to be impartial—to be fair and even-handed in all dealings between persons with power and those who are essentially powerless.

What are the three types of corruption you identify?

RR:

1) Petty, or lubricating: These are the relatively small bribes that people routinely pay to avoid standing in long queues at licensing offices, to avoid being penalized by traffic policemen, and to avoid being held up at road barricades. People also routinely pass bribes along to influence minor decisions favorably, perhaps to obtain a passport, a marriage certificate, or the like—to pay extra to obtain what is rightfully theirs.

2) Venal, or Grand: When a construction company pads its bid to build a bridge or a road (or a refinery) so that it can split the extra proceeds with a person or persons responsible for granting a contract, that is venal corruption. Likewise, when the leaders of FIFA demand large personal payments from cities and countries anxious to hold World Cup tournaments, that is also venal corruption.

3) Corporate to Corporate corruption: To influence a strategic business decision or to gain market share versus a rival, a firm often pays its competitors to turn away. Or a corporate leader might undercut decisions of the company in order to enhance his own firm or to harm the other.

What does corruption cost?

RR: Large-scale customary corruption costs most developing countries at least 1 percent of their GDP growth each year. Overall, the World Bank estimates that the world’s citizens lose $1 trillion in potential growth each year because of corruption. Of equal concern, the more corrupt a country is, the poorer its people tend to be. Corruption is a component of bad governance and the poorer a country’s governance, the worse its economic performance usually is. Corruption undermines a country’s moral fabric. It distorts or destroys national priorities. When politicians live for the rents that they can seek from national incomes, citizens lose vital services like educational opportunity and medical care.

How is corruption measured?

RR: Many indexes measure corruption, but Transparency International’s Corruption Perceptions Index and the World Bank’s Governance Institute’s Corruption Indicator are the leading ones. On both of those indexes and most others, the least corrupt countries in the world are the Nordic nations, Australia and New Zealand, the Netherlands, Canada, and Singapore. The most corrupt places are in Africa (the two Congos, Nigeria, Zimbabwe) and in South America (Venezuela). These last states are all very badly governed, poor, and unstable.

What explains Nordic and Antipodean exceptionalism?

RR: The Nordics and Australia/New Zealand were all outrageously corrupt before the early years of the twentieth century. But the rise of what we call ethical universalism gradually replaced the particularism of early corruption. A new civic consciousness, educational attainments, and the widespread embrace of new aspirations and the appropriate methods for achieving such goals led to a shunning of corrupt dealings. A special chapter of the book examines how these nations and others discarded corrupt pursuits.

What works best to reduce corruption?

RR: The key shift is to alter the mindset of citizens from accepting the inevitability of corruption to refusing to countenance corrupt dealings. Political leadership is essential. In every modern case where a country has abandoned (or greatly reduced) corruption, a political leader – a president or a prime-minister – has understood the dangers of corruption within the body politic and has punished politicians and bureaucrats who thus stole from the people or abused their trust. Where corruption has been reduced sustainably, a political leader has led the way. Other initiatives include limiting opportunities for discretion, putting all interactions between a citizen and a permit-granting official, or a law maker, online, strengthening the operations of auditors general and ombudsmen, strengthening the ability of judges to refuse bribes, encouraging judges to penalize corrupt persons severely, welcoming and supporting a free media, thus adding to the increased transparency and investigative accountability which is foundational in any successful battles against graft and sleaze, and creating a world wide, U.N. sponsored, International Anti-Corruption Court to assume jurisdiction when national courts are either powerless or compromised. This book examines each of these (and other) anti-corruption options at length.

What can corporations do to reduce corruption?

RR: Venal corruption is often stimulated by a multinational enterprise seeking a mining or petroleum-exploitation concession from a national government. The best corporate citizens abide strictly by the letter and the spirit of the American Foreign Corruption Practices Act or its Canadian or European analogues. The best corporate citizens police their compliance policies strictly, and do more than simply pay lip service to anti-corruption legislation. The best corporate leaders refuse to condone any attempts to buy influence from politicians and officials, or to facilitate decisions in their favor that are supposed otherwise to be decided impartially.

Robert I. Rotberg is founding director of the Program on Intrastate Conflict at the Harvard Kennedy School and president emeritus of the World Peace Foundation. His many books include When States Fail and The Corruption Cure: How Citizens & Leaders can Combat Graft. He is a fellow of the American Academy of Arts and Sciences and former president of Lafayette College.

Jan C. Jansen and Jürgen Osterhammel on Decolonization

DecolonizationThe end of colonial rule in Asia, Africa, and the Caribbean was one of the most important and dramatic developments of the twentieth century. In the decades after World War II, dozens of new states emerged as actors in global politics. Long-established imperial regimes collapsed, some more or less peacefully, others amid mass violence. Decolonization by Jan C. Jansen and Jürgen Osterhammel takes an incisive look at decolonization and its long-term consequences, revealing it to be a coherent yet multidimensional process at the heart of modern history. Recently, the authors answered some questions about their new book:

You describe the dissolution of colonial empires as a major process of the twentieth century. What makes decolonization important?

