Hungarian Elections and Viktor Orban

This Sunday Hungarians were asked to vote in the parliamentary elections, which the national-conservative Fidesz party won with a larger majority, thus retaining their two-thirds constitutional majority. The ruling prime minister, Viktor Orban, had done so much to consolidate his power and shut out and weaken the power of unfavorable institutions or fill them with his associates. The seeming invincibility of Fidesz has resulted in a strange electoral coalition among all the opposition parties (Jobbik, the socialists or MSZP and Green LMP) in the mayoral election of the southern town of Hodmezovasarhely, which led to the victory of Peter Marik-Zay, who led the grass-roots Country for All movement (Witte 2018). Such electoral coalition is unlikely to be repeated at the national level, where Orban’s Fidesz had controlled the levers of government since 2010.

What explains Orban’s political power? The first reason, as indicated above, is the fracturing of the political opposition. There are two smaller parties (the Greens and the Christian KDNP, the latter of which sits as junior partner in the coalition), and two larger opposition parties, including the socialist MSZP and the right-wing, anti-immigrant Jobbik. It is rather unlikely for the MSZP and Jobbik to enter a broad electoral coalition given their philosophical disagreements. The second reason is that the credible alternative to Fidesz, the MSZP had itself been discredited by corruption and bad economic management during the 2008 economic crisis, which happened during its rule from 2002 to 2010. Jobbik, which contested its first election in 2006, may be considered a credible right-wing challenger, running on a platform of ethnic nationalism, and gaining 20% of the vote in 2014. But even here, Orban outgunned the anti-immigrant platform of Jobbik by harping on law and order, such that Jobbik has to shift to left-wing economic policies to get popular attention.

The third reason is the somewhat successful economic record of the Fidesz-led administration, which feeds its job growth primarily from subsidies in the EU budget for economically weak regions in the EU (from which poorer countries like Hungary benefit disproportionately). This is all the more ironic given that his declared enemies are an all-powerful Brussels and the liberal cabal financed by George Soros, a Hungarian-American investor and philanthropist. That is perhaps the fourth reason for Orban’s political power: he permanently agitates against some external enemies, whether it is the liberal establishment elite, the European bureaucrats or the refugees that “invaded” Hungary via the Balkan route in 2015 and 2016. Among a frightened and angry electorate that feels left behind by economic globalization and the rapid pace of change in a neo-capitalist society, which was communist for two generations, this agitation seems to work quite well. The fifth reason is that Orban’s pan-Hungarianism, which resulted in the handing out of hundreds of thousands of Hungarian citizenships to ethnic Hungarians in neighboring countries boosted the electoral fortunes of Fidesz, which receives almost all the overseas votes (95%).

I want to explore a sixth reason, which is related to the charisma and dogged determination for power of Viktor Orban. He has been the face of Fidesz since it fought its first election in the post-communist era in 1990. It was not clear initially that Orban would become a power-hungry politician. During his university days he wanted to be an academic intellectual. He was born into a rural lower middle class family in 1963 and was interested in communism, but his military service had disillusioned him from communism.  In 1988, at the age of 24 he became one of the founding members of Fidesz, the Alliance of Young Democrats, which initially only admitted people below the age of 35. The vision was clear: usher in liberal democracy into the decaying communist structures.

There were two factors that favored the end of Hungarian communism: first, Mikhail Gorbachev’s takeover of power in the Soviet Union in 1985 displaced the old generation that had grown up under the yoke of Stalin and initiated liberal reforms in the economy and the polity, which was a signal to the other Warsaw Pact countries that the Soviet Union, which still had hundreds of thousands of military troops stationed in Eastern Europe, would not use violence to suppress communist regime critics. That was a huge blow to all communist leaders from Honecker in Germany to Ceausescu in Romania. Orban himself became emboldened enough during a speech in the reburial of Imre Nagy on June 16, 1989, the tragic Hungarian leader, who was felled in 1956 by invading Soviet tanks which crushed the Hungarian uprising, to demand free elections and the removal of Soviet troops from Hungary. That speech brought Orban much fame in the country and perhaps made him the undisputed leader of Fidesz. In fact, Orban has been the only Hungarian party leader, who has consistently fought every single election since 1990.

The second reason was that Hungary became known for its goulash-communism approach, especially during the long rule of Janos Kadar, who was supposed to be a Soviet henchman after crushing the Hungarian uprising. The essence of goulash communism is to retain broad state ownership over the economy, but relax some central controls by allowing individuals to trade in the market, which resulted in a somewhat consumer-oriented marketplace. In the political sphere this meant that there was some freedom of speech (as long as critique was not directly addressed at the ruling government) and even freedom of travel. As such, it was not too far fetched for Hungary to transition into a capitalist democracy once Soviet control relaxed.

In the fall of 1989, Orban had accepted a Soros-funded scholarship to study politics in Pembroke College, Oxford. It is all the more ironic that Orban would turn so drastically against his funder in order to score political points. But only four months into the course (which really means after 8 weeks of courses, or one trimester- Michaelmas), Orban disrupted his studies to contest as leader of Fidesz in the first parliamentary elections scheduled in 1990. With only 9%, Fidesz only became the fifth-largest party, and Orban became opposition leader. In the following elections in 1994, Fidesz only received 7% of the vote. Orban realized that he had to change his strategy.

Instead of promoting liberal democracy (which had de-facto been achieved with the introduction of elections), Orban shifted to a more right-wing nationalist platform, which fellow party leaders Peter Molnar, Gabor Fodor and Zsuzsanna Szelenyi disagreed with. These more liberal leaders then left the party, leaving the party to Orban. Was Orban a plain racist, who was using his early support for liberalism as an excuse to become elected to power and then promote an anti-immigrant, anti-foreign agenda? I have not found any evidence in favor of this reasoning, but we can state that the rightward shift of Fidesz came from Orban’s belief that political power can only be attained when voters can agitate against an external enemy. Carl Schmitt would have been proud of Orban.

The following exchange that is quoted in BBC (2018) is quite instructive

“We were sitting in the Angelika cafe, across the Danube from parliament,” economist Peter Rona remembers. Orban was describing how he wanted to turn Fidesz into a modern conservative party, but Rona warned of the danger of abandoning the “modern” at the first sign of electoral trouble.

“‘I will not fall into that trap, but if necessary, so be it,’ replied Orban, to my surprise. What mattered to him was to win power, and keep it, at any cost.”

Orban’s electoral strategy to channel the mass resentment against foreign investors, who were not interested in the unproductive socialist-era factories, resulting in a rise in unemployment, and gained sufficient electoral support in the 1998 elections to win power despite fewer electoral votes (because of winning more constituencies, especially the rural ones). Upon election, Orban pushed for lower taxes and lower social insurance contributions. He abolished university tuition fees and reintroduced universal maternity benefits. However, the Fidesz government also continued budget consolidation from the previous administration and did not reverse the privatization begun under the previous administration, which is in line with the liberal economic policy preferred by the EU (which Hungary was about to join) and the IMF.

Orban promptly lost the next elections in 2002 and was pushed into opposition (Fidesz got the most seats, but the socialists formed a coalition with the Free Democrats). This had enraged Orban so much that he vowed not only to return to power later on but also to change the institutions to make it difficult for the other opposition parties to defeat him again. So much for his avid demand for democracy from his student days in the 1980s! Orban doubled down on the national identity agenda, hired a communications guru to talk like the common man and received generous funding from his former schoolfriend Lajos Simicska to finance the next elections (Simicska’s companies were then handsomely rewarded with generous government contracts once Fidesz returned to power). Fidesz was defeated again in 2006. The next opportunity for power came with the 2010 elections after the poor handling of the financial crisis in 2008 of the socialist government (unemployment increased, while corruption charges against high administration officials blew up).

Once back in power, Orban went to the EU and demanded more time to tackle the budget deficit, but was rejected by Brussels, which fueled his rage against the EU. To plug the budget hole, Orban increased taxes on foreign companies, a bank transaction tax and mobile phone charges. He also forced a conversion of private pensions into public pensions, which immediately made funds available for the administration. A 5.5% of GDP budget deficit in 2011 was lowered to 1.6% in 2015. His economic agenda was to reduce unemployment with the help of public works schemes financed by the EU. The emigration of unemployed workers also helped reduce tensions in the domestic labor market, though it created a brain drain of higher skilled talent. Employment was further boosted by slashing welfare for the long-term unemployed, though family benefits continued to increase in the hope of countering the low birth rate (which increased from 1.34 to 1.44 from 2010 to 2015). The government implemented a flat tax and a very high VAT, following in line with liberal policy prescriptions. What endeared voters to Fidesz was that the majority of the tax increases (with the exception of VAT, which is a consumption tax) were focused on foreign banks and commercial chain stores rather than the general population (Financial Observer).

To realize his power consolidation, Orban instituted a new constitution, which stressed nation state and family. The Constitutional court was weakened, the TV and radio news media were put under direct state control, and ethnic Hungarians in neighboring countries were given citizenship. Orban also purged opponents and critics in the civil service, state companies, schools and hospitals. NGOs were put under tight supervision, and the Soros-funded flagship university Central European University is threatened with outright expulsion, which motivates the university officials to open up a branch in Vienna. Finally, electoral reform reduced the parliamentary seats from 386 to 199 and abolished second-round runoff elections, which has so far favored Fidesz.

In a mature and consolidated democracy one would think that rabid nationalism won’t work, but even this cozy assumption has been shattered by Brexit and the Trump elections. Western capitalist countries seem to have a problem to deliver a basic standard of living for the masses. In the Hungarian case, it might be true that greater western corporate investments have created growth and needed jobs (especially from Austrian and German firms), but a more market-driven labor market also means more uncertainty relative to the experience of communism. To some extent, Hungarian nationalism provided the same mantle of rhetorical protection to the population that state socialism used to provide, even as the nationalist mantle claims to fundamentally oppose state socialism. But this similarity is not so surprising insofar as both ideologies deny the premise of liberalism and the primacy of individual rights.

Orban’s electoral strategy worked and his coalition government retained a two-thirds majority in the 2014 elections. The opposition worked together to field single candidates against Fidesz as opposed to split the opposition vote, which benefits Fidesz. Even though there was an electoral coalition between the socialists, the Together Party, the Democratic Coalition, the Dialogue for Hungary and the Liberal Party, it wasn’t enough to break the electoral control of Fidesz. The center-left bloc also did not include a coalition with the right-wing Jobbik, which had received 23 seats on its own right (primarily via the proportional party list rather than first-past-the-post constituency).

