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INSTITUTION UNIVERSITY STANFORD HOOVER THE •
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The Hoover Institution on War, Revolution and Peace is celebrating its hundredth year at Stanford University. Today both an active public policy research center and an internationally recognized library and archives, the institution was established at Stanford in 1919 by Herbert Hoover, a member of Stanford’s pioneer graduating class of 1895 and the thirty-first president of the United States.

The Institution’s overarching goals:

» To understand the causes and consequences of economic, political, and social change » To analyze the effects of government actions and public policy » To use reasoned argument and intellectual rigor to generate ideas that nurture the formation of public policy and benefit society

Herbert Hoover’s 1959 statement to the Board of Trustees of Stanford University continues to guide and define the Institution’s mission in the twenty-first century:

“This Institution supports the Constitution of the United States, its Bill of Rights, and its method of representative government. Both our social and economic systems are based on

private enterprise, from which springs initiative and

ingenuity. . . .

Ours is a system where

the Federal Government should undertake no governmental, social, or economic action, except

where local government, or the people, cannot undertake it for

themselves. . . .

The overall mis-

sion of this Institution is, from its records, to recall the voice of experience against the making of war, and by the study of these records and their publication to recall man’s endeavors to make and preserve peace, and to sustain for America the safeguards of the American way of life. This Institution is not, and must not be, a mere library. But with these purposes as its goal, the Institution itself must constantly and dynamically point the road to peace, to personal freedom, and to the safeguards of the American system.”

By collecting knowledge and generating ideas, the Hoover Institution seeks to improve the hu- man condition with ideas that promote opportunity and prosperity, limit government intrusion into the lives of individuals, and secure and safeguard peace for all.

The Hoover Institution on War, Revolution and Peace is celebrating its hundredth year at Stanford University.

The Hoover Institution is supported by donations from individuals, foundations, corporations, and partnerships. If you are interested in supporting the research programs of the Hoover Institution or the Hoover Library and Archives, please contact the Office of Development, tele - phone 650.725.6715 or fax 650.723.1952. Gifts to the Hoover Institution are tax deductible under applicable rules. The Hoover Institution is part of Stanford University’s tax-exempt status as a Section 501(c)(3) “public charity.” Confirming documentation is available upon request.

HOOVER DIGEST

RESEARCH + OPINION ON PUBLIC POLICY

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HOOVER DIGEST

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The Hoover Digest explores politics, economics, and history, guided by the scholars and researchers of the Hoover Institution, the public policy research center at Stanford University.

The opinions expressed in the Hoover Digest are those of the authors and do not necessarily reflect the opinions of the Hoover Institution, Stanford University, or their supporters. As a journal for the work of the scholars and researchers affiliated with the Hoover Institution, the Hoover Digest does not accept unsolicited manuscripts.

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On November 11, 1918, the guns fell silent on the Western Front, bringing the Great War to a close. This French war-bonds

poster from late in the war, with its soldier and ragged banner, hints at the conflict’s gargantuan trail of destruction. It stands in stark contrast to an earlier poster by the same artist, Jules-Abel Faivre (1867–1945), which portrayed an eager soldier running toward the action and crying out, “We’ll get them!” The armistice a hundred years ago ended the war, and many illusions about war, but not the war’s suffering. See story, page 202.

HOOVER DIGEST RESEARCH + OPINION ON PUBLIC POLICY Fall 2018 • HOOVERDIGEST.ORG The Hoover Digest explores
HOOVER DIGEST RESEARCH + OPINION ON PUBLIC POLICY Fall 2018 • HOOVERDIGEST.ORG The Hoover Digest explores

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Fall 2018

HOOVER DIGEST

HOOVER’S CENTENNIAL

  • 9 Timeless Values Director Thomas W. Gilligan looks ahead to the Hoover Institution’s anniversary and to another century of defending America’s core values. By Bill Whalen GOVERNMENT GROWTH

    • 15 Entitlements: What We Must Do For some seven decades, entitlement programs have grown almost continuously—and yet, even now, it may not be too late to bring them under control. Adapted from Hoover fellow John F. Cogan’s Hayek Prize lecture.

DEMOCRACY

  • 24 The Original “Great Game” Duels between hegemons are as old as history itself. The nations wrestling over the fate of the world in our own time: China and the United States. By Stephen Kotkin

  • 35 Contending Populisms Populist movements can either check political hubris or make it worse. By Victor Davis Hanson

LAW AND LIBERTY

  • 42 Baking Bad Half-baked reasoning in the Masterpiece Cakeshop case left the most important question unanswered: How far does freedom of expression extend? By Richard A. Epstein

  • 47 Anthony Kennedy’s Principles

The departure of the “swing justice” was significant indeed.

By Jack Goldsmith

HEALTH CARE

  • 51 Savings for All Health savings accounts already drive down the cost of health care. Now we should offer them to everyone. By Scott W. Atlas

  • 54 Health Care Fables Reform is hard but not impossible. We can start by discarding three myths. By Charles L. Hooper and David R. Henderson

THE ECONOMY

  • 61 You Could Google It

Economic analysis makes it clear: the efforts to break up big tech companies just don’t compute. By Richard Sousa and Nicolas Petit

LAW AND LIBERTY 42 Baking Bad Half-baked reasoning in the Masterpiece Cakeshop case left the most
LAW AND LIBERTY 42 Baking Bad Half-baked reasoning in the Masterpiece Cakeshop case left the most

SCIENCE AND THE ENVIRONMENT

  • 65 Searching for Higher Ground The market, not regulations, will teach us how to manage rising seas and temperatures. By Terry L. Anderson

  • 69 Diesel Duplicity In the name of climate change, European policy makers nudged millions of drivers into diesel-powered cars, swapping hypothetical hazards for real ones. By Paul R. Gregory

  • 75 Turning over a New (Organic) Leaf Bioengineered crops help farmers and feed increasing numbers of people, but the organic industry still rejects them. New organic labels could, and should, make room for science.

By Henry I. Miller and J. John Cohrssen

TECHNOLOGY

  • 80 Guardians and Gatekeepers Every fresh form of communication adds to propaganda’s toolkit, but computers have unleashed profound new powers of disinformation. Tech titans need to insist on a transparent, open Internet. By Ralph Peters

  • 84 The Mayor of Tech Territory Cyberspace is often compared to the Wild West—but eventually the West was won and the frontier tamed. It’s time for our virtual villages to get civilized. By Markos Kounalakis EDUCATION

  • 88 Teachers Need Sympathy—and Reform Teaching can be a tough, poorly paid job. But teachers need to recognize that respect must be earned, and that their unions are doing them no favors. By Chester E. Finn Jr.

IRAN

  • 92 A Sorry Bargain Weak from the start, the Iran nuclear deal was a fragile political commitment that left Congress out in the cold. By Jack Goldsmith

  • 95 A Deal Worse President Trump’s scrapping of the joint nuclear deal is a godsend to Iran’s beleaguered leaders. It will also breed more Russian and Chinese interference. By Abbas Milani

  • 99 Revolution Ever After? The Iranian revolution, now nearly forty years old, defied the West and the odds against its survival. How have the mullahs pulled it off? By Eric Edelman and Ray Takeyh

THE MIDDLE EAST

  • 110 Hapless in Gaza The world continues to feed Palestinians’ delusions that they will one day return to land that is now part of Israel— encouraging the Palestinians to spurn peaceful solutions that could actually be attained. By Peter Berkowitz

  • 115 Only a Mirage A two-state solution was always going to require Palestinians and Israelis to trust each other. The latest Gaza violence has rendered such trust all but impossible. By Richard A. Epstein

IRAN 92 A Sorry Bargain Weak from the start, the Iran nuclear deal was a fragile
IRAN 92 A Sorry Bargain Weak from the start, the Iran nuclear deal was a fragile

EASTERN EUROPE

  • 119 Where Is Poland Heading?

A new populist party aims to tighten its grip on institutions— and on Polish history itself. By Norman M. Naimark

  • 127 A Taste of Polish Anger Political figure Ryszard Legutko explains why Poland’s ruling party is blazing its own path. By Tunku Varadarajan

  • 132 A Bloc Divided Authoritarianism reappears in Eastern Europe. Will the European Union defend its values? By Timothy Garton Ash

ASIA

  • 136 Two Roads Why did Japan and China take such divergent paths into the modern world? By Mark Koyama

  • 147 Cutting Out the Middle Kingdom Whatever comes of the Trump administration’s negotiations with Kim Jong Un, China can no longer dominate North Korea’s relations with the United States. By Miles Maochun Yu INTERVIEWS

  • 150 “We’re Accountable to You”

Defense Secretary James Mattis, a former Hoover fellow, on running the Pentagon: “You go in, roll up your sleeves, and go to work.” By Peter Robinson

  • 157 The Jung and the Restless Psychologist and author Jordan Peterson spurns the pursuit of happiness, encourages the pursuit of Jungian archetypes, and lays claim to the modern soul. By Russell Roberts

CALIFORNIA

  • 169 Sunny Delusion California recently enacted a law requiring solar roofs on all new homes. Wasteful and pointless, the measure will damage the state’s economy while doing nothing about climate change. By Lee E. Ohanian

  • 175 The Invisible California The coastal elites ignore the Central Valley—yet force it to abide by their decisions. A portrait of California’s own flyover country. By Bruce S. Thornton HISTORY AND CULTURE

  • 183 Marx’s Moldering Manifesto Karl Marx didn’t free the proletariat or anyone else. By Russell A. Berman

HOOVER ARCHIVES

  • 189 Revolution Comes to Stanford Remembering Alexander Kerensky: leader of the short-lived Russian Provisional Government that ruled between the czar and the Bolsheviks, he spent his later years at Stanford, hoping for “the resurrection of liberty in my land.” By Bertrand M. Patenaude

  • 202 On the Cover

CALIFORNIA 169 Sunny Delusion California recently enacted a law requiring solar roofs on all new homes.
CALIFORNIA 169 Sunny Delusion California recently enacted a law requiring solar roofs on all new homes.

HOOVER’S CENTENNIAL

Timeless Values

Director Thomas W. Gilligan looks ahead to the Hoover Institution’s anniversary and to another century of defending America’s core values.

HOOVER’S CENTENNIAL Timeless Values Director Thomas W. Gilligan looks ahead to the Hoover Institution’s anniversary and

By Bill Whalen

As the Hoover Institution approaches its centennial, director Thomas W. Gilligan reflects on the institution’s founding principles, its achievements, and its role today.

Bill Whalen: Since September 2015, Tom Gilligan has served as the Tad and Dianne Taube Director at the Hoover Institution as well as a Hoover senior fellow. We persuaded Tom to move to California from the great state of Texas. Before becoming the Hoover Institution’s director, Tom was dean of the McCombs School of Business at the University of Texas at Austin. This July Fourth was the 242nd anniversary of the founding of this republic, and for a lot of people a day off from work to spend with the family. But the Fourth is also a day for reflection, Tom, and I’m going to read you a couple of quotes from some famous people. I want you to reflect on what freedom means to you. First, let’s start with Thomas Jefferson, who wrote, “The cost of freedom is eternal vigilance.” Let’s now shift to Ronald Reagan, with whom a lot of fellows in this institu- tion have had a personal or working relationship. Reagan said, “Freedom is one of the deepest and noblest aspirations of the human spirit.”

Thomas W. Gilligan is the Tad and Dianne Taube Director at the Hoover Insti- tution. Bill Whalen is a research fellow at the Hoover Institution and the host of Area 45, a Hoover podcast devoted to the policy avenues available to America’s forty-fifth president.

Then there’s someone who cast a very long shadow over this institution. It was the late, great Milton Friedman who said, “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.”

Thomas W. Gilligan: I agree with all of them. I started my adult life as a ser- viceman in the Air Force. I was a Russian linguist. This was a time in the Sev- enties, when the Cold War was going strong. There were two pretty evident contrasts with America and the freedom it offered: China and Russia—the Soviet Union at the time—and neither placed freedom very high up on its list of priorities. The advantages of freedom were paramount, evident, and worth fighting for. I think you really have to prioritize freedom to get anywhere as a society. What Jefferson said is exactly right: freedom isn’t a naturally occurring state. It’s some - thing that has to be worked for all the time. Our current secretary of defense, Jim Mattis, whom we all know from his time here as a Hoover fellow, says this all the time. It really is something that you have to protect, and nurture, and guard against erosion all the time.

Then there’s someone who cast a very long shadow over this institution. It was the late,

Whalen: We have had a very crazy month in this country, a lot of uncivil things—a lot of bad speech,

hateful actions. But this country allows you incredible freedom. Freedom to

do some very silly things, such as heckling people in restaurants Gilligan: Yes.

. .

.

Whalen:

. . .

or chanting outside their homes; freedom to kick people out of

a restaurant, if you want to.

Gilligan: Right. But with freedom comes responsibility as well. Shouting people out of a restaurant is probably taking your freedoms too far. Keeping people from assembling peacefully to protest is going too far. The paradox of modern America is that many people extend their freedoms much too far and particularly as they impede other people. The country has never been freer, if you think about it. After the civil rights movement and all the other equality movements, the gay rights move - ment, people are free to conduct their lives the way they want to. That is

an unqualified good thing. But I think we have kind of crossed the line into disrespect, into not worrying about ensuring that our fellow citizens enjoy the same freedoms that we enjoy. And by the way, I’m not calling for any kind of governmental action to correct that.

Whalen: Right.

Gilligan: I think it’s a civic culture issue. The way to deal with it is just stand up to it, and speak out against boorish behavior that infringes upon people’s freedoms.

Whalen: The challenge to this society is whether or not we can have an adult conversation about these basic rights.

Gilligan: I’m not confident right now that we can have adult conversations about much. We really are polarized, particularly at the elite level. David Brady and Mo

Fiorina have talked about that a lot in your podcast. But again, I’m not for any legislative solutions. I’m just for trying to wait it out, and talk through it, and work through it. We have all come from

families where we had uncomfortable din- ners. Where we end up

“What Jefferson said is exactly right:

freedom isn’t a naturally occurring state. It has to be worked for all the time.”

mostly hollering at each other. The point is just to show up to dinner the next night, and see if the

conversation can be more productive; and the next night and the next night. We owe it to each other as citizens to engage with one another, even if we disagree vehemently.

Whalen: Right. Let’s talk about freedom through the lens of the Hoover Institution, Tom. Hoover likes to put freedom into three channels. One is individual freedom. The second is economic freedom. The third is political freedom.

Gilligan: Well, we started as a library set up by then-citizen Herbert Hoover in order to gather papers that explored the causes of war. What are the pred- icates of peace? How do societies, free societies, govern themselves in ways that avoid conflict? That remains a focus of the Hoover Institution today. We continue to host thousands of researchers every year to uncover knowledge about the causes of war.

I think part of what “freedom” is about is just avoiding the scourge of war—allowing people to flourish, and grow, and prosper in peace to let their freedoms take flight. That’s a core issue.

Whalen: OK. Define economic freedom.

Gilligan: Well, after Hoover had stepped down from the presidency, America went through this very deep and complex debate about what the role of the government would be in assuring economic prosperity, or at least security. Through the New Deal,

“With freedom comes responsibility. Shouting people out of a restaurant is probably taking your freedoms too far.”

we had Social Secu-

rity and various kinds of government programs designed to address

economic need. Former president Hoover pushed back against that. He was worried that the broad level of economic security guaranteed by the government would necessarily infringe upon the freedom of people to explore their economic opportunities and options, and to start new businesses. He was concerned about the tax burden necessary to carry a very large central government that guaranteed economic prosperity or security. I think he also anticipated a lot of the concern we have now about regulation in the administrative state. The laws and regulations would limit people’s economic freedom and prosperity. This is where Milton Friedman is a great voice: he was quick to recognize that you don’t have many freedoms at all if you don’t have eco - nomic freedoms.

The mission of the Hoover Institution was augmented in 1959 to have us work on public policy research that highlighted the value of free enterprise. The value of limited and constitutional government, government that didn’t intrude too much in economic decisions. A government that followed the rules as opposed to be being arbitrary and capricious. That’s a very big part of the research we do.

Whalen: I’m hard pressed to think of a more talented bench of economists in this country than the people in this institution.

Gilligan: Very strong. We had Milton Friedman and Gary Becker, who have passed away. Today we have John Taylor, a clarion call on monetary policy. Ed Lazear and Michael Boskin, former chairmen of the Council of Economic Advisers. A young stable of economists, including John Cochrane. John Cogan, who has a stunning new book on the history of entitlements in this country.

Whalen: The third category, political freedom?

Gilligan: We have a great group of political scientists and other people who study liberty and democratic governance. Which political systems are best at preserving the kind of liberty associated with human flourishing and well- being? Another issue is trickier for the times: what role should America play in promoting or encouraging the dissemination or diffusion of democratic processes around the world?

Whalen: I want to read you a passage from the good book—not the Bible, but Herbert Hoover, American Individualism. Here is what he writes: “Our

individualism differs from all others because it embraces these great ideals:

that while we build our society upon the attainment of the individual, we shall safeguard to every individual an equality of opportunity to take that position in the community to which his intelligence, character, ability, and ambition entitle him; that we keep the social solu-

tion free from frozen strata of classes; that we shall stimulate effort of each individ-

“This is where Milton Friedman is a great voice: he was quick to recognize that you don’t have many freedoms at all if you don’t have economic freedoms.”

ual to achievement; that through an enlarging sense of responsibility and understanding we shall assist him to this attainment; while he in turn must stand up to the emery wheel of competition.” Herbert Hoover passed away in 1964. He did not live to see what’s going on in America today. How would Herbert Hoover make sense of what’s going on today?

Gilligan: I think he would obviously be distressed at the move away from meritocracy, the growth of identity politics, and so on. I think he would still recognize a lot that he likes in America. It’s still a place laden with opportuni- ty. While I think he would find fault with some of the things we do, I think he would find great comfort and satisfaction in the way America works, gener- ally speaking.

Whalen: Next summer is the hundredth anniversary of the Hoover Institu- tion. How do you plan to celebrate it?

Gilligan: We’re going to have a yearlong celebration of lifting up our values to as many people as we possibly can. We’ll have a bit of a recasting of the

strategic plan of the Hoover Institution, designed to answer the questions, “What do we want to be in the second century? What do we want to aspire

to? What we want to do?” We want to apply the values of the Hoover Institu- tion to research that informs public policy. And to propagate it, not only to policy makers in Washing-

ton and the states but also

“Which political systems are best at preserving the kind of liberty asso- ciated with human flourishing and well-being?”

to ordinary people—to the public that wants to be informed about these issues. The occasion of

our centennial celebra- tion just affords us the opportunity to remind everybody what our values are. How durable they are. How they can take flight in current public policy debates.

strategic plan of the Hoover Institution, designed to answer the questions, “What do we want to

Excerpted from Area 45, a Hoover Institution podcast. © 2018 The Board of Trustees of the Leland Stanford Junior University.

strategic plan of the Hoover Institution, designed to answer the questions, “What do we want to
strategic plan of the Hoover Institution, designed to answer the questions, “What do we want to

Available from the Hoover Institution Press is Milton Friedman on Freedom: Selections from The Collected Works of Milton Friedman, edited by Robert Leeson and Charles G. Palm. To order, call (800) 888-4741 or visit www.hooverpress.org.

GOVERNMENT GROWTH

Entitlements:

What We Must Do

For some seven decades, entitlement programs have grown almost continuously—and yet, even now, it may not be too late to bring them under control. Adapted from Hoover fellow John F. Cogan’s Hayek Prize lecture.

GOVERNMENT GROWTH Entitlements: What We Must Do For some seven decades, entitlement programs have grown almost

By John F. Cogan

E ntitlements were never far from F. A. Hayek’s mind as he wrote

about the dangers of the collectivist state. While he focused in

The Road to Serfdom on the consequences of government control

over the means of production, he also presciently warned us that

“the demand for security may become a danger to liberty.” His chapters in The Constitution of Liberty on the rise of the welfare state, Social Security, and income redistribution reflect his growing concern about the dangers of entitlements. Their growth over the past six decades confirms the validity of Professor Hayek’s concerns. The title of my book The High Cost of Good Intentions is an apt descrip -

tion of how we should see the problem created by entitlements. Entitlement programs have been established with the best of intentions—intentions that spring from the natural human desire to help those who are in need through

John F. Cogan is the Leonard and Shirley Ely Senior Fellow at the Hoover Insti- tution and a member of Hoover’s Shultz-Stephenson Task Force on Energy Policy, the Working Group on Economic Policy, and the Working Group on Health Care Policy.

no fault of their own. But over time they have evolved into a costly, complex system that now transfers hundreds of billions of dollars each month from one group in society to another, with little regard for actual human need. They have strayed far from their well-intentioned goals. How far? Consider the following: In 2016,

[Taylor Jones—for the Hoover Digest]

» Fifty-four percent of all US households received cash or in-kind benefits from at least one entitlement program. » This number includes senior citizens, virtually all of whom receive Social Security and Medicare. So excluding elderly persons, two out of every five US households headed by a person under age sixty-five received benefits from at least one entitlement program. » Six out of every ten children are growing up in households that are on the benefit rolls of at least one entitlement program. » Most entitlement assistance has little to do with alleviating poverty. » More than 60 percent of all households that receive entitlement benefits have incomes above the poverty line. » A whopping $700 billion goes annually to households in the upper half of the income distribution. The cost of this system is high. Its incentives undermine the natural desire for self-sufficiency and its enormous fiscal cost is a threat to continued eco - nomic prosperity.

