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2016-05-10 08:03:11
The death of reason
May 4th 2016, 15:13 by Buttonwood
WHEN historians come to write about the 2016 Presidential election, one moment
may stand as emblematic of the Republican primary campaign. It occurred on May
2, when Ted Cruz confronted a Trump protester in Indiana. Mr Cruz, a debating
champion who has been an advocate before the Supreme Court, made point after
point about the gap between Mr Trump's public image and his record and private
rhetoric. He might as well have been speaking Swahili. The protester is openly
mocking in his attitude, countering detailed points with cries of "Lying Ted".
Mr Cruz, who has spent a career pandering to the conservative fringe on issues
such as gun rights or Obamacare while denouncing the establishment, found that
he was dismissed as yet another member of the elite; as a populist, he had been
literally Trumped.
Sloganeering has always been part of elections, of course; remember "Yes, we
can" and "Hope and change". But Barack Obama (and his opponents, John McCain
and Mitt Romney) also offered detailed policy proposals in their campaigns that
they had to defend in debates. It is far from clear what Mr Trump believes in;
where he has concrete policies, such as on the economy, they are completely
implausible. His supporters aren't interested in the details; it is the broad
sweep (anti-immigration, isolationist) that they like along with the impression
of decisiveness that he creates. In that sense, his appeal resembles that of a
Latin American caudillo, or strongman.
When the ancient Greeks contemplated the idea of full democracy, they worried
that emotional appeal, rather than reason, would sway the crowd. Plato wrote
that
Popular acclaim will attend on the man who tells the people what they truly
want to hear rather than what truly benefits them
That phrase might have been invented for Trump. Plato also worried that
an excessive desire for liberty at the expense of everything else is what
undermines democracy and leads to the demand for tyranny. A democratic society
in its thirst for liberty may fall under the influence of bad leaders
Of course, Plato was an unabashed elitist who believed that societies should be
ruled by specially-chosen "guardians". But the idea that there needed to be a
filter between the popular vote and political power survived into modern times;
it can be clearly seen in the writings of the founding fathers. The Senate was
unelected until the 20th century and expected to act as a check on the
democratically-elected House; the electoral college was also supposed to let
the great and the good exercise influence over the choice of President. These
filters dropped away but until recently, the party elites still exercised some
control over the primary system through endorsement of candidates and
fund-raising. In Britain, party leaders always needed the support of their
elected MPs. The success of Trump, and Jeremy Corbyn in last year's Labour
leadership elections, has swept away those lingering vestiges of elite control.
Jolly good, many may say. Not only was the old system undemocratic but the
elites completely cocked things up, opting for a disastrous war in Iraq and
allowing the financial sector to crash the economy in 2008. On the other hand,
one shudders to think what might have happened to the US economy had Congress
listened to voters and refused to bail out the banks under George W. Bush or
push through a fiscal stimulus under Obama in 2009.
It is also worth noting that both the US primary system, and the system for
electing Britain's elected leader, involve the selection of candidates by party
members, rather than the wider public. The result may easily be a candidate who
appeals to the most committed voters but not to the independent, or swing,
voters who decide the election. Old-style party elites, who had been through a
few election cycles, probably had a better idea of which candidates would
appeal to the public. They may also have had a better sense of whether the
candidates, in private, have the same personalities as they present in public;
Mr Cruz's inability to unite the anti-Trump forces clearly owed something to
the fact that party leaders (such as John Boehner) dislike him so much.
There are moments in history, of course, when the old political and economic
consensus breaks down, and a new world view emerges. The 1932 presidential
election is a good example when the activist approach of Franklin Roosevelt
swept aside traditional small government Republicanism or the 1979-1981 period
when the conservative free-market Margaret Thatcher and Ronald Reagan came to
power. But these moments tend to be preceded by a change in intellectual
thought; it is not so much that experts are swept aside but that new experts
replace the old. There is no sign that Donald Trump is drawing on any
intellectual tradition at all; no groundswell of research arguing for building
walls, deporting migrants or trade wars with China. A conservative thintank,
for example, finds that his deportation plan would knock 2% off GDP; his
combimnation of tax cuts for the rich and tariffs (higher prices on imported
goods bought by the poor) would widen the inequality that many of his
supporters are concerned about.
Indeed, this is the big worry for the economy, and for investors, when it comes
to November's election. Some may feel that Trump the President will do none (or
few) of the things that Trump the candidate has proposed. But of course that
means we have no idea what he will actually do, and uncertainty tends to be
what unsettles markets most. On that basis, the only thing we have to go on is
the candidate's temperament, and here the bullying, the insults and his
willingness to spread conspiracy theories are all very worrying. Political
leaders are endlessly tested by "events, dear boy, events" as Harold MacMillan
remarked; if their instant reaction is based on emotion, rather than reason,
that should worry us all.
Congress and the Supreme Court may block some of Mr Trump's domestic policies
(although his tax cuts will probably get through). Presidents have more scope
when it comes to foreign policy which is not reassuring. Again, his electoral
appeal seems to be linked to the idea that he will be "tough", except when it
comes to Russia's Putin with whom he will cut a deal. This looks like a
dangerous combination. A free hand to Mr Putin in eastern Europe could lead to
all sorts of mischief in former Soviet states, and the weakening of the western
alliance. And acting tough sounds good but if the other side's leaders have the
same approach, tensions can quickly escalate. China's leaders have a
nationalistic public to appease; they will not retreat if a trade war starts.
In this sense, Mr Trump is symptomatic of the rise across Europe of more
nationalistic politicians; in Hungary and Poland, they have come into power. A
shift from "love thy neighbour" to "loathe thy neighbour" makes international
cooperation more difficult. But international cooperation is essential for
tackling all kinds of problems from tax evasion though migration to terrorism.
Such deals can only be reached if leaders compromise. But if leaders like Mr
Trump see compromise as a sign of weakness (and encourage voters to think the
same) deals will be impossible. That will make action impossible, ensuring
global problems only get worse, and adding to the sense of public fury at the
incompetence of the elites; a vicious circle.
Trust, compromise, reason these are the elements that allow societies to
function and have allowed, since 1800, what Deirdre McCloskey calls "the Great
Enrichment" to occur. Belief that one man's hunches and facts plucked from the
internet will provide a coherent alternative is the most irrational approach of
all. Investors, who should be rational beings, ought to be very concerned.