Liberalism will endure but must be renewed

It is a work in progress, not a utopian project

Martin Wolf

“There is also the so-called liberal idea, which has outlived its purpose. Our western partners have admitted that some elements of the liberal idea, such as multiculturalism, are no longer tenable.” Thus, did Vladimir Putin claim to be on the right side of history, in a remarkable interview with the Financial Times. But, as Mark Twain might have said, the report of liberalism’s death is an exaggeration. Societies based on core liberal ideas are the most successful in history. They need to be defended against their enemies.

What is “liberalism”? To answer this question, I would first ask American readers to forget what liberalism means to them: the opposite of conservatism. This is a uniquely American meaning that makes sense in the unique American context: immigrants who founded their new state on a set of liberal ideas — liberal in the European sense, in opposition to authoritarian. When Thomas Jefferson wrote of “life, liberty and the pursuit of happiness”, in the declaration of independence, he was building on one of the great liberal thinkers, John Locke, replacing “property” with “happiness”.

The root word in liberal is liber, the Latin adjective denoting a free person, as opposed to a slave. Liberalism is not a precise philosophy, it is an attitude. All liberals share a belief in individual human agency. They trust in the capacity of human beings to decide things for themselves. This belief has radical implications. It implies the right to make their own plans, to express their own opinions and to participate in public life. These attitudes were realised in the system we call “liberal democracy”.

Liberals share a belief that agency depends on possession of economic and political rights. Institutions are needed to protect those rights — independent legal systems, above all. But agency also depends on markets to co-ordinate independent economic actors, free media to allow the spread of opinions, and political parties to organise politics. Behind these institutions are values and behaviours: the distinction between private gain and public purpose needed to curb corruption; a sense of citizenship; and belief in toleration.

Chart showing a link between liberalism and economic performance

Liberalism then demands a balance between conflicting goods. Some liberals believe more in economic freedom and so oppose an active state. Others believe more in equality among citizens and fear plutocracy. Both of these sides can be liberal, broadly defined. Yet Mr Putin is an enemy of liberalism. The tradition from which he comes is Tsarist autocracy. As Anders Aslund argues in Russia’s Crony Capitalism, Mr Putin “has meticulously annihilated the budding institutions of capitalism, democracy, and the rule of law that emerged in Russia in the 1990s. In their place, he has formed a strong vertical of power controlled by his cronies, who oppose the rule of law, favouring their own unlimited powers over the state.”

To measure the success of liberalism, we combine the World Bank’s measure of “voice and accountability” and the Heritage Foundation’s “index of economic freedom”. Economic and political freedoms do tend to go together, partly because both depend on the rule of law. Liberalism, so measured, is associated with prosperity: liberal societies tend to be rich and rich societies tend to be liberal. (See charts.)

Under Mr Putin, Russia has turned away from liberalism. Largely as a result, Russia’s economy is in a poor state. Even though gross domestic product per head is less than half US levels, average growth of GDP per head between 2009 and 2018 was only 1.8 per cent a year. Convergence has slowed to a crawl. Few expect this to improve. Mr Putin’s posturing on the world stage is a way of turning the attention of the Russian people away from his regime’s corruption and its failure to give them a better life. Even in the case of the more successful Chinese economy, we can speculate that Xi Jinping’s turn towards greater state control and political repression will undermine dynamism.

Chart showing how democracy and economic freedom are correlated

Yet Mr Putin is right on one point. Liberal democracies have run into difficulties, notably over their ability to absorb immigrants and manage inequality. Liberal societies do need shared values and identity. That is perfectly compatible with immigration and enduring cultural differences. But both need to be managed: otherwise, popular discontent will bring to power leaders who despise the norms of liberal democracy. The fragile balance might then collapse. Much that US president Donald Trump says and does indicates his contempt for those norms, notably a free press and an independent judicial system. The risk then is that liberal democracy will turn into “illiberal democracy”, which is, in truth, neither liberal nor democratic.

In Freedom in the World 2019, the independent US watchdog Freedom House reported a 13th consecutive year of decline in the global health of democracy. This decline, it noted, also occurred in western democracies, with the US — the most influential upholder of democratic values — leading the way. This development is indeed worrying. Liberalism may be much the most successful approach. But in many liberal democracies people, especially elites, have forgotten the balance that needs to be struck between the individual and society, the global and the domestic, and freedom and responsibility.

Liberalism is not a utopian project, it is a work in perpetual progress. It is an approach to living together that starts from the primacy of human agency. But that is only the starting point. Making that approach work requires constant adaptation and adjustment. Mr Putin has no idea what this means: he cannot conceive of a social order that does not rest on force and fraud. We know better. But we also need to do better — far better.

Power and Interdependence in the Trump Era

President Donald Trump's manipulation of America's privileged international system will strengthen other countries' incentives to extricate themselves from US networks of interdependence in the long run. In the meantime, there will be costly damage to the international institutions that limit conflict and create global public goods.

Joseph S. Nye, Jr.


CAMBRIDGE – US President Donald Trump has been accused of weaponizing economic globalization. Sanctions, tariffs, and the restriction of access to dollars have been major instruments of his foreign policy, and he has been unconstrained by allies, institutions, or rules in using them. According to The Economist, America derives its clout not just from troops and aircraft carriers, but from being the central node in the network that underpins globalization. “This mesh of firms, ideas and standards reflects and magnifies American prowess.” But Trump’s approach may “spark a crisis, and it is eroding America’s most valuable asset – its legitimacy.”

Trump is not the first president to manipulate economic interdependence, nor is the United States the only country to do so. For example, in 1973, Arab states used an oil embargo to punish the US for supporting Israel in the Yom Kippur War. Shortly thereafter, Robert O. Keohane and I published Power and Interdependence, a book that explored the variety of ways in which asymmetrical interdependence can be manipulated as a source of power. But we also warned that short-term gains sometimes turn into long-term losses. For example, during that period, President Richard M. Nixon restricted US soybean exports in hopes of dampening inflation. But in the longer term, soybean markets in Brazil expanded rapidly – and competed with American producers.

