Winner of the New Statesman SPERI Prize in Political Economy 2016

Thursday, 29 March 2018

Is Trump about race and Brexit about culture?


The initial reaction to the Trump victory was to look at the Rust Belt states that swung the result to Trump, and as a result to talk about the economically left behind (as a result of automation or globalisation). Since then there has been a number of pieces of analysis that have appeared to show the opposite, which is that the Trump victory was all about race. This piece in The Nation by Sean McElwee and Jason McDaniel is a good example.

This debate has its exact counterpart with Brexit. While a lot of focus has been on how those voting in areas left behind by automation or globalisation tended to vote Leave, others have argued that the vote is really about cultural values. For example Eric Kaufmann notes how attitudes to the death penalty are a very good predictor for voting Leave.

The evidence from studies of Brexit for a ‘left behind’ effect is essentially geographical, as I discuss here. This corresponds with Rust Belt swing states for Trump. However McElwee and McDaniel use a different measure in their analysis, designed to pick up economic anxiety (worries about job security, mortgage payments etc). They show that while measures of racial resentment or animosity (among whites) are clearly correlated with Trump’s vote, measures of economic anxiety are not, as the RHS of the figure below shows.

They conclude on the basis of this that it was race, not economics, that won the vote for Trump.

However I think the chart above suggests a rather more nuanced conclusion. As the authors note and as shown on the LHS of this figure, high economic anxiety decreased the probability of voting for the Republican Romney in 2012. That is what you should expect. For those in economic difficulty the Democrats are more likely to bring in helpful measures (like more universal health care) than the Republicans. What Trump managed to do was negate a relationship between economic anxiety and voting Democratic that we would otherwise expect to see.

You can see exactly the same phenomenon with Brexit. Brexit is essentially about economics, because at heart it is about leaving a free trade area. To achieve that free trade requires some joint decision making, but I have yet to find a Brexiter who could tell me anything of significance that had been ‘imposed by Brussels’ that they were unhappy with. In that sense, the problems highlighted by Dani Rodrik’s famous trilemma were not critical: the UK was not giving up any sovereignty that really mattered to achieve free trade.

Except, of course, for freedom of movement. Attitudes to immigration, like the death penalty, is a pretty good way of sorting social conservatives from social liberals. But immigration as an issue can do more than that. If you can convince voters that they will also be economically better off by restricting immigration, then you satisfy their economic concerns as well. This is why immigration is such an attractive issue for the political right, particularly if you can shut out all those annoying experts who keep saying immigration has economic benefits rather than costs. That is how the Leave campaign could convince half the population that they will be better of leaving the EU, when almost every economist thinks the opposite.

What the Leave campaign managed to do was make a vote about an economic issue into one about a social issue, and as a result the vote split along the social conservative/liberal axis. McElwee and McDaniel, among others, show that Trump achieved much the same. Because he promised various measures, from immigration controls to restrictions on trade, that were designed to appeal to the economically anxious and the left behind, he negated the natural tendency of those groups to vote Democrat. And as with Brexit, no economist thinks these measures will actually help anyone. 

This helps explain an apparent paradox that might already have occurred to you. How can Trump’s victory be all about race, when before Trump we had the first ever black President who was re-elected for a second term? The answer was that a traditional Republican campaign was not prepared to deflect economic anxieties with building walls and erecting barriers to trade, so many in the rust belt put aside any racial animosity and voted for Obama. In contrast Trump was prepared to do this, so the racial issue dominated. 

That the economic promises made by Trump and Leavers are just a sham can lead to a regressive dynamic that I examined hereHow can more progressive parties actively try and stop that happening and win back control, rather than simply hoping the right are rejected by the electorate? I suspect just explaining why immigration control or trade restrictions will not work will not be enough when we have a media that avoids providing expertise. It has not worked with Brexit. 

The answer may be to fight fire with fire, if the UK 2017 general election is any guide. Labour did not win that election, but in a three week period it staged an unprecedented advance to take away May’s majority. It did that by offering clear economic benefits for various groups, paid for by reversing previous corporation tax cuts and increasing taxes on the wealthy, as well as promising a substantial increase in public investment financed by borrowing. A lesson, perhaps, in how to deal with right wing parties that use populist policies to deflect economic concerns.

Postscript (01/04/2018) Here is a link to a tweet thread from Jason McDaniel commenting on this post.


31 comments:

  1. When it comes to America, we must remember that Clinton won the popular vote by nearly three million, and she also did appalling when compared to Obama on the turnout of the black vote.

