Inequality and Economic Policy

One of my favorite books is Mammon and the Pursuit of Empirewhich throws an interesting curveball at the well-known proposition that empiring and colonialism were net money losers for the imperial powers of 19th century:  yes, the British Empire was a big money loser, but it was a money maker for the English upper classes.  Indeed, Davis and Huttenback went so far as to claim that the empire was, in effect, a very expensive scheme for upward, regressive redistribution of wealth.

It is probably silly to argue that the imperialism was, at its core, an economic scheme per se, especially one designed to enrich the rich at the expense of the poor, even if it became one in practice.  Rather, it was, as many intellectual historians pointed out, an intellectual phenomenon rooted on philosophical basis.  Imperialists knew, even in 19th century, that colonialism was expensive, but they were willing to go through with it for the sake of “white man’s burden” or whatever.

But even as the desire to bear the “white man’s burden” was disproportionately heavy among the upper classes, the actual burden they bore was tiny,  since they held the political power to force the lower classes to share in bearing this burden without due compensation.  In contrast, the lower classes did not share the same romantic sentiment that extolled the “civilizing mission,” being “unsophisticated rubes” that they were, beyond being properly rectified on the proper moral imperatives as the contemporary elites doubtlessly snarked.  An American soldier serving in the Philippines in early 20th century, when Teddy Roosevelt placed William Howard Taft in charge of the place, is supposed to have quipped, with regards the Filipinos in general, “He may be a friend of Big Bill Taft, but he ain’t no friend of mine.”

Thus, we have a strange picture:  the upper classes may “mean well,” whatever that means, and are willing to bear burden for it, but they can lighten their own burden because they have the political power to achieve this.  Thus, the “white man’s burden” being borne by the whiter white men is vastly lighter, if at all a burden, than the not-so-white white men who are less able to shift away their burden.  The upper classes’ vision for reshaping the world is shared with neither the people overseas on the receiving end nor the lower classes at home who bear a lot heavier burden.  If the latter did not care much for empire building to begin with, they certainly won’t care for it when the imperialism is squeezing them dry.  The polarization in opinion with regards the continued pursuit of the said policy sharpens because of the uneven distribution of the burden.

This is not just about “colonialism,” of course.  The abandonment of the “Napoleonic” foreign policy outlook by France came about with the rise of the 3rd Republic and the broader distribution of political power among the French public.  This was the continuation of the peasants’ counterrevolution that I had remarked on earlier:  while the French peasants were happy at the elimination of the unfair arrangements with the nobility that the Revolution brought about, they did not care for the war and disruptions all over Europe for the ideals and strategic interests that they did not care for.  After 1871, even as they were unhappy at the defeat, they did not care for an activist revanchist policy against Germany.  The peasants of France were willing to let go of Alsace and Lorraine, as long as France was not attacked herself–which would remain the case as long as Bismarck, who understood the situation, remained in charge in Berlin.  The French 3rd Republic became a “conservative” power not just because it was weak, defeated power, but also because of the redistribution of the political power within, with the “peasants” interested mostly in keeping the limited gains of revolution in their hands rather than remaking the world outside capturing power.  While the French did pursue an imperial policy in Africa and Asia, it was more a sop for the Napoleonic remnants who could not remake Europe, which became too dangerous in the eyes of the “peasants” who now held the dominant position domestically.  Tellingly, the French colonial army was an all-volunteer force, not even always composed of French citizens, (the Foreign Legion was created specifically to serve in North African colonies.) separate from the regular army composed of conscripts.  No “regular” French citizen served in the colonies.

This bears remarkable similarity to what is going on today.  The modern elites, not unlike their forbears 100+ years ago, are eager to remake the world to their liking, in all manner of realms.  The “peasants” of today are not necessarily unhappy with all the changes they propose, but are interested only in limited changes that improve their well being, not the grand vision of the future that today’s imperialists/revolutionaries promise.  Today’s peasants are no less clear eyed than their forefathers:  disruptions impose severe costs in their lives and they lack the means to insure themselves against them.  The elites will not pay much for the changes they bring about, if they they go bad, and may even profit.  Not so for the masses.  This cuts across “ideologies,” to the degree that both left and the right, as conventionally defined, have become revolutionary propositions, simply pointing to different directions in which the world is to be remade drastically.  The peasants don’t care for either direction.

This is not to say that all peasants are homogeneous in their desires:  while they may agree on their collectively “conservative” interests (in the sense of keeping the changes modest and “close to home,” rather than far reaching and costly ventures to remake the world), they don’t necessarily agree on what modest and close-to-home changes deserve priority and who deserve the trust to implement these changes.  These do not seem especially unbridgeable gaps, however, even if it may be beyond the ability of a Sanders or a Trump in 2016.  (well, we may never know if Sanders could have drawn support from the Republican-leaning “peasants” I suppose.)  Trump’s supporters, for example, are not against bigger government:  they would be happy with a free public college system, for example, if it were packaged appropriately.  Many of them are known to be happy with a single payer health care system, if they could trust who was proposing it.

This in turn, reflects yet another paradox:  Sanders and Trump are not leading “revolutions,” but, in a sense, “democratic counterrevolutions,” against the undemocratic excesses of the “revolutionary vanguard” gone mad on a cocktail of unchecked power and their own “ideals.”  I am not sure if this is necessarily a bad thing.  Political inequality indirectly gets economic inequality.  Political power, in form of the power to set the agenda, is the power to gamble at public expense.  In effect, political power provides those who hold it to buy insurance for themselves in case their decisions go sour.  With unequal distribution of political power, the few elites can gamble at the expense of everyone and buy good insurance just for themselves, ensuring that, in the long run, only they profit (or at least suffer minimal losses).  Broader distribution of power requires needing to buy more, broader insurances, or quit gambling if insurances get too expensive.  If you are a gambling addict, however, the preferred course of action is to rig the institutions so that the rest of the public cannot easily stop you from gambling at their expense.  You can, if you hold unequal power, and the consequence is a growth in economic inequality.

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