28 September 2019
My work has its origins in experiences and people who influenced me. The first had to do with protests. My mother took me and my sister Alice on civil rights marches in the 1950s and early 1960s when we were very small. To our embarrassment, she dressed us up and dressed us up alike!!! She wanted to show that middle class American whites were in favor of fundamental changes in the treatment of people of color and the poor. Thus, I learned early on that governments and laws often fail to serve all of their populations equally. I also learned how polarized the U.S. is; there are deep seated disagreements, often involving very different notions of who our enemies are. These lessons were reinforced by my involvement in the anti-war movement during Vietnam and, particularly, by the black eye I was given by the police who rioted against peaceful demonstrators at the Federal Building in Boston in 1971. Perhaps not surprisingly, my dissertation focused on the complexities of the police as both an arm of state coercion but also as workers with serious wage, benefit, and safety issues.
The second major influence was a set of books my father gave me only a few years after my first civil rights march. The Lanny Budd series by the socialist Upton Sinclair began to provide a framework for understanding the questions I had about politics and economics; they also gave me an appreciation for history and for the very distinctive, often contradictory, perspectives individuals from different backgrounds can have on the same events.
The third set of formative influences came from teachers, mentors, collaborators, and other members of my family, including my husband, sister, nephew and niece. I’ll weave in their contributions as I proceed through my lecture. But let me here and now publicly thank all of you who provided tools for seeing the otherwise invisible and whose arguments with me propelled me to think more deeply and clearly. Some of you are here, some of you are gone. Some will be mentioned by name and some not. But know I appreciate all.
My experiences, mentors, and challengers all served to deepen my interest in the interaction between governments and citizens. This made me particularly alert to the reasons for willingness to comply with government demands in the absence of or in spite of coercion. That led me to a concern with what it means to be a trustworthy government and if there’s more than trustworthiness involved in being a legitimate government. In much of my work, the quality of governance is key to understanding when citizens will behaviorally consent with extractive policies, such as taxes or conscription. I later turned to when the quality of governance matters for costly actions on behalf of those who cannot directly reciprocate, what creates what John Ahlquist and I have called an “expanded community of FATE,” those with whom we perceive our interests as bound and with whom we are willing to act in solidarity even at some personal sacrifice. Now my obsession is how to use what I’ve learned to help generate a new political economic framework, one that my collaborators and I call a moral political economy. I will touch on each of these questions in what follows.
Frankly, it is easier to measure and observe dissent or non-compliance than active consent. And sometimes it’s difficult to observe either. In Of Rule and Revenue, I wanted to understand the reasons for the variations in revenue extraction over time and place. My case studies ranged from Ancient Rome to contemporary Australia. I thought I would find that the main driver of rulers’ policies would have to do with efficiency and transaction costs. I learned instead that as important as economic transactions costs were, political transaction costs were far more important. They have to with the bargaining power of those being asked to pay and the process of winning acquiescence.
Let me give you an example of bargaining problems: When Philip the Fair, King of France from 1285-1314, did not go to war but kept the revenues he had demanded from the barons in support of war, he had a very hard time with subsequent asks. He had to offer more and make his promises credible. Let me also illustrate some costly forms of resistance when rulers tried to impose extractions rather than win compliance to them. Tax collectors in the Roman Empire had to fear for their lives when they worked in colonized areas; so did French tax collectors when they went to villages that did not fully accept the monarch’s right to demand extractions. And a number of U.S. provost marshals, those who were registering young men for the army during the Civil War, were murdered in the process.
As the citizenry gained more say, the problems for rulers became even more complex. When the first income tax was introduced in Britain in 1799, it required government to extend its negotiations about revenue extractions to a broader population. To gain acceptance of the income tax, parliamentary leaders had to promise not only a return from the taxes to the society, they also had to convince the public that the taxes collected would actually go to the government and not the pockets of the tax collectors. And—echoes of the debates today over social media—they had to provide assurances of protection of privacy. This last resulted in a public burning of all the tax records, as required by parliament—although, I should add, the bureaucrats did, it turns out, keep secret copies in the basement of the tax authority.