The next test to the Hungarian government was the influx of refugees over the course of 2015, which escalated in the fall of that year. Orban announced in June 2015 that it would construct a border fence with Serbia, where most of the Iraqi and Syrian refugees on the West Balkan route were trying to head toward western Europe (i.e. Austria, Germany and Sweden). The EU had criticized that step, but Hungary claimed that Serbia was not part of the EU and also not part of Schengen. The flow had intensified going into the fall, reaching 30,000 a week in September (compared to 2-3,000 in May), and refugees were forcibly trying to cross the border, which induced Hungarian police to use teargas and batons to halt the flows. In October, Orban announced the closure of the border with Croatia, an EU member, but not part of Schengen.

But it just wasn’t physically possible to halt the strong flows, which resulted in people flooding the train stations in Budapest. Hoping to remove these refugees, the government encouraged the refugees to move onto Austria. Fortunately for Orban, the widely publicized photos of an infant death in Syria and the suffocation of dozens of refugees on the back of an unventilated truck in Austria had convinced both the Austrian and the German chancellor to temporarily open up the borders and admit a large number of refugees.

In December 2015, Hungary challenged EU plans to distribute the asylum seekers across Europe, which would have provided relief to the main refugee-takers in the EU. In March 2016, the government declared a state of emergency, which has been extended to today. 60 refugees per day were permitted in 2016. In February 2018, the government announced to only take in 2 refugees per day, while deporting most of the rest of the refugees. In the mean time, the border fence kept on being reinforced with barbed wire, heat sensors, video cameras and armed police patrol (Nelson 2018). There are many refugees who are trapped in the Serbian-Hungarian border, receiving poor supplies of food in camps without much protection from the winds during the winter season.

From an electoral standpoint, will Hungarians punish their ruling government for the handling of the refugee crisis? This is the first election since the refugee crisis, and the polls have not suggested any dips for Fidesz, which means that the tough anti-refugee position paid off for Orban. In contrast, Austrian chancellor Faymann’s party lost the first round of the presidential elections, which had increased the pressure against him to resign, which he promptly did in May 2016. Chancellor Merkel’s CDU and the SPD coalition partner in Germany dramatically lost voter support in the fall 2017 elections, which explains in part why it took so long for them to form another new government. The right-wing parties (FPO and AfD) gained a lot of electoral support, though in Austria, the FPO was surpassed by the conservative OVP, which ran an anti-refugee, anti-immigrant campaign, thus resulting in an “Orbanization” of the political process in Austria.

The 2018 electoral campaign in Hungary continues on the anti-refugee sentiment, which is driven by both Fidesz and Jobbik, but given that those themes don’t differ, I doubt that Jobbik can substantially gain in the vote share. Jobbik is somewhat more progressive in social policy, demanding much higher minimum wages, full pensions after 40 years of work for everyone (only for women in the Fidesz program), and the modernization of the education and health systems. Fidesz pushes for higher pensions, family tax allowances and a modern village program to boost the rural vote.

The socialist party does not mention the refugees at all and focuses on bread and butter issues, i.e. higher wages, tax credits for low-income households, inflation indexation for pensions, higher family allowance and gas/ electricity subsidies for poor households. If refugees are a main driver for electoral shifts, we can’t find that they would work to the detriment for Orban. The major weakness in the Orban strategy, which the opposition is hammering him on, is political corruption, which results in the loss of national funds to Orban’s political cronies. But such corruption is not out of line with other eastern European countries or his socialist predecessors.

It may be stated that the electoral success for Orban lies in his ability to manipulate the electorate with a strong anti-immigrant and national identity platform, which is additionally bolstered by his hardline stance during the refugee wave, his persistent verbal attacks against the liberal elites abroad (especially the EU, that finance most of the country’s infrastructure projects, and George Soros, who had financed his Oxford studies), economic policies that favor families and the lower middle class, especially in rural areas, the weakness/ internal division of the political opposition, and making the democratic control institutions (primarily the media and the supreme court) compliant to the government.

For the immediate future we cannot realistically expect a democratic awakening for Hungary nor for any other Eastern European country, which had suffered from various national trauma (from Austria, Germany or the Soviet Union), and recently escaped the comforts of state socialism to be plunged into what Francis Fukuyama alleged to be the end of history, i.e. the triumph of liberal democracy (or neoliberal capitalism for people on the political left). Nationalism is cleverly combined with selective liberalization and a family-oriented welfare state, while the socialist opposition is discredited in part by the state socialist past and the lack of credibility for implementing neoliberal reforms of privatization and deregulation.

But how sustainable is Orban’s strategy? There is a certain economic contradiction in the Fidesz project, which is chiefly related to demographics. Over the short-term, Hungary and other post-socialist states have benefited from western corporate investments into a cheap but (thanks to state socialism) highly educated population/ labor force, but any long-term economic gains are dependent on a population growth strategy, which is not compatible with the anti-immigrant policies of the government. The pro-natalist policies have slightly increased the birth rate but insufficient to halt population decline. In addition, as long as there is a wage and living standard gap between the rich west and the poor east, eastern Europe will continue to lose workers, which in some cases is permanent. To the extent that it is the young and educated people, who prefer to work in Germany than in their native Hungary, population decline is compounded by labor force decline. The implication is that once the easy avenues for growth disappear, then population decline will be felt in the form of economic decline, in which case the argument for limiting foreign migration become even more acute, though there won’t be many scapegoats left to blame.

For arrogant western liberal elites lecturing down on the democratic deficiencies of Hungary and their political cousins in Poland (which are undoubtedly concerning and ought to be criticized), they should be reminded not only of the specific historical context of eastern European, but also the electoral upheaval in their own country, which delegitimate democratic political and social institutions. Donald Trump wants a giant military parade. Donald Trump wants to build a giant border wall to keep out immigrants (even as their numbers are pretty stagnant and in some cases declining). Donald Trump congratulates Vladimir Putin on his re-election (without any credible alternative candidate) and Xi Jinping on ending his term limit in power, and maybe the US should do something like that too.

Thus, Orban and other more authoritarian leaders, who prefer not to surrender their power are vindicated in their strategy, as the liberal political order continues to crumble. Though to be clear, I still find it unlikely that Orban will push for a complete abolition of democracy, so long as curtailments of democratic institutions to retain his power monopoly are sufficient and as long as the EU continues to act as external constraint. Though the paradox in the latter is that the harsher the EU cracks down on the Hungarian government, the more the EU will be delegitimated in the eyes of the electorate that feel closer to Budapest than to Brussels.

In other words, Hungary and the “Orbanization” of politics in the absence of progressive alternatives is the new normal.

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Low Productivity Service Jobs in an Automated Economy

In a raging debate on whether machines and robots will wipe out all jobs, the judge is still out. The economic forecasters strongly believe in the possibility of displacing anywhere between 10 to about 50% of all jobs given the advancements of robotics and artificial intelligence. Other scholars argue that rising productivity pushes down costs, which raises consumer savings, which then become redeployed in other economic areas, which creates new jobs, especially in the service sector.

A decline in the overall unemployment rate and a modest decline in the number of long-term unemployed that have been excluded during the era of “jobless recovery” might suggest that the capitalist economy has not exhausted all means of generating new jobs for people.  This positive labor market trend may be limited by the fact that we are simply waiting for another major economic bubble to burst, perhaps this time in China. But even if we assume that the optimists are correct and we have found a sustainable job recovery, the headwinds lie in the quality of new jobs that are created.

The expansion of a digital labor market interestingly takes the form of low-wage work, like Uber, Lyft, Mechanical Turk or Task Rabbit. Online mediated services undermine the potential for social solidarity, because they lack the face-to-face interaction which is required to create sympathy and a worker organization. As such, any firm rents that these internet platforms generate will unlikely be shared with the workers.

The vast bulk of jobs that exist even in the non-digital economy, like being a substitute teacher in high school, care worker in a veteran’s hospital or a food service worker in a big company, are also rather poorly paid and unionization has been difficult. Progressive political forces have pushed for a higher minimum wage to ensure a socially acceptable standard of living for these low-paid workers. It certainly makes no sense for a single mother to receive 7.25 dollars an hour, when despite her full-time work half the income already goes to childcare, let alone paying for rent and food. The dismantling of basic welfare programs (like AFDC, Aid for Families with Dependent Children) has removed any last economic cushion for the lower class confronting a very bad labor market.

The capitalists’ response to a higher minimum wage is that payment of wages above total worker productivity would result in a cutback in hiring. Naturally we have to ask ourselves how much of the low-payment of wages is linked to worker productivity and how much to the monopsony power of the company. (A monopsony is where the buyer of labor services has a lot of power, because that employer is an employer of last resort, and there are not many other jobs available.) In the case of Walmart, the giant bonuses for managers and the Walton owners suggests that many workers can gain additional thousands of dollars a year without turning up a loss for the company (profits might even increase with reduced turnover and training costs, as well as a spillover effect of larger wages in similar retail companies raising aggregate demand in the economy).

But let us assume that the capitalist is right and that any higher payment of wages for workers in the service sector would induce Baumol’s cost disease, i.e. higher wages have to be compensated by higher product prices. Professors in universities are a classic example: the highly recognized professional status has allowed professors to command increased incomes, which has to be passed down to students facing increased tuition (which increases even more with cuts in state subsidies for public colleges). But what might work for the professor might not work so well for the food-service worker, where automation potential exists, or it might not work for strange service sector jobs like dog walkers, whose high prices lead to substitution with one’s own labor (people walk their own dog instead of hiring someone else).

The key problem in the Baumol cost “disease” (a notably pejorative label) is that workers in those occupations with rising wages experience no increase in labor productivity. Auto workers don’t suffer from such cost disease, because the continuous innovation in production methods, especially the use of industrial robots, results in rising productivity, which would justify rising wages. (Given the lack of political power of the auto unions, who have been battered by outsourcing and automation, productivity rises are often not even matched by rising wages, but instead rising profits for shareholders and executives.)

But it seems to be that rising productivity is not desirable for two different reasons: service decline and technological displacement. In the first case, think of Massive Open Online Courses that can displace brick-and-mortar education. In the latter case, most teachers might have 30 students in a classroom and they won’t be teaching more than 2-3 courses a semester. And that ratio has never really changed over time. But the online education revolution has promised to give more and more people an education where one teacher can teach tens of thousands of students.

