Mark Blyth: Globalization and the Backlash of Populism

Mark Blyth, Eastman Professor of Political Economy and Professor of Political Science and International and Public Affairs at Brown University, traces the rise of populism to the rise and collapse of two economic regimes, arguing that the second regime of neoliberalism ended with the global financial crisis, and that the stagnation that followed established the conditions for populism to thrive.
Slides: gem.cid.harvard.edu/files/gem...

[@drakekoefoed1642]

Wages are decreasing. In 1975 a pickup cost me $4K. Minimum wage was $2. By 2015, the truck was $40K or more. Minimum wage was $7.25. So at minimum wage, you would only be able to buy 36% of the truck. My rent was $180 for a 1 bedroom apartment near San Francisco airport that would also be 10 times as much. I bought whole chickens for .25 a pound, and yes, those are much more today, a lot more than the .90 that would be keeping up. From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent. That is a shorter time period, not inflation adjusted, and relies on government statistics, so probably it isn't 1k%, but more than 10 times what workers got, during a time when productivity of labor increased the fastest in history. The 1% did not earn those increases, they stole them from you.

[@jamesedwards.1069]

"So at minimum wage, you would only be able to buy 36% of the truck. " And yet people stubbornly refuse to learn the truth about inflation and instead keep demanding stupid mindless non-solutions like raising the minimum wage. What the hell is wrong with people that they refuse to admit even the possibility that what the people need is honest money instead of the phony worthless fiat money that the criminal central banks of the world emit? People rejected honest money, so, people deserve the consequences, good and hard.

[@jonfoley3071]

Unfortunately most of the population can't comprehend this.

[@hauuau]

​@@jamesedwards.1069 Money without inflation at all will be even worse than situation is now. You'll basically reward money hoarders. That's how you'll get to monarchy, semi-permanent aristocracy, and eventually to class warfare. That's bad.

[@jamesedwards.1069]

​@@hauuau That was what Williams Jennings Bryan meant when he said they should not crucify mankind upon a cross of gold. I'm very sympathetic to the argument. But I think the real problem is more about who is in control of the banking system that controls the money in the first place. If you control the money, you will profit from either inflation or deflation or both because you're in control of it and the timing of it.

[@hauuau]

​@@jamesedwards.1069 In the end money is always controlled by the government. The value of the money is the trust in the system itself backed by laws, norms, practices, codes, rules, land, resources, infrastructure, diplomacy, agreements, taxes, courts, military, police, intelligence, bureaucracy, history, commitments, population, etc. The state itself has all the power it needs to create, destroy, or reform parts of the system if politicians write and enforce some laws. All the rules, practices, and regulations around the banking system are instituted by the government. Current international financial system with banks, hedge funds, investment funds, property, equity, currency, commodity markets, paper assets, various cross-linked instruments and derivatives is so freaking huge, complex, intertwined, and convoluted that there are no one truly in control. It is possible to profit from such a system here and there but you can't really fully predict and control it because literally no one could ever grasp and comprehend the full system. Amount of variables, moving parts, and unintended side-effects is unbelievable. You can't control it and everyone who thinks they can is foolish and will eventually get burned by the system. Central banks everywhere in the developed world for years are trying to boost inflation and growth by flooding the system with money and it's not working exactly because money almost never trickle down to the bottom of the society. There is not enough liquidity at the bottom and that's why you have squeezed population and squeezed small and medium businesses. That's why polices like rising the minimum wage, higher unemployment benefits, nationalizing healthcare and education expenses, etc might help just a bit. They'll basically add some liquidity, demand, and insurance directly to the bottom either by forcing higher wages or by alleviating some of the pressures at the bottom. It's a temporary band-aid though. The only alternative and probably an eventual endgame is direct helicopter money to the bottom probably controlled by the central bank to target inflation and growth. That'll be very controversial from cultural and political point of view though.

[@WorldlyBong]

Evert Mark Blyth video I see, there is a comments section full of ppl bitching about how Mark doesn't give any solutions. Do you folks need to be spoon-fed everything? Listen and learn the problems he points out and come up with solutions yourselves. In fact, most of the time, just not doing the bad thing he points out will do a lot of good.