I discovered that where revenue extraction was most productive, it relied less on coercion than on activating a sense of duty or ethical obligation. There is no way to monitor sufficiently the entire population. Successful revenue extraction depends on achieving quasi-voluntary compliance, that is a willingness to comply but with coercion in the background. To achieve quasi-voluntary compliance requires confidence that government:
1) has both a commitment to and a capacity to deliver its part of the fiscal contract with its citizens and subjects;
2) has a system of extraction that is fair according to the standards of the day; and
3) can credibly commit to locating and punishing free riders.
The point of this last is to encourage those of us who think it is ethically right to pay taxes to do so. Unless we feel certain that we will not be suckers, complying with extractions when almost no one else is, our protective self-interest will trump our ethical and society-oriented preferences. Thus, the capacity of government to identify and punish defectors is a critical aspect of what constitutes a trustworthy government.
I couldn’t totally prove the importance of the voluntary component of compliance in my book on revenue collection in part because I had information primarily about government choices and in part because there are so many incentives to hide income and wealth. So I had to look for a citizen behavior whose variation I could observe. That led me, in Consent, Dissent, and Patriotism, to consider responses to government demands for volunteering for military service and compliance with conscription. I investigated this issue in six states over 200 years—Britain, U.S., Canada, Australia, New Zealand and France. Among my cases was a study of the very different attitudes of anglophone and francophone Canadians towards the world wars. In Ontario, young men were willing to make great sacrifices and risk their lives in the war effort. In Quebec, they were not. The primary difference lay in their attitudes towards the federal government. For the anglophones the state was relatively trustworthy; it kept up its part of the social contract with citizens and was reasonably fair by the standards of the day. The francophones had a very different view. They believed the Canadian government was continually breaking the agreements embodied in the terms of confederation: to treat all citizens equally and to provide real bilingual schools in anglophone Canada. Most important at that moment was the requirement that going to war—let alone considering conscription—could occur ONLY when Canada was directly under attack. These two distinctive ways of viewing the state resulted in very different behaviors in the two provinces:
• Significant volunteering for military service and then support for conscription in Ontario
• Very little volunteering and significant resistance to the draft in Quebec.
Here’s the rub. It is very difficult to observe what people really believe or feel about their governments. So how do we go about getting at the willingness to comply in instances where behavior is not easy to decipher. While I did a pretty good job of figuring that out in the military service cases, it was not an easy task. It required a process of inference based on deep knowledge of the history, ideologies and revealed preferences of populations, in other words, a deep understanding of context.
Moreover, it also required that I have a model that would enable me to assess whether my interpretation of complex historical events was plausibly correct and not a just-so-story. What guided me in my research in both of these early books—and to this day—were versions of rational choice and game theory (although pretty off the shelf game theory, given my tool box). However, this was rational choice modified by my recognition that people have norms, ethics, emotions, and communities that influence their decisions. They are not motivated only by economic interest; indeed, they sometimes act against their self-interest.
As it turns out, my methodological instincts were shared with a group of people who came together at the Center for Advanced Study in the Behavioral Sciences (CASBS) in 1993-94. We were a group of economists, political economists, and economic historians all deeply influenced by Douglass North, who was to win the Nobel Prize that year, and all interested in comparative and historical understanding of the state and of social order: Bob Bates, Avner Greif, Jean-Laurent Rosenthal, Barry Weingast, and myself. My book on conscription was slowed down and much improved by my conversations with my collaborators, but we also produced a joint book, Analytic Narratives, that outlined our shared methodological approach. Using game theory gave us a means to develop counterfactuals, that is, an alternative possible history. But its most important contribution was to give us a means to identify testable implications that would allow us to arbitrate among competing explanations.
The next immediate step in my life-long research program was to develop a fuller understanding of what constitutes trust in general and trustworthy government in particular. Luckily, my then colleague at the University of Washington and current colleague at Stanford, sociologist Karen Cook, and I joined forces with political theorist Russell Hardin to run a project on just these issues for the Russell Sage Foundation, culminating in our co-authored Cooperation without Trust?