But the initial enthusiasm for MOOCs has by now abated. It might come back later, but the issue seems to be that universities are still controlling the conferral of degrees, which is restricted to the brick-and-mortar experience. Another factor is that a functioning educational experience cannot do away with the personal encounters with teachers. As someone, who has spent his entire life inside the walls of the education system, I can confirm that the entire value-added of my educational experience comes from my direct interaction with teachers and professors, some of which became my mentors. I have once enrolled in a MOOC, watched a few videos, but did nothing else, and there is no penalty to it. Productivity rises in education, thus, make no sense, and might even diminish the quality of education.

On the other hand, the food service sector, custodians, cashiers or the border control officials at airports or any other perfunctory service job, where the things that customers want to have done for them require no specialized attention, but where robots and artificial intelligence have not gotten around to do them yet, productivity rises could make sense. In some cases, the low wages accompanying those sectors might discourage the increased diffusion of robot innovation. There might come a time of technological breakthrough, which will reduce the cost of robots, upon which the technological displacement of those service workers becomes feasible.

But a rising minimum wage in the low-productivity service sector could accelerate the employer demand for service automation. At this point, very few people would suggest that perfunctory service jobs cannot be automated. Some right-wingers might use this situation as evidence for not wanting to raise the minimum wage, but naturally the premise of their argument is quite absurd: heads, you work a miserable, low wage job. Tails, you have no job. The cruelty of this economic logic creates the kinds of economic dislocation that creates political monsters like Donald Trump, Brexit, nationalism, racism and xenophobia.

In some sense, we should celebrate the fact that agricultural and manufacturing work have become more and more productive, which means that we can have material goods and food without having to work that much. As such, we can only slot most people into low-productivity service jobs, which don’t have much wiggle room for higher wages. In the mean time, the high cost of living still requires us to earn sufficiently high wages to afford the services that we need (services are especially expensive in health care and education, where the Baumol cost disease is the most acute). Given that we have a laborist political economy, which forces people to make a living from wage work, we are trapped in a contradiction of rising productivity across most industries and too many low wage jobs for most people in the service sector. And the solution of rising productivity for service workers creates a new unemployment problem.

Defenders of the status quo will counter that the solution has to be to slot more people into higher-skilled jobs. After all, the economic evidence shows skill-biased technological change, which means that high skilled workers, whose work is not (yet) automated, continue to command higher returns to their skills. I am certainly not opposed to a mass education and training program, but it is simply wishful thinking to suggest that training and education will solve our fundamental problem of economic inequality. The entire point of advanced technology is that we don’t need more than 10-15% of the workforce that does a highly-skilled occupation.

Shortening the work week would certainly make sense to distribute these high-productivity jobs across a larger amount of people, and that might defuse some of the economic anxieties. If that solution is not so feasible (as it does not do anything for people, who are still trapped in low-productivity service occupations), then a massive expansion of social services, which lowers the general cost of living, or a universal basic income are ways out of the problem. If we had free health care and free higher education and really cheap housing, then it doesn’t matter if you only make 7 bucks an hour, because the important stuff you get for free. Critics of the enlarged welfare state will counter that we have to collectively pay for these services with higher taxes, but in a functioning progressive tax system the burden of the spending would be shifted from workers to capitalists, who really can’t complain about the neat profits they have made with increased automation and outsourcing to cheaper labor countries.

The expansion of social welfare, including a universal basic income, implies that we would maintain poorly paid employment, but if we wanted to make sure that all people shall somehow benefit from a high productivity economy with low employment in highly productive sectors and high employment in less productive sectors, then I see few alternatives available to us.

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From Wage Labor to a Gift Economy: Contradiction of Capital Accumulation

While reading Profit and Gift in the Digital Economy by Dave Elder-Vass (2016), I was reminded of a contradictory development within modern capitalist economies. We are shifting from an economy based on wage labor, which simultaneously fueled production and consumption, which has been keeping the capital accumulation regime going, to an economy based on unilateral gifts given by individuals to powerful monopoly corporations, who have to pay us virtually nothing in return, thus feeding a cycle of growing income inequality, reactionary populism and frustration with the status quo among what Donald Trump described as the “forgotten men and women”. Declining purchasing power among consumers in developed countries subsequently pushes down rates of economic growth, which will produce not only a crisis of legitimacy but also a crisis of accumulation. To understand this contradiction we have to remind ourselves of the major trends happening in the economy.

The digital revolution implies greater dependence on major monopoly capitalist firms like Amazon, Apple, Google, Facebook and Microsoft. They get to consume a greater share of our attention, and can control the channels of a giant networked customer base (as opposed to e.g. Halal food carts), thus earning more profits than any other firm can. Amazon is a giant bazar displacing the big retail competitors. Apple/ Microsoft are giant suppliers of computers, smartphones and what forms the hardware of consuming many online services. Google is a giant library, which contains all of the world’s knowledge with steadily improving algorithms. Google also runs Youtube, which is a way to access our media entertainment. Facebook is a giant social network that we use to keep in touch with people and share silly thoughts and experiences with others in the network.

In addition to the monopoly power of these internet giants increasing, the invention of self-driving cars, self checkout kiosks, free media streaming (as opposed to buying CDs, DVDs etc.), automated warehouses, software in the service sector and robots in factories implies a mass displacement of mostly routine jobs, which are not growing since the last great recession of 2008 (see graph). Considering the fact that the labor force is continuously growing, the absence of routine jobs means that there will be more frustrated unemployed and underemployed workers, who will vote for the next Donald Trump that hails from some corner in the country. Capitalism is built on labor-saving technology, which pushes out the frontier of production, while eliminating old jobs with the potential promise of creating jobs elsewhere in the chain.

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Source: St. Louis Federal Reserve

Managerial and professional positions may be on the rise, and if we follow the “bullshit job” argument by David Graeber (2013), they can technically be endlessly extended. What he is referring to is the growth of unproductive service jobs that don’t exist to feed, clothe and shelter us, but to entrap us in extended periods of busyness, e.g. advertising, contract lawyers, financial services, education and health care administration, human resources or public relations (see graph). While some may object that these are all necessary aspects to a modern economy, one should be reminded that many health care jobs don’t contribute to the health and welfare of the citizenry. The lack of an efficient single-payer health care system bloats up profits and administrative expenses in the US.

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Source: Michael Roberts

But while we may be inclined to criticize these jobs, our laborist political economy (“work or starve”) convinces us that given the strong force of automation coming down our way, we should defend these jobs as long as possible, no matter how useless they are. As long as we can convince some powerful employer to buy our labor services, we should shut up and be grateful that we can get the means to fill up the gas tanks and keep the lights on at home, even if we perceive our job as socially meaningless. That is how absurd our economic system has become.

The devalorization of labor (either in the form of displacement of expensive, organized labor or in the maintenance of deskilled, low-cost workers with little or no rights) is also connected to an increasing donations/ gifts. Amazon Mechanical Turk, Uber, Google, Facebook, Youtube and Wikipedia are useful representations of this gift economy. But what do I mean by gifts? One may argue that gifts are given in exchange for another favor from that person in the future. Think of lobbyists bribing politicians to make them pass a law friendly to the lobbyists’ industry. But gifts may also be given without any expectation of return. Think of giving the street beggar some small change. For most of us engaging in the internet economy, donating our time for free, we never expect any monetary returns, even as the platforms we are on and their investors make money like there is no tomorrow. Let’s take a look at what I will call the “unilateral gift economy”.

In Amazon Mechanical Turk, one can fill out surveys or complete any tasks that can be done online, which are demanded by requesters. Pay is often very low, in part because there are so many MTurkers (supply) relative to requests (demand). A recent paper by Dube et al. (2018) found that there is substantial monopsony power by MTurk requesters. A monopsony is a market condition where there is only one buyer (i.e. Amazon). Monopsony power is reflected in the inelastic labor supply, which means that regardless of what the price is, the number of MTurkers does not change. In a very elastic labor supply situation small price changes result in substantial shifts in the labor supply. There are simply too many MTurkers, who are desperate for any job that they accept any compensation even if very low.

Now you might object that MTurk sounds like just another job, because responding to a request means work and that becomes compensated even if that is not enough to live on. In a technical economic sense those critics are right. But from a critical perspective, isn’t it also true that once one becomes so absorbed in doing MTurk jobs with so little compensation that MTurkers might use reasons other than making money and paying bills to continue doing it? Subjectivity is very important here. Scholz (2016) reported surveys/ interviews of MTurkers, who participated on the platform because filling out surveys would “benefit science”. These are MTurkers, who used a higher non-economic rationale to justify why they continue to do a lousily-paid job.

Uber is another example of a job, whereby the sheer scale of the number of drivers in the industry pushes down the total compensation in the industry (Schor and Attwood-Charles, n.d.). Subsequently, many Uber drivers that I had encountered were not using earning money as a primary reason to drive, but their ability to communicate with customers, being out of the house, having something to do. As such, drivers are pre-emptively undervaluing their labor, and consent to the unilateral transfer of gifts to the powerful company. It turns out that Uber has also developed algorithms to encourage their drivers to drive more hours to hit certain earning targets, which becomes the gamification of work. Perceive what you are doing as entertainment or fun competition and not work, which eases the unilateral gift transfer to Uber.

Google seems to deliver users the best of all worlds: access to the world’s combined knowledge for free. Even just 30 years ago, knowledge was concentrated in a few minds and a few education institutions. Encyclopedia Britannica and Brockhaus were encyclopedias that were compiled by some very educated people, who then have their works read by an audience of other educated people. But Wikipedia and Google open up knowledge to anyone with an internet connection. Now, we can critique that only educated people will look for interesting information, while others will search for computer games and online porn. But that is beside the point. The key point is that the free receipt of information is not so free.

The famous saying is that if the product does not cost anything you become the product. That is the world of Google, Facebook and Youtube. The economic success of Google despite the free offering of their product is the targeted advertising that is made possible by tracing any online web searches to your individual account. My entire web search history is tied to Google Chrome and I am always logged in with my email account. That is very convenient, because all of my web searches and bookmarks can be pulled up anytime and anywhere that I am logged in. If I have recently searched for neckties, then lo and behold I will see many commercials of neckties on the sidebar. As a result, advertisers who are greedy for user data to target their products to potential customers know that they have to advertise via Google and may even pay a premium to do so. Thus, Google takes a huge chunk of the globally available online ad revenues.

Elder-Vass (2014: 189) claims that Google is embedded in both the capitalist and the gift economy, which does make sense. Targeted ads make Google capitalist, while the free user service and the need to please users with fancy, convenient features make it part of the gift economy. But this demarcation does not allow us to weigh which economic aspect dominates. To the extent that users are providing free data to Google, which profits indirectly from users, the users are uncompensated workers, thus providing a giant gift to Google.