    For America, it is their terrible electoral system which brought Trump to power.

    For us, we need to explain why the Hague, IDS, Howard party went from being a low thirty percent joke to gaining about 70% of Tory voters and 30% of Labour voters by the time of the referendum.

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    1. In a close vote lots of things become important, and this post examines one of those things.

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    2. «Clinton won the popular vote by nearly three million»

      In the context of the USA system that is quite a ridiculous argument, precisely because of the electoral system: in constituencies where the outcome is all but certain turnout is much lower than in contested constituencies, and most republican areas the outcome is very certain, and in swing states quite a bit of tactical voting goes on. Therefore candidates aim to win swing states, not the popular vote, and play largely a turnout strategy in swing states, but ignore non-swing ones.

      Relatedly there was a very good criticism that some B Sanders supporters made of H Clinton's democratic nomination win: in the fight for the nomination she won the majority of the democratic vote in the states that were most likely to safely vote republican (or democrat, while B Sanders was most popular in the potential swing states that mattered, and that ultimately swung for Trump.

      Also Republicans tend to cheat by trying to prevent minority citizens from voting, and Democrats trying to let vote minority non-citizens, in the states where they control the election system (that federal elections are managed by state legislatures is a very bad feature of the USA political system).

      Trump's comment was very realistic and intelligent: “Campaigning to win the Electoral College is much more difficult & sophisticated than the popular vote. Hillary focused on the wrong states!” “I would have done even better in the election, if that is possible, if the winner was based on popular vote - but would campaign differently”.


      Trump seems to me a conceited impulsive far-right jerk, but also a very intelligent and cunning person -- he has been in politics for decades, and survived for decades in the NYC property markets. Even more interestingly it turns out that he was a bigger campaign donor then the Kochs, so a lot of politicians opwe him big: http://uk.businessinsider.com/top-50-political-donors-in-america-by-state-2018-3
      People who demonize and ridicule him are making a big mistake.


      Trump and Corbyn have despite very different politics something in common: they are outsiders who have upset some carefully compromised deals by the neolib/thatcherite/likudnik/neocon "Establishments" of USA and UK, and as a result they are being ferociously attacked by the "Establishment" wings of their own parties, and not just by the main stream media.

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  2. "Brexit is essentially about economics, because at heart it is about leaving a free trade area."

    All continental EU countries have been clear that the EU is fundamentally about political union (not just a free trade area). UK politicians and commentators (such as SWL) have dissembled on this point - which was one the reasons Remain lost the referendum. People don't like being lied to.

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    1. One more time: we are in the EU not the Eurozone. As a result, Brexit is basically about making trade with the EU more difficult. The moment that any future moves towards a political union by the EZ influences those that are just in the EU, then you can think about leaving.

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    2. On the contrary: People love getting lied to! Just look how persuasive being told that we'd get 350 million a week was, let alone that it'd be simple and it'd bring all the fish back.

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    3. It's also worth noting that Cameron's Feb 2016 negotiated deal included a treaty change recognising that the UK would be exempt from "ever closer union".

      S

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  3. "Brexit is essentially about economics, because at heart it is about leaving a free trade area."

    Um, no, Brexit is essentially about sovereignty, and is not about leaving a free trade area for the very good reason that the Single Market is not a free trade area. A free trade area aims to regulate cross-border trade; a single market attempts to regulate economic activity irrespective of whether it crosses a border.

    Popular support for EU membership always rested on the idea that it could help facilitate cross-border trade; therefore the EU's attempts to regulate the purely domestic economy -- an enormous part of its ambit -- are very commonly seen as ultra vires. Compounded with the EU's democratic deficit it creates a crisis of sovereignty. Commentators seem to be utterly obsessed with various barriers to cross-border trade. They miss the point about Brexit entirely.

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    1. How have you been personally influenced in a negative way by the measures that go with the SM?

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    2. I would agree with Simon, in that the impact will be largely economic.
      Brexit will have remarkably little effect on UK sovereignty, despite the rhetoric, before and since the referendum.
      The reality of modern trade deals is that in many of areas in which we were promised control/sovereignty, we will sacrifice much of the same freedoms to achieve new trade deals, just as they were in EU membership.
      Moreover, as a country smaller than the EU block, we will likely get poorer terms, as evidenced in our negotiations with the EU, where HMG blusters fantastically before conceding to the geopolitical reality.