[@qiestisnilomniafite6611]

Perhaps as an academic, he cannot state the solution, which is to overthrow the capitalist system and establish the socialist order - i.e. October Revolution 2.0. The social democratic parties such as those in Europe have gone over to neo-liberalism, so they no longer provide a solution to the socio-economic concerns of the working class and lower middle-class. Also social democracy does not overthrow the underlying system but merely seeks to tweak it to provide for the working class and lower income group but the underlying capitalist system it is still subject to its own contradictions. Unlike a capitalist system which is based upon social production and private profit for the owners of capitalist industry, whilst socialism is based upon the social ownership of the means of production, distribution and exchange and production for social need, not private profit. Realistically speaking though, the revolutionary left, especially in the west is very weak right now, with no strong influence or reach within the working class which it has to organise and lead to overthrow capitalism. Also, the myriad of far-left parties has resulted in a very much fragmented left, which make it difficult to organise around a coherent course of action. The pre-World War I and World War II far-left was very much less fragmented, hence could more easily have a more coherent course of action and following. I'm afraid that at this point in time, right-populist parties which promise to reform how the capitalist game is played by reverting back to a more regulated capitalism will have more success, even if they do not live up to their promises once elected.

[@SinOfAugust]

QI ESTIS NIL, OMNIA FITE! Late Robert Frost wrote is best: "I advocate a semi-revolution. The trouble with a total revolution (Ask any reputable Rosicrucian) Is that it brings the same class up on top. Executives of skillful execution Will therefore plan to go halfway and stop. Yes, revolutions are the only salves, But they're the one thing that should be done by halves."

[@xandercorp6175]

Most people are too lazy to actually read his book, or watch his videos carefully enough to hear him propose several solutions. Most people are also unfamiliar with the academic model for problem solving, where you analyze the mechanisms and root causes of a problem set and describe them to as many people as you can; this puts many eyes and many different philosophies, methodologies and values to work on the problem.

[@matthewmalpeli]

bmbc1310 In the closing statements of that video that went viral where he explains the history of full employment/2% inflation "targeted economic variables" he puts our problem and potential solution in really quite clear language. It's a pity no commentators that picked it up mentioned it. He says, and I quote, "We live in a world where literally 10% of the population could provide super-abundance for everyone. We have a distributional and political problem. We do not have a problem of "where you're going to make your stuff in." Now, I would argue that the complexity of global supply chains is actually a problem because there's only one thing that's grown at a similar rate as finance over the past 40 years and that's shipping and transport. Diesel is an incredibly dirty fuel that we simply have to burn less of or in long term the inheritance you'll give to your darling little princess and princesses will not be worth the paper the ownership titles are printed on. Our economic relationships are completely out of whack with our environment, our social cohesiveness, and our political agency. The old capital vs labour arm wrestle is obsolete. We need a new political landscape

[@perkl1234]

Perhaps the problem is complex enough that there is no "correct" solution, just various solutions with different winners and losers?

[@sail2byzantium]

Always wonderful to hear Prof. Blythe. I would like to see the vide reworked so the slides he's showing have better screen size and visibility as he's making his points.

[@padbrit]

Really need to sort out the sound at these events.......

[@joepeeer4830]

this guy rocks

[@DanHowardMtl]

I wish I could see the slides.

[@HarvardCID]

Sorry, Dan. It's a tricky spot for A/V. The slides are available here for your review: gem.cid.harvard.edu/files/gem2016/files/hall_blyth_berglof_gem17.pdf

[@DanHowardMtl]

thanks!

[@jeremychase7416]

I think Mark Blyth is a genius, but he has evidently not been following the price of groceries and basic living expenses.

[@nutsackmania]

how about cars, services, houses, etc buddy

[@nudgenudgewinkwink3212]

30 years ago a family of 5 could live of one average wage income and just about afford to go on holiday, Now a family of 4 with both parents working where the main earner is on average wage and the other works say 4 days a week because of childcare costs can just about do the same.