A DAUGHTER OF THE CIVIL WAR

In nineteenth-century entitlement programs, we see the same forces driving their expansion and the same pattern of steady, incremental liberalizations that we see in modern entitlements. We also see the same excesses. One fundamental force which has been operating continually on entitle - ment programs throughout all of US history is called the “equally worthy claim.” The force originates from a well-meaning impulse to treat all similarly situated persons equally under the law. Here’s how it works. When an entitlement law is first enacted, for policy or fiscal reasons, it usually confines benefits to individuals deemed to be particu- larly worthy of assistance. As time passes, groups of excluded individuals come forth to lay claims that they are no less deserving of aid. Pressure is brought by, or on behalf of, these excluded groups to relax eligibility rules. This ever- present pressure is magnified during periods of budget surpluses, and since the New Deal, during periods of economic distress, and by public officials’ imperative to be elected and re-elected. Eventually, the government acquiesces and additional “worthy” claimants are allowed to join the benefit rolls. But the broadening of eligibility rules just brings another group of claim- ants closer to the eligibility boundary line, and the pressure to relax qualify- ing rules begins all over again. The process of liberalization repeats until the entitlement program reaches a point where its original noble goals are no

longer recognizable.

The very first major entitlement program, the Revolutionary War pen- sion program, illustrates well the operation of the equally worthy claim. The original program limited disability pensions to members of the Continental Army and Navy who were injured in battle and to widows of those killed in battle. Starting from this narrow base and honorable intentions, Congress first extended eli- gibility to members of state militias and volunteers. Eventually benefits were granted to virtually all soldiers who had served in the war, regardless of whether or not they were disabled.

The last of these liberalizations, the Universal Pension Law of 1832, deserves some comment. The law was not expected to be costly. After all, 1832 was forty-nine years after the war for independence had ended. But the law produced an astounding and unanticipated flood of claimants. Within a year of the law’s passage, the number of persons on the pension rolls had doubled. The surge in claims was so large that it led former president John Quincy Adams to remark that Senator Uriah Tracy “used to say that the soldiers of the Revolution never died—that they were immortal. Had he lived to this time, he would have seen that they multiply with the lapse of time.” The Revolutionary War pattern of incremental expansions was repeated for Civil War pensions, except on a far grander scale. Like the Revolutionary War program, Civil War pensions were initially confined to Union soldiers and sailors who had suffered wartime injuries. In the early 1870s, when it was thought that all soldiers who were disabled in wartime service would have already been granted a pension, there were about 250,000 on the rolls. Then the liberalizations began. When they ended, pensions had been extended to virtually all Union Civil War veterans. In the 1890s, thirty years after General Lee surrendered at Appomattox, nearly one million veterans and their sur- vivors were receiving Civil War pensions. Pension expenditures, at the time, accounted for 40 percent of federal spending, slightly higher than Social Security and Medicare’s share of the federal budget today. Congress badly underestimated the cost of Civil War pensions and how long the program would last. Civil War pension expenditures didn’t reach their all-time peak until fifty years after the war began. Even more remarkable, one Civil War pension recipient is still alive today. How, you might ask, is this even possible? After all, it’s been one hundred and fifty-three years since the war ended. Well, her father, Mose Triplett, served in the Union Army for a time. His Union Army service eventually allowed him to qualify for a pension. Many years later, in 1924, Mose Triplett married Elida Hall. He was seventy-eight, she was twenty-eight. Their daughter, Irene Triplett, was born a few years later. Today, as a survivor of a Union soldier, she is receiving a modest pension, around $80 per month.

NINETEENTH-CENTURY SPLURGES

The underlying forces that drove nineteenth-century veterans’ pensions are evident as drivers of modern entitlements. The original Social Security program was premised on old-age poverty protection and covered only about 60 percent of the workforce. Today, its coverage is universal and, along with its sister program, Medicare,

the two programs allow middle class seniors to enjoy a comfortable retirement. The original Social Security disability program helped only persons fifty and older who were permanently and totally disabled. Today, it provides benefits regardless of age and to workers who are temporarily or partially disabled. The original Medicaid program was a medical supplement mainly for unmarried welfare mothers, and poor elderly and disabled persons. Today, one in every four non-elderly persons in the United States is on the program. The excesses of nineteenth-century entitlements were every bit as egre -

gious as today’s. A good example is the Navy disability pension program. Until the 1840s, Navy pensions were paid from a trust fund financed by prize

money from the capture

The “equally worthy claim” is a major cause of bloated entitlements.

of foreign vessels. With the trust fund experienc-

ing large annual surplus- es, Congress passed the Jarvis Bill in 1837. The law granted widows’ pensions that were retroactive to the date of their Navy husbands’ death. The law produced stunningly large awards. One Sarah Fletcher, the widow of Captain Patrick Fletcher, was awarded benefits back to his untimely death in the year 1800. In today’s dollars, the retroactive benefit would total $628,000. Many others received retroactive awards in excess of $100,000 in today’s money, and the Jarvis Bill soon bankrupted the Navy trust fund. After 1841, most Navy pensions were financed by general revenues. Compare the Navy trust fund problem with twentieth-century examples:

Social Security and Medicare. As a result of benefit increases enacted during years of trust fund surpluses, these two programs now provide the typical married couple who reach age sixty-six with cash and health care benefits that are worth over a million dollars over their remaining lives, after adjust- ing for inflation. Not surprising, the trust funds that finance both programs are heading toward bankruptcy.

A WELL-WIELDED VETO

The 220-year history of US entitlement legislation has been one of nearly continuous, incremental liberalizations. There are, however, a few notable efforts to rein in entitlement programs. Grover Cleveland provides us with the first, though not so successful, attempt. During the 1870s and 1880s, Congress adopted the rather disgrace - ful practice of granting large numbers of Civil War pensions to specific

individuals through the enactment of private relief bills. Within months of

taking office, President Cleveland began vetoing these bills. His vetoes reveal the extent of the program’s abuse. In one case, Congress had awarded a pen- sion to Sallie Anne Bradley, a widow who claimed that her husband had died in the Battle of Nash- ville. As it turned out,

he was nowhere near the battle. According to a local newspaper, many years after the

Today’s entitlement system transfers hundreds of billions of dollars every month from one group to another, with little regard for actual human need.

war, he “had choked to death on a piece of beef when gorging himself in a drunken spree.” Cleveland became frustrated with Congress, and his veto messages increas- ingly acerbic. They make for marvelous reading. One claim involved a widow whose husband had drowned in 1875 and who finally got around to filing a claim in 1885. Cleveland summarized the widow’s appeal as follows: “It is claimed that in an effort to drive across that bay in a buggy with his young son, the buggy was overturned and both were drowned. The application for a pension was based upon the theory that during his military service, the deceased soldier contracted rheumatism, which so interfered with his ability to save himself by swimming that his death may be fairly traced to a disability incurred in the service.” The president wasn’t buying any of it. He promptly vetoed the bill. But controlling an entitlement program by vetoing individual pension bills is not a winning strategy. During Cleveland’s first term, despite his 228 vetoes, the pension rolls increased 50 percent.

FRANKLIN ROOSEVELT—BUDGET CUTTER?

President Franklin Roosevelt provides a second example of presidential action. His is the most successful effort in US history to rein in an individual

entitlement. Yes, when it came to government spending, the father of the modern entitlement state was a very different man in 1933 from what he was in 1935. In his first year in office, Roosevelt removed nearly four hundred thousand veterans from the pension rolls and reduced monthly benefits for most of those remaining on the rolls by 25 percent. For the next eight years, until the United States entered World War II, he steadfastly resisted attempts by Congress to overturn those reductions. Here’s how he did it. Roosevelt’s goal upon taking office was to get the economy back on its feet. After the banking bill, his top legislative prior- ity was to reduce the budget deficit by cutting federal spending. Veterans’

expenditures, the majority of which were World War I pensions, accounted

for 25 percent of the budget, so they had to be on the chopping block. Seven days after taking office, the president proposed that Congress repeal all major veterans’ pension laws and allow him to unilaterally restrict eligibility and cut benefits. Ten days later, Congress passed the so-called Economy Act in accordance with his wishes. A few months later, the adminis- tration issued regulations that by year’s end had drastically reduced pension expenditures. Enacting and maintaining these reductions in the face of a congressio - nal backlash took all of the president’s formidable skills. He then placated protesting veterans who had camped out in the capital by sending his wife, Eleanor, to listen to their stories, sing songs, and sympathize with them. Ronald Reagan provides us with another example of a president success- fully tackling entitle -

ments. President Reagan

The typical married couple who reach age sixty-six are offered cash and health care benefits worth more than a million dollars (after inflation) over their remaining lives.

followed FDR’s model, proposing entitlement changes to achieve a larger goal of putting the economy and federal

finances on a sounder footing. Also like FDR, Reagan backed up his actions with a strong public policy argument for his reforms. He achieved his successes early and then successfully battled Congress’s attempts to reverse his policies. The entitle - ment spending restraint achieved by his administration is unmatched by any

other administration in US history.

REASONS FOR HOPE

So, what are the prospects for entitlement reform? Recent presidential administrations and Congresses certainly give us no reason for optimism. And many students of politics say that the advance of the entitlement state cannot be checked, that the forces which drive entitlement liberalizations are just too strong. I disagree. Why? First, the changes needed to meet the fiscal challenge posed by entitle - ments, while politically difficult, are straightforward. We know what they are:

modestly reduce the growth in entitlement benefits and increase economic growth. Second, history shows us that it can be done. Presidents Roosevelt and Reagan provide the road map. They developed strong public policy

arguments for their proposals, rallied public support for them, and cajoled Congress into acting. This formula can work again. We should have no illu- sions about the damage

that excessive entitle - ment spending can cause. Throughout his- tory, rising public debt

President Reagan enacted entitle- ment changes to achieve a larger goal: putting the economy and federal finances on a sounder footing.

eventually brings some combination of high inflation, economic stagnation, and declining standards of living. But I believe that we can and will act before the economic conse - quences of excessive debt become too severe. There’s one final reason for my optimism: our country has faced and suc- cessfully resolved many larger challenges over the course of its history. We fought a Civil War to correct a fundamental flaw in the Constitution. We then bound the nation together again to propel us forward as a beacon of freedom for the rest of the world. A century later, we fought a titanic struggle with the Soviet Union. We emerged victorious, in a monumental triumph of freedom over authoritarian rule. By comparison, the fiscal challenge posed by growing entitlements seems manageable. We have an army of public policy scholars at the Manhattan Institute, at the Hoover Institution, and elsewhere. These intellectual leaders have the capacity to develop policy solutions, educate political leaders, and together move our country to action. We just have to keep devising policies, writing, and speaking. I am pleased to be a part of that effort.

arguments for their proposals, rallied public support for them, and cajoled Congress into acting. This formula

Adapted from John F. Cogan’s Hayek Lecture, presented June 7 after he was awarded the Manhattan Institute’s 2018 Hayek Book Prize for The High Cost of Good Intentions: A History of US Federal Entitlement Pro - grams (Stanford University Press, 2017).

arguments for their proposals, rallied public support for them, and cajoled Congress into acting. This formula
arguments for their proposals, rallied public support for them, and cajoled Congress into acting. This formula

Available from the Hoover Institution Press is Healthy, Wealthy, and Wise: Five Steps to a Better Health Care System, second edition, by John F. Cogan, R. Glenn Hubbard, and Daniel P. Kessler. To order, call (800) 888-4741 or visit www.hooverpress.org.

DEMOCRACY

The Original “Great Game”

Duels between hegemons are as old as history itself. The nations wrestling over the fate of the world in our own time: China and the United States.

DEMOCRACY The Original “Great Game” Duels between hegemons are as old as history itself. The nations

By Stephen Kotkin

G eopolitics didn’t return; it never went away. The arc of history bends toward delusion. Every hegemon thinks it is the last; all ages believe they will endure forever. In reality, of course, states rise, fall, and compete with one another along the way. And how

they do so determines the world’s fate. Now as ever, great-power politics will drive events, and international rivalries will be decided by the relative capacities of the competitors—their material and human capital and their ability to govern themselves and their foreign affairs effectively. That means the course of the coming century will largely be determined by how China and the United States manage their power resources and their relationship. Just as the free-trading United Kingdom allowed its rival, imperial Ger- many, to grow strong, so the free-trading United States has done the same with China. It was not dangerous for the liberal hegemon to let authoritarian

Stephen Kotkin is a senior fellow at the Hoover Institution and the John P. Birke- lund ’52 Professor in History and International Affairs in the Woodrow Wilson School and History Department of Princeton University. His latest book is Stalin:

Waiting for Hitler, 1929–1941 (2017, Penguin Press).

competitors gain ground, the logic ran, because challengers would neces- sarily face a stark choice: remain authoritarian and stagnate or liberalize to

continue to grow. Either way, the hegemon would be fine. It didn’t end well the first time and is looking questionable this time, too. China will soon have an economy substantially larger than that of the Unit- ed States. It has not democratized yet, nor will it anytime soon, because com- munism’s institutional setup does not allow for successful democratization. But authoritarianism has not meant stagnation, because Chinese institutions have managed to mix meritocracy and corruption, competence and incompe - tence, and they have somehow kept the country moving onward and upward. It might slow down soon, and even implode from its myriad contradictions. But analysts have been predicting exactly that for decades, and they’ve been consistently wrong so far. Meanwhile, as China has been powering forward largely against expecta - tions, the United States and other advanced democracies have fallen into domestic dysfunction, calling their future power into question. Their elites steered generations of globalization success -

fully enough to enable vast social mobility and human progress around the world, and they did quite well along the

China’s institutions have managed to mix meritocracy and corruption, competence and incompetence, and somehow keep the country moving upward.

way. But as they gorged themselves at the trough, they overlooked the negative economic and social effects of all of this on citizens in their internal peripheries. That created an opening for demagogues to exploit, which they have done with a vengeance. The Great Depression ended an earlier age of globalization, one that began in the late nineteenth century. Some thought the global financial crisis of 2008 might do the same for the current wave. The system survived, but the emergency measures implemented to save it—including bailouts for banks but not for ordinary people—revealed and heightened its internal contradic- tions. And in the decade following, antiestablishment movements have grown like Topsy.

GLOBALIZATION AND GROWING PAINS

Today’s competition between China and the United States is a new twist on an old story. Until the onset of the nineteenth century, China was by far the

world’s largest economy and most powerful country, with an estimated 40 percent share of global GDP. Then it entered a long decline, ravaged from without and within— around the same time the United States was born and began its long ascent to global dominance. The United States’ rise could not have occurred without China’s weakness, given how important US dominance of Asia has been to American primacy. But nor could China’s revival have occurred without the United States’ provision of security and open markets. So both countries have dominated the world, each has its own

strengths and weaknesses, and for the first time, each confronts the other as a peer. It is too soon to tell how the innings ahead will play out. But we can be confident that the game will continue. To understand the world of tomorrow, look back to yesterday. In the 1970s, the United States and its allies were rich but disordered and stagnant; the Sovi- et Union had achieved military parity and was continuing to arm; China was convulsed by internal turmoil and poverty; India was poorer than China; Brazil, ruled by a military junta, had an economy barely larger than India’s; and South Africa was divided into homelands under a regime of institutionalized racism. Four decades later, the Soviet Union has dissolved, and its successor states have embraced capitalism and private property. China, still politically commu- nist, chose markets over planning and has grown to have the world’s second- largest economy. Once-destitute India now has the sixth-largest economy. Brazil became a democracy, experienced an economic takeoff, and now has the eighth-largest economy. South Africa overturned apartheid and became a multiracial democracy. The direction of these changes was no accident. After World War II, the United States and its allies worked hard to cre - ate an open world with ever-freer trade and ever-greater global integration. Policy makers bet that if they built it, people would come. And they were right. Taken together, the results have been

[Taylor Jones—for the Hoover Digest]

extraordinary. But those same policy makers and their descendants weren’t prepared for success when it happened. Globalization creates wealth by enticing dynamic urban centers in richer countries to invest abroad rather than in hinterlands at home. This increases economic efficiency and absolute returns, more or less as conventional eco - nomic theory suggests. And it has reduced inequality at the global level by enabling hundreds of millions of people to rise out of grinding poverty. But at the same time, such redirected economic activity increases domes- tic inequality of opportunity and feelings of political betrayal inside rich countries. And for some of the losers, the injury is compounded by what feels like cultural insult, as their societies become less familiar. Western elites concentrated on harvesting globalization’s benefits rather than minimizing its costs, and as a result, they turbocharged the process and exacerbated its divisive consequences. Too many convinced themselves that global integration was fundamentally about economics and sameness and would roll forward inexorably. Only a few Cassandras, such as the political scientist Samuel Huntington, pointed out that culture was more powerful and that integration would accentuate differences rather than dissolve them, both at home and abroad. In 2004, he noted that in today’s America, a major gap exists between the nation’s elites and the general public over the salience of nation- al identity

compared to other identities and over the appropri- ate role for America in the world. Substantial elite elements are increasingly divorced from their country, and the American public, in turn, is increasingly disillusioned with its government.

Soon enough, “outsider” political entrepreneurs seized the moment. Having embraced an ideology of globalism, Western elites left themselves vulnerable to a mass political challenge based on the majoritarian nation- alism they had abandoned. The tribunes of the popular insurgencies may traffic in fakery, but the sentiments of their voters are real and reflect major problems that the supposed experts ignored or dismissed.

AMERICA HELPED CHINA’S RISE

For all the profound changes that have occurred over the past century, the geopolitical picture today resembles that of the 1970s, and even the 1920s, albeit with one crucial exception. Diminished but enduring Russian power in Eurasia? Check. Germany at the core of a strong but feckless Europe? Check. A distracted US giant, powerful enough to lead but wavering about doing so? Check. Brazil and South Africa dominating their regions? Check. Apart from the stirrings of older Indian, Ottoman, and Persian power centers, the most important difference today is the displacement of Japan by China as the central player in the Asian balance of power.

China’s industriousness has been phenomenal, and the country has certainly earned its new position. But it could never have achieved what it has over the past two generations without the economic openness and global security provided by the United States as a liberal hegemon. From the late nineteenth and into the twentieth century, the United States—unlike the Europeans and the Japanese— spent relatively little effort trying to establish direct colonial rule over foreign territory. It chose instead to advance its interests more through voluntary alliances, multilateral institutions, and free trade. That choice was driven largely by enlightened self-interest rather than altruism, and it was backed up by global military domination. And so the various multinational bodies and processes of the postwar system are actu- ally best understood not as some fundamentally new chimera called “the liberal international order” but as mechanisms for organizing and extending the United States’ vast new sphere of influence. Strong countries with distinctive ideologies generally try to proselytize, and converts generally flock to a winner. So it should hardly be surpris- ing that democracy, the rule of law, and other American values became globally popular during the postwar years, given the power of the US example (even in spite of the fact that US ideals were often more honored in the breach than the observance). But now, as US relative power has diminished and the US brand has run into trouble, the fragility of a system dependent on the might, competency, and image of the United States has been exposed.

Will the two new superpowers find a way to manage their contest without stumbling into war? If not, it may well be because of Taiwan. The thriving Asian tiger is yet another tribute to the wonders of globalization, having become rich, strong, and democratic since its unprepossessing start seven decades ago. But Beijing has been resolute in insisting on reclaiming all territories it regards as its historical possessions, and Chinese President Xi Jinping has personally reaffirmed that Taiwan is Chinese territory and a “core interest.” And the People’s Liberation Army, for its part, has gradually amassed the capability to seize the island by force. Such a radical move might seem crazy, given how much chaos it could pro - voke and how deeply China’s continued internal success depends on external stability. But opinion polls of the island’s inhabitants have recorded a decisive trend toward a separate Taiwanese identity, the opposite of what Beijing had expected from economic integration. (Western elites aren’t the only ones who harbor delusions.) Will an increasingly powerful Beijing stand by and watch its long-sought prize slip away?

NEW REALITIES, NEW POSITIONS

Over the past decade, Russia has confounded expectations by weathering cratering oil prices and Western sanctions. Vladimir Putin’s regime may be a gangster kleptocracy, but it is not only that. Even corrupt authoritarian regimes can exhibit sustained good governance in some key areas, and smart macroeconomic policy has kept Russia afloat.

China, too, has a thuggish and corrupt authoritarian regime, and it, too, has proved far more adaptable than most observers imagined possible. Its elites have managed the development of a continent-sized country at an unprecedented speed and scale, to the point where many are wondering if China will dominate the world. In 1800, one would have expected China to dominate a century later—and instead, Chinese power collapsed and American power skyrocketed. So straight-line projections are perilous. But what if that early-nineteenth-century forecast was not wrong but early? Authoritarianism is all-powerful yet brittle, while democracy is pathetic but resilient. China is coming off a long run of stable success, but things could change quickly. After all, Mao Zedong led the exact same regime and was one of the most barbaric and self-destructive leaders in history. Just as

many people once assumed that China could never rise so far, so fast, now some assume that its rise must inevitably

continue—with as little justification. Xi’s decision to centralize power has

The United States—unlike Europe and Japan—chose to advance its interests through voluntary alliances, multilateral institutions, and free trade.

multiple sources, but one of them is surely an appreciation of just how formidable are the prob - lems China faces. The natural response of authoritarian regimes to crises is to tighten their grip at the top. This allows greater manipulation of events in the short term, and sometimes impressive short-term results. But it has

never yet been a recipe for genuine long-term success. Still, for now, China, backed by its massive economy, is projecting power in all directions, from the East China and South China Seas, to the Indian Ocean, to Central Asia, and even to Africa and Latin America. Wealth and consistency have combined to yield an increasingly impressive soft-power portfolio along with the hard-power one, enabling China to make inroads into its opponent’s turf. Australia, for example, is a rich and robust liberal democracy with a high degree of social solidarity and a crucial pillar of the American order—and it happens to be smack in the path of China’s expansion. Beijing’s influence and interference there have been growing steadily over the last generation, both as a natural consequence of economic interdependence and thanks to a deliberate long-term campaign on the part of China to lure Australia into a twenty-first-century version of Finlandization. Similar processes are playing

out across Asia and Europe, as China embarks on building a Grand Eurasia centered on Beijing, perhaps even turning Europe away from the Atlantic. Right now, the United States’ debasement is giving China a boost. But as

Adam Smith noted, there is indeed “a great deal of ruin in a nation,” and the United States remains the strongest power in the world by far. Furthermore, this will not be a purely bilateral game. Yes, the

United Kingdom allowed Germany to rise and lead a hegemonic challenge against it—twice. But it

Until the onset of the nineteenth century, China was by far the world’s largest economy and most powerful country.

also allowed the United States to rise, and so when those challenges came, it was possible, as Win- ston Churchill understood, for the New World, with all its power and might, to come to the aid of the Old. In the same way, the United States has allowed China to rise but has also facilitated the growth of Europe, Japan, India, Brazil, and many others. And however much those actors might continue to chafe at aspects of American leadership or chase Chinese investment, they would prefer the continua- tion of the current arrangements to being forced to kowtow to the Middle Kingdom. The issue of the day might seem to be whether a Chinese sphere of influ- ence can spread without overturning the existing US-created and US- dominated international order. But that ship has sailed: China’s sphere has expanded prodigiously and will continue to do so. At the same time, China’s

revival has earned it the right to be a rule maker. The real questions, there - fore, are whether China will run roughshod over other countries, because it can—and whether the United States will

share global leadership, because it must. Are a hegemon’s com- mitments co-dependent,

Authoritarian regimes respond to crises by tightening their grip at the top. This has never been a recipe for genuine long-term success.

so that giving up some undermines the rest? Can alliances and guarantees in one place unwind while those in another remain strong? In short, is retrenchment possible, or does even a hint of retreat have to turn into a rout? A well-executed US transition from hegemonic hyperactivity to more selective global engage -

ment on core interests might be welcome both at home and abroad, however

much politicians and pundits would squeal. But cases of successful peaceful retrenchment are rare, and none has started from such an apex.