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    3. AFAIK the aim behind the EU (in economic terms) is to create a borderless trading space. A free trade area isn't enough for that because of the issue of goods from outside: you need a single market (so that any product imported into one member state is legal in all member states) and a customs union (as otherwise national-level tariffs could be circumvented by trans-shipping the imported goods through a lower-tariff member state).

      This is why the Irish border is such a problematic issue: avoiding requires that Northern Ireland be at least within the customs union and within the single market for goods.

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    4. In ways that affect my everyday life.

      For example, housing. EU law dictates that (to an approximation) social housing can only be provided to disadvantaged groups and individuals. I would like to see the housing crisis addressed through the mass provision of council housing catering to a wide range of classes and needs, as a by-product promoting the notion that a house is to build a life within rather than as a step on some investment ladder, and demolishing the stigma that surrounds council housing. Can't do that within the EU because you'd be 'distorting the market', and obv the Market (peace be upon it) is of transcendental importance to human and possibly alien life. Result: developers know that the state can't intrude on 'their turf' and so they're safe to dribble out new builds at a speed determined by how much scarcity optimises profits. Thanks to the Single Market, developers piss all over us.

      Then railways or domestic fuel: to me these should be taken out of the market and provided as public, non-profit goods, because they are pretty essential for a decent life. But no, that would 'distort the market'. Well that is entirely the point. The result: both the train companies and the energy companies profit gouge us, safe in the knowledge that the State can't take over. To add insult to injury, we're forced to slap VAT on domestic fuel. Thanks to the Single Market, corporations piss all over us.

      Shelter, warmth, the ability to commute so as to pay for them -- the Single Market makes these much harder. And if you complain about it to politicians they sneer that ideas such as mine are not 'credible' when really they mean they're illegal according to EU law.

      Now, Brexit does not entail such reforms will take place, though I have my hopes for Corbyn. But that's not the point: the point is that as long as we stay within the Single Market I'm stripped of even the hope that someday if I'm lucky democracy will respond to my concerns and act in vaguely the way I hope.

      And why should I tolerate this? According to the elites, because otherwise multinational corporations might have to fill out an extra form or two when conducting international trade. Well consider my pearls pretty bloody unclutched. Does my house cross a border? No. Does my train? No. Therefore it's none of the EU's business.

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    5. 'EU law dictates that (to an approximation) social housing can only be provided to disadvantaged groups and individuals.'

      Do you have evidence for this statement?

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    6. All of those things are things countries far more deeply involved in the single market than us have changed more or less as they wished. France nationalised an Italian shipyard. Read the news, stop being so easily baited by the far right masquerading as left populists.

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    7. «Shelter, warmth, the ability to commute so as to pay for them -- the Single Market makes these much harder.»

      That's completely delusional: there is no such problem in any other EU country. Various countries have socialdemocratic policies, and even Scotland and Wales (and norther Ireland) have policies that according to your delusions are impossible under the Single Market.

      The only reason why England has thatcherite policies is that a majority of english people, in particular in the "magic tory areas" of the south-east and London have voted for them since 1979, with great enthusiasm.

      And with the exit vote in 2016 the most extreme thatcherites have been empowered to continue them in a more extreme form, as the "Leave" vote was taken as a definitive rejection of european socialdemocracy.

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    8. The ECJ case involved social housing in the Netherlands.

      Shipyards are different as there are exemptions on national security grounds. French passports must be printed in France for the same reason.

      Which of those policies are legal in Scotland, Wales and Northern Ireland?

      Brexit is a rejection of European social democracy? Lol. I bet you were one of those people that prophesied immediate catastrophes on a biblical scale and also that these plagues would usher in the Thousand Year Reign of Boris. The Left is by the the most likely (but not guaranteed) beneficiary of Brexit. It already is, in that the Labour Party looked as fragile as any other collapsing European former social Democratic Party in 2015. It was saved by a manifesto that evoked passions that would have been utterly killed by 'ah, but is it legal according to EU law?' musings.

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  4. I think it is questionable that Brexit is all about economics; your title is more apposite in that it is about culture, something which may be much more slippery than economics but which is arguably just as important.