A similar principle exists for Facebook, which is perhaps even more pernicious than Google in aggregating information on individual users. While Google has to infer my tastes and preferences indirectly via my search preferences, any Facebook comment, like/ hate/ love/ disgust etc., sharing of link and inputting of personal data into the profile produces a very explicit and direct expression of my tastes and preferences. Thus, Facebook is as good if not better poised than Google to profit from individual user data.

In the case of Youtube, our video preferences get saved to an individual account, which is often tied to the Google account, and as such it ensures that we constantly watch things on Youtube. In that sense, it is similar to Facebook, Twitter or Gmail in that it can permanently occupy our attention space, which confronts us with more commercials, which showers Youtube with even more profits. While writing this post, I listen to my favorite pop song playlist, getting advertisements in regular intervals (perhaps every 2-3 videos). Video content creators might be put in a position to earn a share of the advertising royalties in pay-per-view agreements. But video creators have to individually negotiate that with Youtube if they want to get any royalties. In the absence of such agreements, Youtube collects all the revenues. It can, therefore, not be surprising that many hobby video creators (e.g. people doing Jackass-style stunts, share their family cooking recipes, or just tell stories) just treat their activity as an entertaining hobby that will enliven the life of their viewers (i.e. a gift) rather than a way to earn royalties.

Music producers, in a classic “if you can’t fight them, join them” manner, had first tried to sue Youtube for copyright infringement for posting music videos, but then realized that it was too stressful/ uneconomic to force removal every time someone uploaded a bootlegged copy of a song. Youtube could not be held to account for such copyright infringement so long as it removed unlawful use of copyrighted songs when told to remove them. The music producers (there are only very few, and the official music videos are sponsored in VEVO) are back to making money, though the total revenues in the music industry have declined, making artists more dependent on live performances to make a living.

Among all of the major examples of the online gift economy (with capitalist underpinnings), only Wikipedia is unambiguously not for profit. It is not listed in the stock market, and is operated by the non-profit Wikimedia Foundation. When going to the Wikipedia page (which had been very useful to me in many of my investigative blogs), you will find the regular pleas for donations from users. There are no ads, and thus no other way to generate revenues to keep the staff which maintains and hosts the site. But it is precisely because of the pure gift economy ethos that all the Wikipedia contributors (which is, again, anyone with internet/ computer access) will ask for nothing more than the feeling of benefiting the community with knowledge in their respective areas of expertise as opposed to any material compensation, as was the case with contributors to other professionally curated encyclopedias. One donates his/ her time and knowledge to contribute to publicly available knowledge, and this is a pure gift economy.

So what are the implications of these three large forces? These forces include (1) the intensification of monopoly capitalism with the giant internet providers; (2) the decline of routine and productive jobs; and (3) the rise of a unilateral gift economy to the benefit of these monopoly companies.

Concerns about surveillance are certainly becoming louder. In China, the social credit system bars people with unpaid financial debts to purchase flight or train tickets (TodayOnline 2018). Facebook is drawing intense public scrutiny for allowing Cambridge Analytica to draw on Facebook profile data for political influencing in the 2016 presidential elections (Tam and Real 2018). When the trolls take over or the state with its own controlling needs, then civil society is besieged because it is unlikely that such a large, complex social network can be democratically held accountable. The few thousand employees in Silicon Valley, who create the products that we all need, hold tremendous amounts of power over the rest of us, who cannot afford to quit Gmail or Facebook for fear of becoming a social isolate. Citizens groups might want to pressure lawmakers and the internet giants themselves to subscribe to a code of conduct that will avoid excesses in surveillance and opinion manipulation, but I doubt how effective that can be.

With respect to the economic forces a play here, we are reminded of the contradiction of capitalism. The growth of monopoly internet firms reflects not the initial failure of capitalism but its success, because it is the objective of firms to control the entire market. Rockefeller had attempted this by consolidating the oil and railroad industry, and in today’s economy it means the control over the digital information channels, but also the centralized controls over the productive portions of our economy (extraction, manufacturing and agriculture). The fact that Silicon Valley firms are swimming in cash should be a source of happiness if that wealth can feasibly trickle down to the rest of us. But the decline of productive/ routine jobs and the rise of the gift economy (i.e. our contributions of time and data to internet companies) imply that there is no such trickle down to be expected.

On the contrary, the existence of a homelessness crisis in cities like San Francisco and Los Angeles indicates a microcosm of a failing social economy. As the tech giants continue to attract more investor capital and grow their user networks, they attract a few thousand engineers form the elite universities, who use their high salaries to buy the scarce attractive residencies in the Bay Area, thus driving up home and rental values for everyone living there, even poor people with minimum wage jobs that have lived in the Bay Area for their entire life. No wonder there is a homelessness crisis. The internet monopoly firms’ drive to accumulate capital is an utter success, but this will be the utter failure as the lack of broad purchasing power in the economy will diminish any future sources of growth, which can by itself negatively affect investor animal spirits and push down ad revenues for these internet giants. Add to that demographic aging and decline, and I can hardly see how the economic growth mantra shall continue indefinitely.

From the perspective of social theory, the unilateral gift economy is even worse than Marxist labor exploitation, because labor is at least compensated for part of their labor, but now we are being paid nothing for any information that we hand to the internet giants.

What is to be done? We certainly know that the endless accumulation of academic credentials or a massive jobs program are no longer sensible tools to ensure broad-based economic benefits. The removal of mass routine production jobs is probably for good. Even as we still have unmet needs in public infrastructure (roads and rail lines have been left to decay), these are temporary priming the pump mechanisms that won’t generate sustainable full employment.

I would also argue that we should stop second-guessing about finding new mass employment industries, because the goal in life is not to have a job for its own sake. Reasonable policies would be to increase paid vacation benefits and shorten weekly work hours so that we can distribute work that is not automated to a broader set in the population. This step might have to to be financed from profits, though- as Kalecki (1943) noted- a full employment equilibrium might produce higher profits as both production and consumption increases. If the market does not generate full employment (as it never does), then the state might have to step in by creating public employment financed by the giant revenues from the internet firms. Because how likely is it that Facebook will hire millions of social media app developers, which it could easily afford at the moment?

In the absence of the full employment option, there are still two other alternatives: Jaron Lanier (2013) is a supporter of so-called micro-payments, which means that we are no longer treated as Facebook’s and Google’s consumers, who are passively benefiting from their service, but we are treated as workers, deserving of financial compensation for inputting our data. To the extent, that we are wasting more and more hours of the day with those internet companies, the survival of the masses might be made possible via these micro-payments. The difficulty lies in the indeterminancy of “fair” compensation levels. Should you just be paid a flat-rate for owning an account (which almost works like a basic income), or should you be paid for the number of likes/ views you get on your post? What happens to very poor people lacking stable internet access, or people who are not voyeuristic enough to display all their life stories on social media or use other non-internet sources for gathering information? Therefore, I think that micro-payments are an interesting idea, but hard to define in practice.

So far we are still assuming that we can rely on a market mechanism to ensure the fair distribution of economic resources. But I find that perspective deeply troubling, because in a market the best networked people will earn the most income compared to those with fewer networks, thus continuously reproducing socially undesirable concentrations of wealth. Mark Zuckerberg (2017), CEO of Facebook, knows that he is not going to create millions of Facebook jobs to cushion the social dislocation of low-wage jobs or lack of jobs, so he supported the universal basic income (UBI), which is in part financed by a wealth tax that would burden people like himself and other similarly situated people. Zuckerberg frames this position as allowing people to experiment with entrepreneurship the same way he has.

It is probably true that there are a lot of people working boring jobs to keep their pensions and health care, while they really want to become independent entrepreneurs like Zuckerberg. But there are also people, who want to take it easy, spend more time with the family and work a job without the threat of being fired becoming an existential threat. But that is not inconsistent with the principle of a UBI. Only when a basic income is conditional, as with the conditional cash transfers in developing countries requiring parents to send their children to be vaccinated and to school, can we mandate desirable behavioral traits on benefit recipients. But conditional cash transfers, even if well intentioned, are still constraining the behavior of individuals.

UBI will decouple economic survival from work and wage labor and has the positive side effect that we don’t have to intervene in the labor market to ensure more job opportunities. We also don’t have to get bogged down by complicated evaluations of how many likes or how many web searches we do to get “fair” compensation. The only question that arises is whether s UBI can weaken the pillars of capitalism, which is based on the exploitation of wage labor. But to some extent, if the only economic benefit that individuals can generate is like Wikipedia, where we gift our knowledge to the broader world community, and not producing food or cars, then it should be possible to subsidize this gifting, which is not based on economic greed but the love of sharing information with others. Payment for service as opposed to payment for time can negatively influence professional autonomy (Crouch 2015). Take, for instance, the doctor, who gets more money for prescribing more medical tests to patients even if they are not medically necessary as opposed to a doctor, who gets paid a fixed salary, and autonomously decides to prescribe tests in accordance to what he/she thinks is necessary for the patient’s health.

This would suggest that it is okay for Facebook, Google, Wikipedia and co. not to sponsor our free work for them as long as those wealthy and powerful entities pay their taxes to fund a universal basic income. The question is merely whether the state actors can be convinced to embrace that solution.

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The Wind of Authoritarian Rule

While one may not be surprised that President Xi Jinping has now decided to scrap the two-term limit on his office, there is an element of discontent among the liberal portions of the Chinese society (among the Chinese overseas students, I have yet to hear an enthusiastic Xi supporter). The lack of surprise lies in the fact that the 19th Party Congress last November had not resulted in the anointing of a potential successor to Xi Jinping. While superficial observers of China may be shocked by the abolition of the term limit for the presidency, keen observers know that there is not much historical precedent for term limits. In the nearly 70 years of Chinese Communist Party rule, only the past three leaders over the last 25 years had an orderly transition.

If you want to be really strict and exclude Jiang Zemin (de facto ruler from 1989 to 2002, while his presidency was limited to after 1993), then we are only talking about the last two leaders over the last 15 years. Jiang had been the hand-picked successor of Deng Xiaoping, the undisputed Chinese leader since 1978, following on the heels of the infamous Mao Zedong, who ruled for his entire life, and his own weak hand-picked successor Hua Guofeng. Deng had the hope that by instituting collective leadership (i.e. multiple leaders within the Politburo rather than have one strongman) and term-limits on the leading positions the excesses of Maoist rule could be prevented. Jiang, thus, became the first leader to peacefully pass the power to Hu Jintao, who in turn accepted his 10 year term and handed power to Xi Jinping. Among all the leaders in Chinese history only Hu can be said to have fully complied with the term limit and fulfill the aspirations of a collective leadership.