History tells us nothing about the future except that it will surprise us. Three-dimensional printing, artificial intelligence, and the onrushing digital and genetics revolutions

may upend global trade

Western elites concentrated on har- vesting globalization’s benefits rather than minimizing its costs.

and destabilize the world radically. But in geopoli- tics, good outcomes are

possible, too—realism is not a counsel of despair. For today’s gladiators to buck the odds and avoid falling at each other’s throats like most of their predecessors did, however, four things will be necessary. Western policy makers have to find ways to make large majorities of their populations benefit from and embrace an open, integrated world. Chinese policy makers have to continue their coun- try’s rise peacefully, through compromise, rather than turning to coercion abroad, as well. The United States needs to hew to an exactly right balance of strong deterrence and strong reassurance vis-à-vis China and get its house in order domestically. And finally, some sort of miracle will have to take care of Taiwan.

much politicians and pundits would squeal. But cases of successful peaceful retrenchment are rare, and none

Reprinted by permission of Foreign Affairs (www.foreignaffairs.com). © 2018 Council on Foreign Relations Inc. All rights reserved.

much politicians and pundits would squeal. But cases of successful peaceful retrenchment are rare, and none
much politicians and pundits would squeal. But cases of successful peaceful retrenchment are rare, and none

Available from the Hoover Institution Press is

Hammer, Sickle, and Soil: The Soviet Drive to

Collectivize Agriculture, by Jonathan Daly. To order, call (800) 888-4741 or visit www.hooverpress.org.

DEMOCRACY

Contending

Populisms

Populist movements can either check political hubris or make it worse.

DEMOCRACY Contending Populisms Populist movements can either check political hubris or make it worse. By Victor

By Victor Davis Hanson

P opulism is seen today as both a pejorative and a positive noun.

In fact, in the present age, there are two sorts of populism. Both strains originated in classical times and persisted in the West until today.

One, in antiquity, was known as the base populism. It involved the unfet- tered urban “mob,” or what the Athenians disapprovingly dubbed the ochlos and the Romans disparagingly called the turba. Such popular movements were spearheaded by the so-called demagogoi (“leaders of the people”) or in Roman times the more radical popular tribunes. These were largely urban movements. Protesters focused on the redistri- bution of property, radical democratization, taxes on the wealthy, the cancel- lation of debts, vast increases in public entitlements, and civic employment. The French Revolution and European upheavals of 1848 reflect some of the same themes. Today, Occupy Wall Street, Antifa, Black Lives Matter, and

Victor Davis Hanson is the Martin and Illie Anderson Senior Fellow at the Hoover Institution and the chair of Hoover’s Working Group on the Role of Mili- tary History in Contemporary Conflict. He is the recipient of the 2018 Edmund Burke Award, which honors those who have made major contributions to the de- fense of Western civilization. His latest book is The Second World Wars: How the First Global Conflict Was Fought and Won (Basic Books, 2017).

the Bernie Sanders phenomenon all stand in the same current. Often, urban intellectuals, aristocrats, and elites—from the patrician Roman Republican street agitator Publius Clodius Pulcher and the Jacobin Maximilien Robe - spierre, to present-day billionaires like George Soros and Tom Steyer—have sought to assist the urban protesters. Perhaps these gentleman-agitators thought they could offer money, prestige, or greater wisdom, thereby chan- neling and elevating shared populist agendas. The antithesis to such radical populism was likely thought by ancient

conservative historians to be the “good” populism of the past—and what the contemporary media

Burke argued for a healthy consistency:

“In what we improve we are never wholly new; in what we retain we are never wholly obsolete.”

might call the “bad”

populism of the pres- ent: the pushback of small property owners and the middle classes

against the power of oppressive government, steep taxation, and internationalism, coupled with unhappiness over imperialism and foreign wars and a preference for liberty rather than mandated equality. Think of the second century BC Gracchi brothers rather than Juvenal’s “bread and circuses” imperial Roman under- class, the American rather than the French Revolution, or the tea party versus Occupy Wall Street. The mesoi, or “middle guys,” both predated and remained somewhat at odds with contemporary radical Athenian democracy. Yet these agrar- ian property-owning classes were also originally responsible for the Greek city-state and thus for Western civilization itself. The Jeffersonian idea of preserving ownership of a family plot, and passing on farms through codified inheritance laws and property rights, were the themes of the constitutions of the early polis. The citizen—neither a peasant nor a subject—remained rooted to a particular plot of ground, and thereby enjoyed the tripartite rights of citizenship: military service, voting rights in the assembly, and the ability to be self-supporting and autonomous. The mesoi, then, lent stability to otherwise often volatile consensual politics.

THE LOST ART OF STABILITY

Edmund Burke is often referenced as the archetypical sober and judicious conservative. Despite the difficulty of finding a systematic political orthodoxy in Burke’s vast body of largely forensic speeches and pamphlets, we are told that Burke serves as a model of modern conservatism in our own uncertain

SEEING RED: Members of the Democratic Socialists of America march dur- ing the Occupy Wall Street protests in New York. The Occupy movement, like the Bernie Sanders phenomenon, belonged to a historical current of urban movements spearheaded by the demagogoi (“leaders of the people”). [David

Shankbone—Creative Commons]

age. Burke, of course, saw through the French Revolution, while earlier hav- ing appreciated elements of the American cause. It is also understandable that Burke can be sourced to refute the current dangerous relativism of the radical left, while defending classical liberalism from the excesses of populist nationalists and mindless mobs on the right. But Burke often emphasized the stability of the property-owning middle classes and their custodianship of custom and tradition: the “unchang- ing constancy” that Burke argued ensures that “in what we improve we are never wholly new; in what we retain we are never wholly obsolete.” An ample property-owning class serves as a bulwark against confiscatory anarchy and revolutionary nihilism, as well as the excesses of monarchial and aristocratic insider and client autocracy. Likewise, that keen observer

of early-nineteenth-century Americanism, the French nobleman Alexis de Tocqueville, in his Democracy in America, saw America’s unique strength in the populist influence of a nation of small agrarians. Such property owners were suspicious of both hereditary aristocracy and monarchy, and yet were economically autonomous enough to resist radical calls for government- enforced equality. Yet somehow the contemporary conservative movement and the Repub - lican Party have confused a traditionally destabilizing populism with the ancient restorative populism, or clumsily feared both equally.

Obviously, we are no longer, as was true at our founding, a nation largely composed of yeoman

Many Americans confuse a tradition- ally destabilizing populism with the ancient restorative populism.

farmers. But in modern

terms, the ownership of a house, a business, or perhaps even a retire -

ment savings plan is the equivalent of Burke’s stewardship of property and tradition. Ancient Ameri- can ideas like the right to bear arms and an end to inheritance taxes still reflect Tocqueville’s interest in maintaining the viability of a large middle class suspicious of both rich and poor. But in our modern context, the trajec- tory of contemporary Republicanism has been largely to downplay culture, especially the effects of globalization and deindustrialization on traditional small communities of property-owning citizens. That neglect led to startling political repercussions in 2016. Illegal immigration and open borders were accepted as an unpreventable—

or even an almost natural occurrence, with largely positive results for both the left and right. In collective fashion, liberals championed the poor arriving on their own terms from Central America and Mexico in expectation of their permanent political support. They sought and received the changing of the Electoral College demography of the American Southwest. Many Republicans, foolishly, either wished for cheap labor or deluded themselves into thinking that amnestied, impoverished illegal immigrants would soon vote for family-values conservatives. Neither party worried much about the insidious destruction of immigra- tion law, much less how federal laws that were otherwise applicable to most Americans could be arbitrarily ignored by a select few or how wages of entry- level workers were driven down by imported labor. Few conservatives raised the objection that mass influxes of illegal aliens, mostly non-diverse, poorly educated, and without skills, were difficult enough to assimilate quickly

under the old culture of the melting pot, but even more so now, given the cur- rent paradigm of the tribal salad bowl. There was a similar consensus across party lines to embrace globalization. It was seen not just as an inevitable result of Western cultural dominance and technological supremacy but rather as something almost morally and culturally enriching. Internationalism and open borders would give way to a positive, globalized sameness—even as such homogenization left millions of Americans between the coasts with stagnant wages, or lost jobs, or a sense of alienation from the centers of power in bicoastal America. Globalization without concern over its cultural effects was most un- Burkean, given its unchallenged assumptions that unfettered trade, outsourc- ing, and offshoring were to be welcomed as organic processes, certainly inevi- table and thus ultimately moral for all Americans. An outsider might have remarked that writing off large swaths of the American interior as lost was among the most radical developments in American history. Did any bicoastal Americans think that by deindustrializing and deprecating the value of tradi- tional hard work there would be no cultural consequences, given the historic roles of the middle classes as custodians of American values?

THE TRUMP DISRUPTION

Our popular culture reflected these new norms. Coastal winners were seen on sitcoms and in psychodramatic movies as smart, cool, upwardly mobile, and anointed, often even proudly neurotic and self-absorbed as they navi- gated hip restaurants, on-and-off-again hookups, and office melodramas. In contrast, the working classes in the interior seemed to be portrayed as near opposites, as aboriginal people worthy of caricature, who still insisted that Sarah Palin would have been a great vice president. In reality TV’s Deadliest Catch, Ice Road Truckers, Duck Dynasty, or Ax Men, they shuffled about with rural accents and bib overalls. Most had short tempers and were too eager to swear and fight. Lots of broken-down and often dangerous equipment, along with shacks and trailers, provided the film backdrops and sets. Republicans had also come to believe in a holistic market that would adjudicate culture and values. A community’s lost aluminum smelters and fertilizer plants de facto proved that they should be lost, given the gospel that globalized rules of capital and labor always favored the most efficient—efficiency judged by lowest cost of production, without much regard for the larger ripples of culture. What was lost to the fading middle classes in good wages would supposedly be made up by cheaper imported

consumer goods.

When, during the 2016 campaign, a crass Manhattan billionaire real estate developer began campaigning in terms of the first-person plural pronoun— our miners, our workers, our farmers—few emulated him. Most rivals were

convinced apparently that he would prove as irrelevant as those to whom he appealed. Yet again, in Burkean terms, assembly-line workers, clerks, miners, loggers, fabricators, welders, and builders had been the traditional bulwarks of thousands of American communities. Their loss of viable livelihoods—at a time when their products were often highly coveted—was a radical prescrip - tion for cultural suicide. So into this conundrum came Donald Trump, as a sort of self-described fixer, loudmouth, nationalist populist, or perhaps even a tragic hero of sorts. Of course, the very word

Globalization without concern for its cultural effects is most un-Burkean.

“heroic” in conjunction

with the name Trump appalls half the coun-

try, as do terms such as “nationalist” and “populist.” Nonetheless, one way of understanding both Trump’s personal excesses and his appeal to red-state America is that his not being traditionally presidential may have been valuable in bringing long- overdue changes in foreign and domestic policy—and in rediscovering the middle-class populists hidden beneath the nose of the Republican Party. The billionaire Trump was able to connect with red- and purple-state vot- ers in a way past Republican candidates had not—and not just in terms of his signature and unorthodox focus on issues such as trade, globalization, and illegal immigration. Trump, the person, mattered just as much. Throughout Trump’s invectives a number of messages were implicit. One, Trump, by his manner of speaking, his temperament, and his vulgar- ity, was not embedded in the existing establishment or Washington power structure, and thus in theory he was not beholden to it in either the way he spoke or acted. Two, like Homer’s Achilles, or Sam Peckinpah’s Wild Bunch, he was a dis- ruptive force who could end a common threat (in the mythological fashion of “man slaughtering” Hector or General Mapache’s federales) by the use of skill sets unavailable to, or felt to be unattractive by, his benefactors. Whether concerning the missiles of Kim Jong Un or the overreach of the federal gov- ernment, Trump supporters wanted someone to try something different. Three, Trump’s own history and brand ensured he would not be able to partake fully of, or be accepted by, the restored society he sought to salvage,

given his own distance from those he championed. Certainly, Trump’s own

randy past, excessive appetites, and high-stakes financial dealings made him somewhat unappealing. But, ironically, his constituents thought he was nev- ertheless a champion who at a distance could be turned loose on their behalf against those they had grown to despise.

THE FORCE MULTIPLIERS OF 2016

So Trump was a populist nemesis visited upon the hubris of the coastal culture. When he took on “fake news,” when he tweeted over the “crooked” media, when he railed about “globalists,” when he caricatured Washington politicians—and ranted nonstop, shrilly and crudely—a third of the country felt that at last they had a world-beater who wished to win ugly rather than, as in the case of John McCain or Mitt Romney, lose nobly. As a neighbor put it to me of Trump’s opponents, “They all have it coming.” The targets of Trump’s ire never quite understood that the establishment’s attacks on him, and their own entitled appeals to their greater sensitivity, training, experience, education, morality, class, and authority, were precisely the force multipliers that made Trumpism so appealing. In 2016, pundits and experts had focused mostly on the populism of the race, class, and gender brand, and its would-be champions Hillary Clinton and Bernie Sanders, who sought to channel the new identity, youth, and femi- nist politics for their own advantage. All had forgotten that there was also another populist tradition, lying dor- mant. It was a quieter but far more potent bomb just waiting to blow up—if someone ever would be so uncouth and angry enough to detonate it.

randy past, excessive appetites, and high-stakes financial dealings made him somewhat unappealing. But, ironically, his constituents

Adapted from remarks delivered at the New Criterion gala honoring Vic - tor Davis Hanson, recipient of the sixth Edmund Burke Award for Service to Culture and Society.

randy past, excessive appetites, and high-stakes financial dealings made him somewhat unappealing. But, ironically, his constituents
randy past, excessive appetites, and high-stakes financial dealings made him somewhat unappealing. But, ironically, his constituents

Available from the Hoover Institution Press is Rugged Individualism: Dead or Alive? by David Davenport and Gordon Lloyd. To order, call (800) 888-4741 or visit www.hooverpress.org.

LAW AND LIBERTY LAW AND LIBERTY

Baking Bad

Half-baked reasoning in the Masterpiece Cakeshop case left the most important question unanswered: How far does freedom of expression extend?

LAW AND LIBERTY LAW AND LIBERTY Baking Bad Half-baked reasoning in the Masterpiece Cakeshop case left

By Richard A. Epstein

  • I n Masterpiece Cakeshop Ltd. v. Colorado Civil Rights Commission, the US Supreme Court issued a narrow decision that commanded the support of seven justices. Although the outcome

of the case was welcome, its threadbare reasoning left much to be desired. Jack Phillips, proprietor of Masterpiece Cakeshop, had refused to design and create a custom wedding cake for the wedding celebration of Charlie Craig and David Mullins in 2012, when same-sex marriages were not yet legal in Colorado. In the main opinion issued last June, now-retired justice Anthony Kennedy—who in 2015’s Obergefell v. Hodges held that the equal-pro - tection clause protects the right of same-sex couples to marry—partially reversed field. The ruling allowed, at least for the moment, Phillips’s refusal to stand.

Key points » The Supreme Court failed to grapple with the clash between re- ligious liberty
Key points
» The Supreme
Court failed to
grapple with the
clash between re-
ligious liberty and
discrimination.
» The shapeless
opinion gives little
guidance as to
what should hap-
pen next.
» The justices
should have up-
held a blanket ex-
ception for sincere
religious belief.

Richard A. Epstein is the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution and a member of the steering committee for Hoover’s Working Group on Intellectual Property, Innovation, and Prosperity. He is also the Laurence A. Tisch Professor of Law at New York University Law School and a senior lecturer at the University of Chicago.

The correct way to deal with this issue, as I have argued at length elsewhere, would have been to ask whether the antidiscrimination laws

of Colorado that prohibit discrimination on grounds of sexual orienta- tion should apply to a baker who believes in good faith that it violates his sincere religious beliefs to “design or create” a wedding cake for a same-sex wedding. Phillips was neither careless nor inattentive in articulating his concerns. He made it crystal clear, as Kennedy noted, that he was prepared to provide Craig and Mullins any goods from

his shop for any other occasion, or indeed any standardized goods that they needed for their

Nothing is worse for the administra- tion of justice than to let a decision hinge on the indeterminate mental state of some public official.

wedding celebration. There is not the slightest hint here that Phillips overstated his objections to avoid dealing with gay individuals, whose business he has actively sought on many other occasions. On the strength of this simple fact, the Supreme Court’s decision should have protected Phillips’s constitutional rights of religion and speech, even if the general prohibition of the Colorado Anti-Discrimination Act on matters of sexual orientation otherwise remains in force. To see why, contrast the situation in Masterpiece Cakeshop with that in Obergefell. The traditional definition of marriage as the union of one man and one woman imposes a flat prohibition against the ability of any same-sex couple to marry. It is for that reason that the libertarian approach (wholly apart from the sound- ness of Obergefell’s equal-protection argument) rejects the proposition that the state can block by force the union of two such willing partners. But the antidiscrimination law imposes no such barrier on the ability of any couple to marry, for the refusal of any individual to serve another in a competitive marketplace means that the harm suffered by the couple is the well-nigh trivial cost of finding one of sixty-seven nearby bakeries that advertised their willingness to design cakes for same-sex weddings. In contrast, the burden imposed on Phillips for the exercise of his rights of religion and speech includes the loss of his business license, heavy fines, and mandatory participation in various re-education programs suitable only for totalitar- ian regimes. Craig and Mullins sought to raise the ante when they proclaimed that “no one should have to face the shame, embarrassment, and humilia - tion of being told ‘we don’t serve your kind here’ that we faced.” But that

hyperbolic statement fails to acknowledge the limited nature of Phillips’s refusal, and it wholly overlooked the shame, embarrassment, and humilia - tion, and outright intimidation and abuse, that their vocal supporters were willing to inflict on Phillips for the exercise of his religious and expressive beliefs. While Craig and Mullins were blessed with multiple choices if the antidiscrimination act does not apply, Phillips has no place to run if it does.

A SHAPELESS OPINION

A clear ruling backing Phillips would have cleared the air. The needed excep -

tion applies to only a trivial fraction of cases covered by the antidiscrimina- tion act, but it provides religious individuals all the protection they ask for, given that they have no desire to mount a general campaign against same-sex couples. But instead of reaching a principled decision in this case, Kennedy cobbled together his seven-member majority by writing an amorphous opin- ion that shows a lack of both intellectual clarity and moral courage. No one can say what happens next. The final sentence of Kennedy’s opinion limply concluded, “The judgment of the Colorado Court of Appeals is reversed.” So does the Colorado commission have to walk away? Or can it reopen its investigation? What happens to other actions before this commis- sion or similar bodies? The reason that no one can say what will happen is that Kennedy’s opin- ion attached inordinate significance to inessential details that should have been ignored in any

serious opinion. He thus

When the court is faced with a clear question of high principle but then muddles it, the nation loses out.

noted that this incident occurred in 2012, before same-sex marriage was

legal in Colorado or protected under the equal-protection clause to the US Constitution. Are we to infer from this tidbit that the case should come out differently now that same-sex marriage enjoys constitutional protection everywhere? I can think of no reason why the correct balance should be altered by this detail. Yet the legions of enterprising state courts can now say that Masterpiece Cakeshop is irrelevant to any complaints that have arisen since Obergefell came down. Worse still, Kennedy’s shapeless opinion made the entire outcome of this particular case turn on the overt hostility that the Colorado commis - sion showed toward Phillips throughout the proceedings. That abusive behavior is good reason to sack the commissioner who said in the course

of a public hearing, “Freedom of religion and religion has been used to justify all kinds of discrimination throughout history, whether it be slavery, whether it be the Holocaust.” Hitler did not kill six million Jews by refus - ing to patronize Jewish bakers. The commissioner’s disgraceful statement highlighted the serious danger of using specialized tribunals filled with zealots to decide sensitive issues better left to courts of general jurisdic - tion. But more generally, it leaves open the question of what happens next time if a commissioner manages to tone down this virulent form of opposi- tion but echoes the outsized and one-sided claims of “shame, embarrass - ment, and humiliation” that can always be invoked to limit religious liberty and freedom of speech. There is no hint whatsoever as to what softened statements, if any, by the next commission will trigger the hostility test, and certainly no indication of whether, and if so, how, any commissioner can be cross-examined to learn if he harbors latent hostility on this issue. Nothing is worse for the administration of justice than to let any decision hinge on the indeterminate mental state of some public official.