In a way, decolonization is both among the most overrated and underrated historical processes of the twentieth century. On the one hand, many contemporaries pinned high expectations to the end of colonial rule: a new age of social and international equality, post-racism, peace, empowerment of the South, economic redistribution, cultural self-determination, democracy, technological progress, etc. Many of these expectations did not, or only partially, materialize. Hierarchies and inequality continue to shape the relations between formally independent states. It is thus only natural that many see decolonization through the prism of historical disappointment and disillusion. They regard decolonization as a failure. Yet we also have to see what decolonization did change: It dramatically altered the norms that govern the word-wide relations between nations and peoples. While in the late 1930s large parts of the world population still lived in territories that were under alien rule, this has become an anomaly in the present time. Racial hierarchy is no longer an accepted structuring principle of world order. This fundamental normative change is a major dimension—and yes, also an achievement—of the decolonization era. In general, it is important to go beyond these narratives of failure and success and to understand decolonization as a fundamental restructuring—and geopolitical fragmentation—of the international system. This is a perspective we put forward in the book.

How do you explain this international sea change?

This is a question that many contemporaries and witnesses of decolonization were already debating, and today’s historians and political scientists have inherited several ways of explaining the end of colonial rule: that the colonial powers simply could not stem against the rising tide of national liberation movements, that the new postwar international scene of the Cold War and international organizations forced Europe’s colonial powers to give up colonial rule, or that the colonial powers, in association with influential big business interests, realized that they could pursue their interests in more cost-effective ways than colonial rule, the classical “neo-colonialism” theory. In our book, in line with today’s excellent scholarship, we try to avoid overtly simplified models. Decolonization was a multifaceted and complex historical process, and its sheer geographical breadth should caution us against one-factor-theories. The book seeks to provide an analytical grid that takes into account various levels of historical action (local, imperial, international) and time frames. This grid may be used by our readers to analyze and describe specific cases, and may also help to explain decolonization in comparative perspective.

How irreversible is this process, in light of the current international scene? Are there no clear signs that the international order marked by decolonization is coming to an end?

Decolonization never did away with power structures between nations and peoples. Rather, it changed the ways in which these hierarchies are arranged and exercised. The formally sovereign nation-state—and no longer the empire—has become the basis of the international system. Despite the current renaissance of “spheres of interest” and “interventions,” as worrisome as these tendencies are, we do not see the reemergence of internationally codified hierarchies between “metropoles” and “colonies.” To be sure, the post-1989 international order has been under great pressure. Yet, there are no historical precedents for the reappearance of once collapsed empires. If current talk of a “Greater Russia” really leads to Russian “re-imperialization” remains to be seen. In that case, Russian ambitions will eventually clash with a self-confident China, ironically its old Asian rival, which, by the way, has never really ceased to be an empire. Elsewhere, the rise of xenophobic and racist movements throughout the Western world hardly seems to be inspired by the desire to be again at the pinnacle of a diverse and multi-ethnic empire. These movements want to minimize interaction with what they conceive as the inferior and dangerous other (be they Syrians, Eastern Europeans, or Mexicans); their new symbol is “the Wall.” Colonial re-expansion would necessarily go in a different direction.

You also argue that decolonization marked “a crucial phase in West European nation-building.” What do you mean by this?

Of course, decolonization did not bring about new European nation-states. This happened in the global South. Yet, it did have a considerable impact on the European metropoles, and also on Japan, which had built up its own colonial empire in Asia from the late nineteenth century on. These metropoles were closely tied to their overseas possessions, and it is one of the paradoxes of the decolonization era that such ties intensified at the very moment of imperial demise. After the Second World War, Great Britain and France, the two leading colonial powers, sought to facilitate mobility within their imperial spheres and set up, by today’s standards, relatively liberal citizenship laws for people from their respective empires. Decolonization, in this context, came as no less than a rupture in longstanding geopolitical orientations. It set off a new phase in European nation-building, a sort of nation-building by way of contraction. The metropoles had to dissolve or redefine the many—economic, political, social, also mental—ties to their respective empires. In light of increased immigration from their former colonial territories, they also had to redefine what it meant to be British, French, or Dutch. Though not produced by the end of empire, European supranational integration became enmeshed in European decolonization: the postcolonial European nation-states started to focus on Europe and the European market, which more than made up for their losses in former imperial trade. Great Britain, marked by a long-standing ambivalence toward continental Europe, made its first attempt to join the European Common Market in 1961, after the disaster of the Suez crisis and at the apogee of African decolonization. In a way, the 2016 “Brexit” vote to drop out of the European Union concluded this period of postimperial British supra-nationalism.

How present is the history of decolonization today?

Remnants of the colonial past and the decolonization era are pervasive. They remind us that our current world was built out of the ruins of empire. For example, a large portion of international borders between states, including the conflicts they sometimes nourish, have been the result of colonial rule. Decolonization basically enshrined most of them as the borders between sovereign nation-states. Some of the most troubling conflicts in the world—such as the Israeli-Palestinian conflict or the conflict between Pakistan and India—can be traced back to the decolonization era. Yet, notwithstanding the many apparent links, assessing the long-term impact of decolonization and the colonial past remains a tricky operation. Postcolonial countries have taken very different trajectories, sometimes starting from the same colonial system. Consider the two Koreas which had been under Japanese rule and which took diverging paths. The Syrian civil war, to cite another case, can hardly be seen as the ineluctable result of Franco-British quasi-colonial rule in the Middle East during the interwar years.