One common approach to getting at questions of trust—one with which we all had serious problems— is surveys. Surveys don’t fully capture attitudes, particularly when it comes to government trustworthiness: The questions, unless in the hands of the likes of one of my co-authors, Laura Stoker, or of Bo Rothstein and his collaborators, seldom distinguish between favorable affect and perceptions of trustworthiness. Nor can they inform long-term historical analysis. Key questions do not even go back into 1950s when serious political surveys began, let alone the early 1800s when serious democratic politics commence. And until very recently they told us nothing about the variation in the perceived trustworthiness of different government agencies but only about government itself. To make that concrete: While lack of confidence in the police is high among black Americans in the United States, confidence in the police is high among other American groups and high more generally in other countries. People almost everywhere these days lack confidence in politicians but have high confidence in the courts.
A further complication is the fact that many, probably most, people don’t act on their own convictions either because they’re afraid of punishment or are not sure what their neighbors really think or will do. Consequently, few of us reveal our own preferences until we feel safe to do so. This transports me back to my formative teacher in political science, Peter Bachrach, and his theory of non-decision making. Fear of reprisals or recognition that any effort is wasted effort prevents certain groups from even trying to lobby or vote. He, of course, was particularly concerned about black Americans, but his insights transport to multiple settings and peoples.
Complicating the picture even more is the fact that our beliefs about what government has a right to do, let alone IS doing, are influenced by information that may—or just as often may not—reflect the realities of what is happening in the world and who is the source of the problem. I’m not just talking about social media here. I’m talking about the interactions we have with our peers, in our schools, religious organizations, and what newspapers we read and TV we watch. And those interactions are affected by our experiences. This was the Anglophone-Francophone story in Canada, well before the onslaught of social media.
The Russell Sage project involved multiple workshops and a book series that culminated in our Cooperation without Trust? Almost all of what I learned reinforced my intuition and earlier observation that government trustworthiness accounts for considerable variance in why and when citizens (and subjects more generally) comply with the extractive demands of governments. It also made me realize that I was neglecting the significance of legitimacy, and so I began to delve into the sources of legitimating beliefs, first in work with Audrey Sacks on Sub-Saharan Africa and then in other projects.
For a long time, I discounted the role of legitimacy. I was unsure of what conceptually distinguished the term, and perhaps more importantly, I was unsure about how to recognize it empirically. The past few years have taught me its significance as the underpinning of what makes our democracies work. It has always been obvious that occupied states, e.g. the Palestinians, the Northern Irish, could not and would not perceive the state as legitimate. However, what we’ve been seeing in Black Lives Matter and in some of the populist and nationalist movements throughout the capitalist democracies reflect strongly held beliefs that governments, or at least significant agencies of government, are acting in illegitimate ways.
To reiterate: A trustworthy government is one that keeps its promises to deliver goods and services (or has exceptionally good reasons why it fails to). It is a government that is relatively fair in its decision-making and enforcement processes, and a government that makes it possible to act on a sense of duty or ethics by detecting and punishing rule breakers. A legitimate government is one that appeals to widely accepted justifications for its selection, maintenance, and policies. Investigations across history and countries reveal that the more trustworthy the government, the more likely it is to evoke observation of its laws and acquiescence to policies. Less clear is the link between perceptions that government is trustworthy and beliefs that it is legitimate, at least in countries claiming or trying to be democratic.
Being trustworthy in practices and outcomes may contribute to perceptions of government legitimacy. However, trustworthiness is, at best, a necessary but not sufficient condition for legitimating beliefs. The trustworthiness of government speaks to its ability to keep order, identify and punish free riders, ensure the trains run on time, provide services, and make and implement policy. Authoritarian governments can be trustworthy in this sense. What makes for trustworthy DEMOCRATIC government is its accountability to the population through fair and free elections and a process of decision making that reflects a reasonably representative process and shared ethos.
These attributes of a trustworthy government contribute to legitimacy, but they are more about process than values. And legitimacy is fundamentally about meeting consensual values about the selection of government and the premises of its policies and its actions. When the polity is too polarized or when major government actors violate norms of governance—let alone break its actual rules or engage in corruption—then legitimacy itself is in peril.