[@Dfootg]

Brilliant

[@roc7880]

Mark Blyth. the only professor who has empty chairs behind him, not in front.

[@charlesashurst1816]

The way the world economy seems to work is there's an established world order that goes along for awhile, but then, as tensions store up within its tectonic plates, fault lines appear and eventually rupture, whereupon humanity has another of its little hiccups such as a world war, and then things realign to a new reality for a period. Perhaps we're at one of these tectonic shifts and our world is about to change again. I don't think we're ever going back to the days of powerful labor unions and high paying unionized factory jobs. But neither can we continue hollowing our our middle through stagnant wages. But what are we headed towards? The big black dark unknown. Perhaps we might see the end of the industrial age with its gigantic centralized factories and the rise of the maker movement as manufacturing once again becomes local.

[@flankspeed]

Wow, this might've been the best presentation ever in human history, but I don't know that BECAUSE I CAN'T SEE ANY F****** THING.

[@awesomeface10123]

Can anyone name everyone in the slide at 0:50 for me?

[@SarahD1987]

Really interesting, but it doesn't really explain how we get out of the mess we're in? It sounds as if if we continue as we are we get another huge crash and if people vote for the populist parties then we also get a huge crash

[@euroclyde]

I'm not as smart as Blyth by any stretch, but in America, if we could just get 1 other party's view injected into our political debate we'd be on our way. If it's a far right party, it'll push the Republicans back towards the center and allow the Democrats to start living up to their left-wing routes. If it's a far left party, the Democrats will be pulled left in an attempt to compete (with the positive populist policies). The Republicans may or may not pull back towards center, but honestly, if we have pro-people candidates winning debates, who gives a flying F what the right does as their supporter calve off to the left when they see their lives starting to improve. In America, our big problem is that both our parties are private parties who have gained control of our public elections. They limit who's allowed to participate in our democracy while they generally field the candidates who are acceptable to the big donors. Even Trump, while he talked populist, is as much, or more, in the tank for the usual suspects.

[@patrickmcgoohan115]

Interesting Mark Blyth added the rise of the bankers under neo-liberalism 1980's. Nixon dropped the gold standard in '72 with fractional gold reserves in reserve currency dollars held by countries for a fiat currency printed by central banks. No QE would've been possible under fractional gold. Neo liberalism was 10 yrs later - deregulation, market liberalization & privatization. State assets were sold to corporations underwritten by central banks for fiat money. Those state owned assets will never be returned to the state, assets like transport, electricity, telecommunications etc, that returned profits to the state. Regardless on your opinion of Trump here's one of his speeches confirming Mark's analysis of the populist right & their message. Trump won through on the ground campaigning. Donald Trump west palm beach 10/13/16 speech "Our movement is about replacing a corrupt & when I say corrupt I'm talking about a totally corrupt political establishment, with a new government controlled by you, the American people, there is nothing the political establishment will not do, no lie they won't tell, to hold their prestige & power at your expense & that's what's been happening. The financial establishment & media corporations that fund it exists for only one reason to enrich & protect itself. The establishment has trillions of dollars at stake in this election, as an example just one single trade deal involving trillions of dollars, controlled by many countries, corporations & lobbyists (TPP) . For those who control the levers of power in Washington they partner with these people that don't have your good in mind. Our campaign represents a true existential threat like they haven't seen before. The Clinton machine is at the center of this power structure, we've seen this 1st hand in the wikileaks documents with which Hillary Clinton meets in secret with international banks to plot the destruction of US sovereignty in order to enrich these global financial powers, her special interest friends & her donors. our great civilization here in America & across the civilized world has come across a moment of reckoning we've seen it in the United Kingdom where they've voted to liberate themselves from global government, global trade deals and global immigration deals that have destroyed their sovereignty & have destroyed many of those nations but the central base of world political power resides right here in america & it is our corrupt political establishment is the greatest effort behind radical globalization & the disenfranchisement of working people their financial resources are virtually unlimited, their political resources are unlimited, their media resources are unmatched & most importantly the depth of their immorality is absolutely unlimited. Many of my friends & political experts warned me that this campaign would be a journey to hell"