While the impact of the colonial past and the decolonization process may be fading with time, memories relating to this period have experienced a boom over the past two decades. Certainly, many episodes of the decolonization period remain largely forgotten. Who remembers the bloody repression of a major insurrection in Madagascar in 1947–49? Yet, debates about the colonial past and its end have attracted a great deal of attention not only in formerly colonized countries, but also in Japan and in many European countries. These memories have even become a concern in the diplomatic world. Internationally concerted efforts at remembering the effects—and the many victims—of colonial rule, similar to what we have seen with regard to the Holocaust or the world wars, however, are still no more than a wild dream by some historians.

Why did you write this book?

Decolonization has become an important topic in international historical scholarship, a development not completely detached from the memory boom we just talked about. Over the past two decades, historians and social scientists around the world have worked at piecing together a complex picture of this process and its reverberations. In many cases they have unearthed new archival evidence, a lot of which has only recently become accessible. Decolonization is in the process of turning into a highly productive—and specialized—research field. The wealth of new empirical studies, however, has been rarely accompanied by attempts at synthesis or general interpretation. The book offers such a broader survey. We sought to write it in a clear, accessible prose which addresses students and scholars, but also readers from outside the historical profession who are interested in this process.

Jan C. Jansen is a research fellow at the German Historical Institute in Washington, DC. Jürgen Osterhammel is professor of modern and contemporary history at the University of Konstanz. He is a recipient of the Gottfried Wilhelm Leibniz Prize, Germany’s most prestigious academic award. His books include The Transformation of the World: A Global History of the Nineteenth Century (Princeton).

 

 

 

Tony Smith on how Woodrow Wilson shaped America’s foreign policy

Why Wilson Matters by Tony SmithThe liberal internationalist tradition is credited with America’s greatest triumphs as a world power—and also its biggest failures. Beginning in the 1940s, imbued with the spirit of Woodrow Wilson’s efforts at the League of Nations to “make the world safe for democracy,” the United States steered a course in world affairs that would eventually win the Cold War. Yet in the 1990s, Wilsonianism turned imperialist, contributing directly to the invasion of Iraq in 2003 and the continued failures of American foreign policy. In Why Wilson Matters: The Origin of American Liberal Internationalism and Its Crisis Today, Tony Smith traces how Wilson’s thinking about America’s role in the world evolved in the years leading up to and during his presidency, and how the Wilsonian tradition went on to influence American foreign policy in the decades that followed. Smith recently took the time to answer questions about his book.

How does Woodrow Wilson’s foreign policy (1913-1921) relate to today’s world?

TS: Wilson never articulated a grand strategy for the United States. Still, his two terms in office, and especially his design for the League of Nations, laid out concepts for how to “make the world safe for democracy” that came to life with the challenges Washington faced to win the peace after victory in World War II. The package of Wilson’s proposals for a system of world peace called for an alliance of democratic governments, working to promote an integrated international economic system, through multilateral agreements that included first and foremost collective security, all maintained under American leadership. What at first would be a Pax Americana would in time become a Pax Democratica. The result is what we call “Wilsonianism,” the American variant of liberal internationalism. We can distinguish a “preclassical” stage of liberal thinking that goes back to our Revolution, a “classic” period with Wilson, a “hegemonic” stage during the cold war, and an “imperialist” phase that began in the 1990s. This last stage is best called “neo-Wilsonianism.”

Was President George W. Bush the heir of the Wilsonian mantle in world affairs?

TS: Certainly the Bush Doctrine (defined as the National Security Strategy of the United States in September 2002) seemed to show continuity between Wilson’s thinking and that of the Bush administrations of 2001-2009. The key difference lay in the defensive character of classical and hegemonic American liberal internationalism and the offensive posture of neo-Wilsonian imperialism. The neo-Wilsonian belief that democracy was a “universal value” that had “universal appeal” such that the United States could embrace a “just war” doctrine that overthrew the Westphalian system of state sovereignty in terms of a “responsibility to protect” peoples everywhere from autocratic government would never for a moment have been entertained by Wilson. Wilson did not march on Mexico City in 1914, nor on Moscow or on Berlin in 1918. By the same coin, he would surely not have approved the attack on Baghdad in 2003, nor is there reason to think he would have celebrated the April Spring eight years later.

Why, then, is Wilson’s name so often associated with American imperialism?

TS: At the root of the problem is the failure to study Wilson’s political thinking about the origins and character of democratic government developed during the decades when he was one of this country’s leading social scientists, ideas he later followed as president. The result is that American liberal internationalism has lacked a clear identity to give it a compass in foreign relations after the collapse of the Soviet Union in 1991. To call Wilson, as so many have, “a crusader,” “messianic,” and “utopian” is simply to misunderstand the prudent restraint he repeatedly showed in thinking that democratic government would quickly, easily, or indeed ever at all expand worldwide. Yes, he was “idealistic” and “moralistic” in thinking democracy was the best form of government for peoples capable of enjoying its blessings of liberty. But a utopian, and so an imperialist, he never was. Let’s call him a “realistic liberal.”