In 2010, after a collision of Chinese and Japanese ships near the disputed Senkaku/Diaoyu Islands in the East China Sea, China punished Japan by restricting exports of rare-earth metals, which are essential in modern electronics. The result was that Japan lent money to an Australian mining company with a refinery in Malaysia, which today meets nearly one-third of Japanese demand. In addition, the Mountain Pass mine in California, which had shut in the early 2000s, was reopened. China’s share of global rare-earth production has fallen from more than 95% in 2010 to 70% last year. This year, in a not-too-subtle response to Trump’s tariffs, Chinese President Xi Jinping made sure he was photographed visiting a rare-earth production site whose exports are vital to US electronics producers.

The US (and other countries) have legitimate complaints about Chinese economic behavior such as the theft of intellectual property and subsidies to state-owned companies that have tilted the playing field in trade. Moreover, there are important security reasons for the US to avoid becoming dependent on Chinese companies like Huawei for 5G wireless. And China has refused to allow Facebook or Google to operate within its Great Firewall for security reasons related to freedom of speech. But it is one thing to restrict certain technologies and companies for security reasons and quite another to cause massive disruption of commercial supply chains to develop political influence. It is not clear how long the influence will last or what the long-term costs will turn out to be.

Even if other countries are unable to extricate themselves from US networks of interdependence in the short term, incentives to do so will strengthen in the longer run. In the meantime, there will be costly damage to the international institutions that limit conflict and create global public goods. As Henry Kissinger has pointed out, world order depends not only on a stable balance of power, but also on a sense of legitimacy, to which institutions contribute. Trump was right to respond to Chinese economic behavior, but he was wrong to do it without regard for the costs imposed on US allies and international institutions. The same problem weakens his policies toward Iran and Europe.

Alliances like NATO stabilize expectations, and the existence of institutions like the United Nations, the Nuclear Non-Proliferation Treaty, and the International Atomic Energy Agency enhances security. Open markets and economic globalization can be disruptive, but they also create wealth (albeit often unequally distributed). Maintaining financial stability is crucial to the daily lives of millions of Americans and foreigners alike, even though they may not notice it until it is absent. And regardless of what a nativist populist backlash does to economic globalization, ecological globalization is unavoidable. Greenhouse gases and pandemics do not respect political borders. The laws of populist politics, which have dictated Trump’s denial of the science and his withdrawal of the US from the 2015 Paris climate agreement, are incompatible with the laws of physics.

States will increasingly need a framework to enhance cooperation on the use of the sea and space, and on combating climate change and pandemics. Referring to such a framework as a “liberal international order” confuses choices by conflating promotion of liberal democratic values with the creation of an institutional framework for promoting global public goods. China and the US disagree about liberal democracy, but we share an interest in developing an open, rules-based system to manage economic and ecological interdependence.

Some defenders of the Trump administration argue that his unorthodox style and willingness to break rules and spurn institutions will produce major gains on issues like North Korea’s nuclear weapons, China’s coerced technology transfer, or regime change in Iran. But the relationship of power and interdependence changes over time, and too much manipulation of America’s privileged position in global interdependence could prove self-defeating. As The Economist argued, the institutional costs of using a wrecking-ball approach may reduce American power in the long run. In that case, Trump’s approach will prove costly for America’s national security, prosperity, and way of life.

Joseph S. Nye, Jr. is a professor at Harvard University and author of Is the American Century Over? and the forthcoming Do Morals Matter? Presidents and Foreign Policy from FDR to Trump.

Mad in Britain

How Boris Johnson Turned the British against Europe

By Jörg Schindler

Photo Gallery: Britain's Next Prime Minister

Boris Johnson has always wanted to make it to the top, and he's almost there. The man who helped Brexit pass will now likely have the job of delivering it. But it's possible that even he doesn't know what he wants to do. Europe is in for a turbulent autumn.

One day, Boris Johnson had the idea to build a luxuriant garden bridge in London. On another, he urgently pushed for an airport on an artificial island, mocked by detractors as "Boris Island." Once, he believed the time had come for a truly enormous construction that would connect England to Europe. And recently, he's been saying he would like to build a bridge connecting Scotland and Northern Ireland.

Johnson appears to dream of one day walking on water. For now, though, he simply wants to become Britain's next prime minister.

That's what brought him here to the seaside resort of Bournemouth in southern England. He ignores the thousands of Brits frolicking on the kilometer-long beach on this summer day, and instead marches straight into the Pavilion Theatre where the "Laugh Out Loud Comedy Club" regularly performs and the musical "Jesus Christ Superstar" will soon be staged.

Around 600 members of the Conservative Party are sitting in the cream-colored theater and are currently in the process of electing a new leader -- who will also be Britain's next prime minister. There's not much excitement in the hall; the whole thing is more reminiscent of a funeral service than a coronation mass, though that probably has less to do with the desolate state of the Tories than with the advanced median age of the audience, which looks to be around 70.

The two top candidates each have one hour to charm their fellow party members in Bournemouth. Johnson gets to go first. Before the moderator has even finished speaking his name, the 55-year-old works his way around the stage set and marches forward with his bull-necked, compact posture, which always makes him look like a younger and blonder Winston Churchill. Then he rattles off witty remarks to the audience like volleys of gunfire. Are these dark times for the Tories? Yes, but "the night is darkest before dawn." Brexit? A piece of cake. All the doomsayers who warned of biblical droughts and skies without any airplanes didn't believe in the greatness of Great Britain.

Boris Johnson says he will complete Britain's withdrawal from the EU "with style" and that he will no longer ask questions in Brussels, but instead dictate the way forward. "A little bit more resolve is necessary," he says. By this point, even the most elderly in the theater are cheering.