CAN’T STAND THE HEAT

. .

.

There was, happily, at least of whiff of displeasure in Kennedy’s opinion of

one of the late justice Antonin Scalia’s worst opinions, 1990’s Employment Division, Department of Human Resources of Oregon v. Smith, which stands for the untenable proposition that all facially neutral laws do not offend the protection of free speech, even if they have a known and

massive disparate impact on the exercise of religious liber- ties. Smith is desperately wrong

The baker was neither careless nor inattentive in articulating his concerns.

because it does not understand the need to make workable accommodations between general public laws and religious liberties. These accommodations will always fail if they are done on hopelessly ad hoc grounds that create unneeded uncertainty. Each of the three concurring opinions in Masterpiece Cakeshop (by Justices Elena Kagan, Clarence Thomas, and Neil Gorsuch) tried to put its own spin on the Supreme Court’s handiwork, which only compounds the uncertainty that is pushed off until another day. Judicial minimalism may sound nice in theory. But when the court is faced with a clear question of high principle, the nation loses when it is handled in a muddled and ham-handed way. The

Masterpiece Cakeshop fiasco needs to be put behind us. A decision that gives

blanket exceptions for religious liberty on grounds of sincere belief does all that is needed to protect religion while leaving the basic structure of the antidiscrimination act intact. Pity that this Supreme Court decision opened yet another battle in the endless culture wars.

blanket exceptions for religious liberty on grounds of sincere belief does all that is needed to

Reprinted by permission of SCOTUSblog (www.scotusblog.com) under a Creative Commons license. © 2018 SCOTUSblog. All rights reserved.

blanket exceptions for religious liberty on grounds of sincere belief does all that is needed to
blanket exceptions for religious liberty on grounds of sincere belief does all that is needed to

Available from the Hoover Institution Press is The Case against the Employee Free Choice Act, by Richard A. Epstein. To order, call (800) 888-4741 or visit www.hooverpress.org.

LAW AND LIBERTY

Anthony Kennedy’s Principles

The departure of the “swing justice” was significant indeed.

LAW AND LIBERTY Anthony Kennedy’s Principles The departure of the “swing justice” was significant indeed. By

By Jack Goldsmith

J ustice Anthony M. Kennedy’s retirement from the Supreme Court

after more than thirty years of service is the most consequential

event in American jurisprudence at least since Bush v. Gore in 2000

and probably since Roe v. Wade in 1973. For three decades, he was a

guiding force on the court’s most consequential decisions, conservative and liberal. His departure has left the future of US constitutional law entirely up for grabs. Kennedy made it to the highest court in the land after Ronald Reagan’s failed selections first of Robert Bork and then of Douglas Ginsburg. When the Reagan administration looked for a safer choice, it turned to the soft-spoken, bookish Californian who ran his father’s law practice and taught constitutional law before becoming a respected appellate judge on the US Court of Appeals for the Ninth Circuit. The Senate confirmed Kennedy 97–0 on February 3, 1988. Kennedy dominated the direction of the court in its most important deci- sions from the beginning, and especially in recent years. One proxy for an ideologically contested case is when the court splits 5–4. In his thirty-one

Jack Goldsmith is a senior fellow at the Hoover Institution and co-chairman of Hoover’s Jean Perkins Working Group on National Security, Technology, and Law. The Henry L. Shattuck Professor of Law at Harvard University, Goldsmith clerked for retired Supreme Court justice Anthony M. Kennedy from 1990 to 1991.

[Taylor Jones—for the Hoover Digest]

terms on the court, Kennedy led or tied for the most 5-4 cases in the major- ity a remarkable twenty times, including every term but one since swing justice Sandra Day O’Connor retired in 2006. His vote was extraordinarily consequential. There are many reasons Kennedy was the man in the middle. He struggled with all sides of a case and brooded more than most justices about the right answer. And though he possessed a latent libertarianism, he lacked rigid ideological commitments that would have placed him consistently on one side of the court. Kennedy will be most remembered for his famous progressive opinions— establishing a constitutional right to same-sex marriage and other gay rights, refusing to overturn the abortion right declared in Roe, extending the con- stitutional right of habeas corpus to wartime detainees held at Guantánamo Bay despite congressional and presidential resistance, limiting prayer in school, and striking down the death penalty for juvenile criminals. Despite these notable opinions on the left, Kennedy usually voted with the right side of the court—for example, to invalidate ObamaCare, revitalize the Second Amendment right to bear arms, disable public-sector unions, and uphold business prerogatives. He was also the author of influential conserva- tive rulings. He penned the progressives’ bête noire, Citizens United, which interpreted the First Amendment to ban government restrictions on corpo - rate and associational political expenditures. He was a defender of federal- ism who wrote opinions limiting Congress’s power to enforce the Fourteenth Amendment against states and its power to abrogate state immunity from lawsuits. He also wrote many opinions that narrowed criminal defendants’ rights and an important opinion upholding restrictions on abortion. While Kennedy lacked an overarching jurisprudential commitment, some combination of three principles informed most of his landmark rulings. The first and most distinctive principle is dignity—the quality of proper worth and esteem. Kennedy’s articulation of a constitutional “dignity as free persons” is an ineffable meld of privacy, liberty, and equality that guided his landmark gay-rights decisions and will long reverberate in US constitutional law. For Kennedy, dignity was not limited to individuals. The Constitution also preserves for states “the dignity and essential attributes inhering” in sovereignty, as he wrote in a famous opinion on states’ rights. The second and related principle was a capacious notion of liberty from gov- ernment interference. This principle informed his progressive social opinions but also led him to be suspicious of burdensome regulations and to read the First Amendment broadly. It also inclined him to push freedom downward,

so to speak, with a thumb on the scale for states over the federal government and for individuals over both. The third principle was a robust conception of judicial power. Kennedy believed in his bones in the integrity of judging. He had great confidence that the court’s intervention into contentious issues was vital to the effectiveness of the constitutional scheme. These principles led Kennedy to different places in different contexts. But no matter which way he ruled, he truly sought “in each case how best to know, interpret, and defend the Constitution and laws that must always confirm to its mandates and promises,” as he put it so well in his retirement letter to President Trump. And he possessed a model judicial temperament:

fair-minded, thoughtful, balanced, and deliberative. Kennedy’s jurisprudence will be debated for generations. But those who know him well understand that his activities off the court are just as impor- tant to him. He is a devoted mentor to his law clerks. And he is a gentleman who possesses an unfailing personal kindness toward everyone he meets. He and his beloved wife, Mary, add rare grace to official Washington. Kennedy has long been, and will surely remain, an active ambassador for the court and the US rule of law—at home for everyone from legal experts to schoolchildren and lay people, and abroad before foreign jurists and dignitar- ies. He pushes himself incessantly to learn and think about US and judicial history and traditions. And he is a mesmerizing speaker and devoted teacher. Two years ago, my students gaped in awe for ninety minutes as the now-eighty- two-year-old justice, without notes, brilliantly analyzed a recent opinion. It is hard to exaggerate Kennedy’s impact on the court and the nation dur- ing the past three decades. And because of that impact, it is hard to exagger- ate the stakes in future Supreme Court rulings.

so to speak, with a thumb on the scale for states over the federal government and

Reprinted by permission of the Washington Post. © 2018 Washington Post Co. All rights reserved.

so to speak, with a thumb on the scale for states over the federal government and
so to speak, with a thumb on the scale for states over the federal government and

Available from the Hoover Institution Press is

Speaking the Law: The Obama Administration’s

Addresses on National Security Law, by Kenneth Anderson and Benjamin Wittes. To order, call (800) 888-4741 or visit www.hooverpress.org.

HEALTH CARE

Savings for All

Health savings accounts already drive down the cost of health care. Now we should offer them to everyone.

HEALTH CARE Savings for All Health savings accounts already drive down the cost of health care.

By Scott W. Atlas

  • D espite a failure to repeal and replace ObamaCare fully, health care reform is progressing under President Trump. The indi- vidual mandate is nullified. The administration has permitted more low-cost “limited duration” insurance plans, and more

small businesses now have access to association health plans. The next step should be to expand and improve health savings accounts. Health savings accounts allow people to set aside money tax-free to pay for health expenses, but their fundamental purpose is not simply to cushion the blow of costly care. HSAs put consumers directly in charge of their health care purchases. This drives competition, which leads to lower prices for everyone.

ObamaCare, and most of the proposals that followed, stressed making insurance more affordable, mainly through subsidies. Subsidizing premiums artificially props up coverage that typically minimizes out-of-pocket pay- ments. This is counterproductive. Patients with such coverage don’t think of themselves as paying for services. This shields medical providers from competing on price. Instead of subsidizing premiums, policy should focus on reducing the cost of medical care itself by generating competition for patients. That is the

most effective pathway to affordable, high quality care. The market should be reformed to encourage patients to consider the price of the medical care they consume and to equip them with the tools to do so. Outpatient nonemergency care, which forms the bulk of health expendi- tures, is amenable to price-conscious purchasing. Almost 60 percent of all health expenditures for privately insured adults under sixty-five and almost 40 percent of the elderly’s expenses are for outpatient care, according to a 2012 report from the IMS Institute for Healthcare Informatics. Prices rapidly decrease when patients pay out of pocket for procedures like Lasik correc- tive vision surgery and MRI or CT screening. Data from MRI and outpatient surgery confirm that prices fall almost 20 percent when patients are moti- vated to shop around. Because HSAs reward saving, they are particularly effective at putting downward pressure on prices. Spending reductions averaged 15 percent annually, according to a 2015 National Bureau of Economic Research work- ing paper, when workers were given high-deductible plans and personal medical accounts. When HSAs were added to high-deductible plans, savings increased to up to double the savings that high-deductible plans alone pro - duced. More than one-third of the savings reflected price-conscious decision making. Corroborating prior studies, these reductions occurred without harming patients’ health. By increasingly choosing HSAs when given the opportunity, American consumers are approving their value. By the end of 2017, there were at least twenty-two million health savings accounts in the United States, up 11 percent year-over-year. This isn’t a tax benefit for the rich: median household income for HSA holders is $57,060, and two-thirds earn less than $75,000 a year. The challenge now is to expand HSA use and fully leverage its power to reduce health care prices. Congress should pass legislation making HSAs universally available. These accounts should not be connected to specific insurance deductibles, a coun- terproductive requirement that limits the possibility of HSAs with tailored- or direct-payment plans. To maximize consumer power on prices, Congress should remove restrictions on full HSA participation by seniors on Medicare. Motivating seniors, the biggest users of health care, to seek value is crucial to driving prices down. Congress should raise the maximum allowable HSA contribution to match total possible out-of-pocket spending under ObamaCare—$7,350 for individu- als in 2018. Account holders should be allowed to use their HSA funds to pay for the care of elderly parents. And the accounts should be fully owned by

individuals. This means abolishing more restrictive variants tied to employ- ers and eliminating expiration or forfeiture due to arbitrary “use it or lose it” deadlines. When account holders die, they should be allowed a tax-shel- tered rollover of their HSA funds to all surviving family members, not only spouses. HSAs have also been a valuable vehicle through which employers offer effective wellness programs and medical screening. Yet ObamaCare limits financial incentives from employers, such as deposits into employee HSAs. Congress should abolish this rule. Legislators can also change the tax code to encourage more people to sign up for HSAs. Today’s unlimited income exclusion for employer-sponsored health benefits is harmful because consumers are rewarded for spending more on health care. This reduces concern for price and value. Beyond cap - ping any total health expense deduction or exclusion, the tax code should also limit eligibility to HSA contributions and catastrophic-coverage premiums. Increasing the supply of medical care by eliminating anticompetitive bar- riers would make HSAs even more effective, as patients need enough choices to compare. Despite widely recognized doctor shortages, scope-of-practice limits on nurse practitioners and physician assistants prevent competition with doctors for simple primary care. Archaic nonreciprocal state licensing restricts telemedicine. State certificate-of-need requirements limit competi- tive technology. Scandalous contractual gag clauses prohibit pharmacists from telling patients that medication may be cheaper if purchased outside insurance. Health savings accounts are not appropriate for every patient. But they represent a powerful tool to lower prices and improve access to quality care for everyone. And those are goals everyone can share.

individuals. This means abolishing more restrictive variants tied to employ- ers and eliminating expiration or forfeiture

Reprinted by permission of the Wall Street Journal. © 2018 Dow Jones & Co. All rights reserved.

individuals. This means abolishing more restrictive variants tied to employ- ers and eliminating expiration or forfeiture
individuals. This means abolishing more restrictive variants tied to employ- ers and eliminating expiration or forfeiture

Available from the Hoover Institution Press is

Restoring Quality Health Care: A Six-point Plan for

Comprehensive Reform at Lower Cost, by Scott W. Atlas. To order, call (800) 888-4741 or visit www. hooverpress.org.

HEALTH CARE HEALTH CARE

Health Care Fables

Reform is hard but not impossible. We can start by

discarding three myths.

HEALTH CARE HEALTH CARE Health Care Fables Reform is hard but not impossible. We can start

By Charles L. Hooper and David R. Henderson

HEALTH CARE HEALTH CARE Health Care Fables Reform is hard but not impossible. We can start

N obody knew health care could be so complicated,” was President Trump’s now-famous pronouncement on the issue. Congressional Republicans were

struggling too. Not only did they fail to reach a legisla-

tive solution, but even worse, they were confused about where to even search for a solution. All told, health care begins to look insoluble. But is it really that complicated? Actually, no. Some progressives claim that they have an easy solution, one that proceeds from their belief that more government is often the answer: Medicaid or Medicare for all. What solution would satisfy classi- cal liberals? Addressing just the demand side, there is a surprisingly simple combination of out-of-pocket

Key points » Preventive care, it turns out, doesn’t actually generate true cost savings. » Expanded
Key points
» Preventive care,
it turns out, doesn’t
actually generate
true cost savings.
» Expanded ac-
cess to health care
doesn’t seem to
make previously
uninsured people
any healthier.
» Insurance is
being stretched
too far: it shouldn’t
care for inexpen-
sive and predict-
able services.

payments, a new type of event-based health insurance, traditional care-based health insurance for some, and perhaps judicious subsidies. The Affordable Care Act (ACA) was supposed to solve many health insur- ance and health care problems, but it appears to have exacerbated them. One such problem is that those with pre-existing conditions are getting worse care. Such patients are generally more expensive to treat but insurance companies cannot charge more for them, and so health plans are designed to dissuade these types of customers through restricted access to specialists and expensive drugs. “Anything sick patients like, ObamaCare’s pre-existing conditions provisions punish,” Michael F. Cannon wrote in Health Affairs. “Anything sick patients hate, those provisions reward.” Another problem is that insurance premiums for many people have approximately doubled in just the four years that ObamaCare has been in force.

THREE UNHEALTHY MYTHS

Three prominent, persistent myths have helped lead us down the path to more regulation and more government intervention. » Preventive care is a good investment. The ACA assumed that preven- tive care is a good investment and that people typically underinvest in it; therefore, they must be nudged in that direction. It turns out that’s not true. In 2010, physician Joseph W. Stubbs noted: “Experts suggest that only about 20 percent of preventive measures, such as counseling a smoker to quit smoking, vaccinating against influenza, and screening men for colorectal cancer, actually generate true cost savings.” The previous year, Douglas W. Elmendorf, then–director of the Congressio -

nal Budget Office, stated: “Although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall.” » When previously uninsured people get insurance, their health will improve. Then, according to this myth, overall health care costs will fall because many of the newly insured will use office-based doctors instead of expensive emergency rooms for their health care. A fascinating 2008 experiment in Oregon punctured this double-barreled myth. Oregon’s government conducted a lottery to enroll a limited number of low-income adults in Medicaid. The results? According to an article in the New England Journal of Medicine, those in the Medicaid group spent about 35 percent per person more than those in the control group. But, although the increased spending did lead to some improvement in mental health, it

“generated no significant improvements in measured physical health out- comes,” according to the article. If Medicaid were a new drug, the Food and Drug Administration would reject it. Has the Affordable Care Act improved Americans’ health? The usual way proponents have argued for measures like the ACA is to point to higher life expectancies in countries with more government control of health care but lower spending per capita. That was always too crude an approach for com- paring across disparate countries. But, interestingly, in the four years before the ACA was passed, preferred provider organization (PPO) plan premiums rose 15 percent; in the four years since the ACA was enacted, PPO premiums

have increased by 66 percent. It is difficult to say whether the ACA has made Americans healthier, but in 2015 and 2016, according to the National Center for Health Statistics, life expectancy declined by 0.2 years. It hadn’t declined since 1993. » Insurance should cover all medical expenses, including inexpen- sive and predictable goods and services. Insurance is an actuarial-based product. People, when spending their own money, typically buy insurance when they face a small probability of a large loss. Insurance companies pool roughly equal risks and charge accordingly. Both parties benefit via this arrangement: insurance

When third parties pay, patients tend to buy too much health care. Doctors and hospitals are happy to oblige.

companies generate rev-

enues that exceed their costs, and consumers offload substantial risk.

We don’t buy insurance for everything, though. We don’t insure our blue jeans against holes in the knees or our cars for an oil change. Instead, we self-insure. That is, we cov- er those small out-of-pocket costs ourselves. This makes sense. Insurance companies must charge more for insurance than they pay out because they need to cover all their costs. A simple rule of thumb is that your insurance premium will be twice the expected loss. If you have a 1 percent chance of a $100,000 loss, you have an expected loss of $1,000 (0.01 times $100,000) and should expect to pay about $2,000 for the insurance to cover this event. If insurance companies were not able to charge the extra amount to cover the other costs, they would go out of business. When we buy “insurance” for annual physical exams or to purchase our monthly prescription for cholesterol drugs, each of which has a probabil- ity approaching 1.0, we are effectively prepaying for a known expense; we

aren’t buying insurance. When we do that, we expose the system to multiple

administrative steps as a third-party payer must negotiate with hospitals and drug companies, among others, and approve, pay, and monitor our expenditures. At each step, additional organizations are involved and regula- tory costs are incurred, resulting in, perhaps, a doubling of costs for these predictable expenditures. Further, when patients are spending someone else’s money, they are less careful with their purchases and effectively cease to be the ultimate custom- er—someone else is—and prices become opaque and widely variable, with one person paying a small amount and another a large one. When prices, which convey information to help buyers and sellers make decisions, become so distorted, shopping wisely becomes difficult for consumers and investing wisely becomes difficult for providers. We all lose.

BETTER MEDICINE

When patients select health care goods and services but third parties pay for them, patients tend to purchase too much health care. Doctors and hospitals are happy to oblige. Not surprising, third-party payers impose burdensome controls, such as formularies and prior authorization, to limit such purchas- es. These controls impose added costs on the system and put roadblocks in the way of doctors who are trying to provide good medical care. A technique for good decision making is to put decisions in the hands

of those who will receive the benefits of good outcomes and pay the costs for bad outcomes, aligning incentives

with dominion. One solution would

If Medicaid were a new drug, the Food and Drug Administration would reject it.

be to eliminate third-party controls by taking decisions away from third parties and putting them in the hands of those who already have an incentive to limit low-value purchases: the direct consumers. Small co-payments (a fixed payment) and even co-insurance (a percentage payment) do not fully incentivize patients to choose medical services wisely. The only way to eliminate the controls imposed by third-party payers is to eliminate the involvement of the payers themselves and to have consumers—in this case, patients—pay 100 percent from their own pocket. Third-party payers would become just that: payers; their controlling and purchasing roles would be excised. The in-between solution, which we often saw when people paid their own money for individual, nonsubsidized insurance, is catastrophic insurance:

customers bear high out-of-pocket costs for initial expenditures, which

causes them to make wise purchases, and insurers pay 100 percent of the costs after a high deductible. Today, catastrophic health insurance is avail- able only to those under thirty and those facing certain types of hardships. Probably the best solution is insurance that covers health events. With this type of insurance, first suggested in 1992 by health economist Susan Feigen-

baum, if you were to get appendicitis, for example, you would be paid a lump sum, perhaps $35,000, an estimate of the median cost for treating appendici- tis—mainly the appendectomy—in your geographic area. The money would go to you, not a doctor, hospital, or drug company. Any insurance company in the world that can run

Subsidies distort when they induce people to make poor choices.

numbers and set odds

could provide this event- based insurance.