Why does all this matter?

TS: The American tradition of human rights and democracy promotion, like that which sponsors open economic relations, all in the name of making the world safe for democracy, has badly overplayed its hand. Its belief that our way was the only way led to a clash of civilizations the fruits of which we can see on every side, from the Muslim world, to China and Russia to economic inequality at home. The tragedy is that a way of thinking that did so much to establish the strength of the free market democracies between the early 1940s and the early 1990s should have been the source of its own undoing is an irony whose logic needs to be grasped. Here lies the explanation for how the greatest successes in the Republic’s history in foreign affairs—going from the creation of the Bretton Woods System to the North Atlantic Treaty Organization, passing by occupation policies for Germany and Japan—should give way to a change in its course that would lead to the invasion of Iraq under Bush and the surge in Afghanistan and enthusiasm about the Arab Spring under Obama –policies which now constitute the greatest defeats in our country’s history in world affairs.

Is liberal imperialism related to the economic crisis that has best the world since 2007?

TS: Most certainly it is. To read the criticisms of Economics Nobel Prize winner Joseph Stiglitz is to see the logic of Wilson’s thinking applied to our day with the same concern from American power and American democracy being steadily eroded by what Wilson called “predatory” capitalism. He feared its machinations globally, and not only domestically. Wilson was right.

What can be done?

TS: Neo-Wilsonianism is now deeply embedded in American elite institutions. The neoconservative takeover of the Republican Party in the 1990s bears much of the blame for popularizing and militarizing the Wilsonian tradition. However, the neoliberal movement within the Democratic Party did most of the intellectual heavy-lifting in the development of this thinking, as can be seen from a review of the Obama years and the policies advanced by Hillary Clinton and John Kerry. The international regulation of the capitalist world and the growth of a national security state simply have too much momentum behind them for us to have much confidence in a progressive future. That said, the faith of an earlier day returned under FDR with astonishing success and may yet be able to light the future before it is too late. Nation- and state-building that Washington likes to discuss so much with respect to our efforts to reform peoples abroad might better begin at home. From income inequality, to campaign finance reform, to prison conditions there should be quite enough here and with our democratic partners to keep us busy. “Physician, heal thyself.”

Tony Smith is Cornelia M. Jackson Professor emeritus of political science at Tufts University. The best know of his earliest work on American liberal internationalism is America’s Mission: The United States and the Worldwide Struggle for Democracy (published by Princeton University Press in 1994 and again, in an expanded version, in 2012).

David Runciman on the new year’s challenges to democracy

In a video interview now featured on the London Review of Books homepage, David Runciman, author of The Confidence Trap, talks about Trump, Brexit and threats to democracy. Threats to democracy are nothing new; the US has survived threats ranging from the Great Depression to the Cuban missile crisis. Runciman shows that in fact, democracies are very good at recovering from emergencies, leading to the false belief that they are indestructible. In The Confidence Trap, Runciman argues that such complacency may lead to a crisis that is just too big to escape.

Read Runciman’s articles for the LRB from the past year:

Is this how democracy ends? · 1 December 2016

Untouchable? The Tory State · 8 September 2016

Where are we now? Responses to the Referendum · 14 July 2016

Short Cuts: the Coalition · 5 May 2016

Deliverology: Blair Hawks His Wares · 31 March 2016

 

 

#Election2016: And then we came to the end

Our Election 2016 blog, active since last January, has featured our authors discussing everything from oration styles, to the particulars of populist rhetoric, to the politics of motherhood. And now, gratefully, for many an exhausted blogger and policy wonk, it’s a wrap. Time to get to the polls! If you’ve forgotten the location of your polling place, you can find it on Vote411 by entering your address.

 

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Adam Seth Levine: Does Populist Rhetoric Undermine Itself?

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by Adam Seth Levine

The 2016 presidential race features no shortage of populist rhetoric. While scholars and commentators disagree about the extent to which candidates such as Donald Trump or Bernie Sanders are truly populists, there is no doubt that they have frequently employed rhetoric that contains two essential features: first, a critique of contemporary political and economic life and, second, a call for broader participation by the people that will set things right in response to an elite held responsible for these problems.

At first blush, these two features would seem to be perfectly compatible with one another. However, a growing body of research shows that they often are not. In fact, the sharper the critique of contemporary life—and, in particular, the more it is phrased in terms that are personally relevant—the more likely it is to undermine people’s desire to heed the call to action. In short, populist rhetoric is often self-undermining.

This line of research uses experiments to randomly assign people to receive populist rhetoric (or not) and then measures their level of political engagement. The general conclusion that emerges is that, when rhetoric reminds people about critiques of economic and political life that relate directly to their personal financial concerns and/or ways in which our democracy fails to be responsive the wishes of the citizenry, then such rhetoric often reduces rather than increases their willingness to spend scarce resources on activism. At the same time, however, it does increase people’s concern about the issues and willingness to express support for remedies. So, it satisfies one goal while at the same time undermining another. This pattern is important because, while public opinion can impact the shape of the political agenda and the likelihood of policy change, that link is not automatic. Such change is more likely to arise when there is also organized activism pushing for it.