'Hunt Would Be More Competent, Boris More Amusing'

It's an entertaining and energetic performance, so very different from that of his challenger Jeremy Hunt, who has rolled his sleeves up to his elbow and memorized almost all the economic strongholds in southern England. But he manages only to gently lull his audience to sleep with facts and figures.

Asked what his takeaway from Bournemouth is later, one conservative answers, "That Hunt would be the more competent prime minister, but that Boris would be more amusing."

So, has Johnson's time finally come? Will this man who has had a role in shaping British politics for 30 years now be holding the keys to 10 Downing Street next Wednesday? It certainly seems so.

Alexander Boris de Pfeffel Johnson still has to keep his notorious penchant for self-destruction in check during the final dash. And he has to secure the majority of votes from the Tory Party, which has around 160,000 members. And if he does succeed, he will also have to convince Her Royal Majesty Queen Elizabeth II that more than half of the elected parliamentarians in the British House of Commons back him. Otherwise, she might refuse to appoint him.

But even at this point, it's hard to imagine Johnson not becoming Britain's 77th prime minister. He's too far ahead in the polls not to win, with seven out of 10 Tories saying they want to vote for him. The man who loves writing about great Englishmen like Churchill and Shakespeare will soon have the chance to show whether he is built of the same stuff.

Another Joke in the Never-Ending Brexit Farce

It isn't even remotely possible to predict what Johnson as prime minister would mean for a country that voted to leave the European Union over three years ago and has been teetering on the edge of a constitutional crisis since. Brexit has put Britain into a kind of political coma -- it's still managing to handle basic things, but the country is more or less unconscious and leaderless.

The two major parties -- the Conservatives and Labour -- have been worn out by countless internal Brexit skirmishes and are at risk of breaking apart. Meanwhile, a determined competitor has emerged in the form of right-wing populist Nigel Farage's Brexit Party, which feeds on people's anger and wants to smash the entire democratic system to pieces.

The fact that the originally planned Brexit date of March 29, 2019, has already been postponed twice, and could possibly be postponed a third and fourth time, plays right into the hands of this destructive force. And though time may be running out for other British politicians, it is not for Farage.

Prime Minister Theresa May, who has been humiliated more often and more mercilessly than just about any British politician before her, has been forced to abandon the effort to complete Brexit -- in any form. Someone else will have to do that now. And that someone will likely be named Boris Johnson, in yet another joke in the never-ending Brexit farce.

Johnson of all people. The man who, for a long time, couldn't even decide whether he was for or against leaving the EU; who prepared two newspaper columns in the run-up to the June 2016 referendum, one arguing Britain should stay in the union and the other arguing that it should leave; who ultimately, out of obvious personal calculation, made himself the front man for Brexit and played a pivotal role in tipping sentiment in the country in its favor. And now he's supposed to repair the porcelain he has delighted in smashing over these past years? It promises to be a grandiose -- and potentially disastrous show.

A clear majority of the British distrust the stage character that Johnson plays, which so often comes across as a kind of 21st century Falstaff: a loud-mouthed, vain and rowdy ditherer, but also so shrewd and eloquent that many find it difficult to resist his seductive ways. A large share of British parliamentarians and even many Tory members of the European Parliament trust Johnson about as far as they can throw him.

And yet a bizarre coalition of conservative enemies of the EU and former EU allies have rallied behind him, united in their panic over the Tories' potential loss of power and the far-fetched belief that only Johnson can make the impossible possible: Namely keeping Nigel Farage and socialist Labour leader Jeremy Corbyn at bay while at the same time guiding the British people into the much vaunted post-Brexit Promised Land.

'A Ceaseless Struggle for Supremacy'

But there's a catch: Johnson may also have inexhaustible charisma, but he doesn't have a plan -- only an apparently unshakable belief in himself. But how far will that take him?

History is repeating itself. The country that gave birth to modern democracy now seems willing to elect a populist born in New York who has made his peculiar hair his trademark and who, as a member of the elite, is now agitating against them -- and who feels like he is destined for greatness.

Boris Johnson was born "to wage a ceaseless struggle for supremacy," says Andrew Gimson, as he ponders Britain's future prime minister over a glass of white wine. It's not easy for the British journalist to utter those words. The 61-year-old is a friendly contemporary of Johnson's who at times closes his eyes for an extended moment before muttering remarks that are ready-for-print. They don't include many critical ones. Recently, he says, people have been saying too many negative things about Johnson. "He is often kinder than the people who attack him."

Gimson is a friend and ex-colleague of Johnson's. The two used to work together at the Spectator, a weekly conservative magazine. In 2006, Gimson felt it was time to write a biography of Johnson. At the time, Johnson was just a simple member of the House of Commons but one, as Gimson wrote, who might someday become prime minister. Many shared that feeling back then.

When he approached Johnson about the idea at the time, he says, the politician was at first enthusiastic and then horrified. In the end, Gimson claims, Johnson jokingly offered him 100,000 pounds or, alternatively, free tutoring for his children if he abandoned his plans. Apparently, Johnson, who has an "excessive wish to be liked," suspected the book would go deeper rather than simply provide a flattering account.

In his biography, Gimson draws the image of an unsettled man who actually wanted to become "king of the world" even as a child. A lot of that is attributable to Stanley Johnson, who looks a lot like his son and, despite an age difference of 24 years, is often confused with him.

The family's history, rooted in Turkey, could be straight out of a fairy tale. Boris Johnson's great-grandfather, Ali Kemal, was the last interior minister of the Ottoman Empire and even ordered the arrest of Kemal Atatürk, the man who would go on to found modern Turkey. Ali Kemal eventually got lynched. Johnson's grandfather Osman Ali fled to London and renamed himself "Wilfred Johnson." Gimson writes that the Johnson family was not one that played together, with the focus instead on sibling rivalry. "If I came in second in Latin, my father would instantly demand: Who came first?" says Boris' half-sister Julia. "It became a standard catchphrase in our household and a vigorous deterrent against being anything except top."