With a flush bank account, or the guarantee that the money is coming, you could decide where, when, how, and even whether to be treated. If there were two hospitals near you, you could compare them and choose the one with the better combina- tion of price and quality. Does this type of insurance look familiar? It should. This is how casualty auto insurance works. If you slide your car into a tree and dent some sheet metal, your insurance company will pay you the esti- mated cost of the repair. Then, you can choose to skip the repair and pocket the money, use the money to fix the fender only, or supplement that amount and have your whole car painted. The insurance company won’t know or even care which path you take because its involvement is related to your col- lision event, not your fender repair. For too long, health insurance has been

focused on the repair and not the event. It’s time to rectify that. Appendicitis is an acute health issue and the lump-sum payment would happen once. What if you developed a chronic condition, such as Parkinson’s disease, diabetes, asthma, or multiple sclerosis? In this case, you would regu- larly consult your physician, who would update your diagnosis and prognosis. Your insurance company would then pay you an annual, quarterly, or even monthly amount for that health event. Here’s the important point: that insur- ance company forever “owns” your Parkinson’s disease, which first appeared during the time it covered you, regardless of whether you later cancel that policy or become insured by a different company. This type of insurance completely obviates the problem of pre-existing conditions, at least for those who buy insurance early. If you are insured when the problem is first discovered, that insurance company forever owns it, and therefore owes you for that health condition. If you weren’t insured,

you were self-insured, and you are responsible for any health conditions that arise. Children could be covered under their parents’ plan. Moving to this type of insurance system would require the well-established practice of medical underwriting to determine the baseline risk with any given individual, and it would expose those of us with pre-existing conditions to a potentially difficult transition. Logically, you can’t get insurance for a medical condition that’s already happened. For this reason, care-based insur- ance—what we currently have—will always be necessary for some segment of the market. With an event-based insurance market, there will always be people who, for whatever reason, were not insured with event-based insurance when their condition was diagnosed, leaving them to pay for expensive treat- ments. Care-based insurance—the type of health insurance we are familiar with—could cover this subset of people, and a national market could be used to find the optimal combination of coverage and price. It would be expensive, as those without pre-existing conditions move to the cheaper event-based insurance. So public and private organizations could selectively target these patients with subsidies to defray their costs. Since only those with document- ed need would be targeted, the subsidies and interventions for this limited segment of the market could be lower, and less distortionary, than those that preceded and are currently a part of the Affordable Care Act. Subsidies distort when they induce people to make poor choices, such as when customers purchase a subsidized item that they would never have purchased without the subsidy, because the overall costs were greater than the overall benefits. The long-term goal should be to move everyone to an event-based health insurance system, the benefits of which are many: lower prices, better care, better patient control over health care choices, lower administrative expens- es, more portability, more security, more transparency of prices, wider access to medical professionals, wiser shoppers, a better market for insur- ance, better health outcomes, and less financial risk.

EYEWITNESS EVIDENCE

Note that these demand-side reforms we offer would have a salutary effect on the supply side as well. Because the reforms would cause consumers to be much more cost-conscious, their awareness of costs would drive positive changes in supply. One of the best illustrations of this is the evolution in eye surgery over the past few decades. This is a corner of the health care market largely free of

government and commercial third-party interference. The original surgical procedure, called radial keratotomy (RK), relied on the skill of the surgeon to make large cuts in the cornea, required a six-week recovery, and cost about $8,000 ($18,600 in 2018 dollars). Today, Lasik has largely replaced RK for those who are eligible. According to George Mason University economist Alex Tabarrok, in 1998 the average price of Lasik laser eye surgery was approximately $4,400. Just six years later, the price had fallen to $2,700, a 38 percent reduction. Adjusted for inflation, the price had fallen by over half, a result we are used to seeing in computers but rarely in medical procedures. For far too long, most of us, including many health economists, have thought and written as if health care and health insurance were special. In some ways they are. But the same principles that have made auto insurance work so well—there is no auto repair cost explosion—can be applied to make health insurance and health care better and more affordable.

government and commercial third-party interference. The original surgical procedure, called radial keratotomy (RK), relied on the

Reprinted by permission of the Library of Economics and Liberty. © 2018 Liberty Fund Inc. All rights reserved.

government and commercial third-party interference. The original surgical procedure, called radial keratotomy (RK), relied on the
government and commercial third-party interference. The original surgical procedure, called radial keratotomy (RK), relied on the

Available from the Hoover Institution Press is In Excellent Health: Setting the Record Straight on America’s Health Care, by Scott W. Atlas. To order, call (800) 888-4741 or visit www.hooverpress.org.

THE ECONOMY

You Could Google It

Economic analysis makes it clear: the efforts to break up big tech companies just don’t compute.

THE ECONOMY You Could Google It Economic analysis makes it clear: the efforts to break up

By Richard Sousa and Nicolas Petit

S ome members of the economics profession have been busy bash- ing big firms for their allegedly destructive effects on American workers. Scholars from the so-called “New Chicago School” claim that large firms increasingly act as labor market monopsonists in

the US economy, that is, the only demanders of labor in specific markets. In this account, they suppress wages and fuel income inequality. In the neo-Chicagoan “big is bad” philippic, the colossus FAANG (Face - book, Apple, Amazon, Netflix, and Google) takes much of the heat. A recent Bloomberg column by Harvard professor Cass Sunstein suggests that “big companies (like Apple and Google) might use their market power to hurt

employees” by paying low wages. The traditional Chicago School is largely credited—and sometimes criti- cized—for its role in reshaping economics as an applied science. A basic principle of applied science is that scholars back their claims with evidence. Are the data supportive of accusations of these tech giants’ negative impact on employment and wages?

WELCOME: A Google office in Chicago offers its workers a variety of ameni- ties. High-tech workers are paid well above those not employed in tech, a fact that contradicts fears that the big tech firms are able to hold down wages. Amazon and Google employees also are among the readiest workers to change

jobs. [Antonio Perez—MCT]

If the large companies were monopolizing the labor market, one would expect to see falling employment by the monopsonist’s competitors, declining wages, and increasing job tenure, since there are fewer com - peting job opportunities. Yet no such picture emerges from the avail - able data. To the contrary, US Bureau of Labor Statistics (BLS) studies estimate total private high-tech sector employment at more than twelve million; employment at FAANG plus Microsoft and Intel totals around one million—surely a large number of employees, but by no means competition-threatening. Similarly, Securities and Exchange Commission (SEC) filings show that job growth among the five tech giants has approximated job growth in the high-tech sector over the past few years. This does not portend labor market concentration. The BLS also recently reported that high-tech workers are paid well above those not engaged in high tech. This percolates through all employee ranks.

Not only are engineers paid more, but sales reps, managers, and administra-

tive staff earn wage premiums of between 8 and 48 percent. Last, but not least, data show that employees at Amazon and Google have among the lowest job tenures of Fortune 500 companies, indicating the job churn that characterizes a vibrant, competitive

industry. Doubtful as a mat- ter of economics, the

How can a tech firm be said to enjoy a monopoly on labor inputs yet be fear- ful of its employees’ job mobility?

arguments against the FAANG monopsonists also fall flat as a matter of law. Legal developments illus- trate that the state of nature in tech is one of intense competition for talent. In US v. Adobe Systems Inc., et al., the Department of Justice prosecuted several large technology firms, including Google, Apple, Intel, Pixar, Intuit, and Adobe, and found they had unlawfully agreed to refrain from soliciting, cold calling, recruiting, or otherwise competing for each other’s computer engineers and scientists. Moreover, the laws of several states, including California, dictate that contractual restrictions on employee mobility (known as noncompetes) are nonenforceable. Hence, the incumbent firm’s ability to prevent lateral hires by rivals is weakened, as seen recently with Apple’s spectacular poaching of Google’s AI chief John Giannandrea. Even if the firms can mimic noncom- petes with financial incentives and other perks, this cuts against the claim that monopsony power restricts wages. Last, there is logic. How can a tech firm be said to enjoy a monopoly on

labor inputs yet be fearful of its employees’ job mobility? Some from the New Chicago School write that the “problem boils down to excessive merger activity, which has led to concentrated labor markets.” But big mergers are quite infrequent in tech. Most

mergers and acquisi- tions, instead, involve the

In tech, there’s intense competition for talent.

“acqui-hiring” of suc- cessful startups, for example Facebook-Instagram and Apple-Shazam. Those acquisitions represent low head counts, and their astronomical valuations lean against the very idea of monopoly power. Perhaps competition for jobs in the tech sector could be stronger and wages higher. But this is an example of what economist Harold Demsetz once

called the “Nirvana fallacy,” namely, an idealized, unrealistic situation.

The monopsonist naysayers have not brought proof that smaller tech firms would improve competitiveness in labor markets. What matters is the con- sumer welfare generated by firms, regardless of their size. If large tech companies make our lives better by putting people to work at good wages and by innovating and creating higher quality products, they should be acknowledged for their role in the economic recovery and their contributions to society’s well-being. They should not be vilified by unsup - ported claims that the grass could be greener.

The monopsonist naysayers have not brought proof that smaller tech firms would improve competitiveness in labor

Reprinted by permission of The Hill (www.thehill.com). © 2018 Capitol Hill Publishing Corporation. All rights reserved.

The monopsonist naysayers have not brought proof that smaller tech firms would improve competitiveness in labor
The monopsonist naysayers have not brought proof that smaller tech firms would improve competitiveness in labor

Available from the Hoover Institution Press is The Structural Foundations of Monetary Policy, edited by Michael D. Bordo, John H. Cochrane, and Amit Seru. To order, call (800) 888-4741 or visit www.hooverpress. org.

SCIENCE AND THE ENVIRONMENT SCIENCE AND THE ENVIRONMENT

Searching for Higher Ground

The market, not regulations, will teach us how to

manage rising seas and temperatures.

SCIENCE AND THE ENVIRONMENT SCIENCE AND THE ENVIRONMENT Searching for Higher Ground The market, not regulations,

By Terry L. Anderson

  • D espite the apocalyptic drumbeat from climate scientists, most Americans remain skeptical that climate change is the “most urgent threat facing our entire species,” as actor Leonardo DiCaprio argues. According to a 2017 Yale poll, only 20 percent

of Americans were “very worried” about global warming. Moreover, a Pew survey found that only 39 percent of Americans trust scientists “a lot” for “full and accurate information about the causes of global climate change.” This does not mean, however, that most Americans side with President Trump in thinking climate change is a “hoax,” that they are climate “deniers,” or that they favor pulling out of the Paris Climate Accord. Instead, there is evidence that they are realists who rationally adapt to their environment as the species has for millennia. This is evidenced by beach- front real estate markets. Not surprising, property owners who see increased coastal flooding due to slowly rising sea levels are moving to higher ground. A recent paper in the journal Environmental Research Letters by three Harvard University professors tested the hypothesis “that the rate of price

appreciation of single-family properties in MDC [Miami-Dade County] is positively related to and correlated with incremental measures of higher elevation.” Using the value of 107,984 properties between 1971 and 2017, they found a positive relationship between price appreciation and elevation in 76 percent of the properties (82,068) in the sample. A similar study by economists at the University of Colorado and Penn

State found that beachfront homes in Miami exposed to rising sea levels sell at a 7 percent discount

compared to properties

This doesn’t spell the end of Amer- ica’s breadbasket. But it does mean farmers will have to adapt.

with less exposure to coastal flooding. More - over, the discount has

risen significantly over the past decade. Comparing rental rates to selling prices of coastal homes, they found that the discount in selling prices “does not exist in rental rates, indicating that this discount is due to expectations of future damage, not cur- rent property quality.” Though not armed with large data sets and sophisticated regressions, Mas- sachusetts real estate agents are coming to the same conclusions. According to Jim McGue, a Quincy agent, the nor’easter that “happened here in March certainly underscores what a hundred-year flood map is all about.” Another broker, Maureen Celata from Revere, said a home that included a private beach sold for 9 percent less than its list price of nearly $799,000 and took fifty-five days to sell, which she called an “eternity.” Wine producers in California, Bordeaux, and Tuscany: beware. A study by

Conservation International published in the Proceedings of the National Academy of Sciences forecasts that the amount of land suitable for high- quality wine production in California may drop by 70 percent and in regions along the Mediterranean by as much as 85 percent over the next fifty years. The silver lining is that vintners may adapt by moving their grape production north. Some predict vineyards will even move to places such as Michigan, Montana, and Wyoming, noted for their severe winters. In the future you may also see more signs on fruit saying, “Country of origin: Canada.” Canadian biologist John Pedlar sees more people in southern Ontario “trying their hand at things like peaches a little farther north from where they have been trying.” This is consistent with the US Department of Agriculture’s Plant Hardiness Zone Map, which shows tolerant zones mov- ing north.

[Taylor Jones—for the Hoover Digest]

This need not mean the end of America’s breadbasket, but it does mean that farmers will have to adapt. Government regulators could help by allow- ing more use of genetically modified crops such as drought-resistant grains and corn.

Property owners have little faith that government can mitigate the effects of climate change.

There are two mes-

sages for policy makers in these examples of human adaptation. First, prop - erty owners have little

faith that government can mitigate the effects of climate change. An article in Nature Climate Change estimates that there is only a 5 percent chance of achieving the aim of the Paris accord to keep “a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels.” Second, government programs aimed at making us more resilient to the threat of climate change only delay adaptation. Codes requiring building high to withstand a hurricane storm surge or requiring fire-resistant roofs in the urban-wildland interface may reduce the cost of bailing out victims of nature’s wrath, but they only delay the inevitable adaptation required to live with it. Instead, we should get rid of subsidies to coastal developers and to hur- ricane, flood, and crop insurance. The best thing policy makers can do is to make sure they don’t distort market forces. If asset prices are allowed to reflect the risks of climate change, property owners who have the most at stake will literally move to higher ground. It is not faith in better or more

government, but faith in humanity, that will allow us to weather the climate change storm.

This need not mean the end of America’s breadbasket, but it does mean that farmers will

Reprinted by permission of CNN. © 2018 Cable News Network. All rights reserved.

This need not mean the end of America’s breadbasket, but it does mean that farmers will
This need not mean the end of America’s breadbasket, but it does mean that farmers will

Available from the Hoover Institution Press is Greener than Thou: Are You Really an Environmentalist? by Terry L. Anderson and Laura E. Huggins. To order, call (800) 888-4741 or visit www.hooverpress.org.

SCIENCE AND THE ENVIRONMENT SCIENCE AND THE ENVIRONMENT

Diesel Duplicity

In the name of climate change, European policy makers nudged millions of drivers into diesel- powered cars, swapping hypothetical hazards for real ones.

SCIENCE AND THE ENVIRONMENT SCIENCE AND THE ENVIRONMENT Diesel Duplicity In the name of climate change,

By Paul R. Gregory

T he fatal conceit of government planners is to believe that they

can direct an economy as a chess master moves pieces on a

chessboard. Adam Smith, in his 1759 Theory of Moral Sentiments,

and F. A. Hayek, in his 1988 treatise on socialism, warned of this

pitfall. Such planners fail to understand that unlike chess pieces, the millions of actual consumers and producers they wish to control act in their own self- interest with results quite different from those anticipated by government. The collapse of the Soviet economy proved the folly of planning an entire economy, yet today’s advocates of industrial policy and state capitalism con- tinue its tradition. They believe that government interventions can avoid or

correct the mistakes of “chaotic markets.” Unlike private companies preoc- cupied with competition and survival, government planners claim to have the foresight to pick future winners and to direct resources their way. The European Union’s “go diesel” initiative of the mid-1990s is a perfect example. After years of negotiation, most countries (with the exception of the United States) signed the Kyoto protocol in 1997, which pledged the industrialized world to binding reductions of greenhouse gases. To meet

their pledged 20 percent reduction in emissions, EU environmental planners pushed car manufacturers to invest heavily in fuel-saving diesel technology. But contrary to the planners’ expectations, the diesel initiative did not lower automobile fuel use or reduce greenhouse gases. Rather, it blanketed cities with air pollution, destroyed the value of used diesels, set back Europe’s car manufacturers in the international competition for a clean and fuel-efficient car, and created a powerful pro-diesel lobby that continues to exercise influ- ence on regulators and bureaucrats throughout the European Union. The “go diesel” initiative shows that government planners can restructure an entire industry simply by manipulating taxes, regulations, and subsidies. In other words, they no longer must issue Soviet-style commands to get the changes they want. Consider that in 1990, the share of diesels in the EU and Japanese fleets was around 10 percent each. In the United States, diesel vehicles were rare. By the early 2000s, however, a whopping 60 percent of vehicles sold in the EU were diesels, while their shares of the Japanese and American markets remained negligible. Europeans bought diesels because the EU kept diesel fuel prices low and offered various incentives to buy die - sels. Virtue signaling also helped: “good” Europeans bought and drove diesels.

The diesel was winning in Europe but failing wherever free markets prevailed. In Europe, the pro-diesel initiative strewed a string of unantici- pated consequences in its wake, to which we now turn. » Where are the national fuel savings? A key factor behind Europe’s decision to “go diesel”

[Taylor Jones—for the Hoover Digest]

was the technology’s apparently higher fuel efficiency. The logic was simple:

if a diesel can drive 20 to 30 percent more per liter, the rise in the diesel share of Europe’s auto fleet would surely reduce Europe’s overall automotive fuel consumption. But such was not the case: Europe’s per capita fuel con- sumption has actually risen by a fourth since 1990. There could be a number of explanations—rising income and changing driving habits, for instance— but government planners also ignored the fact that lower diesel prices would make road travel cheaper and hence promote more driving and greater fuel consumption. A study by researchers at DIW Berlin, a think tank focusing on economic policy, found that German diesel drivers averaged almost 50 per- cent more kilometers per year than gasoline drivers. Diesel car owners used more transport fuel than gas drivers, thanks to the state’s cut-rate diesel prices. When something is underpriced, we use more of it. Chalk one up to unanticipated consequence. » Where are the Kyoto climate gains from “go diesel”? European elites seemed convinced that a switch from gas to diesel vehicles would also help save the planet from overheating. The EU’s Kyoto logic was similar to its reasoning on automotive fuel. The diesel used less fuel per kilometer. Driving more diesels would thus reduce Europe’s carbon footprint. The engineered switch from gasoline to diesel was clearly an integral part of the EU’s indus- trial policy plan to meet its Kyoto targets. Europe’s Kyoto signers apparently did not pay enough attention to major advances in automotive carbon dioxide emissions. Toyota released its Prius hybrid as Kyoto was being signed in 1997. With advanced catalytic converters and other new technology, Japanese gasoline vehicles matched diesel green- house gas emissions (per kilometer driven) by 2005. Thereafter, Japanese gas cars had a small but distinct carbon dioxide advantage over European diesels. Studies have also shown that diesel cars now emit more greenhouse gases over their life cycle (from construction to scrapping) than do gasoline cars. Market economies spread out their bets over new technologies. Some companies will bet on diesel engines, others on gasoline, and still others on battery-powered vehicles. Those who make the right choice prosper, and society gains new technologies. European planners, not market forces, tilted the playing field of regulations, subsidies, and bonuses in favor of the diesel. Given the growing emissions advantage of gas cars, Europe’s industrial planners should perhaps now switch to nondiesels if they are to be consis- tent. In fact, France’s Ségolène Royal, a former socialist presidential candi- date, has suggested that the EU “start preparing [its] move out of diesel.” It

may, however, be too late. Europe’s diesel automakers have overinvested in diesel technology, and they employ more than eight hundred thousand people in Germany alone. With such employment levels and sunk investments, Europe’s diesel lobby will fight to keep its privileges.

» Who forgot about toxic emissions? When Europe’s planners began their love affair with diesel, they knew that diesel autos emitted the toxic waste of black soot and nitrogen oxides. This pits the diesel industry against environmentalists and mayors, whose cities are

blanketed in toxic pollu- tion. The public health

When something is underpriced, we use more of it.

damage from toxic diesel emissions is considerable. Some estimates suggest that nitrogen oxides in the atmosphere cause five thousand premature deaths in Europe every year, largely through respiratory diseases. On bad days, the diesel-induced smog in major European cities approaches urban Chinese levels. EU, national, and municipal administrations have imposed or are imposing nitrous oxide emis- sion limits. Smog-prone cities are debating outright bans on diesel cars from city centers. If anything, government planners were accomplices to the pollution. Early on, experts underestimated the degree to which diesel fuel produces car- cinogens that penetrate respiratory systems. Europe’s pro-diesel emission standards allowed the diesel cars to emit twice as much nitrous oxide as their gasoline competitors. As nitrous oxide emission standards tightened, Germany’s largest car manufacturer, Volkswagen, was caught cheating on

emission tests. The Volkswagen scandal, which apparently was not limited to Volkswagen alone, called into question Germany’s vaunted reputation for quality and reliability. Sales of diesels plummeted and prices of used diesel cars collapsed as diesels came to be regarded as damaged goods. European manufacturers cannot walk away from the diesel industry, which has powerful lobbying capabilities. Hence resources are pouring into direct and hidden subsidies to prop it up. European car manufacturers are even offering so-called environmental bonuses (up to ten thousand euros per car) to owners who scrap their old diesel to buy a new one.

THE WAGES OF CONCEIT

In Europe, greenhouse gas emissions from transportation account for 2 per- cent of the world total of such emissions. An EU Kyoto pledge of a 20 percent reduction in carbon dioxide from European vehicles would therefore scarcely

register on the world scale. Europe’s industrial policy makers created a real and present public danger—toxic air pollution—to address an imaginary or intractable problem: reducing world greenhouse gas emissions of which they account for only a tiny portion. London’s mayor Sadiq Khan, leader of a city hit hard by diesel pollution, explains how Europe’s planners allowed toxic emissions to get out of hand:

“The problem is that governments often fail to grasp that focusing on one

issue at a time, such as [carbon dioxide] output, inevitably leads them to

Market economies spread out their bets over new technologies. Those who make the right choices prosper.

ignore others.” The single-minded pro -

motion of diesel cars by Europe’s planners was, as Berlin-based writer Paul

Hockenos puts it, “a well- intentioned response to climate change.” But shouldn’t we judge government planners on results, not intentions? Europe’s Dieselgate is a precautionary tale of the power of government. Unelected bureaucrats decided that European car makers should make diesels, and they did so not by direct orders but by taxation, regulations, and subsidies. Government restructured the automobile industry based not on market forces but to achieve the grandiose goal of combating climate change. There is a lesson here: eventually market forces catch up and reveal the folly of government intervention, but it is the private companies—led by the nose by state planners—that end up being blamed.

register on the world scale. Europe’s industrial policy makers created a real and present public danger—toxic

Reprinted from Defining Ideas (www.hoover.org/publications/defining- ideas), a Hoover Institution online journal. ©2018 The Board of Trustees of the Leland Stanford Junior University. All rights reserved.

register on the world scale. Europe’s industrial policy makers created a real and present public danger—toxic
register on the world scale. Europe’s industrial policy makers created a real and present public danger—toxic

Available from the Hoover Institution Press is Keeping the Lights on at America’s Nuclear Power Plants, by Jeremy Carl and David Fedor. To order, call (800) 888- 4741 or visit www.hooverpress.org.