Political scientists claim that the pursuit of a particular policy would result in path dependence, i.e. increasing returns to scale for the present system, and high costs of switching to an alternative system (e.g. electoral backlash). In the Chinese case of presidential term limits, this principle is difficult to apply, because firstly China still has an authoritarian government, i.e. does not rely on popular, democratic elections to change the rules of the game. If the party wants a change in the statute, then it will happen. Thus, the key challenge becomes how to wrest control over the party. Second, to have only two neat leadership transitions is not enough time for institutionalizing the term limit.

With the advent of a strong leader like Xi Jinping the term limit has been formally removed, and there are no visible forces within the Communist Party to challenge Xi’s leadership. The last formal challenge came with the fairly charismatic Bo Xilai, the former party chief in Chongqing, who had been removed from office in 2012 because of corruption charges and accusations against his wife of killing a foreign businessman. Xi followed up with a brutal crackdown on corruption, which no longer only targeted the lowest officials, but also high generals and party officials. Xi argued that in order to retain popular legitimacy the state-capitalistic corruption and self-dealing had to be contained, and the people supported him. But the side effect is that anyone, who could potentially oppose and challenge Xi, would also be pushed to the wayside.

Popular support for Xi

What forces allow Xi Jinping to cement his power for life? Evidently, removing his political opponents with the anti-corruption crackdown have helped his cause, but as with Mencius, the Chinese political philosopher, who stated that the ruler can legitimately rule only if he has the support of the masses, Xi can only hope to retain power if people are unlikely to want him step down. Can we infer people’s support for Xi? Social researchers, evidently, have trouble to study public opinion in authoritarian countries (already hard enough in democratic societies), because social desirability bias (or the inclination to not be punished by the state) will make respondents lie to pollsters collecting data on people’s views on the political climate. (A highly educated Chinese person admitted to me that it is not particularly safe to comment on Chinese politics via Wechat, their version of social media, which is algorithmically tracked by authorities.)

But can we infer people’s support for the current leadership? The TV interviews tend to exhibit broad Chinese support for Xi, because he is fighting corruption, improving the economic fortunes for the masses and returning China as the proud, outward-looking dragon on the international arena, which it deserves to be. Surely, people might be discontent about land grabs or environmental pollution, but the positives that the Xi administration has delivered outweigh any weaknesses. And it surely can’t be so bad that he will now get to rule for life. Isn’t that what Chinese people are used to with the dynasties lasting 250 to 300 years, handing power from father to son until conditions led to their toppling by a different set of rulers?

While for the common working class, which has escaped the worst poverty during the Mao era, economic improvement is the single most important factor for contentment with the present political system, the emerging middle class is more heterogeneous, as they might travel abroad, and become exposed to the “subversive” western influence of democracy, rule of law and strong civil society. We will turn to this point next.

Weakly developed civil society

A foreign journalist, who covered China during most of Hu’s rule in the 2000s, reported on the relative freedom that she had experienced in Chinese academia, journalism and civil society. The rather liberal and open framework for Chinese circumstances (there still were no free elections, free media or freedom of speech) came to an abrupt halt with Xi’s ascendancy to power. Civil society organizations- focused on labor, environment and social welfare that were hoping to expand- now faced much harsher conditions. They have to register with various government branches, which in turn were staffed by officials, who received directives to crack down on too much independent civil society activity. Government funding became focused on specific organizations that were most closely allied with the government, and some organizations refused funding from foreign organizations for fear of state reprisal.

The 2014 Umbrella Movement in Hong Kong resulted in a government backlash against civil society organizations. The Umbrella Movement was a culmination of popular and student-led discontent against the increasing power of Beijing, which interfered in Hong Kong’s domestic affairs despite the 1985 agreement to retain Hong Kong autonomy until 2047. After a few months, Hong Kong authorities began to crack down on the movement and put their leaders on trial. Hong Kong elections resulted in three movement members being elected, but the executives refused to swear them in for not conforming to some protocol. (The Hong Kong parliament is a sham anyway, as most members are either appointed by Beijing or by organized big business interests in Hong Kong.)

There was some spillover of protest action to the mainland, especially in adjacent Guangzhou. But more so than any practical action on the ground, the Xi administration became alarmed that there could be organized protest culminating in a challenge to the CCP power monopoly, which had to be prevented by all means. The first step was to replace the provincial leader in Guangdong to ensure that a party hardliner would hold the position. Then rules were tightened on many NGOs, some were closed down and/ or defunded, leaders were put on trial and jailed. As independent NGOs move to the defensive, some of them adjust by increasing cooperation with government officials and changing their advocacy to less politically controversial topics, but also sacrificing some of their original objectives.

The poor fate of the Chinese NGOs produces the question whether a liberal middle class is in a position to challenge the political leadership. There is no immediate indication for it, and as long as less politically active classes (e.g. workers, farmers, bureaucrats) are mostly dispersed and quiet, the liberal middle class is not in a position to challenge the party, thus ensuring further power consolidation for Xi. But there is another reason why liberal mobilization against Xi will be difficult.

 

Increasing surveillance power of the Chinese state

With the increasing uncertainty over economic growth and rising economic inequality, potential domestic discontent is on the rise. This is so much so that the Chinese government has refused to publish mass public incidents (usually protests or strikes) since 2010, fearing that the statistic could give more momentum to the regime critics. Fortunately for the regime, improvements in computer technology and the emerging field of artificial intelligence are giving the Chinese government the opportunity to surveil the population ever better.

Social movements have taken advantage of social media in order to mobilize large crowds for protest action or even just to raise awareness of political issues. While social media cannot be considered the root cause for the Arab Spring, it has catalyzed more activism than would be possible otherwise. Knowledge of foreign discontent could also provide the impetus for the Chinese middle class to mobilize discontent against the authoritarian state, or at least against undesirable trends like environmental pollution, worker exploitation or land grabs.

The reaction of the Chinese state was to delete activist posts, hire a 50 cent army to make distracting posts to inundate people’s social media walls with non-political messages, and in the most recent development indict and jail some bloggers and activists. The regime also holds a tight leash on information, ensuring that Chinese people cannot access western media sources that have often reported quite critically on the regime. The only way to circumvent the Great Firewall has been to acquire a foreign VPN (virtual private network). Generally, the government had been quite reluctant to abolish VPNs as foreign businesses insisted that it would be necessary to access an unfiltered internet. But just in the last year, the government decided to also crack down on VPNs, putting many of them out of business and banning them. While I had been in China, the VPN service was mostly reliable, but not all the time, which suggests that the Chinese state is finding ways to control people’s access to information.

As algorithmic tracking capabilities continue to increase, the state will be better capable of cracking down on what they regard as social misfits, i.e. people who can mobilize discontent against the state actors. State surveillance would not be possible if it were not for the cooperation of the major private communications firms such as Alibaba and Tencent. State officials generally approve of concentrated economic power in the private sector, but only if the party can continue to appoint high officials in those firms. Furthermore, these firms have to cooperate closely with the state and disclose all information of individual users to the state. This allows the state to imprison people, who write negative things about the regime. This strategy of state-corporate cooperation has been pursued even in western developed countries, though not as systematic as in China.

The surveillance power of the Chinese state also increases to the extent that the Chinese people become more and more dependent on their smartphones for all of their personal and commercial needs. Wechat is a single service that combines the payment of bills, communication with friends and family, online gaming, work payroll, newsfeed, booking doctor appointments, paying electricity fees, booking transportation and a so-called heat map. The heat map shows users about the number of people in a certain location, which also allows the government to monitor mass assemblies, which are generally prohibited.

While high technology use allows the Chinese to leapfrog into higher stages of economic development compared to western countries, who still use older methods of electronic payment, it also permits the state to more completely monitor the population to an extent that was not possible in the past. Even during the height of the Cultural Revolution of the 1960s, Mao Zedong had to rely on the social willingness of his Red Guard to out and prosecute the “capitalist reactionary traitors” (i.e. enemies of the regime). Now, every move that is somehow electronically recorded can make individuals liable for prosecution.

Does every somewhat liberal person in China now fear immediate prosecution by the state? Not necessarily. If the Chinese state wanted to prosecute everyone for the smallest infraction, jail cells would have to be filled many times over and the entire society might collapse. We still have to keep in mind that despite the harsh human rights regime, there are fewer Chinese in jail than in the US with only a quarter of the Chinese population. What is more pernicious than the prospect of landing in jail for criticizing the regime is the fear or expectation of landing in jail, which then re-structures people’s behavior to avoid making political statements in public or even in private messages, which are surely monitored. Another pernicious element is the extent of algorithmic power, because there are not enough state bureaucrats to monitor all people’s behavior, but if algorithms can automatically evaluate people’s messages and flag them for the police, then it will be hard for regime critics to remain under the radar.

For social scientists it is practically impossible to measure people’s extent of self-censorship. Perhaps you need to track people that were outspoken on social media and then they turn silent, but there could be any number of reasons when that happens, e.g. death or switching accounts. But self-censorship imperceptibly happens as people consciously state they cannot talk about political issues online, which had happened to me several times. I also recognize that the extensive political statements that fill my Facebook wall don’t tend to be replicated on the Wechat wall, which is mostly perfunctory political commentary and mostly non-political talk. Some Chinese friends tell me that they are socialized to not discuss politics, and that sentiment exists in some circles in my own family as well. Naturally, depoliticization of the public is a godsend for the government, which does not want to see the status quo overturned. The turn toward authoritarianism is, however, not merely restricted to China.

International examples of populist authoritarianism on the rise

In a globalized world economy with improved transportation and communication technology it is really difficult to conceive of different geographic spheres that lack interconnection. It might have been the case that the Mesopotamian, Indus Valley and Chinese civilization had each developed distinctly, but today any kind of development is embedded in a global economy and subsequently a global culture. As such, the political observer notes a rise of populist authoritarianism that transcends the borders of the nation state.

Within democratic societies, populist authoritarians generally use similar strategies of getting their way. Firstly, they wage a political campaign based on hatred toward outsiders, whether they be globalists, liberal elitists, foreign trade, ethnic minorities, homosexuals or immigrants. Interestingly, these authoritarians can get away without a positive ideology, suggesting that it can’t be worse for the masses if they are in power. If they do offer a positive vision it tends to be nebulous and zero-sum. “We will take from the immigrants and give it to you.”