A Permanent Charm Offensive

To get there, her big brother relied on three things in particular, starting with his undeniable talent. The second being humor. He inherited the role of the eccentric and, at times, simple-minded Englishman from his father Stanley, a book author, politician, philanderer and joker. It helps him to cloak his ambition. Third, he relies on his charm, which has enabled him to survive more scandals than any other politician of his generation.

Early on, Johnson made himself unassailable through his mix of talent, humor and the art of seduction. One telling episode is from his time at Eton, the elite boarding school that has produced more prime ministers than any other British school. During a school staging of Shakespeare's "Richard III," it was of course Johnson who got cast in the role of the king. But he didn't memorize his lines. Instead, invisible to the audience, he stapled notes to the stage set and hurried from one to the next during the performance.

"Boris is pretty impressive when success can be achieved by pure intelligence unaccompanied by hard work," one of Boris' teachers wrote to Stanley Johnson in 1982. The teacher added: "I think he honestly believes that it is churlish of us not to regard him as an exception, one who should be free of the network of obligation which binds everyone else."

Those airs -- that he was different than the others -- could also be observed during his time at Oxford University, only he often thought he was better. Oddly enough, many of the men who are responsible for Britain's current political fate, met at Oxford in the mid-1980s. On the one hand, you had men like former Prime Minister David Cameron, Exchequer Philip Hammond and current foreign minister and Johnson rival Jeremy Hunt, who chose subjects like politics and economics. On the other, you had people like Boris Johnson, who studied classical antiquity and ardent EU opponent Jacob Rees-Mogg, who earned a degree in history. The first group would campaign 30 years later for their country to remain in the EU, with the latter choosing Brexit.

The Political Entertainer

Johnson even wanted to stand out from this group, so he ran to become president of the famous Oxford Union debate club in 1984. It shocked him when he lost to a nobody who hadn't even gone to an elite boarding school. He ran again the following year. The second time, he chose a strategy that he is using again today to try to unite his party and country behind him: He presented himself as a tough-as-nails Tory to fellow conservative students, while making liberal promises to students who skewed toward Labour. That's how he won.

The fact that he was never able to precisely articulate the policies he wanted to pursue as a leader somehow got lost in all the Boris euphoria. Andrew Gimson also met Johnson at Oxford. "Boris made people helpless with laughter," he says, "and so great was their enjoyment that they scarcely cared what he did with their support, as long as he kept on amusing them."

Johnson's time as a political entertainer began in the spring of 1989. The young journalist had been sent to Brussels as a correspondent for London's Daily Telegraph newspaper. He had previously been forced out at the respected Times of London newspaper after fabricating a controversial quote. But his employers at the Telegraph didn't seem to care. Johnson knew the EU capital well, too -- his father Stanley had once transplanted the family to Belgium because he had landed a job at the European Commission and in the European Parliament. When Boris was young, his mother disappeared from his life for eight months that she spent at a clinic following a nervous breakdown. His parents later separated. This left Johnson without any positive memories of his life in the EU capital.

His second run in Brussels came at a very interesting time. Less than six months earlier, the debate in Britain over its membership in the EU had hit a new peak of intensity. Margaret Thatcher, who had always been skeptical about integrating too deeply, had gone on the offensive. Arch-conservative Thatcher was deeply suspicious of then-European Commission President Jacques Delors' vision of turning the economic alliance into an ever-closer and, above all, a "social" union. To her, social sounded a bit too much like socialist. In a speech in Bruges, "Mrs. No" warned of a "European super-state." The atmosphere was ripe for someone who would become Thatcher's "favorite journalist" in no time at all.

There is little to suggest that Boris Johnson had a strong attitude toward Europe when he began reporting from Brussels. But the bureaucratic wrangling, the antagonism that is inherent to the democratic process and all the hullabaloo over regulations must have felt like an imposition for a freethinker like him who always has to be thinking in superlatives.

A Pinocchio-Like Relationship With the Truth

He soon began making fun of all the EU's trivialities, and he got a warm reception for it back in London, where the euroskeptics in the Tory party were growing louder and louder. So, Johnson began delivering ever wilder articles. As long as people bought into his fairy tales, it didn't bother Johnson that he was curating an increasingly Pinocchio-like relationship with the truth.

Johnson claimed that the EU wanted to ban British shrimp-flavored potato chips. That the EU wanted to standardize condom sizes throughout the Continent, ignoring what he alluded to be a smaller endowment among Italian men. He also claimed the EU wanted to categorize snails as fish. Even that the internal market would possibly lead to one of the biggest art thefts in history and make the borders between states so permeable that the Continent would become a paradise for drug smugglers, terrorists, arms dealers and migrants of all kinds.

Every afternoon, Johnson, who was often choleric and resentful, would work himself up into his ritual "4 o'clock rage," says Sonia Purnell, who was his deputy at the time and would later write a biography about him. In return, he would scream obscenities at the yucca plant on his desk to get in the right mood to write his anti-EU treatises. Just for fun.

Purnell is convinced that her former colleague negligently supplied British right-wing populists and anti-EU agitators with all kinds of ammunition. It may or may not be a coincidence. The UK Independence Party, whose rise would later play a decisive role in the successful 2016 Brexit referendum, first ran in an election for the European Parliament in 1994 -- Boris Johnson's final year in Brussels.

Former British EU Commissioner Chris Patten considers Johnson "one of the greatest exponents of fake journalism." But he says you can't really label the former journalist as a liar. "I think he's one of those people in life who simply doesn't really understand the difference between fact and fiction," says Patten.