SCIENCE AND THE ENVIRONMENT SCIENCE AND THE ENVIRONMENT

Turning over a New (Organic) Leaf

Bioengineered crops help farmers and feed increasing numbers of people, but the organic industry still rejects them. New organic labels could, and should, make room for science.

SCIENCE AND THE ENVIRONMENT SCIENCE AND THE ENVIRONMENT Turning over a New (Organic) Leaf Bioengineered crops

By Henry I. Miller and John J. Cohrssen

T he Department of Agriculture’s arbitrary rules about what is permitted for the “organic” designation prohibit important advances in agriculture and food production, while unneces- sarily restricting consumer choice. Those problems could be

remedied by expanding what is permitted under the federal National Organic Standards. The Organic Foods Production Act of 1990 required the USDA to develop national standards for the production of “organic foods” because of con- sumer demand for food that was supposedly more healthful and produced with more sustainable methods than that grown on traditional farms.

However, the standards actually adopted do not improve food safety, quality,

Henry I. Miller, MD, is the former Robert Wesson Fellow in Scientific Philosophy and Public Policy at the Hoover Institution. John J. Cohrssen is an attorney who has served in a number of government posts in the executive and legislative branches of the federal government.

or nutrition—nor were they intended to. When the final National Organic Standards were issued in 2000, Secretary Dan Glickman said, “Let me be clear about one thing: the organic label is a marketing tool. It is not a state - ment about food safety, nor is ‘organic’ a value judgment about nutrition or quality.” Another secretary of agriculture, John Block, added in 2014, “Yet USDA’s own research shows consumers buy higher priced organic products because they mistakenly believe them safer and more nutritious.”

ORGANIC INNOVATION FALTERS

Organic agriculture has burgeoned. According to the Organic Trade Asso - ciation, sales in the United States from domestic and international sources totaled some $47 billion in 2016, an increase of almost $3.7 billion from the previous year. About 56 percent was for crops; the remaining 44 percent was for livestock, poultry, and related products. Innovation to improve safety, quality, or nutrition of organic products has faltered. In fact, various studies have raised concerns about a lowering of organic foods’ safety, quality, and nutrition, and about the burdens of organic production on the environment, especially its excessive use of water and arable land. Moreover, typically organic crop yields are lower and their retail prices significantly higher. Meanwhile, innovation in the organic sector has not benefited from three decades of escalating use of precise molecular techniques for the genetic

improvement of food crops and food processing. This genetic engineering—

primarily of commodity crops but increasingly of some specialty crops— has contributed to more efficient, sustainable food production, and also to the introduction of

The original draft of the National Organ- ic Standards did not exclude organisms improved with molecular genetic engi- neering techniques, or “GMOs.”

traits appealing to

consumers. Crop plants have been genetically engineered (“geneti-

cally modified,” or “bioengineered”) to be fortified with important vitamins and minerals and to be resistant to drought, floods, pests, diseases, and herbicides, requiring less spraying of insecticides and other inputs and often increasing yields. Likewise, animals can be genetically engineered to be more nutritious and disease-resistant, to lessen their suffering (such as by introducing the polled, or hornless, trait), and to impose less stress on the natural environment

(for example, by producing less-toxic manure). The genetic engineering of microorganisms has also been pivotal in advances in the production of food,

additives, and beverages. Such innovations are critical not only to meet the global need for improved food quality and availability but also for adaptation to the challenges of increasing population and a changing climate. The original draft of the National Organic

Standards proposed by USDA did not exclude organisms improved with molecular genetic engi- neering techniques, or

Modifying the standards would establish the United States as the world’s pacesetter in the creation of a new, welcome category of organic bioengineered products.

“GMOs,” as long as they met the specified organic production standards. But ultimately, in response to public comments from organizations and individuals, including the organic industry (which sought to prevent market share gains by the nascent plant- biotechnology companies), and because of anti-biotechnology sentiment in the USDA’s political leadership, the department used its discretion to exclude genetically engineered products from the definition of organic food. Accordingly, by definition, the National Organic Standards promulgated in 2000 prohibit the use of the USDA Organic Label on foods derived from organisms created with molecular genetic engineering techniques, even when the foods are otherwise grown with complete fidelity to the require - ments of organic production. With the possible exception of the prohibition on using irradiation to kill

pathogens in food, the genetic engineering exclusion is perhaps the most irrational aspect of the organic standards. Except for wild berries and wild mushrooms, virtually all the fruits, vegetables, and grains in our diet have been genetically improved by one technique or another, including through wide crosses, which move genes from one species or genus to another in ways that do not occur in nature. The newer molecular techniques are part of a seamless continuum, more precise and predictable extensions, or refine - ments, of earlier techniques for genetic modification. The prohibition against “genetically engineered, organically produced” crops denies consumers nutritionally improved foods, such as rice fortified with the precursor of vitamin A; canola oil with enhanced levels of omega-3 fatty acids; apples that don’t turn brown when cut; and potatoes that are bruise-resistant (and therefore, reduce waste) and have lower levels of the precursor of acrylamide, a carcinogen produced at high temperatures.

Thus, the exclusion from organic agriculture of plants made with molecu- lar genetic engineering forfeits their potential for higher yields and lower environmental burdens, which were explicit goals of the Organic Foods Production Act of 1990.

A CHANCE FOR CONVERGENCE

A major reason for the exclusion of genetically engineered products from the definition of organic was to make organic food acceptable to consum-

ers who objected to genetically engineered products at a time when the US government did not require them to be specifically labeled. The FDA had determined that the use of molecular genetic engineering techniques did not, per se, raise nutritional or safety concerns, and so specific labeling was not required unless safety or usage issues were raised by the characteristics of the product. Thus, as far as the US government was concerned, there was no compel- ling reason—and hence, no requirement—to label genetically engineered food products. Never-

Higher yields and lower environmen- tal burdens were explicit goals of the organic-food movement. So why shun genetic engineering?

theless, responding to

pressure from a small number of consumer activists and certain industries, several

states enacted laws requiring the labeling of food from genetically engineered organisms, thus creating disparate labeling requirements, confusing consumers, and creating a significant logistical problem for the agriculture and food industries. That led Congress in 2016 to pass a pre-emptive disclosure law that required the USDA to establish rules for a uniform national label for “bioen- gineered” food. The disclosure law does not in any way automatically alter the current National Organic Standards, but it does provide an opening for the secretary of agriculture to consider modifying the definition of organic to include genetically engineered food, as originally proposed almost thirty years ago: Section 293(f) of the disclosure law requires the USDA to “con- sider establishing consistency between—(1) the national bioengineered food disclosure standard established under this section; and (2) the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et seq.) and any rules or regulations implementing that Act.” With the new labeling requirements for bioengineered, or genetically engi-

neered, food products, arguably those products should now be eligible for the

USDA organic seal if they comply with the requirements of both the National Organic Standards and the new bioengineered-food disclosure rules. No longer would consumers be denied the choice of purchasing food that is both organic and genetically engineered. As noted, genetic engineering increas- ingly introduces traits with palpable benefits to consumers, including biofor- tification of plants with vitamins and minerals, more healthful vegetable oils, leaner meats, and reduced levels of allergens. If consumers who protested the inclusion of bioengineered food within the “organic” definition three decades ago remain opposed, they could simply refuse to purchase organic products bearing the “bioengineered” label. There is no reason that others should be denied the opportunity to partake of “organic bioengineered” products. The Trump administration should direct USDA to comply with Section 293(f) by amending the National Organic Standards to permit the inclusion of crops, animals, and microorganisms (for example, to produce yogurt or alcoholic beverages) modified with the most precise and predictable genetic techniques. That would establish the United States as the world’s paceset- ter in the creation of a new, welcome category of organic bioengineered products. It would favor consumer choice and encourage more sustainable agricultural practices.

USDA organic seal if they comply with the requirements of both the National Organic Standards and

Reprinted by permission of the Washington Examiner. © 2018 Washing- ton Examiner. All rights reserved.

USDA organic seal if they comply with the requirements of both the National Organic Standards and
USDA organic seal if they comply with the requirements of both the National Organic Standards and

Available from the Hoover Institution Press is To America’s Health: A Proposal to Reform the Food and

Drug Administration, by Henry I. Miller. To order, call (800) 888-4741 or visit www.hooverpress.org.

TECHNOLOGY

Guardians and Gatekeepers

Every fresh form of communication adds to propaganda’s toolkit, but computers have unleashed profound new powers of disinformation. Tech titans need to insist on a transparent, open Internet.

TECHNOLOGY Guardians and Gatekeepers Every fresh form of communication adds to propaganda’s toolkit, but computers have

By Ralph Peters

N o plague in history spread with the speed of Internet disinformation. We live in an age of hyper-charged pro - paganda, an onslaught of lies more

pervasive than any that came before. Over millennia, propaganda changed minds. Today, it changes govern- ments and subverts institutions. And this flood has burst the dams that, for centuries, kept the foulest waters in check. Propaganda and its ultimate product, subversion,

are ancient. The imprinted profiles of early rulers on coins served as propaganda, while subversion efforts appear in the Old Testament. Monotheist religions always engaged in propaganda, as did ruling

Key points » Editors, the traditional gate- keepers of re- sponsible news, are overwhelmed by tech-powered
Key points
» Editors, the
traditional gate-
keepers of re-
sponsible news,
are overwhelmed
by tech-powered
social media.
» Western media
used to puncture
Soviet lies. Then
the Internet ar-
rived.
» The private sec-
tor must police its
own platforms.

dynasties—the faces of female saints in Milanese Renaissance portraits bear a striking resemblance one to the other because the Visconti and Sforza dynasties had their wives and daughters sit as models for Madonna and Child to legitimize their rule. But modern propaganda really got started with the Reformation and Coun- ter-Reformation, as contests of belief collided with newly inexpensive printing technologies. The result was twelve decades of merciless wars of religion. Eventually, an ethical reform gathered force. Newspapers as we know them got off to a start in the eighteenth century and swelled wildly in popular- ity in the nineteenth, as literacy increased and technical advances enabled mass production and distribution—and the vital gatekeepers called editors emerged. Particularly in the English-speaking world, but also in Europe’s other advanced societies, even the most hysterical printed diatribes had to have some provable grounding in facts. Accuracy became an ideal (if, as with many ideals, it has never been fully attained). Then new media—and new dangers—emerged. As communications means broadened, first to radio and film, then to television, propaganda enjoyed a new heyday under authoritarian regimes and dictatorships. Even today, Leni Riefenstahl’s images of mass Nazi rallies grip the viewer, as do the brilliant, if obsequious, films of Sergei Eisenstein: two artists in amoral service to evil, killers with cameras. In contrast, the American media, even at their most partisan, needed facts behind the spin. Those unsung heroes, responsible editors, might have bent to the publisher’s editorial policies, but they spiked outright lies. Planted stories did slip through: in Stalin’s 1930s heyday, the New York Times made the still-haunting mistake of trusting a corrupt foreign correspondent who lied on a grand scale about conditions in the Soviet Union. Generally, though, Western consumers of mainstream news sources received a fact-based picture of the world. Today’s pop culture celebrates a few big-name editors who broke con- vulsive stories, but the true heroes holding the bridges and gates were the workaday editors from Springfield to San Diego who wanted to know, “Where’s the proof?” Now their efforts have been overwhelmed by a hydra host of websites, blogs, tweets, trolls and troll farms, self-radicalized fanatics, attention-seek- ers, and skillful propagandists who suddenly can reach millions without a filter, without the need to meet editorial standards of background knowledge and truth. It’s a crippling threat to the democracies and republics that cham- pion free speech and the open exchange of ideas. And the Russians, once again, are leading the charge.

Whether in its czarist, Soviet, or current klepto-nationalist incarnations, Russia long has been an outlier, embracing shameless propaganda in the absence of a culture of facts. The first international triumph of Russian- spread propaganda was the czarist Okhrana’s (secret police) dissemination and exploitation of a then-obscure pamphlet, The Protocols of the Elders of Zion, which soon became the most notorious—and murderous—anti-Semit- ic screed in history (the document is still accepted as truth in the Arab world and, in recent decades, served as the frame for an Egyptian television mini series). As for the Soviets, even their spiritual father, Karl Marx, was a far better

propagandist than economist. His Communist Manifesto begins with an ambi- tious lie, “A specter is haunting Europe, the specter of communism.” Commu- nism would, indeed, spook the world one day, but it was hardly on the playing field in 1848. And Marx’s grandiosity established the template for Lenin to seize the term “Bolsheviks,” or “those of the majority,” for his pitiful, ruthless handful of acolytes. Stalin then developed a propaganda machine that not only lied but told precisely the lies the world wished to hear (ever a key to effective propagan- da). Western dupes praised the Soviet Union through every manmade famine and vast purge. Then, in

First with radio and film, then televi- sion, propaganda enjoyed a new hey- day under authoritarian regimes and dictatorships.

the post–World War II

era, the Soviet Union and the United States waged a propaganda war for West- ern Europe, focused on

influencing elections from Greece and Italy to France (materialism, not the dialectic, won). Next came the Soviet-sponsored “Ban the Bomb” movement, succeeded by its unruly stepchildren, the anti-nuke protests of the 1970s and 1980s in Europe. And let us not forget the still-circulating claim by Soviet propagandists that AIDS was developed by the CIA to kill black Africans. Through all these assaults, responsible Western media punctured the Soviet lies, condemning them to the fringes of discourse. Thank editors again. We, the people, generally recognized propaganda, and its outlets were limited. To buy ill-printed Soviet books (as I did when studying Russian), you went to a single bookstore on Shaftesbury Avenue in London that made no secret of representing Moscow. The clerks were as drab and dreary as their wares. Then the digital revolution arrived to conjure Internet anarchy. This Fifth

Horseman of the Apocalypse, the avatar of the genocidal lie, empowered

fanatics and propagandists everywhere: one man or woman with a laptop computer could spread a destabilizing or deadly claim worldwide. Further enabled by Silicon Valley hubris, which discounted

editorial checks, the new apparatchiks of Vladimir Putin’s Russia suddenly

Russia long has been an outlier, embracing shameless propaganda in the absence of a culture of facts.

could run wild—the bigger the lie, the warmer its reception by the ill-educated, the disaffected, or the cravenly ambitious; by political hacks, bigots, fanatics, and madmen. Under the false flag of free speech, the Internet subverted our democracy, and its corporate masters grew fabulously rich through their self-adoring irresponsibility. Putin’s Russia swiftly leapt from propaganda to outright information warfare. But instead of standing shoulder to shoulder against the threat to our vital institutions, we’ve been reduced to squabbling among ourselves, compounding the effects of Russian schemes. We’ve entered a new age of hyper-propaganda, of post-modern warfare. If we fail to unite and take this threat as seriously as the danger from long- range missiles or terrorism, we’re committing suicide by the gigabyte. Now it’s up to the titans of tech to defend the civilization that enriched them by imposing objective editorial standards on their platforms, to develop a new and credible system of guardians of the facts, of gatekeepers against subversive lies. And the private sector, not the government, has to do it. Or we can let the propagandists win.

fanatics and propagandists everywhere: one man or woman with a laptop computer could spread a destabilizing

Read Military History in the News, the weekly column from the Hoover Institution that connects historical insights to contemporary conflicts (www.hoover.org/publications/military-history-news). © 2018 The Board of Trustees of the Leland Stanford Junior University. All rights reserved.

fanatics and propagandists everywhere: one man or woman with a laptop computer could spread a destabilizing
fanatics and propagandists everywhere: one man or woman with a laptop computer could spread a destabilizing

Available from the Hoover Institution Press is America and the Future of War: The Past as Prologue, by Williamson Murray. To order, call (800) 888-4741 or visit www.hooverpress.org.

TECHNOLOGY

The Mayor of Tech Territory

Cyberspace is often compared to the Wild West— but eventually the West was won and the frontier

tamed. It’s time for our virtual villages to get civilized.

TECHNOLOGY The Mayor of Tech Territory Cyberspace is often compared to the Wild West— but eventually

By Markos Kounalakis

F acebook is the largest community in the world. It is also one of the least democratic institutions on earth. That’s why Facebook needs a mayor. In nonvirtual communities—meaning “IRL” (in real life) physi-

cal cities and states—where people interact face-to-face daily, societies have developed self-governing structures and policing institutions to serve and protect them. Private companies like Facebook, however, were not organized around democratic ideas or social justice principles. Despite the often-lofty mission statements of social media companies, they are businesses put together for one reason: to make money. Oodles of it. Thanks to the “network effect,” unplanned, but highly profitable, com- munities have grown on these Internet platforms to number in the billions. Greater in size than any nation-state. More politically powerful than any party or person. They cross borders and span the globe.

Markos Kounalakis is a visiting fellow at the Hoover Institution and a senior fellow at the Center for Media, Data, and Society at Central European University in Budapest, Hungary. He is the author of Spin Wars and Spy Games: Global Media and Intelligence Gathering (Hoover Institution Press, 2018).

As they have grown, so have the scale of their problems and the onus of their responsibilities. The network effect cuts both ways. What has not grown apace has been the capacity to deal with the downside of a digital community’s size and scale. Systems are inadequate to manage communities’ dark side. The bigger these diverse social networks get, the less responsive they are to their complexity and breadth. Worse, they are undemocratic. Many people reside, interact, and organize within these social net - works more than they do in their physical, local community. How do they participate in Facebook’s governance? Who reviews and settles their grievances? And when did they give up their rights to safety and rep - resentation? By clicking “I agree” to a terms of service agreement they never read? By sad-face emoji-ing, individuals might feel at times as if they are lodging a meaningful political protest, but an anonymous algorithm can willy-nilly

silence a voice or mute dissent. Whom do you call when you want to fill the propaganda potholes or arrest violence-inciting cyberbullies? Who monitors and manages the daily self- donations of personal, private data? Which social media platforms get to decide twenty-first-century campaign finance laws? To function healthily, these platforms need representational roles for their

As they have grown, so have the scale of their problems and the onus of their

global communities. Mayors, sheriffs, judges, school boards, regulatory bodies.

Who owns the data of the dispossessed?

These platforms must democratically open up to typical community representatives and roles to manage cross- border political speech, for example, or develop bodies to hear and settle accusations of libel. It’s time to recognize that Facebook has become a real global commons that needs a real public governing structure. Today, however, Facebook denizens are not Facebook citizens. Sure, people can drop out of the community and live a Walden-like life in the analog outback with other digitally disconnected and disaffected humans. But all people know that even if they now choose to leave digitized society, it is impossible to erase their past and purge the digital breadcrumbs of their previous searches and interactions. Surviving in a twenty-first-century society means a dependency on digital life, whether banking, finding a job, or staying connected with friends and family. We are neither willing nor able to make the trade-off between digital

subject or analog citizen.

TRUST ME: A kiosk in Manchester, England, communicates Facebook’s promise to be a source of trustworthy information for its hundreds of millions of users. Facebook CEO Mark Zuckerberg has made a personal commitment to

defend democracy. [Joel Goodman—ZUMA Press]

Regardless, the choice should not be binary. Why should we be subservi- ent to a big data behemoth and “voluntarily” relinquish the rights we have accrued since 1776? Since when is “I agree” enough to strip us of a participa- tory role and make us subject to psychographically advanced targeting of our preferences and person? Who’s looking out for us? Tech leaders like Facebook CEO Mark Zuckerberg have argued they should be entrusted with this role. Zuckerberg has made a personal com - mitment to defend democracy. Despite his good intentions, anyone who understands democracy’s evolutionary history should feel slightly uncom - fortable when someone powerful says “trust me” or that he alone can fix a problem. Further, while digital “platforms” are entrusted to secure the data and dreams of billions, they need to recognize they are not immune to the vaga- ries of a market that values them on projected revenue and future growth. Tech stocks can be volatile and markets fickle. A market’s normal function- ing can lead to failure.

What happens if a social media company collapses under the weight of

debt, the failure of leadership, or the loss of potential growth? Who owns the data of the dispossessed? How does that community re-form itself and find new expression and connection? This is not a

theoretical question. The virtual world is made up of tenta-

Whom do you call when you want to fill the propaganda potholes or arrest violence-inciting cyberbullies?

tive topographies and ephemeral communities. In 1994, Apple Computer (disclosure: I used to con- sult for Apple) once hosted a social site called “eWorld,” where I established an identity and built a community. I lost both when eWorld went bell-“e”-up after two years. If only I could have called eWorld’s mayor to complain or offer help. In a future social media democracy, I would own my data, ask my represen- tatives to shut out political advertising paid for by Russian rubles, and vote for my teenage boys to learn less about condom-snorting and more about civics. I bet I’m not alone.

What happens if a social media company collapses under the weight of debt, the failure of

Reprinted by permission of the Sacramento Bee. © 2018 Sacramento Bee. All rights reserved.

What happens if a social media company collapses under the weight of debt, the failure of
What happens if a social media company collapses under the weight of debt, the failure of

New from the Hoover Institution Press is Spin Wars and Spy Games: Global Media and Intelligence Gathering, by Markos Kounalakis. To order, call (800) 888-4741 or visit www.hooverpress.org.

EDUCATION

Teachers Need Sympathy—and Reform

Teaching can be a tough, poorly paid job. But teachers need to recognize that respect must be earned, and that their unions are doing them no favors.

EDUCATION Teachers Need Sympathy—and Reform Teaching can be a tough, poorly paid job. But teachers need

By Chester E. Finn Jr.

I t’s hard not to sympathize with

striking schoolteachers. They’re

not very well paid, inflation is

creeping up, a lot of classrooms

are crowded with kids and lacking in textbooks and supplies, and a number of state and local budgets for school opera- tions are extremely tight and sometimes declining. All that is true. It’s also true that while

US kids and parents generally like and respect the teachers they know best,

Key points

» Sluggish economic growth, not stingy politicians, is to blame for many lethargic school budgets.