    As far as fighting fire with fire is concerned I think that JC himself remains a major obstacle for many and the policies will be drowned out by that simple fact

    Free movement of goods and services is not so contentious as free movement of labour because goods and services move through the choice of both parties whereas free movement of labour does not require the agreement of both parties; it is a right within the single market structure. This asymmetry and the volatile flows of labour can, and do, cause problems for both countries, problems which would not exist in a unitary state structure. When you have a great deal of transfer this imposes problems on infrastructure and assimilation in the host country and when such labour returns there are problems of labour shortages. We have had both in the UK in the last twenty years. The bleatings of employers that Brexit will cause labour shortages is not an argument for free movement; it is rather the converse as it shows the volatility that occurs when it is free movement between sovereign states not within a sovereign state as these people are fully entitled to exercise their rights.In this issue the economic case is not paramount.

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    1. Brexit is about leaving a free trade area. As a result it is basically about economics. The triumph of the Leave campaign was to ignore the economics and make it about social conservatism.

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    2. «Brexit is about leaving a free trade area. As a result it is basically about economics.»

      The EU is a political institution, with an almost-parliament even, and those political institutions also enable a free trade area to be accepted by members, because free trade has deep implications for the distribution of income and wealth that can only be handled by political institutions.

      Many scots for example want to leave the british free trade area, but that does not make scottish independence “basically about economics”.

      Trade is a very political issue, the "end of history" part of the "There Is No Alternative" propaganda, beloved of neolibs, has not quite happened yet.

      Trade in goods is currently not regarded by many as very political in developed countries because the losers from trade in goods have zero political weight, but trade in agriculture and services, which impacts directly the incomes and wealth of tory voters, still has a large political significance.

      «ignore the economics and make it about social conservatism.»

      The 52% of "Leavers" did not have a single motivation, "social conservatism" or any other. I reckon that the biggest motivators were imperial nostalgia/national humiliation in the affluent tory shires, economic troubles in the labour left-behind areas, and a small minority of people who thought that on balance political isolation was better than integration.
      It happens that the tory shire nostalgics and the labour left-behinds are also usually socially conservative, but that is largely a coincidence, even if probably it did contribute a bit.

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    3. «Free movement of goods and services is not so contentious as free movement of labour because goods and services move through the choice of both parties whereas free movement of labour does not require the agreement of both parties; it is a right within the single market structure.»

      Sure free movement in itself is a right, but the issue is not free movement as such, but employment, and employing foreign workers requires the agreement of local businesses, including in the UK free trade area and customs union:

      * When workers move from Sunderland to Bristol, they are free to live in Bristol, but they are not free to take a job in Bristol -- that depends on the decision of people in Bristol (employers) to pay a wage to Sunderland migrants instead of paying it to Bristol workers.
      * When a Sunderland business makes products, they are free to warehouse them in Bristol, but not free to have them bought in Bristol -- that depends on the decision of people in Bristol (consumers) to buy products made by Sunderland workers rather than made by Bristol workers.

      The reason why trade in manufactured goods is politically easier is completely different and not related to the non-existent difference between mobility of goods and labour: it is that manufacturing workers have been comprehensively politically smashed, so their objections to foreign competition count for nothing; instead farm goods and financial services earn an income for tory voters and tory donors, so tory governments have a great interest in protecting their own.

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    4. Poignant obervations. Just one quibble:

      "When workers move from Sunderland to Bristol, they are free to live in Bristol, but they are not free to take a job in Bristol -- that depends on the decision of people in Bristol (employers) to pay a wage to Sunderland migrants instead of paying it to Bristol workers."

      What neo-liberals and neo-classical economists argue is that there have not been such substitution effects - that the additional aggregate demand from a larger population has ensured that both the locals and the migrants get the jobs. However, I am sceptical. At the very least there very high rates of inward labour flows into the UK has been a disincentive to train up local workers (and reduced incentives for local workers to find new opportunities) which has probably made the long standing problem of low rates of labour mobility within the UK even more entrenched.

      NK.

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  5. Very nice post! Carefully considered reasoning, giving honest accounts of the arguments in support of the different positions, backed up by charts that are easy to understand.

    I knew there was a reason why I follow this blog.

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  6. Perhaps a symptom of a sea change in politics. In the States, certainly the "powerful right", Trump supporters represent themselves as a threatened minority - not just on grounds of ethnicity but as a fight for survival against "liberals". Alex Jones was famously calling for "war on liberals" (http://www.newsweek.com/trump-alex-jones-infowars-violence-639912) during the last presidentials - and it was a cry taken up by some elected US politicians.