Given that he always got away with everything that he said and did, he just got even more carried away. Even after his switch to politics in 1997, he continued to invent facts, figures and threats. Infatuated with his own, classically schooled art of formulating things, he insulted women, black people, gays, Muslims, Liverpudlians, abuse victims, Labour voters, climate protection activists and practically every other group in and outside of Britain -- except rich white men.

The fact that his ability to seduce stretched beyond the political arena meant that he lied repeatedly about his amorous escapades, which were and are so numerous that it still isn't clear how many illegitimate children he actually has.

Plan B. B for Boris.

At some point, a transcript of a conversation between Johnson, back when he was still a journalist, and his old Eton and Oxford buddy Darius Guppy appeared in the British press. Guppy, very much a fly-by-night businessman who would later spend several years in prison, asked Johnson to get him the address of a disliked journalist so he could have him beaten up. Here are some excerpts from that conversation:

Johnson: "Really, I want to know, because if this guy is seriously hurt I will be fucking furious."

Guppy: "I guarantee you that he will not be seriously hurt ... He will probably get a couple of black eyes and a cracked rib."

Johnson: "A cracked rib."

Guppy: "Nothing which you didn't suffer in rugby, OK? But he'll get scared and that's what I want him to do."

Johnson: "OK Darry, I've said I'll do it. I'll do it, don't worry."

Johnson, who categorically denies helping Guppy in the matter, suffered no consequences. Big B almost never gets into trouble, apart from the occasional delay in his ascent to power when his lies are exposed. While other politicians would have fallen from grace, he just keeps stumbling along.

He suffered no long-term damage, for instance, after coming under scrutiny several times for making misleading statements about his side earnings. Likewise, there was no damage after he brazenly lied to his former party leader about an affair. Nor did it hurt him when he traveled across Britain in a bus emblazoned with grotesquely false information about British payments to the EU and how London was allegedly transferring 350 million pounds (389 million euros) a week to Brussels that could be put into the NHS, the national healthcare system, in the future. This was probably the most serious lie of Boris Johnson's political life.

Yet people fall for him, because he's so wonderfully different than the others. He's louder, livelier, funnier. To this day, it's unclear what Johnson believes in -- except himself. He has fought for the rights of gays and he has spread homophobic stereotypes. He has demanded policies for the poor and for the rich. He is apparently proud of his Turkish roots, yet while he was waging his Brexit campaign, he warned against the alleged onslaught of millions of Turkish immigrants if the country were ever allowed to join the EU. Today, he denies ever having said that. Besides, what's that compared to his insight that Tory voters get "women with bigger breasts?"

The Profanation and Infantilization of Politics

Boris Johnson, like Silvio Berlusconi, Donald Trump and all the other populist seducers who have made their entry onto the world stage of late, stands for the profanation and infantilization of politics. If it benefits him somehow, he can be a liberal today, a social democrat tomorrow and conservative the day after. And he doesn't even need to conceal his lack of plans and principles. He's like the emperor who tells his people: "Look! I'm not wearing any clothes!" Many people find him so disarmingly honest and hilarious, that they can't help but vote for him.

That's why even the Londoners -- the enlightened, progressive, multicultural Londoners -- elected Boris Johnson as their mayor in 2008. It was a sensation and the most convincing proof yet of Johnson's political allure. It was never his goal to become mayor. But three years earlier, the Tories had tapped the younger though not half as charming Eton and Oxford alum David Cameron to be their leader. For Johnson, it was a humiliation.

Under those circumstances, the posting to London's City Hall seemed like a suitable alternative way of getting closer to his ultimate goal. So, Johnson joined the race and achieved the unimaginable: As a Conservative in London, a Labour stronghold, he deposed legendary leftist Ken Livingstone.

This is the underdog story Johnson uses today to promote himself to Tory party members. Coming out of nowhere, he not only managed to keep a dangerous socialist in check, he also successfully administered a mega-city with a population of 10 million for eight years. One day, he wants to run the entire country the way he did London, with an "all-star team" and a political agenda for those "who are the worst off." But is he telling the truth?

It's indisputable that during Johnson's time in office, London -- at least temporarily -- became more climate-friendly, less crime-ridden and generally more livable. Many of the successes that he ascribes to himself, however, are thanks to Livingstone's initiatives. The congestion charge, the increased police presence, the "Boris bikes" on which masses of tourists can be seen zipping through the city and even the fabulous Olympic Games of 2012 -- all of these policies were originally spearheaded by the Labour politician.

Johnson, on the other hand, whose own people describe him as a peevish "do nothing" politician, opened London's doors primarily to the rich and super-rich from around the world. With this, he exacerbated inequality and the city's desperate housing situation. One of his most striking legacies was the ArcelorMittal Orbit tower, a 19 million-pound monument with a red, steel scaffold entwined in tangled loops -- and whose primary purpose is to stand out from all the other buildings in East London.

One man, one tower.

But it's not as if the wavering course of Johnson's 30 years in politics hasn't left behind any bruises in the minds of Brits. At the latest, since becoming the leader of the Brexit campaign in 2016, the politician, who counts "Apocalypse Now" among his favorite movies, has been one of the country's most polarizing personalities. In recent polls, 47% of Brits said they considered Johnson's election as prime minister to be a foregone conclusion. But only 13 percent said they would buy a used car from him. Around half of those polled said they doubted he could unify the divided nation. Even more consider him "immoral."

For now, though, Boris Johnson doesn't really need to worry about that. The fact is, of the United Kingdom's 66.4 million citizens, more than 66.2 million will have no say when the country's next prime minister is proclaimed in the next few days. Only registered members of the Tory Party will elect their new leader -- and that person will then automatically ascend to the top of the government. Britain is home to around 160,000 card-carrying Conservatives. Anyone keen on getting to know these people a little better can swing by the Swigs Hole Farm in Kent County, an hour's train ride southeast of London.