Second, they aim to win the elections, which tends to be quite successful, as the popular masses are upset about a political establishment that promotes neoliberalism, i.e. more inequality, lower wages, more precocity at work, weaker social policy and more gifts for the rich. Third, once they win the elections, they gang up against democratic institutions that could criticize their policies, usually the media, parliament and the court system. Once those control institutions become compliant with the ruling government, the turn toward authoritarianism has become successful, even if it isn’t so obvious that the common people will benefit from it.

Some Germans have surely benefited from Nazi full employment policies, but firstly labor unions were prohibited under the Nazi regime, which was reflected in stagnant wages even during full employment; second all excess economic surplus was invested in the armament industry, which yields less economic benefit than other civilian economic sectors; and third, the German people were dragged into a world war, which ultimately resulted in their defeat and the death of over 50 million people.

The only reassuring trend is that we don’t have a populist authoritarian as strong or as megalomaniac as Adolf Hitler. What we will likely see in the immediate future is a continuous chipping away of freedoms and democratic institutions, as we see in Hungary, Poland, Russia, Turkey and even the United States (where president Trump had praised Xi for becoming president for life). Even in my native Austria, a supposedly stable democracy, the right-wing populist vice chancellor HC Strache has made “satirical” posts attacking the public media and journalists (ORF) as liars. His government also wants to end mandatory user fees for public media and replace it with direct treasury funding, which is a prelude to make its reporting more compliant to the government.

As more evidence of authoritarian control emerges, pro-capitalist free traders might be inclined to double down on their neoliberal version of globalization, though they are clearly on the political defensive. Disembedded liberalism, which only prioritizes corporate access to markets while ignoring citizens’ demand for economic security, has provided the necessary fuel for populist authoritarians to gain political power.

Marx has been right in critiquing bourgeois democracy in that one cannot speak simultaneously of freedom and rights for the individual and combine that with the private appropriation of the means of production. Political democracy (one man, one vote) stands in contradiction to economic authoritarianism (wealth only accrues to capitalists, not workers and citizens), which defines contemporary capitalism, whether it be of the more democratic (western) or authoritarian (eastern) variety. As the social contradictions (extreme inequality) increase, I predict a stronger pull toward authoritarianism. In other words, rather than China adopting democratic institutions, the west will increasingly adopt authoritarian institutions. The technological surveillance tools are certainly available for that to happen.

Meta-stability of authoritarian regimes

Even as neoliberalism is in shambles, the question remains whether the Chinese leadership can retain political stability. Observers, who believe in static conditions, might be inclined to argue that Xi Jinping’s power grab implies the strengthening of the political status quo. But I should remind people that history is actually quite dynamic. Over the short-term the end of the term limit means that Xi will be able to rule for the rest of his life, and we are back to a quasi-monarchical system (though without family inheritance as in the North Korean regime). But over the long term, there are dynamic social forces that could predict instability for the regime. While democratic regimes tend to adjust to the wind of popular pressure, this is much harder in an authoritarian regime, where there are no elections to capture and channel popular sentiment.

To adjust for this weakness, the Chinese government allows restricted channels for the airing of public discontent, usually in the form of petitions or a customer service department, where citizens can call in and make complaints. What is notable is that customer service representatives are instructed to not hang up on the callers and perform emotional labor to calm down the caller. The Chinese might not be so concerned about functioning democratic institutions as much as having responsive institutions in general. With the right balance of carrots and sticks, the government hopes to steer the public in ways that will maintain the political hegemony of the Communist Party and whoever is in charge at the helm of it.

But there are limits to this kind of political stability under authoritarianism. A completely stable political regime has to apply almost no coercion on the populace and receive high levels of popular approval. A meta-stable political regime has to increase surveillance and punishment to keep the public under a tight leash. In this way, the regime can maintain some political stability until the entire structure blows up and disintegrates, as had happened during the Arab Spring in many north African states. Once the military sides with the public masses on the street, the regime can no longer hold. What will provide the spark for such a social explosion? This is as hard to predict as the next economic crisis. We can talk about underlying fundamentals (e.g. economic inequality, riots, protests, house prices etc.) that favor disintegration, but we cannot predict a certain timeline. Until that happens, hail to our overlord rulers!

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The Problem of Gun Control

It almost becomes a waste of time to have another dinner conversation around another school shooting carried out by a deranged person, who had access to guns. An examination of public polls shows that there is a solid majority of the population that favors stricter gun control.

guns_poll

Source: Gallup

The relevant question, thus, becomes why the US cannot copy countries like Australia or the UK that had mass shootings that became restricted by the passage of strict gun control laws. There might be some people, who argue that the government should not take the freedom from people to own property, including guns, but to not distinguish ordinary property from guns is highly questionable, because of the potential harm to other people guns produce. And the ability to kill other people is the greatest restriction in the freedom of other people. I would scarcely deny Robinson Crusoe gun ownership rights, but the moment he joins society, we do want to minimize homicide possibilities.

Some people might respond that cars kill many more people than guns, and my logic would require the prohibition of cars too. But here the comparison to utility matters. To the extent that we have built our cities and villages in ways that make us reliant on cars to get around (as opposed to have reliable public transit), the benefit of a car is still greater than the cost of potential car crash. The benefit of owning a gun is negligible, e.g. the feeling of safety (which is more than offset by the experience of unsafety when insane people get to run around with machine guns). The second factor is intentionality, as there is virtually no one that wants to kill himself or others in a car crash, but gun deaths are in most cases purposeful, which is more problematic.

Some people would suggest that the existence of the second amendment and the popular belief in becoming safer after owning guns makes effective gun control legislation very difficult. In addition, every school school shooting seems to strengthen the irrational belief that one’s own security is increased by clutching tightly to a gun.

But these reasons are insufficient to explain the lack of movement on gun control. Gun control would include a stricter background check on the purchase of guns; the prohibition of selling automatic weapons; and a government policy to re-purchase any guns under private ownership. So why is it so hard to pass these restrictions? The power of the NRA, the National Rifle Association, makes any movement on gun policy self-defeating for politicians, who dump enormous sums of money in the electoral process to ensure that the politicians vote in the “right” way.

The absurdity of the liberal gun laws are not even challenged when one of the power holders, Rep. Steve Scalise, was shot during a baseball game. Former Congresswoman Gaby Giffords was also shot during an event. It can, thus, be said that no one is formally safe from crazy people using guns to kill other people.

The NRA naturally does not demand lighter sentences on mass murderers. In fact, they are in favor of strictly punishing gun abusers, but that can only be stated after the fact, i.e. after the mass murder happened. There are plenty of social problems in this country that create victims rather than focus on prevention. Our health care system, for instance, still makes the purchase of good health insurance difficult, and thus encourages people, who are not able or willing to make the financial trade-off to purchase insurance to wait until they become very sick before they go to the emergency room, where doctors might discover that the disease is so advanced that they can’t really do anything for the patient anymore. A preventive health care system would guarantee health care to all people, such as via a single-payer system.

A major cause of sickness in turn is the unhealthy diet of most Americans, who have to consume excessive amounts of sugar, high fructose corn syrup and fat because they happen to be cheap and convenient to get. While in Europe and Asia, obesity is increasingly becoming a major health threat too, I do notice that there are cheap alternatives that do not nearly produce the same amount of plaque around the arteries and fat on the body as in the US. Europe has many bakery shops that sell cold sandwiches with plenty of salad. China has many restaurants that dish out the balanced meals of plenty of vegetables, some meat and rice or noodles. A preventive food system would offer cheap, healthy options and make unhealthy options expensive and harder to acquire.

Subsequently, a preventive approach to mass shootings would be to minimize popular access to guns. Some people might suggest that taking away guns from law-abiding citizens goes too far, while no one would oppose background checks on mentally troubled individuals. But there are two problems with this argument. First, I might be a sane person who becomes insane as a form of affect. Second, I might be a sane person, who illegally resells the gun to an insane person. The first case is not as rare as one might think. I cite the gun violence statistics here.

In 2013, there were 73,505 nonfatal firearm injuries (23.2 injuries per 100,000 U.S. citizens),[2][3] and 33,636 deaths due to “injury by firearms” (10.6 deaths per 100,000 U.S. citizens).[4]These deaths consisted of 11,208 homicides,[5] 21,175 suicides,[4] 505 deaths due to accidental or negligent discharge of a firearm, and 281 deaths due to firearms use with “undetermined intent”.[4] Of the 2,596,993 total deaths in the US in 2013, 1.3% were related to firearms.

Source: Wikipedia

In the second case, it might be hard to measure because it is an illegal activity, but the possibility is just there compared to when most people cannot acquire guns. Critics will object that insane people can still acquire guns regardless. But the relevant comparison is not to a perfect society, but to a society that prohibits guns to the masses, and you will see that most countries with the stricter gun laws have fewer gun deaths, which suggests that in those cases insane people are less likely to have access to guns, and that itself is a justification for stricter gun laws.

What might change the dynamics on gun laws? It is hard to say, but without public mobilization it will be impossible. Mancur Olson had pointed out that the beneficiaries of a dysfunctional policy are small in number and are part of a concentrated organization, while the losers are many in number, the cost is widely dispersed and it is hard for the multitude to mobilize on any particular issue. Not all hope is lost, though, because there has been a limited gun control law in 1994, which was allowed to expire in 2004, but with changing circumstance it does become possible to rein in guns.

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What’s the Problem with the Universal Basic Income?

Ian Goldin (2018) claims that even with accelerating technological change and the displacement of workers, we should not introduce a universal basic income (UBI), which he had called a “red herring”. I counter, in brief, that while his concerns about the UBI are valid, his reasoning is insufficient to reject UBI as a necessary social policy tool to mitigate the problems in the labor market and society we all acknowledge. Let us examine his arguments.

UBI is financially irresponsible

Essentially, UBI is really expensive and would result in enormous tax increases. The proof is in the pudding, though. The more generous the UBI is the higher the taxes would have to go and the less sustainable the policy becomes. If our national GDP is 60,000 dollars per capita, I would doubt that the UBI per person can equal to 60,000 (we are assuming non-inflationary payment of the UBI), as there has never been an economy that exactly consumed what it produced. If we reserved a quarter of the national income about 15,000 dollars as a basic income payment that does not sound too bad, and will leave enough income for other purposes like investment. Naturally, the role of the state will have to increase, and to some extent we have gotten used to the state taking up nearly 40% of the national economy, in some European countries even more than half. Fair accounting of UBI would also have to mention other social programs that are folded into the UBI. In other words, these other social programs are either eliminated or reduced in size once the UBI exists to take care of people’s needs.