» Unions defend early tenure and protect weak teachers— positions that harm teachers’ professional credibility.

» The forces that send unhap- py teachers into the streets are complex, and teachers have a role in addressing them.

American schoolteachers as an occupational class don’t enjoy the status and esteem conferred upon their peers in some other countries. It’s wholly under- standable that a number of them are dissatisfied with their lot. They show it in other ways besides wearing red, shutting down schools, and marching around. Particularly in schools serving disadvantaged youngsters, the places where we most need experienced teachers, there’s a great deal of turnover— both departures for less-challenged schools and abandonment of the field altogether. But several other things are also true, and they need to be kept in mind as we watch interviews with angry or tearful teachers and wonder how to respond when teachers walk out. » Maybe the money just isn’t there. Although state and local budgets in some places are tight because tight-fisted policy makers have cut taxes and slashed spending, in other places there’s just not as much revenue as was expected. Blame slow recovery from the “great recession,” lower-than- anticipated economic growth—and sometimes the exit of wealthy people to places where taxes are lower. In a great many places, school budgets are tight because competing obligations to pay for nondiscretionary activities are hogging much of the available money. Medicaid is a big one (and is squeez- ing out higher-ed funding as well), but so too are the pensions and associated benefits of retired public employees, many of whom are former teachers. The Pew Charitable Trusts reported recently that “even states that have overcome the effects of the recession may face financial pressures that could shape their budgets now and for years to come. A number of state govern- ments face fiscal constraints today because of inherited shortfalls, such as unfunded public pension and retiree health care liabilities that total more than $1.5 trillion nationwide, and recurring deficits between annual state rev- enue and expenses.” And Education Next reported in February that “pension costs, excluding Social Security and retiree health insurance, have grown from $520 per student in 2004 to $1,220 today—or from roughly 5 percent to 10 percent of current expenditures per student.” » Where is the money going? As I have previously noted, US school systems continue to use available dollars to hire more teachers rather than paying more generous salaries to the teachers they already have. This means hiring more teachers rather than better teachers. Education Week reported earlier this year that “over the past two decades, the number of the teachers in US schools has increased by 21 percent while the number of students has increased only 12 percent.” This is an old phenomenon but it persists even in our era of lean budgets; the United States has 13 percent more teachers than

HARD LESSONS: Kentucky schoolteachers march last spring to press their demands concerning pensions and budget cuts. Many state governments face fiscal constraints because of inherited shortfalls, such as unfunded pen- sion and retiree health care liabilities that total more than $1.5 trillion nation-

wide. [Charles Bertram—TNS]

HARD LESSONS: Kentucky schoolteachers march last spring to press their demands concerning pensions and budget cuts.

it did four years ago but just 2 percent more pupils. That’s not true in every single state—and it’s revealing that two of the four states where student growth has outstripped teacher inflation are Oklahoma and Arizona, where recent protests by aggrieved teachers have been especially forceful. Consider the seeming paradox of classrooms overflowing (in some schools) with kids while ever more teachers are employed. But note, too, how many schools— mostly in other places—are half-empty and how many have been closed or mothballed because of declining enrollments. Chicago was down ten thousand kids this past autumn, compared with a year earlier—and thirty-two thousand since 2013, enough to fill fifty-three average-size schools. Though the teaching workforce often appears highly mobile, in reality Chicago teachers—with tenure, benefits, pensions, and so on—just aren’t very likely to move to Houston.

» How do you earn respect? While it’s true that US teachers as a work- force don’t get the respect they would like—and which their counterparts enjoy in, say, Finland and South Korea—this is due in no small part to the political actions and policy preferences of their own unions. By insisting on tenure after just a few years in the classroom, by protecting the jobs of even the weakest instructors, and by demanding that physical education teachers be compensated the same as physics teachers, they have fouled their own nests when it comes to status and esteem. This also affects salaries. While it’s easy to say that dear, hard-working Ms. Rosencrantz—who is hugely effective with her math students—should get paid a lot more, does lazy Mr. Guildenstern down the hall, whose pupils seems to watch a lot of movies and do poorly on the state tests, deserve the same raise? » It’s not a year-round job. Finally, though teachers and their representa- tives despise this observation and offer all manner of (unpersuasive) expla- nations and rationalizations, it’s still true that the typical day in American public schools lasts six or six and a half hours and there are one hundred eighty of them in a year. That’s a lot less time than is put in by most people with full time jobs, and that discrepancy needs to be borne in mind when making salary comparisons. Yes, it’s sad that many teachers must make ends meet by taking second jobs. But it’s also sad that their school job leaves them with that extra time— and pays them accordingly. It’s not good for the kids, either. So yes, let’s sympathize, but let’s also be hard-nosed (not hard-hearted) in understanding the circumstances and forces that have conspired to cause a number of unhappy teachers to take to the streets. And let’s understand that if we’re serious about ameliorating the conditions that aggrieve them, a great many things need to change in very big ways.

» How do you earn respect? While it’s true that US teachers as a work- force

Reprinted by permission of the Thomas B. Fordham Institute. © 2018. All rights reserved.

» How do you earn respect? While it’s true that US teachers as a work- force
» How do you earn respect? While it’s true that US teachers as a work- force

Available from the Hoover Institution Press is What Lies Ahead for America’s Children and Their Schools,

edited by Chester E. Finn Jr. and Richard Sousa. To order, call (800) 888-4741 or visit www.hooverpress. org.

IRAN

A Sorry Bargain

Weak from the start, the Iran nuclear deal was a fragile political commitment that left Congress out in the cold.

IRAN A Sorry Bargain Weak from the start, the Iran nuclear deal was a fragile political

By Jack Goldsmith

P resident Obama crafted the Iran nuclear deal on his own presi- dential authority and in the face of significant domestic opposi- tion, neither seeking nor receiving approval from the Senate or the House. He was able to do this, and to skirt constitutional

requirements for senatorial or congressional consent, because he made the deal as a political commitment rather than a binding legal obligation. As Curt Bradley and I recently explained in the Harvard Law Review, a political com- mitment “imposes no obligation under international law,” a nation “incurs no state responsibility for its violation,” and thus “a successor president is not bound by a previous president’s political commitment under either domestic or international law and can thus legally disregard it at will.” Thus the manner in which Obama crafted the Joint Comprehensive Plan of Action (JCPOA) paved the way for President Trump to withdraw from it. Presidents have the clear authority to make nonbinding political commit- ments. That is why I defended the legality of the Iran deal (as opposed to its wisdom) at the time it was arranged. But a president who makes an agree - ment as a political commitment rather than as a binding agreement under international law is making a tradeoff. As I wrote three years ago, Obama’s

approach to the Iran deal made it “easier to make (because the president can

clearly do it on his own) and easier to break (because there is no domestic or international legal obstacle to breaking it).” The Obama team was aware of this tradeoff, but it knew it had no chance to secure approval from Congress. Because the Iran Nuclear Agreement Review Act forced a vote, we know that majorities in the Senate and the House opposed the deal. The House of Rep - resentatives voted 247–186 against allowing the president to lift US sanctions contemplated by the deal. And 58 senators (two short of necessary) voted to break a filibuster that would have allowed a vote on a resolution to disapprove the deal. For Obama to join the agreement that he thought so crucial to the fate of the world, he needed a constitutional mechanism that avoided the require - ment that Congress approve. The only available option was to make the agreement a fragile political commitment not binding on his successor. After Trump announced the US withdrawal from the agreement, former Obama administration officials complained about the harm done to the US reputation for compliance with international agreements. “When the United States unilaterally abrogates an international agreement in the absence of any breach, we under- mine international

perceptions of our reli- ability and responsibil- ity,” Obama’s national security adviser Susan

One of the most important purposes of legislative consent is to ensure that an international agreement actually serves the national interest.

Rice said. Obama foreign policy adviser Ben Rhodes echoed: “Trump’s action

. . .

severely undermines

the credibility of the United States to uphold international agreements that we sign which will endure after he is gone.” We should recall Federalist No. 75, in which Alexander Hamilton explained the wisdom of the original constitutional mechanism of Senate approval for treaties in terms directly applicable to the Iran deal. It would be “utterly unsafe and improper to intrust” the “entire power of making treaties” in the president alone, he wrote, since the president alone could not be trusted to serve the national interest:

The history of human conduct does not warrant that exalted opinion of human virtue which would make it wise in a nation to commit interests of so delicate and momentous a kind, as those which concern its intercourse with the rest of the world, to the

sole disposal of a magistrate created and circumstanced as would be a President of the United States.

Rather, he added, “the vast importance of the trust

. . .

plead strongly for the

participation of the whole or a portion of the legislative body in the office of making them.” One of the most important purposes of legislative consent for international agreements is to ensure that the agreement actually serves the national inter- est clearly enough to garner such consent. Agreements that have the approval of the Senate or the House

For President Obama to seal the agreement, he had to avoid the need for Congress’s approval.

tend to be longer-lasting

and more durable. One reason is that they, unlike the Iran deal, are binding

under international law. A more important reason is that a later president is much less likely to back

away from an agreement made by a prior president with the support of the nation secured by its consent through elective representatives. The Obama administration did not secure this consent. It made the agree - ment unilaterally, and thereby pledged the reputation of the nation, even though it knew the Iran deal was nonbinding and lacked approval among the nation’s elected representatives. If the United States’ reputation for uphold- ing agreements takes a hit, the responsibility for that outcome lies squarely with the original decision by the Obama administration to make the hugely consequential deal on its own. The Obama administration took a bet either that Hillary Clinton would win the election or that the unwinding of sanctions for three years would make any re-imposition of sanctions too painful politically. And it lost the bet.

sole disposal of a magistrate created and circumstanced as would be a President of the United

Reprinted by permission of the Lawfare Institute. © 2018 The Lawfare Institute. All rights reserved.

sole disposal of a magistrate created and circumstanced as would be a President of the United
sole disposal of a magistrate created and circumstanced as would be a President of the United

Available from the Hoover Institution Press is Total Volunteer Force: Lessons from the US Military on

Leadership Culture and Talent Management, by Tim Kane. To order, call (800) 888-4741 or visit www. hooverpress.org.

IRAN

A Deal Worse

President Trump’s scrapping of the joint nuclear deal is a godsend to Iran’s beleaguered leaders. It will also breed more Russian and Chinese interference.

IRAN A Deal Worse President Trump’s scrapping of the joint nuclear deal is a godsend to

By Abbas Milani

T he long-expected announcement by President Trump that

he would order the United States to withdraw from the Iran

nuclear deal—officially known as the Joint Comprehensive Plan

of Action, or JCPOA—was arguably the worst policy option for

addressing problems in what was, at the time it was signed, the least-bad possible deal. Contrary to what candidate and then president Donald Trump often said, it was not the worst deal in history. There are some remarkable similarities between the slings and arrows being launched at this agreement in the United States and in Iran. When the deal was signed, presidents in Iran and the United States both oversold the agreement, promising more than they could deliver. Conservatives in the United States and in Iran were also, from the outset, ready to pounce on the deal—sometimes based on false claims about what it did or did not do, some - times claiming that their side had made too many concessions. Ironically, in words that almost echo Trump’s language, Iranian conservatives called

Abbas Milani is co-director of the Hoover Institution’s Iran Democracy Project, a member of Hoover’s Herbert and Jane Dwight Working Group on Islamism and the International Order, and a Hoover research fellow. He is also the Hamid and Christina Moghadam Director of Iranian Studies at Stanford University and an adjunct professor at the Center on Democracy, Development, and the Rule of Law at the Freeman Spogli Institute.

SATISFIED: Iran’s supreme leader, the Ayatollah Ali Khamenei, was among the Iranian officials opposed to rapprochement with the United States. The scuttling of the US-Iran deal will give them leverage and divert attention from

failed policies. [AY-Collection/SIPA]

the JCPOA the most shameful one-sided deal Iran had signed in its modern history—a veritable Treaty of Turkmenchay, the 1828 agreement forced on a defeated and demoralized Iran by Russia, a pact synonymous with Iranian defeat and colonial arrogance. In Washington, as in Tehran, the opponents of the deal missed no opportunity to undermine it, demonize its negotiators, dampen or limit its potential positive impact, and create or use an excuse to overturn it. The ironic structural similarities between enmities here and in Tehran have, under the complicated contours of current realities, particularly in Iran, taken on a new and ominous turn, with far-reaching, even historic, stra- tegic consequences. Much discussion of these consequences has focused on what might hap - pen to the Nuclear Non-Proliferation Treaty, to regional arms races, to US relations with allies, or to relations between the United States and North

Korea. In reality, the most important consequences must be sought in the

realities and balance of forces in Iran. There, the economy is reeling under double-digit inflation and unemployment, a 50 percent fall in the price of Iranian currency, a massive flight of capital

from Iran’s fledgling markets, a financial

Russia has been increasing its power and presence in Iran.

system on the verge of collapse, a water shortage of almost biblical proportions, and most important, an increasingly disgruntled population more and more militat- ing against regime corruption, incompetence, cronyism, and costly and regional adventurism. For the first time, that population is also defiantly finding Ayatollah Ali Khamenei, the supreme leader, responsible for failed policies. In these troubled times, for Khamenei and his allies, the US scuttling of the JCPOA will be a godsend. It will give them—as it has already done— bragging rights, allowing them to plausibly declare that they were right in their opposition to rapprochement with the United States. It might give the Islamic Revolutionary Guard Corps (IRGC) the excuse to seize power outright and establish a military government. It will certainly give the IRGC a chance to busy giddy minds with allegations of foreign intrigues. In other words, the US pullout from the Iran nuclear agreement will afford the supreme leader and his allies yet another scapegoat for their own failed policies and dogmas. Iran will not leave a US-less JCPOA, but the conser- vatives there will milk the US pullout for all they can to isolate any opposi-

tion to their failed regime. Yet more potentially dangerous is the effect of the US action on the

regional role and power of Russia and China. In the United States, the media have been preoc- cupied with covering

the apparent Russian meddling in US politics.

Iranian opponents of the deal have long craved an excuse to overturn it.

In Iran, however, Russia has been increasing its power and presence. Russian planes now have the right to use Iranian bases to fly missions. Iran quietly announced recently that it will henceforth try to replace English with Russian as the primary foreign language taught in Iranian schools. Khamenei has long quietly favored an Iranian pivot to Russia. Talk of the US withdrawal from JCPOA was enough for him and his allies to propose such a move more openly. An

Iranian pivot toward Russia—and away from the West—will have far-reach- ing, perhaps historic, consequences. No less critically, China, with investment capital on hand, waits patiently on the horizon. A further weakened Iranian regime and economy might have no place to turn but to China. The imprudent policies of today, including a unilateral withdrawal or undermining of the JCPOA, might well lead to dangerous results, long after Trump ceases to be president.

Iranian pivot toward Russia—and away from the West—will have far-reach- ing, perhaps historic, consequences. No less

Reprinted by permission of the Bulletin of the Atomic Scientists. © 2018 Bulletin of the Atomic Scientists. All rights reserved.

Iranian pivot toward Russia—and away from the West—will have far-reach- ing, perhaps historic, consequences. No less
Iranian pivot toward Russia—and away from the West—will have far-reach- ing, perhaps historic, consequences. No less

Available from the Hoover Institution Press is The Myth of the Great Satan: A New Look at America’s Relations with Iran, by Abbas Milani. To order, call (800) 888-4741 or visit www.hooverpress.org.

IRAN

Revolution Ever After?

The Iranian revolution, now nearly forty years old,

defied the West and the odds against its survival.

How have the mullahs pulled it off?

IRAN Revolution Ever After? The Iranian revolution, now nearly forty years old, defied the West and

By Eric Edelman and Ray Takeyh

  • I t is often claimed that every revolution contains the seeds of its own destruction. After a spasm of radical overreach, the revolutionaries yield to the temptations of pragmatism. The need to actually run a government and address domestic concerns eventually causes them

to come to terms with the international order. Like the French Revolution, all subsequent regimes have their Thermidorian Reaction. No nation can live on ideology alone, and the imperative of staying in power forces erstwhile radicals to soften their edges. The twentieth-century Chinese experience tends to define our view of how modern revolutionary regimes evolve. After decades of agitating against the prevailing order, Mao Zedong’s successors accepted its legitimacy and abandoned communism for a more workable capitalist system. The lure of commerce proved too tempting, as the Chinese revolutionaries soon transformed themselves into savvy businessmen. Even

Ambassador Eric Edelman is the Roger Hertog Distinguished Practitioner- in-Residence at the Philip Merrill Center for Strategic Studies at Johns Hopkins University. Ray Takeyh is the Hasib J. Sabbagh Senior Fellow for Middle East Studies at the Council on Foreign Relations. They are the authors of Revolution and Aftermath: Forging a New Strategy toward Iran (Hoover Institution Press, 2018).

[Taylor Jones—for the Hoover Digest]

Vietnam and Cuba are mending their ways. Revolutionaries can either con- tinue to celebrate their ideals or maintain power; they cannot do both. Why has Iran defied this pattern? It is becoming increasingly clear that Ayatollah Khomeini was the most successful revolutionary of the twenti- eth century. While Vladimir Lenin, Mao, and Ho Chi Minh would no longer recognize the polities that they attempted to transform with revolutions, Khomeini’s ideas continue to animate the regime he left behind. Through an ideology that he concocted, institutions that he created, and an elite that he molded, Khomeini remains a central figure in Iran nearly three decades after his death. The endurance of Khomeini’s message belies the notion of him as a stern mullah professing a retrogressive ideology. The imam, as his followers would call him, forged his own path and articulated a distinct set of ideas that integrated Islamic principles, populist slogans, and Persian nationalist themes into a seamless narrative. The Islamic Republic was to defend Iran’s national rights and prevent the exploitation of its resources by foreigners that had been so commonplace throughout its history. Khomeini may have been ignorant of economics, but the revolution was as much about coin as God. The new regime committed itself to providing cradle-to-grave

social services to the poor and the peasantry. At times this smacked of class warfare, as the regime expropriated the property of the wealthy and dis- persed it to the theocracy’s lower-class constituents. Subsidies and material rewards would become an important pillar of the legitimacy of the regime, much to its eventual chagrin. The government that Khomeini left behind proved to be incapable of producing a vibrant economy and unable to relieve itself of onerous subsidies, thereby laying the foundation of an insoluble dilemma for its successors. The flirtation with progressive concepts of economic redistribution ought not to be confused with any inclination by Khomeini to accept a system of government based on anything

Ayatollah Khomeini may have been ignorant of economics, but Iran’s revolution was as much about coin as God.

but an inflexible adherence to

his interpretation of Islam. In his most influential book, The Islamic Government, Khomeini radically departed from the pre -

vailing Shiite traditions of politi- cal disengagement. His concept of velayat-e faqih (guardianship of the jurist) called for direct assumption of power by the clergy. After all, the prophet of Islam was not just a spiritual guide but also an administrator, a dispenser of justice, and a political figure. Given the need to conform the social order to religious injunctions, the clergy must rule, as they are most knowledgeable in matters of religious law. Khomeini disdained those who urged the clergy to retreat to the mosque and leave politics to the professionals. In Iran, the mul- lahs dispensed with the seminaries for the more exhilarating task of creating

and administering a religious state.

A THIN VENEER OF DEMOCRACY

In fact, it is precisely reliance on religion that sets apart Khomeini’s revolu- tionary experiment from his twentieth-century counterparts. The Islamic Republic is different from its radical peers, as the ideology of the state is its religion. To be sure, this is a politicized and radicalized variation of Shiite Islam and Khomeini’s experiment does contradict normative Shiite political ideas that have evolved over centuries. Still, religion is the official dogma. A dedicated core of supporters, loyal to this ideology, determined to perpetuate it long after Khomeini himself disappeared from the scene. Revolutionary regimes have usually collapsed when their once-ardent sup - porters abandoned their faith. Mikhail Gorbachev and his cohort of reform- ers ultimately had to accept that Lenin’s patrimony had failed them and that

his brainchild had to be disposed of in the dustbin of history. Mao’s loyalists pay tribute to him at official ceremonies and then rule the state by capital- ist precepts that he would find appalling. And the Vietnamese rulers are too busy attracting Western tourists and hosting American presidents to create a Marxist utopia in Southeast Asia. It is, after all, easy to be an ex-Marxist,

as this is merely a sign of intellectual maturity. But how easy is it to become an ex-Shiite? In the former case, it is mere political defection; in the latter, it is apostasy. Although the Islamic Republic has become unpopular over the years, for a small but fervent segment of the population it is still an important experi- ment of realizing God’s will on earth. And it is this sector of society that continues to produce leaders who are determined to return to the “roots of the revolution” and that provides a pool of enforcers who are willing to shed blood in the name of God. Khomeini’s concept of Islamic government may have been for the people, but it certainly was not meant to be democratic. The imam created a set of institutions that not only ensured clerical political hegemony but also protected his revolution’s values from the inevitable forces of change. The Islamic Republic’s constitu- tion enshrined the unprec-

edented theory of velayat-e faqih, whereby a supreme leader would oversee all national affairs. The office

Khomeini disdained those who urged the clergy to retreat to the mosque and leave politics to the professionals.

designated for Khomeini him- self had virtually unlimited responsibility and was empowered to command the armed forces and the newly created Revolutionary Guards, dismiss any elected official, countermand parliamentary legislation, and declare war and peace. The new office was subject to neither elections nor the scrutiny of the larger public. Islamic law was to displace the existing legal codes, circumscribing individual rights and prerogatives. A Guardian Council, composed mainly of clerics, was to vet all legislation, ensuring its confor- mity with Islamic strictures. All candidates for public office had to submit their credentials to the Guardian Council for approval. Yet another clerical body, the Assembly of Experts, would be responsible for choosing the next supreme leader. The constitutional arrangements guaranteed that Khomeini’s reinterpre - tation of Shiism would remain the ideology of the state and that only those

devoted to his vision would command state institutions.