On a recent Sunday morning, around 40 sprightly men and women are sitting on some artificial turf here, eating salmon sandwiches and tiny sausages baked in dough. It could be the scene of an ad on television for English sparkling wine. (As it happens, there's a vineyard nearby.) Dogs and cats roam around the small pond, next to which stands a statue of a bathing nymph. In the distance, cornfields gently undulate past crooked farmhouses with turrets and half-timbered facades. It's all so idyllic, almost as if it had been designed for a huge model railway.

The Tory chapter in nearby Tunbridge Wells is hosting the "Summer Fizz & Canapés" party to chat about politics in a relaxed atmosphere. Pauline Aylett, whose pink blouse, pink lipstick and lavish pearl jewelry starkly contrasts her green surroundings, finds today's politics "terrifying." Pauline is 81 years old. She used to be a stock trader in London and has the same hair color as Boris Johnson.

Leave Europe, No Matter the Cost

She doesn't like him very much, though. He's an "idiot," she says, not to mention a serial philanderer who is then too stupid to cover up his own tracks. "What's the matter with the man? Hasn't he ever heard of birth control?" Pauline jibes. But "of course" she would still vote for Johnson -- he's the only one who can beat Corbyn and deliver Brexit. "I want out," Pauline shouts, spilling a few drops of her bubbly.

This sentiment can be heard all over the farm. That the good Jeremy Hunt is really smart and capable and all, but he's also too polite to stand up to the Europeans. Boris, on the other hand, though uncouth and unsteady, is at least an unflinching man who will slam his fist on a table in Brussels if need be. And what about the fact that he called the French "turds," which conceivably might not be very helpful in forthcoming negotiations? Pauline's friend, Sonia Borrago, 88, just smirks: "I must admit I go along with that."

Leave Europe, no matter the cost. This is practically all Britain's Conservatives care about these days. The Tories are not only older, whiter and richer than the rest of the country, they're also more ardent enemies of the EU, according to research conducted at Queen Mary University in London.

Just how far they would go to finally become an independent island nation again was made clear recently by a sensational YouGov survey: A clear majority of Conservatives would be willing to accept the disintegration of their own party, Scotland's secession, the reunification of Ireland and lasting damage to the British economy as long as they finally got their precious Brexit. Two out of five Tories would even be willing to put up with a Corbyn government.

It's impossible to overstate just how dramatic such a development would be -- not only for the traditional political balance, but for the country as a whole. The party known formally as the Conservative and Unionist Party is willing to sacrifice its kingdom for Brexit. A party that has courted business like no other for decades is now ready to follow a Brexit fanatic who only months ago shouted: "Fuck business!" The party that has perfected the acquisition and maintenance of power like no other in Europe is about to hand its fate over to an egomaniac and a political rogue. As a side note: The Tories were once the self-proclaimed "Party for Europe."

But that was long ago.

It's as if Brexit has caused the more than 300-year-old Tory party to mutate into a political sect with Boris Johnson playing the sect leader with simple, messianic messages: Believe in this great country and be nice to each other and we'll manage. Faith, love and hope -- but no political agenda.

Johnson even survived his only TV debate with Jeremy Hunt on Tuesday of last week. By the end, his exhausted rival groaned: "I think he has this great ability: You ask him a question, he puts a smile on your face, and you forget what the question was." Johnson returned the favor by calling Hunt "a stickler for detail." For him, that's an insult.

In the one-hour broadcast, Johnson exposed his dithering side, the one that has so often gotten himself and others into trouble. This time it was aimed at Britain's ambassador to the United States, Sir Kim Darroch, one of the country's most distinguished diplomats. Shortly before the live debate, Darroch's unflattering cables about Donald Trump's government were leaked to the public. Trump and his administration were "dysfunctional" and "inept," Darroch wrote, adding that Trump himself was so dim-witted that he must be communicated to in the simplest possible terms. The U.S. president seethed and lashed out against Darroch and his superiors on Twitter. It was an unprecedented attack, one which Foreign Minister Jeremy Hunt condemned on live television.

An Almost Unbeatable Lead

Johnson, on the other hand, gave a confused answer in which he somehow managed to position himself behind Trump, whose benevolence he will have to rely on when Britain seeks a post-Brexit free trade deal with the U.S. In doing so, he snubbed Darroch, who resigned shortly afterward. Johnson's party colleagues -- and his enemies -- immediately questioned how such a lily-livered individual could hope to survive tough negotiations with the EU. His popularity among the Conservative kingmakers, however, remained untarnished. Recent polls showed Johnson as having an almost unbeatable lead.

And so the great unsolved mystery of our day remains: What does Johnson intend to do with power if (or when) he attains it? Especially when it comes to Brexit? In the three years since the ill-fated referendum, he has revealed little more than his grim opposition to compromises with the EU.

As May's short-time foreign secretary, he wandered aimlessly around the world, committing assorted blunders and lamenting his country's lack of self-confidence. As a highly paid columnist for the Daily Telegraph, which has long positioned itself squarely behind its bumbling former staffer, he insisted Britain take the fight to its enemies in the EU. But Johnson has offered little more than these bombastic outbursts, which he faithfully tries to make sound like those of his great role model, Winston Churchill. There's a reason why Nick Clegg, the former deputy prime minister, once called Johnson "Donald Trump with a thesaurus."

Johnson recently made it abundantly clear in a memorable BBC interview that he hasn't made much progress on that front, even now. In typical Johnson form, meaning without an eye for detail or even a firm grip on reality, he said he would "make progress with the bits of the withdrawal agreement that we have," including the "stuff about the European Union citizens."

All this will be tackled in the planned transition phase. With an eye to the danger of a hard border emerging between Northern Ireland and Ireland, he surprised the interviewer by saying that he believed there were "abundant technical fixes that can be introduced to make sure that you don't have to have checks at the border."