And that’s the world we are currently in. At the root of the contemporary political crisis is the failure of government to be trustworthy in its delivery of promised services and protection and legitimate in relation to the norms and values of much of the populace. Governments are no longer delivering on their promises to provide a path to the middle class. Indeed, far too many people are seeing the end of a stable job, and affordable health and retirement benefits. They are experiencing real economic hardship and loss of status—and have well-grounded parental fear that upward mobility and economic progress are coming to an end, that their children will be even worse off than they are. This is not just an American problem; even countries such as Germany and Sweden that have done so much more in providing a safety net are beginning to feel the pressures. The world wide refugee crisis affects all of us, and so do globalization and climate change. Work, workers, and supply chains that employ people and provide goods and services are undergoing major transformations. Education is not preparing people for the world in which we now live. Indeed, in every country institutions that worked once need renewal in light of technological, environmental, and social changes.
We are living in what John Seely Brown and Ann Pendleton-Jullian call a “white water world,” where change is constant and new forms of flexible learning and action increasingly necessary. It is a world that demands a new political economic framework, one that serves the interests of the society as a whole, that builds on and produces shared values, and that institutionalizes trustworthy and legitimate government. This is what I mean by a moral political economy, the focus of a major project at the Center for Advanced Study in the Behavioral Sciences and of a forthcoming book I’m writing with Federica Carugati.
Every political economic framework embeds values and encodes standards for behavior and choices. All are moral political economies. Neo-liberalism is no exception. It enshrines the rational individual as decision-maker and centerpiece; it then emphasizes the importance of rational choices defined narrowly in terms of personal costs and benefits. It is normative about firms, governments, and the economic system itself: Firms should single-mindedly maximize profit, governments are primarily to protect property rights and provide the infrastructure that the market will not, and relatively unfettered capitalism will ultimately benefit all who work and strive. It is also normative about individuals: free riding is expected, and economic failure generally reflects personal, not structural, problems.
The major achievement of neoliberalism—and all prevailing political economic frameworks since Adam Smith’s—is to make normative prescriptions seem like descriptive statements of the natural behavior of people, governments, and organizations. We come to understand the system as given and natural; it can be tweaked but not fundamentally changed. The fact that some prosper while others do not is an effect of choices or luck, not of system design.
This belief in the system as natural is a parlor trick. Economies are the result of moral and political choices, which can be made and remade. And have been, as one political economic framework gave way to another. The history of capitalism is the history of the evolution of institutional frameworks and motivating ideas. In the past century, we’ve seen Keynesianism replaced by neo-liberalism, which has held sway since the 1980s when Prime Minister Thatcher and President Reagan enshrined it as the doctrinal road map for government and international aid agencies imposed neo-liberal terms on developing countries. This framework is as subject to being superseded as its predecessors were.
Political economies embed values and norms of justice and fairness. We observe that a populace responds not only to material changes in their status quo but also—and sometimes in contradistinction to their narrow interests— to what they perceive as violations of those norms, of wounds to their dignity, and of failure to recognize the worth of their cultures. Any political economic framework enshrines reciprocal rights and obligations that link populations, governments, corporations, and all the other various organizations that make up the society. It guides the social relations among the actors, and it defines what constitutes legitimate action. Incorporated in a moral political economy are accepted justifications for the actions and power of government, employers, landholders, and financiers—justifications based on widely shared values and beliefs.
A moral political economy is not just its abstract qualities or its economic reasoning and political justifications. It must speak to the concerns that people have and outline a set of values that guide policy to meet those concerns. There is growing empirical evidence—statistical, experimental, qualitative and interpretive—of what various populations want. While we can presume that everyone seeks a modicum of economic and physical security, we cannot presume other values and relevant trade-offs. In addition to more knowledge of existing preferences, we also need a grounded understanding of the role of context, persuasion, socialization, and other factors that influence values and how they are prioritized. Every day observation informs us that group identities and norms are a huge influence on perceptions of both preferences and strategies for achieving them. Everyday observations—and recent Facebook and Google exposés—alert us to how actions on those values are manipulable by information.
So how do we go about constructing a new moral political economy. What are the building blocks? Dan Berliner, Millie Lake, and I, in the company of other colleagues and scholars, took some earlier steps in understanding the nature of required institutional changes for workers in supply chains, and Henry Farrell is making progress in thinking through issues implied by changes in technology. But I think the keystone is generating what John Ahlquist and I call an expanded community of fate.