[@frankc242]

going off the gold standard was one of the biggest mistakes of the century

[@whatfruit]

It's worth reading his new paper. "Black Swans, Lame Ducks, and the mystery of IPE's missing macroeconomy" I'm probably butchering his arguments. The general thrust of the thesis is that in Western Banking and Political systems when a policy goal is defined and agreed by both parties new institutions are created to regulate and promote this stated goal. The problem is when this new stated goal is pushed so far when it becomes self defeating and causes active harm leading to a crisis, the institutions are unable to change course, because there very existence is reliant to maintain the adverse goal. Essentially the system gets flooded with Yes men. Therefore crisis actually worsen and systemic faults become more entrenched. This is true of both centre right and left governments in Europe which have adopted the same economic agenda since the 70's. We keep looking for the solution in the existing institutions that are not designed to change course and just prescribe more of the same. As I said I've probably butchered his paper.

[@WorldlyBong]

+Frank C What are you talking about? Gold Standard was restrictive and now our currency doesn't have the constraints it used to. Its sad to see progressives peddle libertarian nonsense. Blyth will laugh at you.

[@lesleyegg]

The sound is quite bad. Loud but not clear.

[@EricBrinkman]

Ok great. So what do we do?

[@TheGoodChap]

The first step is to just understand the problem so we're all on the same page, then we can have a discussion on what to do. Doing both at the same time would leave people far more confused, and having more people able to think about it can get us a better answer to that question.

[@shadowdance4666]

I guess Chris Cornell is ahead of the curve

[@patersjy]

As with all astrologers brilliant 20/20 hindsight.

[@cmw3737]

Hindsight? Mark Blythe predicted Trump before Scott Adams and explained the reasons why.

[@patersjy]

Solutions??

[@Kang5030]

I'm more comfortable with economists who focus on understanding the context rather than providing ideological solutions. One good takeaway from Mark's lectures: Focus on one thing for ideological reasons for long enough and the system will falter. We used to focus on full employment at any cost, the price was unions gaming the system and inflation. Then we focused on keeping inflation down at any cost, the price was banks gaming the system and austerity. We can respond to today's problems with another solution but if it comes from yet another "Aha! We've found the formula!" we're in for a nasty surprise later on. Personally I think we should focus on ending the austerity era, but that means chipping through mountains of propaganda aimed at discrediting public investment as "too expensive", in the same way it's "too expensive" to buy any cement mix when you're building the foundation for a house. Just throw in some gravel, pour water on it and call it fiscal responsibility!

[@patersjy]

I was thinking more that the goal of continuous growth may be the real problem and system change is what is required.

[@greg5326]

Appreciate your research, but I'm not buying the "anti-immigrant" claim. I'm right of center now because I believe the law is a better rule than personality. The immigration laws have been ignored. That does not mean that enforcing them (for a change) means I (or those that want them enforced) don't like immigrants. It means I want them to follow the same laws my own relatives had to follow. Without those laws enforced, we've had little control of the criminals escaping other countries only to create more chaos in ours. Otherwise, one of my supervisors is an immigrant, my project manager is an immigrant and our CEO is an immigrant. I have nothing but respect for them, even when they make fun of my crazy American colloquialisms.

[@TheGoodChap]

What are you talking about? My family came from Germany and Slovakia in the early 1900's. You know how they got in? They walked onto Ellis Island, were checked to see if they had contagious diseases, and walked into the US to find jobs. That was it. They didn't even speak English, they lived in Pittsburgh in a neighborhood where people spoke and still taught schools in Slovak and Polish until 1992. Today you need more than $1,000 cash and several years of filling out forms before you're a legal citizen. And crime tends to follow poverty. Do you still have something against Italian immigrants? Maybe we could do something to fix the poverty in the country rather than punching down and complaining that our societies issues can be blamed on poorer more desperate people...