For instance, in my 2015 book, American Insecurity: Why Our Economic Fears Lead to Political Inaction, I conducted a series of experiments in which some participants were randomly assigned to receive general information about a civic organization along with populist appeals related to its work to address health care costs or education costs, while others just received the general information. I found that when the populist rhetoric reminded people about financial constraints they were personally facing (e.g. students with education loans, or people without health insurance facing large health care costs), then it reduced their willingness to donate money to the organization. If they were in the labor force, it also reduced their willingness to spend time by joining the organization. Yet, in all cases, people become more concerned about the issue at hand and were more likely to consider it a political priority. In short, reminding people about their financial constraints often does not motivate them to want to spend money or time on politics, even if it heightens concern about the problem.

What about critiques of contemporary political life? During the 2016 race, both Trump and Sanders have repeatedly warned that citizens’ voices are not being heard and that the election is rigged. Robyn Stiles and I recently tested the effect of this kind of rhetoric on people’s willingness to be electorally engaged. We found that in each case messages about elections being rigged or the wealthy buying elections reduced electoral engagement, even though they increased the degree to which people expressed increasing concern about the problem. In short, telling people that their voice may not matter does not make them want to spend scarce resources exercising it, even if it makes them more likely to support policies that would reduce political inequality.

While these two experiments by no means cover the full range of populist rhetoric, they do highlight the central point: there is often a critical and unrecognized tension within the two main goals of populist rhetoric. What to do? One answer is that sparking activism in response to people’s concerns about contemporary economic and political life will often require tapping into motivations other than the issues themselves. After all, people get involved in politics for many reasons that are not solely about the personal grievances and policy goals they hold, such as motivations tied to social influence and other social goals (e.g. the desire to respond affirmatively to a friend). Invoking these motivations is not always easy, but at the same time holds greater promise for sparking activism in situations where the rhetoric itself is self-undermining.

Levine

Adam Seth Levine is an assistant professor in the Department of Government at Cornell University. He has published in a variety of outlets such as the Journal of Politics, Political Analysis, Review of Behavioral Economics, and Political Communication. His work has won numerous awards, including the 2011 E. E. Schattschneider Prize. This prize is the highest dissertation award in the field of American government and is given annually by the American Political Science Association. He is the author of American Insecurity: Why Our Economic Fears Lead to Political Inaction.

The Curse of Cash: An interview with Kenneth Rogoff (Part II)

Rogoff

This is the second installment of a two-part interview with economist Kenneth Rogoff on his new book, The Curse of Cash. Read the first part here.

Your new book advocates a “less cash” society, phasing out all paper currency notes over (roughly) $10, and in due time even replacing those notes with large coins.(You observe that notes of $10 or less account for only 3% of the US currency supply). How will getting rid of the vast majority of all paper currency help central banks fight financial crises?

KR: It will allow central banks to engage in much more aggressive stimulus with unfettered and open-ended negative interest rate policies, without running up against the “zero lower bound” on interest rates, a bound that exists because cash pays a zero return that any bond has to match. There are other ways to stimulate the economy at the zero bound, some quite elegant, but phasing out cash is simplest and more robust solution. If only large bills are phased out, people could in principle hoard smaller ones, but the cost is far greater (allowing rates to be much more negative), and in extreme circumstances, the government can place other restrictions on redepositing cash into the banking system.

How do negative interest rates work?

KR: The idea behind negative interest rates is simple: they give money that has been hibernating in the banking system a kick in the pants to get it out into the economy to stimulate demand thereby pushing up inflation and output. If successful, negative interest policy could end up being very short-lived because as demand and inflation rise, so too will market interest rates. In other words, if there were no obstacles, central banks could use negative interest rate policy to push down very short term interest rates, but at the same time longer term interest rates would actually rise because people would start to again expect normal levels of inflation and inflation risk. If you are worried about your pension then, on balance, this would be a very good trade.

Are negative rates the main reason to phase out cash?

KR: There are other very clever ways to introduce negative rates without phasing out cash, and the book explains these at length, with one especially clever idea in having its roots in the practices of the Mongol empire of Marco Polo’s time. In any event, the case for drastically scaling back paper currency is very strong even if the central bank is proscribed from setting negative rates. That would be mistake, as negative rates are a valuable tool. In any event, because phasing out cash opens the door wide to negative rates, it makes sense to treat the two topics in any integrative fashion as we do in this book.

Haven’t the early returns on negative interest rates been mixed?

KR: Some central banks have tiptoed into negative interest policy already, but they can only move so far before investors start to hoard cash, hampering the effectiveness of negative interest rates. If negative interest rates were open-ended, central banks could decisively shift expectations without necessarily having to go to extreme lengths.

Aren’t negative rates bad for financial stability?

KR: Not necessarily, because open-ended negative rate policy would allow central banks to turbocharge out of deflation, so that the low interest rate period would be relatively short-lived. The existing regime, where rates have been stuck at zero for many years at a time, likely presents far more risk to financial stability.

Is expanding the scope for negative interest rates really worth the trouble if the next big financial crisis isn’t expected to occur for many decades?