We develop this concept in In the Interest of Others, the book I co-authored with Ahlquist with the able assistance of Amanda Clayton who also co-authored a chapter. The book reveals the factors that encourage unions, organizations created to serve economistic self-interest, to mobilize their members on behalf of distant others who could never reciprocate. We analyzed several labor unions that evoked such actions from their members. What made that possible was a set of governance arrangements that made their leaders highly accountable but also introduced members to events in the world, allowed them to argue about the interpretation, and then come to a determination about whether to act by shutting down the port or refusing to load cargo, e.g. scrap iron to Japan to protest the occupation of Manchuria in the 1930s, guns on Dutch ships going to repress the rebels in Indonesia in the late 1940s, or goods to South Africa in the last decades of Apartheid.
The union members developed an expanded community of fate in which they recognized that their well-being and destinies were entwined with those of others. There but for the Grace of God go I! Or in the words of the legendary Knights of Labor and then Industrial Workers of the World: “an injury to one is an injury to all”. This is the slogan adopted by the International Longshore and Warehouse Workers Union, the union that motivated our study.
The unions we investigated produce this expanded community of fate with institutions that socialize and inform workers about the world and appeal to action based on norms of fairness rather than narrow economic interest. One pensioner, who followed John and me out of a meeting we held in Sydney, summed it up, “I loved and respected our union leader, but I never understood his communism. But when I learned we were being asked to load guns on ships to shoot down the rebels in Indonesia, I said, ‘That’s not fair dinkum.’ I joined with the others in refusing to load the arms.”
These governance institutions are also deeply democratic. They give workers voice and agency to challenge the information and make reasonably informed decisions. Workers have the power both to recommend actions and to veto them. And the actions give them “the pleasure of agency,” as Elizabeth Wood describes in a very different context, the civil war in El Salvador. The emotional pleasure derived from acting in the interests of others becomes motivational. We see these same kinds of factors operating in many other settings, and much of that analysis is inspired by the Nobel laureate and Skytte Prize winner Elinor Ostrom, my good friend with whom John and I workshopped our book shortly before her passing.
What I took away from these and other cases is that: Beliefs about the way the world is and what one can do about it influence both the attitudes towards the legitimacy of relevant authorities but also the understanding of possible actions. Given the crisis in trustworthiness and legitimacy of government and given that we need new skills and capacities in this whitewater world, the case for a new moral political economy is clear, it seems to me. And that in turn requires an expanded community of fate.
All of us have some community of fate, those with whom we perceive our interests as bound and with whom we are willing to act in solidarity. But sometimes that community is exclusionary: emphasizing race, nation, or religion rather than common humanity. To build the kind of expanded community of fate on which a moral political economy can be built requires that we figure out:
1) How to scale (yes, to that extent I’ve bought into Silicon Valley, which we can see from CASBS) the lessons of my book with John Ahlquist; but also
2) how to achieve a community of fate that encompasses all those likely to be affected by climate change or globalization or some other overarching concern that moves us beyond the bounds of our family, personal connections, and parochial forms of identity.
The values of a moral political economy would be those that cut across divides, rather than deepen them: values such as protection of our common planet, significant reduction of political inequality, protection and facilitation of human dignity and flourishing. Failure of government, employers and other organizations to ensure these kinds of goals or unfair and unjust implementation of them would be defined as illegitimate use of power. They would be perceived as violations of the social compact and reasons for protest and withdrawal.
The post-WWII institutions—both domestic and international—are experiencing a crisis in capacity and fitness. Neo-liberalism once promised solutions, but is no longer delivering, if it ever did. It may still be touted and articulated, but it is fraying and with it the economy, political coalitions, and social fabric that were its backbone. Fashioning a new “moral political economy” will require shifting popular ideas about markets and about work, designing a new regulatory apparatus, and fashioning a safety net that unleashes the economic potential of a technologically driven economy. We have choices over where we will go next, and my energy now is devoted to making those choices both apparent and possible.
Photos by Mikael Wallerstedt. View more official photos here.