[@MrBoreray]

@@TheGoodChap Times change,your own personal history is irrelevant,if you think the U.S. and/or Europe can handle ANY amount of immigration,legal or not,then you're either a fool or blind to reality,you think by taking the world's poor you'll end poverty ? Take a look around you and then tell me yes! I hope you have VERY deep pockets.

[@donaldgrant9067]

Still a lot of talk and no answers.

[@MrBoreray]

There are no 'answers',just variable short to medium term fixes,ideaology is the enemy of economics,so is the electoral 4yr.term system,every politician looking for short-term solutions to complex problems in order to get re-elected.Laying the foundations of a long-term fair and peaceful productive society requires political self sacrifice,if your policies in the long term ARE succesful then you can bet others will be lining up to claim the 'laurals'.+Why is lying socially acceptable nowadays ? It appears polititians can say anything with impunity with no penalty whatsoever.

[@frepi]

Not for the economics illiterates like me. I don't understand the concepts, the implied conclusions nor the jokes. And his accent makes it even more difficult to grasp.

[@archiebunker4108]

I agree. I could follow quite a bit of it, but there were points where he assumed economics literacy such as when he explained what led to capital controls without explaining what these entailed and what the consequences of imposing them were. I find him brisk and incisive but I do feel he needs to bring his audience in more when it comes to economic ideas and measures.

[@Nine-Signs]

As usual, Mark is running around with a correct diagnosis but never bothers to tell you of the solution because that's beyond the preview of his education. The answer is simple, instead of fighting to redistribute and level the system, don't distribute income unfairly to begin with. Only Marx could tell you that, which is why Harvard nor Mark ever will. There are hundreds of companies in the USA operating like this, the number is increasing by the day. There are thousands more globally. The solution to today's capitalism? Democracy at work: kzbin.info/www/bejne/bHWxoJmaipmniac

[@NosyFella]

Many things are simple and obvious in theory but how does somebody like Corbyn break through when the establishment is so set against him? That's the difficult part.

[@adc8655]

Will Bianchi as in America, people will consider him seriously when g things start getting really bad. People may not be hurting sufficiently in sufficient numbers to consider him right now, especially with the tories lapping up the anti-immigrant sentiment and still managing to keep the 'strong and stable' illusion alive. Frequent labour gaffs on basic numbers don't help either in their striving to be taken seriously by the whole electorate

[@RhoneM]

ArmyOfAll corbyn has a problem of thinking like a back bencher. he does not fight like an opposition leader is supposed to, which makes him look like a week leader.

[@Nine-Signs]

No friend, Corbyn fights like a man being led by the people of this nation behind him. Not the politicians, not the special interests. 70% of papers are owned by 3 tory billionaires, the Guardian is owned by hedge funds. The BBC is controlled from within by Rupert Murdoochs close friend James Harding, shoe horned into the position of "Director of News" by his childhood friend George Osborn. Orwell would be astounded. He is seen as weak because the media, and those politicians who represent the interests of money before the population have done their absolute damnedest in conjunction with that corrupt media, to stop him. Corbyn isn't the problem, the fact he is left wing is. Anyone from the left wing who leads Labour will get exactly the same treatment today. Because only the left recognizes the vast bulk of our problems are not immigrants, not a broken EU, nor a failed neoliberal ideology, those are all symptoms of a much larger cause. The problem is capitalism itself. The rich via the center and right will do EVERYTHING in their power to stop people understanding this and voting to modify/change the system. This is the explanation not explained to the majority, that is the cause of civil unrest and political polarization of the masses, across the western world. Capitalism is the crisis. Even the main stream cheerleader economists for capitalism are coming to understand the reality I have known was coming for many years. www.theguardian.com/business/2017/may/13/mohamed-el-erian-signals-system-enormous-stress-global-capitalism All systems have a birth, a golden age, and a death. Welcome to Late Stage Capitalism.

[@yam83]

In another video, Blyth said that the solution is for corporations to pay their fair share of taxes; such revenue should cover the needs of the working and middle class and preclude the need for a bloody rebellion against the 1%. Thus spake Mark Blyth: 'The Hamptons are not a defensible position.'