KR: Well, first of all, the next major financial crisis might come a lot sooner than that. Besides, the option of negative interest rates might matter even for the next “normal” recession if the general level of world interest rates remains as low as it has been in recent years. Clearing the way for open ended negative interest rate policy would not only help make monetary policy more effective, it would clear that air of a lot of dubious policy suggestions that would be extremely damaging in the long run. Too often, the zero bound is used as an excuse to advance politically motivated policies that might or not be a good idea, but should be evaluated on their own merits.

Kenneth S. Rogoff is the Thomas D. Cabot Professor of Public Policy at Harvard University and former chief economist of the International Monetary Fund. He is the coauthor of the New York Times bestseller This Time Is Different: Eight Centuries of Financial Folly (Princeton).  He appears frequently in the national media and writes a monthly newspaper column that is syndicated in more than fifty countries. Rogoff resides in Cambridge, Massachusetts.

The Curse of Cash: An interview with Kenneth Rogoff

Rogoff

What if cash is making us poor?

Called a “fascinating and important book” by Ben Bernanke, The Curse of Cash by leading economist Kenneth Rogoff argues that cash is making us poorer while fueling a corrupt underground economy on a global scale. Even as advanced economies are using less paper money, the amount of cash in circulation is on the rise, a reality Rogoff says feeds terrorism, tax evasion, and human trafficking, among other nefarious activities. Rogoff’s case for eliminating most paper currency is sure to stir serious debate. Recently we asked him to comment on his book and the reasons for his position.

Why do you think paper currency can be a “curse?”

KR: The big problem with paper currency is that a large part of it is used to facilitate tax evasion and a huge spectrum of criminal activities, including drugs, corruption, human trafficking, etc. Most people don’t realize the sheer scale of currency outstanding, over $4200 for every man, woman and child in the United States, with 80% in 100 dollar bills. The vast bulk is unaccounted for; it is not in cash registers or bank vaults. The phenomenon is the same across virtually all advanced economies. The dollar is not special in this regard.

Won’t the government be losing out on huge profits from printing currency?

KR: Yes, governments delight in being able to pay for things by printing money, and the United States government earns tens of billions of dollars each year by doing so. But tax evasion, which is widely facilitated by the use of cash to hide transactions from authorities, costs government far more, in the hundreds of billions for the United States alone, and far more for Europe. If phasing out most paper currency reduces tax evasion and crime by say, 10%, the government should at least break even, and the overall gains to society will be far larger. This is not a quixotic attempt to end all crime and tax evasion, but simply the observation that earning profits by printing large denomination notes is penny wise and pound foolish, a point I first made in an academic paper almost two decades ago.

Are you arguing for phasing out all paper currency?

KR: No, for the foreseeable future, I am proposing a “less-cash” society, not a cashless society. My plan would leave smaller notes, say $10 and below, for an indefinite period. This will help mitigate concerns about privacy, power outages, and the continuing convenience of cash in some small scale transactions. Over the very long run (perhaps several decades), moderately heavy coins would be substituted for small bills to make it even more difficult to transport and conceal large quantities. This last piece is inspired by the experience of ancient China, where paper currency was introduced in part because lower-grade metals were used in coinage, and it proved burdensome to carry large amounts over long distances.

Are you advocating digital currencies such as Bitcoin instead of cash?

KR: Private digital currencies are, in fact, a complete non sequitur, though of course they need to be regulated. Drastically scaling back currency was already a good idea two decades ago when I first wrote on the topic. Credit cards, debit cards, checks and electronic transfers have long been far more important than cash in the legal economy for larger transactions. Today, the role of cash is dwindling even for smaller transactions.

If we get rid of most paper currency, won’t criminals and tax evaders find other ways around the system?

KR: Of course, but there are good reasons why cash is king in the global underground economy. There are other ways to launder money and hide income, but they do not offer the same safety or universal acceptance as cash.

Aren’t most dollars held abroad anyway?

KR: Overwhelmingly, the evidence is no, at least half of all dollars are held inside the United States, still more than $8000 per four-person family.

Do other countries have the same issue with huge amounts of currency outstanding or is the dollar unique?

KR: The US is no way unique, virtually every advanced country has a massive currency supply, some even larger than the United States. And in virtually all cases, the vast bulk is in very large denomination notes. Japan, for example, has issued over 50% more cash per capita than the US, with over 90% of it in 10,000 yen notes (roughly equivalent to the US $100 bill). T

What will happen to the poor in your “less-cash” society?

KR: The poor are not the ones accounting all the 100 dollar bills, but they are the ones suffering the most from crime and who stand to benefit the most if the government were more effective at collecting tax revenues. To facilitate financial inclusion, my plan calls for providing free basic debit card accounts; several other countries have already done this.

What about privacy from the government?

The continuing circulation of small bills will ameliorate privacy concerns to some extent.  The basically philosophy of this approach is that it should remain convenient for individuals to keep modest-size transactions completely private from the government, but for large transaction, the government’s right to tax, regulate and enforce laws trumps individual privacy considerations. I am making this argument on pragmatic, not moralistic grounds.  The current system just makes it too easy to do repeated large-scale illicit trades in cash with big bills.  Even after big bills are gone, there will still be many ways for ordinary citizens to conduct one-off high-value transactions with a significant degree of privacy.  These alternatives, however, are typically inferior to cash for repeated large-scale transactions, as risk of detection rises proportionately.