It doesn't seem to matter to Johnson that there won't be a transitional phase at all until the withdrawal agreement has been ratified by all 28 EU member states or that a miracle solution for Ireland has yet to reveal itself after three years. He claims to have sensed "a real positive energy about getting it done." And he'll take care of the rest with "creative ambiguity." Plan A didn't work, so now it's time for Plan B.

B for Boris.

Johnson has announced that he will lead his country out of the EU by Oct. 31 at the latest -- "come what may." The completely arbitrary Halloween deadline was dictated to Theresa May by the EU; she was powerless to do anything about it. If Johnson wants to negotiate a completely new agreement with Brussels before then, as he has announced he will, he'd better get to it.

Infinitely High Stakes

After his probable inauguration at the end of July, the government and parliament will likely first go on holiday. Then there will be party conferences. Once things pick back up in London in mid-September, there will only be six weeks left for meetings before Halloween. And it's not even entirely certain that the EU will be ready or able to negotiate, considering how distracted it is with its own internal struggles.

In the end, Johnson really could opt for the so-called nuclear option and try to disjoin his country from the EU without any formal agreement. It would be a highly risky move, not only because a no-deal decision in Britain would trigger indeterminable economic, political and social unrest in the country. The stakes would be infinitely high for Johnson himself, too. The majority of the conservative government in the House of Commons has shrunk to only a handful of votes. It may only take a few Tory rebels breaking ranks to overthrow the new prime minister with a vote of no confidence. And more than three have already threatened to do just that.

So, how will Johnson, the player, decide? There is much to suggest that a man who has always regarded life as one great exercise in improvisation doesn't yet know himself. "Boris Johnson will, as always, do whatever he thinks he can get away with," says Tim Bale, an expert on the Tories at Queen Mary University. "If he realizes that no-deal looks like a disaster, he may well swerve at the last minute. If he thinks it's the only option, he may risk an election to create a parliament that will deliver it. To be honest, all bets are off."

All bets are off.

You couldn't find a more concise way of describing Boris Johnson than that. He wanted to make it to the top. Now he's just a few steps short. And even once he gets there, there's only one direction he can take. Depending on the circumstances, things could go downhill faster than he would like.

But he also wouldn't be Boris Johnson if that prospect frightened him. "There are no disasters, only opportunities," he once said. "And, indeed, opportunities for fresh disasters."

China’s Deleveraging Is Over

Weak growth and inflation data make another ramp up in Chinese debt all but inevitable

By Nathaniel Taplin

The June purchasing managers index for Chinese manufacturers was weak on almost every front. Photo: aleksandar plavevski/Shutterstock 

For all its denials, Beijing is highly likely to put its foot on the gas pedal of the Chinese—and global—economy.

China’s job market is worsening, exports are sinking, and factory-gate inflation is at risk of going negative. The People’s Bank of China is adamant that a renewed ramp up in debt isn’t around the corner, but investors should view its assertions with a high degree of skepticism.

Nominal output growth, at 7.8% in the first quarter, is already running well below growth in the central bank’s own measure of total finance outstanding. Yet the economy is still weakening. Barring an ambitious trade deal, China’s “deleveraging” campaign will be on the back burner for quite a while.

The June purchasing managers index for Chinese manufacturers, released on the weekend, was weak on almost every front. Employment fell at the fastest pace in 10 years. New orders and output both worsened. But most striking was the steep drop in factory-gate prices: The PMI price index dropped nearly four full index points to 45.4. Numbers below 50 indicate weakening on the month.

What really looks bad in China right now is nominal growth, which is what matters for corporate revenues and debt servicing. Raw material costs also fell on the month but far less sharply, implying deteriorating margins. Moreover, shuttering excess factory capacity to boost sales prices—as China did in 2016 and 2017—looks risky, given the weakest job market in years.

As in late 2018, part of what is weighing on producer prices is a recent drop in global oil prices.

But the weakness also looks more fundamental this time. For the past two months, China’s PMI has shown output outpacing new orders by the widest margin since 2016, when industry was fighting off years of deflation. Output of some key industrial products like steel have also been growing more rapidly than investment in property, the main source of industrial demand.

All of this signals that demand is too weak to absorb production at current levels. Prices will fall further unless Beijing jump-starts the economy with additional stimulus or dumps excess inventories on global markets. Since another deflation-fueled industrial debt crisis is the last thing the Chinese government needs, easier monetary policy is surely coming.

Beijing recognizes that China’s debt problem is the biggest long-term threat to China’s growth.

It may pivot back to debt control in the future, should conditions improve externally.

Meanwhile, it is too busy putting out fires: More water from the monetary sluice—and another rise in indebtedness—is on the way.

Socialism and Capitalism

By George Friedman

Socialism is a global political movement that emerged from the French Revolution. Its goal was to speak for the dispossessed, only sometimes as a democratic political party. In all of its guises, it has been a powerful political force in most of the world. In the United States, however, it has been relegated to the political margins, seen largely as alien to the American ethos. It has now emerged explicitly as a subject of debate in American politics and therefore requires some thought

Origin Stories
The important difference between socialism and capitalism – even more important than what each actually preaches – is that capitalism is less an intellectual or moral system than a reality born of the industrial revolution. Socialism, on the other hand, has always been an intellectual movement, crafted by intellectuals such as Saint-Simon, Fourier, Lassalle and Marx, all of whom made the moral case for socialism and imagined what such a system would look like. These intellectuals loathed inequality and despised the intellectual shallowness of the rich and sought to create a political movement that could bring their vision to life. It was commandeered by politicians such as Karl Kautsky in Germany, and Vladimir Lenin in Russia.

Socialism argued that the private ownership and control of investment capital, which created the means of production, was flawed in two ways. First, it diverted wealth from the common good to the private benefit of the rich. Second, in investing on the basis of the highest return on capital, capitalism neglected investment in social goods that had a lower or no return on capital. It limited human possibilities.