I don’t advocate for the most right-wing interpretation of the UBI, as is formulated by Charles Murray. 10,000 dollars for everyone annually, and then get rid of all other social spending. In that case, social spending by the government might be expected to stay the same or fall, and that would be a very regressive perspective, as declining social wages for poor people means that the 10,000 dollar UBI grant they get will quickly be spent before the year is over (e.g. expensive kindergarten for families with young children), and we have not done anything to reduce poverty or insecurity. A basic pension granted via social security may very well become displaced by the UBI, because UBI is an expansion of social security to all individuals rather than only old people. With Food Stamps, we might have to see whether it will lower the standard of living of current recipients if it gets cut. For health care, it obviously makes no sense to privatize it, when single-payer health care systems all over the developed world have done a great job in curing people’s illness without bankrupting them (as in the US).

UBI will lead to higher inequality and poverty

The reasoning here is that the displacement of targeted economic transfers (unemployment insurance, disability and housing benefits etc.) with a UBI will disproportionately help the rich more than the poor. A billionaire does not get unemployment insurance, but he will surely get a UBI, which would be a waste of resources. But among social policy scholars, there has long been the paradox of redistribution in that earning-related social insurance tend to be more effective than poverty-targeting or flat-rate benefits (Korpi and Palme 1998). Thus, poverty-targeted programs that lack the broad middle class support do not necessarily help in redistributing income and reducing poverty. either Granted, UBI is a flat-rate benefit and might not dent inequality. Imagine an inflation-adjusted UBI paid out into eternity which does not change the amount of goods you can buy with it, but productivity continues to rise and the Zuckerbergs and Gates of the world continue to make their fortunes. For UBI to make sense, the state would also have to raise more taxes on capital, which also forms the basis for raising the UBI with the rate of productivity rather than just by inflation. If we don’t want to sacrifice the U in UBI, yet hoping to dent inequality, the UBI will have to be supplemented by other government policies, and I reiterate my opposition to the Murray position that restricts all social policy to solely UBI.

UBI will undermine social cohesion

Work is identity-forming and creates social integration, while the subsidization of non-work via UBI will foster laziness, moral decay, the break-up of families, crime and drug addiction. He cites the US as an example where the contemporary inexistence of work among some social quarters has produced that outcome. But the US is a strange example to pick, because it does not have a UBI, and for his reasoning to be effective, Goldin has to pick an example where the UBI contributes to less work and to social disorder. Right now we only know that less work leads to social disorder, a point that is well-taken. In the absence of solid evidence to the contrary, we might argue that the UBI will encourage economic activity (or at least not reduce it). Perhaps not of a wage-labor kind, but there are two other economic activities that might increase: entrepreneurship and volunteer work.

Today, there are wannabe novelists toiling away as corporate accountants, because that is the best way to pay their bills. Naturally, if you have a Protestant inclination and argue that any work is better than no work, an accountant is a fine way of making a living, but for that wannabe novelist it is a huge opportunity cost. They are wasting their time crunching numbers in the office, when they could have spent that time typing their novel. Perhaps society would enjoy such a novel if only that person were paid a UBI, and can afford to point the middle finger to a boring, meaningless job. Entrepreneurial ventures, whether it is writing a book, selling and designing skirts or inventing a new twist to barbecue sauce, can become possible with UBI, which will actually enhance economic life. People can also afford to volunteer for after-school programs for kids or old people’s homes, which incidentally reduces the social cost for caring for kids and old people, because volunteers are not necessarily paid a wage.

Unstructured lives may very well lead to social dislocation and disorder, but it is questionable why most people receiving the basic income would have to fall into this trap. Community centers and NGOs have to become more proactive in offering meaningful activities for an unemployed population, but let us not forget the basic premise of the UBI: the lack of good job opportunities because of technological displacement. It is given the lack of good employment options that the basic income is needed as social stabilizer.

UBI undermines incentives to participate

In other words, UBI creates dependence on the welfare state rather than independent living. But the reality under contemporary capitalism is that independent living is made impossible for people, who lack affluent parents or a huge stock or real estate portfolio. In that context, why is UBI defined as dependence on the welfare state rather than freedom from capitalist control? One may argue that the expansion of the social safety net with a UBI means an empowerment of the public bureaucracy, which is another monster of rationalized modern existence besides the big corporation. But UBI would work similarly to Social Security in that the benefit administration that is tasked with administering the payout of the UBI is much smaller than the drug-testing welfare bureaucracy and other shenanigans invented by right-wing administrations. Therefore, we should not underestimate the importance of positive freedoms that can be afforded only by the attainment of material security, which is at most precarious for wage laborers under capitalism.

UBI postpones discussions on the future of jobs

Goldin thinks that discussions of the UBI distract from necessary changes to a bad labor market and the promotion of things like shorter work weeks, part-time work, reward for tele-working and the promotion of caring and creative industries. But if you believe in my foregoing discussion of people becoming liberated under UBI to pursue caring and creative work, then this argument collapses in itself. Besides if we think that the low quality jobs originate from worker inability to say no to bad employment relationships, then the introduction of a UBI would naturally force employers to offer better wages and working conditions to attract enough workers.

But let us assume the correctness of the premise of the argument, namely that UBI distracts from bad employment relationships and these relationships stay bad, because employers know they can pay their workers little and they will still survive because of the UBI. That would, indeed, be a less than desirable outcome, but the relevant comparison is not some ideal utopia but the present moment of bad employment relations without UBI, and I prefer a world with bad employment relations with a UBI to one without UBI.

I do understand the argument that UBI is a cop-out for the political impetus to improve work relations, which is part of the reason that trade unions tend to view UBI also quite skeptically, but here I want to question the moral premise of our social economy: is our desire to create ideal employment relationships or to live a good life? And if I say good life, I don’t mean pure hedonism and the pursuit of frivolity, but the ancient Greek idea of minimizing work and pursuing leisure for the increase of knowledge, friendships, social relationships and the admittedly ill-defined ‘virtue’ (which I won’t define here). I would prefer the latter.

I don’t detest all notions of work. Let us reflect again what we mean by work, which I treat separately from a job. Work is the activity requiring physical, emotional and mental exertion to produce something of value to somebody, which may be hunting animals for food, growing crops for food or loading carts with merchandise in a retail store. This is tied to human activity from the beginning, which may co-exist with leisure and we shall pursue as long as humans exist. A job is a social formation, where one group of people works for somebody else for hire, and has existed for extended parts of human history, but radically took off not until the Industrial Revolution. The job is thus a particular historical formation that is built on domination and exploitation, because there are people who provide the work, and there are other people who benefit from the work thanks to their ownership claims over the means of production.

If the UBI has the capacity to kill the job- a prospect that Goldin and others seem to detest- then go ahead with the UBI. If UBI maintains bad jobs, we at least no longer struggle with existential problems and the unrestrained power of our bosses. Though I cannot confirm my suspicions, it is for that reason, perhaps, that anti-UBI ideologues are so fierce in their stance: don’t mess with the social order of the status quo!

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Why Did South Sudan Split From Sudan?

It was a total puzzle to me why this large country called Sudan suddenly decided to split itself in 2011, thus ushering in a new country of South Sudan. Foreign investors were happy nonetheless as they rained into the country to grab the most desirable farm land for their own purposes. On the face of it the split between the two parts is based on different tribal affiliations, as the north was mostly Arab Muslim and the south was mostly sub-Saharan African with Christian and animist beliefs. The political mobilization based on tribal affiliations has long plagued Africa, and Sudan has been no exception to this worrisome trend, but there are other noteworthy creases in Sudan’s history. In addition to tribal divisions based on ethnicity, race and religion, Sudan has also been plagued by a permanent economic crisis, an incompetent, corrupt political leadership and continuous civil war.

There has been an extended history of foreign domination in Sudan. Sudan is immediately to the south of Egypt, and has thus benefited from the Egyptian civilization. The Nubians were one of the original rulers in Sudan (3,000 BC) until the Assyrian army under Sennacherib defeated the Nubians in a military campaign around 700 BC. By the sixth century AD, there were three successor states to what was called the Meroitic Kingdom: Nobatia, Muqurra and Alawa. Christianity spread to that region and a little later Islam. Islam primarily spread via Arab merchants marrying into the local population. There was a material interest for the population to convert to Islam, as they did not have to pay taxes to the king. What is now called northern Sudan is still the result of a mixture of Nubian and Arab culture, while the south was made up of east African tribes and ethnicities.

In 1821, the Ottoman ruler of Egypt Muhammad Ali invaded and conquered northern Sudan, and promptly worked on improving the country’s infrastructure. Over the course of the nineteenth century, the European colonial powers had increased their influence over the region, and in 1879 they initiated a coup against Ismail Pasha, the Ottoman Khedive of Egypt and Sudan. The desired successor Tewfik Pasha turned out to be a corrupt and bad ruler, which incited the Urabi Revolt. The British used the revolt as a pretext in 1882 to formally annex Egypt, while leaving Sudan under Pasha’s rule. Sudan was badly managed, as taxes on farms became unbearably high, and European initiatives against slave trade adversely affected the Sudanese economy. The Mahdists, a group of Sharia-law supporting forces led by Muhammad Ahmad ibn Abd Allah, became popular and successfully conquered Khartoum (capital) and Sudan. The Mahdists promptly planned conquests of neighboring states (Eritrea, Ethiopia, Egypt), but each time were repelled by the European forces. By the 1890s, the British have had enough and they defeated the Mahdists in a military conquest in 1898. The British were acting under the indirect pressure of the French and the Belgians, who were also interested in controlling the Nile, and so the British had to be quick to snap up Sudan as well.

But British colonization meant new challenges, because Egypt and the Ottoman Empire had insisted in a union between Egypt and Sudan, while the British wanted to prevent any strengthening of potential adversaries, so they were intent on keeping the two countries apart. The British also separated Sudan into a northern and a southern province, which was in effect from 1924 to 1956. The game changer was in 1952, when the Egyptian revolution restored independence from British rule. The Egyptian leaders Muhammad Naguib and Gamal Abdel Nasser abandoned sovereignty claims on Sudan, but nonetheless demanded the full independence of Sudan from British rule. The British continued to support Abd al-Rahman al-Mahdi, but his regime suffered from political mismanagement as well, which reduced support for the regime. In 1956, the British relented by allowing the Sudanese people to vote on an independence referendum.