What about power outages, hurricanes, etc.?

KR: Again, the continuing circulation of small bills mitigates the issue. Other payment mechanisms, including via cell phones, are rapidly becoming more important in the aftermath of storms anyway, and there are a variety of backup technologies such as checks. In a sufficient profound power outage, ATM machines and cash registers will not work either, and the government will have to airlift cash and script regardless.

How will reducing the role of cash help deal with illegal immigration?

KR: Without paper currency, it would be vastly more difficult for employers to pay workers off the books, and sub-market wages. It would be more difficult for employers to avoid making social security tax contributions and to skirt labor laws. Phasing out paper currency is a far more humane way of channeling immigration through legal channels that some of the draconian methods being proposed, such as building giant walls and barbed wire fences. Remarkably, no one in the heated political debate on immigration seems to have quite realized this. Of course, any substantial phase-out of paper currency would take place of a very long period, perhaps 10-15 years, giving a long runway for policy to help existing immigrants.

If the US gets rid of large denomination, won’t other countries just fill in the void and supply their large notes to the world underground economy?

KR: The gains from reducing domestic tax evasion and crime still should make it a big win, even though the US would forgo profits earned from supply the global underground economy, including for example, Colombian rebels, Russian oligarchs and Mexican drug lords. Europe might profit if the euro becomes more popular, but frankly Eurozone countries have much larger underground economies than the United States, and thus even more incentive to phase out paper currency. By the way, foreign notes will hardly fill the void in the United States underground economy. There are already strict reporting requirements on banks and financial firms, and there already exits limits on taking cash in and out of the country. Any alternative currency that cannot easily be spent and recycled in the legal economy will be costly to use and sell at steep discount.

Is it realistic to think cash will ever get phased out?

KR: In fact, the Scandinavian countries are already far along the path, and have successfully negotiated many of the practical concerns that have been raised, for example now to give money to indigent individuals on the street. Sweden is particularly far along. Several countries, including Canada, Sweden, the European Central Bank and Singapore have already taken action to phase out their largest denomination notes, very much in response to concerns about their role in tax evasion and crime.

Part 2 of this interview with Kenneth Rogoff will appear tomorrow.

Kenneth S. Rogoff is the Thomas D. Cabot Professor of Public Policy at Harvard University and former chief economist of the International Monetary Fund. He is the coauthor of the New York Times bestseller This Time Is Different: Eight Centuries of Financial Folly (Princeton).  He appears frequently in the national media and writes a monthly newspaper column that is syndicated in more than fifty countries. Rogoff resides in Cambridge, Massachusetts.

Brexit, voting, and political turbulence

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Helen Margetts, Peter John, Scott Hale and Taha Yasseri

On 23rd June 2016, a majority of the British public voted in a referendum on whether to leave the European Union. The Leave or so-called #Brexit option was victorious, with a margin of 52% to 48% across the country, although Scotland, Northern Ireland, London and some towns voted to remain. The result was a shock to both leave and remain supporters alike. US readers might note that when the polls closed, the odds on futures markets of Brexit (15%) were longer than those of Trump being elected President.

Political scientists are reeling with the sheer volume of politics that has been packed into the month after the result. From the Prime Minister’s morning-after resignation on 24th June the country was mired in political chaos, with almost every political institution challenged and under question in the aftermath of the vote, including both Conservative and Labour parties and the existence of the United Kingdom itself, given Scotland’s resistance to leaving the EU. The eventual formation of a government under a new prime minister, Teresa May, has brought some stability. But she was not elected and her government has a tiny majority of only 12 Members of Parliament. A cartoon by Matt in the Telegraph on July 2nd (which would work for almost any day) showed two students, one of them saying ‘I’m studying politics. The course covers the period from 8am on Thursday to lunchtime on Friday.’

All these events – the campaigns to remain or leave, the post-referendum turmoil, resignations, sackings and appointments – were played out on social media; the speed of change and the unpredictability of events being far too great for conventional media to keep pace. So our book, Political Turbulence: How Social Media Shape Collective Action, can provide a way to think about the past weeks. The book focuses on how social media allow new, ‘tiny acts’ of political participation (liking, tweeting, viewing, following, signing petitions and so on), which turn social movement theory around. Rather than identifying with issues, forming collective identity and then acting to support the interests of that identity – or voting for a political party that supports it – in a social media world, people act first, and think about it, or identify with others later – if at all.

These tiny acts of participation can scale up to large-scale mobilizations, such as demonstrations, protests or petitions for policy change. These mobilizations normally fail – 99.9% of petitions to the UK or US governments fail to get the 100,000 signatures required for a parliamentary debate (UK) or an official response (US). The very few that succeed usually do so very quickly on a massive scale, but without the normal organizational or institutional trappings of a social or political movement, such as leaders or political parties. When Brazilian President Dilma Rousseff asked to speak to the leaders of the mass demonstrations against the government in 2014 organised entirely on social media with an explicit rejection of party politics, she was told ‘there are no leaders’.