In general, socialism advocates a radical restructuring of society – the means of production should be transferred to state control, and the state should determine the investment strategy. There were three underlying goals to this argument. First, that socialism would make possible the political equality that wealth inequality did not allow for. Second, that the state would produce for the common good, since state officials would not profit from the decisions they made. Finally, that the state would be controlled democratically, and therefore be under control of the public.

Capitalism did not attempt to make the case for itself. In fact, it was not something imagined and planned for. It was the reality that emerged alongside the Industrial Revolution. The industrial revolution could not develop without investment, and the investors hoped to make a profit, and that profit was reinvested. The capitalists’ wealth came to dwarf that of the old European aristocracy, and it grew larger as capitalists pursued more wealth. The capitalist did not contemplate the virtue of wealth, or the effects of industrialism on the human condition. The capitalist considered the moment and acted on it. Capitalism was not an ideology, nor did intellectuals defend it until the 20th century, when Hayek and Friedman, among others, sought to make the moral case. In the United States, capitalists bound their work to Christian notions of charity, but they had no systematic vision of their own.

Capitalism’s greatest explicator was Adam Smith, who wrote “The Wealth of Nations.” In it, he described how individual decisions, driven by self-interest, would culminate in an increase in the wealth of nations. In one of his lesser-read books, “The Theory of Moral Sentiments,” Smith made the argument that moral principles do not derive from external theories (by which he implicitly meant socialism and religion) but rather from pragmatic, necessary solutions to problems. So, Smith’s ultimate defense of capitalism is that it worked. But by this he meant that it maximized wealth – not that it limited inequality.

The capitalists determined where money was invested, based on expectations of returns on capital. In this sense, they controlled the direction capitalism would go, in that they didn’t care where it went so long as their wealth increased. From this came the towering structures of Euro-American civilization, along with the reality that the wealth of nations left vast swaths of society serving the system as workers and excluded many others from the system. Human action usually comes at the expense of others.
Reallocating Capital
The socialist argument was that, so long as capitalists pursued their own immediate interests, the wealth of society would accumulate in their hands, and the matters of inequality and poverty would not be addressed. At the core of the socialist argument was that the very indifference to ideology by the capitalists would create vast wealth for the few, without alleviating the suffering of the many. Therefore, there had to be a reallocation of capital. Some capital would go toward easing the suffering of the excluded. But even more would go to the state, which would assume responsibility for investment. The state was a superior agent of investment the individuals making investment decisions would either be civil servants or an elected representative of the people, and, having no personal interest in the outcome, would make the best decisions possible based on democratically defined ends.
The clash between capitalism and socialism has many dimensions, but the most important is this: Capitalist investment is not centralized. Investment capital comes from many sources, and there are countless investors making decisions. The diversification of capital limits the consequences of any single decision. It makes capitalism vulnerable to cycles and fads, but devastation is not the same as annihilation. It can and (and regularly does) recover from devastation. But the emphasis is on what the investment process can recover from, not the havoc that the devastation might cause to the public.

Socialism places confidence in the state, and control of the state in the hands of the public. The public as a whole has an understanding of what it needs but is not sensitive to the price paid. The state, then, must either abide by the will of the many or make investment decisions regardless of the public will, but for the good of the public (or at least what the state regards as their good). Since the state is an abstraction, the decisions are actually made by state officials. Given the vastness of the decisions made by the state, it must devolve to an army of civil servants who individually hold minimal power, but who collectively would take the place of investors, unbound by the demand of self-interest.

Democratic socialism cannot be democratic because of the scope and scale of modern economies. It either evolves in a Soviet direction, to name one extreme, or, as in oft-cited Sweden, leaves most investment decisions to private investors, taxing them and transferring money to the rest of society. In the Soviet model, the state tries to manage mid-level civil servants by terrifying them with death. In the Swedish model, the battle is formed by demands of increasing social benefits and decreasing investment capital.

Under capitalism, the diversification of capital sources protects against bad decisions made by centralized governments. But it must, by its nature, create inequality and occasional social crisis. The flow of money into the hands of the investor class must generate crises as industries are shut down and as new ones are created. The speed of what Joseph Schumpeter called “creative destruction” generates rapid and intense crises that can turn just as rapidly into social unrest, chaos or repression. Capitalism has generally solved this in the same way that social democracy has: It has left investment to private investors and then imposed taxes on them to cushion social dislocation.

In short, the distinction between modern industrial capitalism and social democracy is minimal. Leaving aside socialist fantasies about the abolition of greed or capitalist fantasies in which a state will expect nothing from its citizens, the two systems have more or less merged. Capitalists and socialists accept private investment. Both expect economies to grow and from that growth they will pay taxes. In both Sweden and the United States, taxes are hated by the public, but the benefits are loved. Still, the political system decides the taxes and the politicians do what they were meant to do in a democracy – pander to the public. What may differentiate one politician from the next is the amount of taxation they propose, but even that is used to balance the system.

Even within today’s hybrid system, democratic socialism has risen as a topic of debate within the Democratic Party. I would argue that the reasons for the emergence can be explained this way. The Democratic Party was defeated by Donald Trump in the last presidential election because he seemed to speak for the interests of the industrial working class that is in decline. This class had been the foundation of the New Deal coalition that had dominated the Democrats and from which the Democrats shifted, focusing instead on other sectors of society.

The conversation around socialism in the Democratic Party represents an attempt to woo the voters feeling intense pain who voted for Trump. Whether this group will respond is a key question. For the most part, the conversation will appeal most to those already committed to the Democratic left. That is where the battle is going on now. So it seems designed to win the Democratic nomination and lose the general election. But I am not a politician, so they may see things I can’t. What I can say is that the discussion of socialism is purely symbolic and intended to indicate a commitment to unspecified radical change. But structurally, there is little there that can substantially change the economic system, because there has been a massive convergence between the socialists rising from the French Revolution and the industrialists rising in the factories of Edinburgh. The debate is functionally archaic – but perhaps of some symbolic power.