The first prime minister of the newly independent Sudan was Ismail al-Azhari, but his regime was not stable and a new faction led by Abdallah Khalil took over forming a coalition between Umma and PDP (People’s Democratic Party), the two political parties formed post-independence. Umma wanted more foreign aid and a strong presidential constitution, while the PDP objected to foreign aid as a form of undue foreign influence and did not want to empower the president. Factionalism, corruption and vote fraud dominate political life. A 1958 military coup led by Ibrahim Abbud and Ahmad Abd al Wahab ended democratic governance. The military regime was briefly boosted by scrapping the high cotton price policy, which made Sudanese cotton exports too expensive to be competitive, and ending Nile water disputes with Egypt. Nonetheless, the Abbud regime was not stable either as they neither implemented an economic development strategy nor were they able to prevent coup attempts against it. The fatal mistake of the Abbud regime was to suppress Christianity and its support of Arabizing the south of the country, which alienated the non-Arab south. Thus, the political conflict between the central government in Khartoum and the southern province became the defining feature of political tension that culminated in two lengthy civil wars and South Sudan’s independence in 2011.

Popular discontent unloaded against Abbud, which was reinforced by civil servants, teachers and students were unhappy with Abbud’s education and economic policies. Abbud resigned amid political pressure and appointed a non-political civil servant, Sirr Al-Khatim Al-Khalifa as prime minister in 1964. A scheduled 1965 election lacked overall political legitimacy as the PDP and SCP (communists), two major parties boycotted the vote because the southern security situation was so bad that ballots could not be held. The Umma and NUP under Muhammad Ahmad Mahjub took power, and quickly worked to pacify unrest in the south, yet that meant using the military to crush organized protest, which increased southern resentment against the Sudanese military. Mahjub was replaced by Sadiq al Mahdi, who was replaced by Mahjub again. The two men, both leading different factions of Umma, clashed with each other, as the country had two government for a brief time. The situation was resolved when a new parliamentary election removed Sadiq from his seat.

In 1969, there was a second military coup d’etat led by Col. Gaafar Nimeiry. Socialists were a substantial force within the military government. Conservative forces called ‘Ansar’ resisted the new military government, and their Imam al Hadi al Mahdi demanded a return to democratic government, which resulted in a battle between Ansar and the Sudanese military, which was won by the military. Nimeiry, the military leader, then turned against the Marxists and socialists by putting trade unions under national control and suppressing the communist party (SCP). Several Marxist factions within the military led by Major Hisham al Atta then tried to overthrow Nimeiry in 1971, but he was restored to power. Nimeiry was determined to end the southern insurgency led by the Southern Sudan Liberation Movement (SSLM) by granting more political autonomy to the south and by promoting its economic development. With the help of Ethiopia’s Emperor Haile Selassie, the two sides reached an agreement called the Addis Ababa accords in 1972, which created a regional government in the three southern provinces of Sudan and strengthened southern representation in the central government in Khartoum. To appease the Arab Muslims in the north, Nimeiry also reaffirmed Islam as having a special position and granted administrative decentralization in the northern provinces. Nonetheless, many Arab Sudanese were offended by the agreement with the south and leftist students also opposed the government. A coup attempt by the Muslim brotherhood/ Ansar in 1976 was thwarted by the military.

In 1978, Nimeiri tried a return to parliamentary rule, but the elected representatives in the assembly defected from party discipline and furthered their own financial interest over that of the country. Continued corruption undermined Nimeiri’s legitimacy, who subsequently returned to a more dictatorial leadership style of imprisoning opponents and dissidents without trial. To counter the growing political power of the south, he redivided the south into the three old provinces and suspended their assembly in 1983. A little later, he imposed sharia law, which was resented by secular Muslims and non-Muslim southerners. By the end of 1983, the next civil war began. Nimeiri was ultimately toppled in 1985 as rising food, gasoline and transport costs brought people out on the streets. The coup was led by General Abdel Rahman Swar al-Dahab, who then promoted Sadiq al-Mahdi to become prime minister after elections.

Sadiq was a weak leader, who had already been deposed back in 1969. His Umma, DUP, NIF and 4 southern party coalition was internally divided, while corruption scandals bogged down any effective governing and worst of all did not resolve the civil war. The DUP was intent on signing a cease-fire agreement with the southern party (SPLM), which would also have ended sharia law and lifted the state of emergency, but NIF rejected the deal. DUP then pulled out of the coalition, which infuriated the military generals, who wanted to see terms to end the civil war. Under military pressure, Sadiq then invited DUP back into the government and vowed to implement the DUP-SPLM cease-fire agreement, but the government was too weak to implement the ceasefire. In 1989, Lieutenant General Umar Hassan Ahmad al Bashir then overthrew the Sadiq regime, though he was not a very peaceful ruler himself, as he pushed for the continuation of sharia law, which was not acceptable in southern Sudan that was barely Muslim. Bashir called out the Revolutionary Command Council for National Salvation to rule Sudan, which was dissolved in 1993 upon which Bashir became the president. Bashir has continuously ruled Sudan since his takeover, and has been indicted by the International Criminal Court for genocide, war crimes and crimes against humanity in Darfur. His presidential term runs until 2020. Bashir is no less corrupt than his predecessors, as he transferred 9 billion dollars from the public treasury into foreign bank accounts.

In addition to the civil war with the south, which had displaced over 4 million southerners, the western province of Darfur also became engulfed in a rebellion in 2003 led by the Sudan Liberation Movement (SLM) and the Justice and Equality Movement (JEM). SLM and JEM had accused the central government of economically neglecting the Darfur region. Arab militias (Janjaweed) supported by the central government committed atrocities and killings of many people, and the rebels also killed many people. Only in 2004 was there a ceasefire agreement, between the different parties, which was monitored by the African Union and the Ceasefire Commission. Rwanda and Nigeria dispatched troops to ensure the ceasefire. Sudanese militia attacked villages in eastern Chad, which induced Chad to fight a war with Sudan at the end of 2005, which was not ended until 2010. The Darfur conflict ended in 2010 as well, though there continue to be millions of displaced people in camps.

With the southern provinces the situation stabilized somewhat with the peace treaty of Nairobi in 2005, which would grant 6 years of autonomy to southern Sudan followed by an independence referendum. Income from the oil fields should be shared. Islamic law would continue in the north, while in the south it was decided by the local assembly. The January 2011 referendum in the south approved independence and on July 9, 2011, South Sudan became an independent country with Kiir Mayardit as first president. Bashir accepted the independence vote, but fighting broke out in Abyei, a territory along the border of both countries and claimed by both. Both sides then decided to demilitarize Abyei and deploy Ethiopian peacekeepers.

This account of Sudan’s history shows that the South Sudanese independence likely made sense. Since independence in 1956, Sudan had been almost continuously in a civil war. The first ranged from 1955 to 1972, the second ranged from 1983 to 2005. The first civil war had killed 500,000 people, of which 4 out of 5 were civilians. The decade of peace in the 1970s, was not really peaceful, as there were continuous incursions from the north, which resulted in mutual hostilities. The resumption of open conflicts with the second civil war resulted in 1 to 2 million deaths, again mostly civilians whose economic lives became disrupted with the war, which resulted in starvation. The two sides were too different: the north was Muslim, Arabic and lighter skinned, while the south was sub-Saharan, east African, darker-skinned and English-speaking. The north monopolized political positions, and the exclusion of southern elites in the leading posts of the bureaucracy created sufficient alienation to mobilize the south for civil war and the quest for independence.

Another sticking point is the existence of oil reserves, which are mostly concentrated in the south (75%), yet the oil pipelines and refineries connecting to the Port Sudan along the Red Sea are in the north. Given the desert conditions in the north of Sudan, the central government had good reasons to retain authority in the south. With the southern independence, the north has focused on drilling more in the oil fields they still have and also exploring the Red Sea deposits. Post-independence both sides still rely on each other, because the south has the oil fields and the north has the refineries and the port. Sudan still has the upper-hand as final sellers, they determine the price. Although there is a certain quota that has to be shared with South Sudan, Khartoum can effectively screw the south by misreporting prices and skimming from the top. 90% of the foreign exchange is earned by the sale of oil (Business Insider 2011), which would be fine if there were existing political institutions to responsibly shepherd these abundant natural resources, like in Norway. In Sudan, a substantial share of the oil revenues is siphoned off by officials. South Sudanese president Salva Kiir admits in a letter to his officials, “An estimated $4-billion are unaccounted for or, simply put, stolen by current and former officials, as well as corrupt individuals with close ties to government officials.” (Globe and Mail 2012) Foreign oil corporations, who provide the equipment and investment, are also the primary beneficiaries of the two countries’ oil wealth. Most recently, China has become the largest importer of Sudanese and South Sudanese oil, indicating a shift in global political relations.

Cross-border clashes continued after South Sudanese independence. In March 2012, South Sudanese forces seized Heglig oil fields, which are claimed on both sides. A few weeks later, they withdrew as the Sudanese Army seized the oil fields. On the other hand, bilateral tensions have been restricted to border clashes, while for the multi-ethnic South Sudan it meant that there was no longer any Arab opponent to fight against. With the lack of a common enemy, internal tribal divisions in South Sudan broke out with a vengeance. Since 2013, the political power struggle between president Kiir and his former deputy Riek Machar engulfed the country in the South Sudanese Civil War. The UN put pressure on Kiir and Machar to end their conflict, and in 2016, Machar was invited back to the capital Juba to take up a post as vice president. The power-sharing agreement failed as violence broke out in Juba, and Machar was forced to flee the country. Out of a population of 12 million people, 3 million had become displaced and 300,000 have died with the number continuing to rise. Although Kiir and Machar have supporters from each tribe, Kiir is an ethnic Dinka (38%, largest ethnic group) and Machar is an ethnic Nuer (27%, second largest ethnic group), thus pro-Kiir government troops tend to target Nuer and the anti-government rebels tend to target the Dinkas.

The deeply entrenched tribal divisions along race, ethnicity and religion along with a permanent economic crisis, an incompetent and corrupt political leadership and near permanent civil war explains the break-up of Sudan and continued political instability. As with the problems of post-colonialism after independence across sub-Saharan Africa, creating a new country does not solve underlying political problems and the fighting will rage on.

 

Further Readings

https://en.wikipedia.org/wiki/Sudan

https://en.wikipedia.org/wiki/History_of_Sudan_(1956–69)

https://en.wikipedia.org/wiki/History_of_Sudan_(1969–85)

https://en.wikipedia.org/wiki/History_of_Sudan_(1986–present)

https://en.wikipedia.org/wiki/First_Sudanese_Civil_War

https://en.wikipedia.org/wiki/Second_Sudanese_Civil_War

http://www.businessinsider.com/sudan-oil-production-2011-2

https://en.wikipedia.org/wiki/South_Sudan

https://en.wikipedia.org/wiki/Omar_al-Bashir

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