This explosive rise, non-normal distribution and lack of organization that characterizes contemporary politics as a chaotic system, can explain why many political mobilizations of our times seem to come from nowhere. In the US and the UK it can help to understand the shock waves of support that brought Bernie Sanders, Donald Trump, Jeremy Corbyn (elected leader of the Labour party in 2015) and Brexit itself, all of which have challenged so strongly traditional political institutions. In both countries, the two largest political parties are creaking to breaking point in their efforts to accommodate these phenomena.

The unpredicted support for Brexit by over half of voters in the UK referendum illustrates these characteristics of the movements we model in the book, with the resistance to traditional forms of organization. Voters were courted by political institutions from all sides – the government, all the political parties apart from UKIP, the Bank of England, international organizations, foreign governments, the US President himself and the ‘Remain’ or StrongerIn campaign convened by Conservative, Labour and the smaller parties. Virtually every authoritative source of information supported Remain. Yet people were resistant to aligning themselves with any of them. Experts, facts, leaders of any kind were all rejected by the rising swell of support for the Leave side. Famously, Michael Gove, one of the key leave campaigners said ‘we have had enough of experts’. According to YouGov polls, over 2/3 of Conservative voters in 2015 voted to Leave in 2016, as did over one third of Labour and Liberal Democrat voters.

Instead, people turned to a few key claims promulgated by the two Leave campaigns Vote Leave (with key Conservative Brexiteers such as Boris Johnson, Michael Gove and Liam Fox) and Leave.EU, dominated by UKIP and its leader Nigel Farage, bankrolled by the aptly named billionaire Arron Banks. This side dominated social media in driving home their simple (if largely untrue) claims and anti-establishment, anti-elitist message (although all were part of the upper echelons of both establishment and elite). Key memes included the claim (painted on the side of a bus) that the UK gave £350m a week to the EU which could instead be spent on the NHS; the likelihood that Turkey would soon join the EU; and an image showing floods of migrants entering the UK via Europe. Banks brought in staff from his own insurance companies and political campaign firms (such as Goddard Gunster) and Leave.EU created a massive database of leave supporters to employ targeted advertising on social media.

While Remain represented the status-quo and a known entity, Leave was flexible to sell itself as anything to anyone. Leave campaigners would often criticize the Government but then not offer specific policy alternatives stating, ‘we are a campaign not a government.’ This ability for people to coalesce around a movement for a variety of different (and sometimes conflicting) reasons is a hallmark of the social-media based campaigns that characterize Political Turbulence. Some voters and campaigners argued that voting Leave would allow the UK to be more global and accept more immigrants from non-EU countries. In contrast, racism and anti-immigration sentiment were key reasons for other voters. Desire for sovereignty and independence, responses to austerity and economic inequality and hostility to the elites in London and the South East have all figured in the torrent of post-Brexit analysis. These alternative faces of Leave were exploited to gain votes for ‘change,’ but the exact change sought by any two voters could be very different.

The movement‘s organization illustrates what we have observed in recent political turbulence – as in Brazil, Hong Kong and Egypt; a complete rejection of mainstream political parties and institutions and an absence of leaders in any conventional sense. There is little evidence that the leading lights of the Leave campaigns were seen as prospective leaders. There was no outcry from the Leave side when they seemed to melt away after the vote, no mourning over Michael Gove’s complete fall from grace when the government was formed – nor even joy at Boris Johnson’s appointment as Foreign Secretary. Rather, the Leave campaigns acted like advertising campaigns, driving their points home to all corners of the online and offline worlds but without a clear public face. After the result, it transpired that there was no plan, no policy proposals, no exit strategy proposed by either campaign. The Vote Leave campaign was seemingly paralyzed by shock after the vote (they tried to delete their whole site, now reluctantly and partially restored with the lie on the side of the bus toned down to £50 million), pickled forever after 23rd June. Meanwhile, Teresa May, a reluctant Remain supporter and an absent figure during the referendum itself, emerged as the only viable leader after the event, in the same way as (in a very different context) the Muslim Brotherhood, as the only viable organization, were able to assume power after the first Egyptian revolution.

In contrast, the Leave.Eu website remains highly active, possibly poised for the rebirth of UKIP as a radical populist far-right party on the European model, as Arron Banks has proposed. UKIP was formed around this single policy – of leaving the EU – and will struggle to find policy purpose, post-Brexit. A new party, with Banks’ huge resources and a massive database of Leave supporters and their social media affiliations, possibly disenchanted by the slow progress of Brexit, disaffected by the traditional parties – might be a political winner on the new landscape.

The act of voting in the referendum will define people’s political identity for the foreseeable future, shaping the way they vote in any forthcoming election. The entire political system is being redrawn around this single issue, and whichever organizational grouping can ride the wave will win. The one thing we can predict for our political future is that it will be unpredictable.

MargettsHelen Margetts the Director of Oxford Internet Institute and professor of society and the internet at the University of Oxford. Peter John is professor of political science and public policy at University College London. Scott Hale is a data scientist at the Oxford Internet Institute and a faculty fellow of the Turing Institute. Taha Yasseri is a research fellow in computational social science at the Oxford Internet Institute, a faculty fellow at Turing Institute, and research fellow in Humanities and Social Sciences at Wolfson College, University of Oxford. The four collaborated on the book Political Turbulence: How Social Media Shape Collective Action.