    I see Brexit very much as an extension of the dynamic of the "new right" in the USA. There are clearly strong ties between them and key Brexit agitators. The Cambridge Analytica affair has revealed Farage's "friendship" with Steve Bannon and Fox was director of Atlantic Bridge, set up specifically to build ties between the US and UK right, two examples that are almost certainly the tip of an iceberg.

    US right wing policies have waged war on "liberal" values for decades. Much of the current government's "austerity" could equally be characterised as a "war on liberal/social democratic" values. Clearly leaving the EU is a necessary step for a group who want to pursue and deepen this fight - we couldn't, for example, undermine workplace conditions and environmental standards to be a "deregulated fearless global player" inside the EU.

    Have we reached a point where cultural conservatism has transcended the traditional working class/upper class divide? Does a liberal voice in the UK need to accept the struggle is no longer one of squeezing concessions from the "owning classes" but one of defending progressive thinking against a regressive inward and backward looking conservative revolution.

    It certainly looks more and more like that in the USA - and I see many possible parallels here in the UK.

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  7. «That is how the Leave campaign could convince half the population that they will be better of leaving the EU, when almost every economist thinks the opposite.»


    There is a subtle problem here that interestingly out blogger (perhaps as Economists are well disciplined in not considering distributional issues because of the laughable Second Welfare Theorem) did not consider: “almost every economist” have claimed that in the aggregate the english population will be somewhat worse off, they have not claimed that everybody will be worse off, or that the half who voted "Leave" will be worse off.

    The half who voted "leave" could well think they will be better off economically, not just politically. They might well be right: exit may make them better off and the make other half (which includes immigrants) worse off.

    That is not an irrelevant because the central fact in english politics is south-east and London property prices, and as long as those property prices balloon, a large percentage of "imperial nostalgic" tory voters could not care less what "leave" does to the rest of the voters and the economy. Then there are still many pensioners on defined benefit pensions. This quote from a blogger who listened to a June 24 2016 conversation between a young friend and her retired father may exemplify:

    “Friend: How did you vote then, Dad?
    Dad: I voted Out.
    Friend: Dad! Why did you do that? The economy will crash! It’ll cause chaos!
    Dad: That won’t bother me hen, I’m retired.
    Friend: But it’ll affect me! What about me?
    Dad: (Long silence).”

    There is also the convenient fact that several million workers are immigrants, who don't have the vote in general elections, so if they are made worse off by exit, and GDP or GDP growth falls because of that, well tough. Indeed one of the goals of exit is to make them worse off.

    Suppose, as a mental experiment, that the english GDP goes down by 5-10% because it is the 5-10% produced by immigrants, and all of them are deported: many "Leavers" would be delighted, because they don't care about the GDP of immigrants, actually they are quite upset about it.

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    1. Ah, yes, voting against national interests because you don't care about your neighbour's job. What a wonderful attitude to have to your friends and family.

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  8. Brexit is about economics because UK growth has been inadequate for 10 years plus.

    Trump is about economics because US growth has been inadequate for 10 years plus.

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    1. I would not have assumed it wise to deal with this by voting for it to be inadequate for another ten years, but then I'm a whinging remoaner who just wants a functioning country, I suppose.

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  9. I believe you underestimate the working man's skepticism of the experts who claim immigration is an economic boon. We recall that proponents of a global economy admitted that there would be some local pain as factories relocated but that the overall effect of lowered prices would offset that. Few would argue that has worked out for rust belt populations as the experts predicted. Why would we trust them on the supposed benefits of immigration?

    You provide insight into a fact of life we must deal with: the go-to explanation for our recalcitrance on making progress as your clan defines it is our racism. Watch with what certainty this activist tells me my interest in returning to traditional public policy is racist. https://m.youtube.com/watch?t=1416s&v=Pliu74bniYo

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  10. Those who voted (mostly older voters who were also information deficient) made an emotional vote. In US, voters have rejected most local reform efforts, so US is now even behind South Africa!

    There's a bitter price to pay and both British Brexit voters and Americans will start paying it BIG Time by 2020s (for US 2025 and afterwards).

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  11. Here's something for you to think about: why does Italy have a larger middle class than US, UK and Canada? Seems to me SMEs account for the difference. IF country has more reliance on SMEs, than that counts for a lot even in a country with Italy's weaknesses.

    IF supported its SMEs the way Germany does, it would do even better!

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  12. 58 is most common age for white Americans. At the moment no serous effort to address inevitable future. Time is the enemy!

    To prosper in future US needs to treat as assets, those who it has neglected deliberately! This neglect is a bi partisan project!

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