Throughout his life, Khomeini despised democratic norms and rarely made references to a republic. For him, Iran was not an Islamic republic but an Islamic state. He firmly believed that laws should be derived from Quranic sources as applied to contemporary conditions by a clerical elite. Thus, tradi- tional democratic institutions and practices such as assemblies, the right to vote, and referenda had no place in his political imagination. He insisted that people had to be guided by the righteous and the public had to submit to the authority of the clerical class. Unlike many of his younger disciples, Khomeini saw limited utility even in the facade of republicanism. Khomeini’s concept of proper governance was a religious autocracy that could not be reconciled with pluralistic concepts.

RENEWAL FROM WITHIN

Had Khomeini remained faithful to his concept of absolutist rule, his religious state might not have endured. The genius of the Islamic Republic is that it contains within its autocratic structure elected institutions that have little power but still provide the public with the means for expressing its griev- ances. In the absence of such an outlet, however superficial, the state would have confronted even more protests than it has already. The inclusion of provisions for electoral politics in the constitution stemmed from the nature of the revolutionary coalition that overthrew the shah and seized power in 1979. Khomeini and his disciples may have led the revolt, but the support and participation of many liberals and secularists were critical to its success. The revolution called for creating a state that would be religious in its character but democratic in its procedures. This would prove an impossible task. A

state can draw its legitimacy from either elections or religious dogma. The Islamic Republic bears all the hallmarks of a dictatorship, but maintains a thin veneer of collective action. The Islamic Republic does have an elected president, a parliament, and local councils. These offices may be subordinated to the clerical bodies, but they are not entirely insignificant. The office of the president appoints the heads of government ministries, administers the bureaucracy, and frequently represents Iran at international fora. Although all of the candidates for office

NEVERTHELESS, HE PERSISTED: Iranians gather at the shrine of the founder of the Islamic Revolution, the Ayatollah Ruhollah Khomeini. Khomeini returned from exile in 1979 and spent a decade establishing his revolution, which endures through a combination of state violence, a veneer of democ- racy, and a self-perpetuating leadership clique. [Maryam RahmanianUPI]

must be approved by the Guardian Council, the Islamic Republic has none - theless featured a diverse collection of presidents. During the past three decades, the presidency has changed hands from a reformer with a genuine desire to foster change to an unreconstructed reactionary and finally to a

cunning pragmatist. The fact that the Iranian people can have a say in who becomes president and which candidates

Unlike many of his younger disciples, Khomeini saw little utility even in a pretense of republicanism. His view of proper governance: religious autocracy.

become members of the parliament gives them the ability to express their grievances in

an orderly manner. Members of the public can hope for a voice in national deliberations. This hope may be a delusion, and the elections have hardly affected the essential distribution of power, but they have fostered the impression that the citizens are not mere bystanders in the game of clerical politics. The elected institu- tions of Iran will not govern the theocracy, but they do provide it with an important safety valve. All this is not to suggest that the clerical oligarchs have mastered the means of staying in power forever. The Islamic Republic’s tenure has been turbulent. In its first decade, the theocracy had to battle the marginalized remnants of the revolutionary coalition that were agitating for their share of power. Then in the 1990s came the reform movement, with its enterpris- ing efforts to conform religious ideals to pluralistic norms. Supreme leader Ayatollah Ali Khamenei and his militant followers understood that such a

reform effort would not

A revolution usually fades when those who were present at the cre- ation pass from the scene. Iran defied this pattern.

create an Islamic democ- racy but would lead to the extinction of the Islamic Republic. And then came the titanic Green Move -

ment in the aftermath of the fraudulent presidential election of 2009 that shook the foundations of the state. The regime has never completely recovered from the convulsions of that summer. In 2018, Iran was once more rocked by demonstrations that began with economic grievances but quickly led to calls for the overthrow of the theocracy. Still, Khomeini’s unusual amalgamation of clerical ruling bod- ies coexisting with less-consequential elected institutions was an ingenious

manner of protecting his revolution. It is an enterprise that will one day

come to an end. But its sheer longevity is a tribute to his innovative approach to founding a political regime. Yet another facet of the Islamic Republic is its uncanny ability to renew its constituency in the Iranian polity. A revolution usually fades when those who were present at the creation pass from the scene and a new generation of leaders inevitably look to different sources of authority and legitimacy to underpin their rule. In the 1990s, Iran gave the impression that it would be following the model of China and other revolutionary states that eventually transcend their founding dogmas. Intellectuals, businessmen, and techno - crats dominated the public sphere as Iran seemed to be distancing itself from its revolutionary heritage. The clerical reformers were speaking of an Islamic democracy while the younger generation was moving away from a political culture that celebrated martyrdom and spiritual devotion. Beneath the surface of reform and change, however, was another segment of society:

pious young men, many of them veterans of the extreme violence of the Iran- Iraq War, who remained committed to Khomeini’s original vision. From this part of society emerged men such as Mahmoud Ahmadinejad and diplomat Saeed Jalili, to provide a second wave of true believers in Khomeini’s original ideology. A strong strain of nostalgia motivates this younger generation of conser- vatives. In their publications and declarations, they tend to romanticize the 1980s as the pristine decade of ideological

purity and national solidarity. Adherents of this view see it as an era when the entire nation

After the Rushdie fatwa, Iran was once more globally ostracized, a development entirely acceptable— even desirable—to Khomeini.

was united behind the cause of the Islamic Republic. In this view, Khomeini and his disciples were dedicated public servants free of corruption and crass competition for power, traits that would hardly characterize many of their successors. Self-reliance and self-sufficiency were cherished values of a nation that sought to mold a new Middle East. As with all idealized recollections, the conservatives’ view of the 1980s has a limited connection to reality. But it is an invented past—a manufactured reality—that continues to draw a segment of the public to the theocratic state. It is impossible to determine what portion of the Iranian public supports the revolution and its mission of ensuring God’s will on earth. Given all that

we know about the cultural tastes, political aspirations, and cosmopolitan

nature of Iranian society, it is likely to be a small minority. Still, it is a minor- ity tied together by religious networks, state patronage, and a sense of being under siege by the forces of change. The toxic mixture of radical religion and strident nationalism continues to attract some portion of the younger generation to Kho - meini’s cause. These

Marxism promised its adherents rewards here on earth, but Islamism calls for sacrifices to be redeemed in the afterlife. That makes it harder to falsify.

people find material benefits in his state and a sense of salva- tion in his ideology.

Marxism promised its adherents rewards here on earth, while Islamism calls for sacrifices that will be redeemed in the afterlife. After decades of failed experimentation, it was easy to prove that Marxism had not succeeded and that it could not transcend the forces of history. It is harder to demonstrate conclusively that Islamism cannot deliver on its celestial promises.

BRUTAL REASSURANCES

As Khomeini approached the end of his life, he grew apprehensive about the vitality of his revolution. Suddenly there was a risk that the vanguard Islamic Republic would become a tempered and moderate state. Iran would, in short, experience the same cycle of revolution and reaction that other revolutionary regimes from the eighteenth through the twentieth centuries had experienced. China was a cautionary model as, soon after the death of Mao, it moved in a pragmatic direction of discarding his ideological legacy. At this point, Khomeini undertook two specific acts to ensure that his disciples would sustain his revolutionary radicalism and resist moderation. In 1988, shortly after the cease-fire with Iraq, he ordered one of his last acts of bloodletting: the execution of thousands of political prisoners then lan- guishing in Iran’s jails. The mass executions, carried out over several months, were designed to test Khomeini’s supporters and make certain that they were ruthlessly committed to his revolution. Those who showed hesitancy would be seen as halfhearted and dismissed from power. And this indeed did happen to Ayatollah Hossein Ali Montazeri, who objected. Khomeini was confident that the government he would leave behind had the courage to inflict massive and arbitrary terror to maintain power. Even after this bloodletting, however, he still worried about possible backsliding on relations with the West. Khomeini, therefore, manufactured another external crisis to stoke the

revolutionary fires. The publication of Salman Rushdie’s Satanic Verses,

which depicted the Prophet Muhammad in an unflattering light, offered a perfect opportunity. In February 1989, Khomeini issued his infamous fatwa offering a bounty for the deaths of Rushdie and his publishers. Numerous bombings and acts of violence followed the issuance of the edict, including the death of twelve people in a large anti-Rushdie riot in India. While the world saw his act as an indication of his intolerance and militancy, Khomeini considered domestic political calculations to be paramount. The fatwa thus was cynically designed to radicalize the Iranian masses in support of the regime’s ideology. Iran was once more globally ostracized, a development entirely acceptable—even desirable—to Khomeini. On June 3, 1989, one of the most militant and successful revolutionaries in history died. Khomeini breathed his last, confident that his republic and his ideology would survive. Although many external observers appeared certain that the inevitable process of moderation would set in to tame the revolu- tionary fervor of the Iranian regime, it was not to be. The Islamic Republic’s commitment to the revolution has remained remarkably resilient.

which depicted the Prophet Muhammad in an unflattering light, offered a perfect opportunity. In February 1989,

Excerpted from Revolution and Aftermath: Forging a New Strategy toward Iran, by Eric Edelman and Ray Takeyh (Hoover Institution Press, 2018). © 2018 The Board of Trustees of the Leland Stanford Junior Uni- versity. All rights reserved.

which depicted the Prophet Muhammad in an unflattering light, offered a perfect opportunity. In February 1989,
which depicted the Prophet Muhammad in an unflattering light, offered a perfect opportunity. In February 1989,

New from the Hoover Institution Press is Revolution and Aftermath: Forging a New Strategy toward Iran,

by Eric Edelman and Ray Takeyh. To order, call (800) 888-4741 or visit www.hooverpress.org.

THE MIDDLE EAST THE MIDDLE EAST

Hapless in Gaza

The world continues to feed Palestinians’ delusions that they will one day return to land that is now part of Israel—encouraging the Palestinians to spurn peaceful solutions that could actually be attained.

THE MIDDLE EAST THE MIDDLE EAST Hapless in Gaza The world continues to feed Palestinians’ delusions

By Peter Berkowitz

  • L ast May, freelance journalist Ahmed Abu Artema, an organizer of “Gaza’s Great Return March,” emphasized in a New York Times op-ed the peaceful intentions of a movement that has sparked violence since late March and led to dozens of Palestinians killed

and thousands injured by Israel in defense of its border. In fact, the move -

ment’s very name proclaims a warlike ambition. The “great return march,” a journey from Gaza to Palestinians’ supposedly true homes in the sovereign state of Israel, reflects the dream of abolishing the Jewish state. This dream is the root cause of the humanitarian disaster that blights the lives of Gazans, and of Hamas’s new round of war—involving the use of flaming kites on a near-daily basis to set Israeli fields ablaze and of terrorist infiltration to commit atrocities against Israel’s civilian population. The seed that grew into “Gaza’s Great Return March,” according to Artema, was planted in December when President Trump announced—in accordance with a 1995 congressional resolution—that the United States would move its embassy from Tel Aviv to Israel’s capital city, Jerusalem. This, asserted Artema, deepened the wound he feels when he looks across

the fence that separates Gaza from Israel and sees what he believes to be occupied Arab land. The international community stokes Gazans’ ruinous belief that Israel belongs to them and fuels their delusive dream of return. On May 18, for example, the UN Human Rights Council (UNHRC) again improperly inter- vened in the Israeli-Palestinian conflict in favor of Hamas. By an overwhelm- ing margin—twenty-nine countries in favor, two against (the United States and Australia), and fourteen abstaining—the UNHRC authorized an investiga- tion into the violence arising from the Gaza demonstrations while, in advance of the investigation, it said it “condemns the

The “great return march” reflects the dream of abolishing the Jewish state.

disproportionate and

indiscriminate use of force by the Israeli occupying forces against Palestinian civilians.” Never mind that Israel, having withdrawn from the territory in 2005, does not occupy Gaza, and resorted to force in the recent confrontations only after issuing abundant warnings and in manifestly legitimate defense of its territorial integrity. The council’s gratuitous and entirely foreseeable action usurped Israel’s right and interfered with its responsibility under international law to investigate allegations of misconduct by its military. The one-sided resolution, moreover, airbrushed Hamas’s unlawful dispatch of combatants dressed as civilians into the frontlines of the border-fence dem- onstrations with the intent of breaching Israeli defenses. Meanwhile, the United Nations Relief and Works Agency (UNRWA) persists in encouraging Gazan and West Bank Palestinians—indeed Palestin- ians living in Lebanon, Syria, Jordan, and throughout the Middle East and around the world—to see themselves as refugees endowed with an eternal right of return to Israel. In December 1949, the United Nations established UNRWA to provide care for local Arabs displaced by the war five Arab armies launched against Israel after its declaration of independence in May 1948. UNRWA, however, has deviated greatly from its original mandate. With the international community’s blessing, it has turned itself into the only UN organization dedicated to restoring homes and lands not to the people who left them but to their descendants.

PERPETUAL REFUGEE STATUS

All refugees around the globe, apart from Palestinians, come under the jurisdiction of the UN High Commissioner for Refugees, which refers to itself as the UN Refugee Agency. The UNHCR’s overarching goal is to transform

NO PEACE: A Palestinian takes cover amid tear gas fired by Israeli soldiers. Violence from Gaza is egged on by a belief, encouraged by the United Nations Relief and Works Agency, that Palestinians living anywhere in the world are endowed with an eternal right to return to Israel. [Xinhua]

refugees into citizens. First it tries to repatriate them. If that fails, it prompt- ly turns to resettling and integrating them elsewhere. In stark contrast to the UNHCR, UNRWA is single-mindedly dedicated to repatriating Palestinians, most of whom by now were not born in Israel, while neglecting for several generations Palestinian resettlement and integration elsewhere. Unlike the UNHCR, UNRWA treats refugee status as heritable. That’s why, despite there being no more than about 650,000 Arabs who left their homes in 1948 and 1949 during Israel’s war of independence, UNRWA today recognizes more than five million Palestinians as refugees. By nurturing this dream of return, the international community perpetu- ates the Israeli-Palestinian conflict. Repeatedly assured by diplomats and intellectuals that their people are blameless, Palestinian leaders refuse half measures. Systematically encouraged to believe that their grievances are all Israel’s fault, Palestinians reject compromise. Relieved of accountability for violating the laws of war, they make human shields of their noncombatants and make military targets of Israeli noncombatants.

A solution to Gaza depends on a dramatic transformation of Palestinian political culture, and of the political culture of the international community that enables Palestinian belligerence and intransigence. Israel, however, cannot pin its fate on such improbable developments. As a matter of self-interest, it must look for ways to reduce tensions with Hamas

and ease Gaza suffering. Gaza is a crisis waiting to explode. A narrow slice of land a little more than twice the size of Washington, DC, it is bordered to the west by the Mediter- ranean, to the north and east by Israel, and to the south and west by Egypt’s Sinai Peninsula. About 45 percent of the approximately 1.8 million Gazan Palestinians are under fifteen; about 66 percent are under twenty-five. Since seizing control of Gaza in 2007, Hamas has established a theological des- potism whose overrid- ing purpose is Israel’s destruction. Neverthe -

Any solution to Gaza depends on a dramatic transformation of Palestin- ian political culture—and its interna- tional enablers.

less, Gaza remains dependent on Israel for water, electricity, and

other humanitarian necessities. That is in part because Israel imposed a land, sea, and air blockade on Gaza to prevent Hamas from importing rockets and other weapons. It is also because of harsh controls instituted by the Egyptians at the Rafah border crossing. Three times in the past ten years—the winter of 2008–9, autumn 2012, and summer 2014—Israel undertook military operations inside Gaza to counter Hamas mortar, rocket, and missile attacks on its civilian population. With the advent of the Iron Dome air defense system, Israel has a gone a long way toward neutralizing the threat from Gaza’s projectiles. So Hamas has diverted a substantial portion of the building materials arriving in Gaza to constructing tunnels into Israel for terrorist attacks. Israel has countered by installing an underground anti-tunnel wall. It is also building an underwater fence to prevent attacks from the sea. Hamas’s response is the great march of return.

OPPORTUNITIES ARE FEW—BUT THEY EXIST

An understandable consensus has formed in Israel, stretching from beyond the center right to beyond the center left, that there is little to do in the short term to improve the situation. That’s probably right.

But Israel should pursue the little it can do energetically. Even as it ensures that Hamas pays the price for acts of war, Israel must maintain a flow of basic goods to Gaza. And it must take advantage of opportunities—few and far between though they may be—to develop commerce and industry there. Egypt can help. As Anat Berko, a Likud member of the Knesset, told me, Cairo should allow a much freer flow of goods and individuals through the Rafah border crossing. Sinai’s El Arish International Airport, less than fifty miles away, should become a Gaza hub. The United States can help. It should bring diplomatic and financial pres- sure to bear on the Egyptians to ease restrictions on Gaza. And other nations can help. By ceasing to encourage vain hopes and absurd expectations, they can help Gazans emancipate themselves from their self-destructive dream of return and replace it with the resolve to build prosperous lives in the present.

But Israel should pursue the little it can do energetically. Even as it ensures that Hamas

Reprinted by permission of Real Clear Politics. © 2018 RealClearHoldings LLC. All rights reserved.

But Israel should pursue the little it can do energetically. Even as it ensures that Hamas
But Israel should pursue the little it can do energetically. Even as it ensures that Hamas

Available from the Hoover Institution Press is Israel Facing a New Middle East: In Search of a National Security Strategy, by Itamar Rabinovich and Itai Brun. To order, call (800) 888-4741 or visit www. hooverpress.org.

THE MIDDLE EAST

Only a Mirage

A two-state solution was always going to require Palestinians and Israelis to trust each other. The latest Gaza violence has rendered such trust all but impossible.

THE MIDDLE EAST Only a Mirage A two-state solution was always going to require Palestinians and

By Richard A. Epstein

F ew issues produce more political and emotional discord than the Israeli-Palestinian conflict. In principle, there is much to commend a two-state solution. If achieved, it could allow the two groups to live beside each other in peace. Unsurprisingly, the interminable

peace process hit yet another roadblock earlier this year when the US embassy opened in Jerusalem. Israeli Prime Minister Benjamin Netanyahu proclaimed before Israeli and American dignitaries, “We are in Jerusalem and we are here to stay.” Meanwhile, thousands of angry Palestinian demonstrators were rebuffed with deadly force as they sought to storm into Israel from Gaza. The Palestinians timed those May confrontations to correspond with the seventieth

anniversary of the Palestinian exodus that resulted in the birth of the Israeli state. Dozens of Gazans died and thousands were wounded as the Israelis used live ammunition to keep protestors from storming over the barricades. Now that the protests have subsided, Hamas seeks to capitalize on the deaths and injuries to isolate Israel diplomatically. The United Nations Human Rights Council in Geneva has harshly condemned the Israelis for

Richard A. Epstein is the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution and a member of the steering committee for Hoover’s Working Group on Intellectual Property, Innovation, and Prosperity. He is also the Laurence A. Tisch Professor of Law at New York University Law School and a senior lecturer at the University of Chicago.

a “wholly disproportionate response” to the provocations they faced. Any fair-minded assessment can judge the Israeli response only by first looking at Hamas’s provocation. But as with other UN tribunals, the evidence on the ground does not matter. In this instance, Hamas was fiendishly clever by mixing in children with violent protesters to bolster its common claim that the Israelis fired on “unarmed individuals” who posed little or no imminent threat to the Israelis, a claim that was quickly repeated by US congressmem- bers Keith Ellison (D-Minnesota) and Tulsi Gabbard (D-Hawaii). Hamas’s charge was bizarre for two reasons. The first is that a mob, even of “unarmed” individuals, is typically intent on committing acts of violence by its sheer force of numbers. Indeed, the fiery confrontation looked like a war zone, marked by the hurling of Molotov cocktails, rocks, grenades, and pipe bombs at Israel Defense Forces (IDF) border guards, backed up by the use of incendiary kites flown over Israeli territory. At multiple points along the border, Hamas operatives used wire cutters to tear up fences to allow hordes of Palestinians to fan out into Israeli territory. As Israeli intelligence reported, Hamas paid women and children to go to the front in order to put them in the line of fire. This was no peaceful protest, and it takes an uninformed view of the law of self-defense to insist that Israeli soldiers should have held back their fire until personally faced with “imminent danger,” at which point it would have been too late both for them and the civilians they were there to protect. There is no principle in the law of self-defense that requires a group to forgo self- defense because there is some chance that the assailant, if successful, will inflict fewer casualties by its aggression than are in fact inflicted on it. The Israelis were right to stand their ground.

NO HINT OF COMPROMISE

Politically, the discussion takes a more ominous turn when the protests are set against the context of the deplorable conditions in which Palestinian Gazans live. The Palestinian argument is that any acts of immediate aggres- sion must be viewed within the larger context of the long-running dispute between the Palestinians and the Israelis. That argument boils down to the proposition that any and all force needed to reverse the so-called illegal occupation of Palestine is justified. But that no-holds-barred attitude only hardens the lines of division. As the recent confrontation indicates, short of any major transformation of Palestinian demands, there is no chance of a constructive movement away from the intolerable status quo. Formidable obstacles lie in the path of the two-state solution. The Palestin- ians are up in arms about the United States’ decision to locate its embassy in

Jerusalem. In their view, this action forestalls their ability to have their own cap- ital in East Jerusalem, despite President Trump’s carefully crafted statement on Jerusalem, which specified: “We are not taking a position of any final status issues, including the specific boundaries of the Israeli sovereignty in Jerusalem, or the resolution of contested borders.” So the only reason for linking their pro- test to the new embassy is that the Palestinians do not concede that a compre- hensive settlement will include Jerusalem as the capital of Israel. Israel would have to move its capital to Tel Aviv—assuming there is any Israel at all. At no point have the Palestinians in the West Bank, let alone Gaza, allowed for the possibility of recognizing Jerusalem as the capital of Israel while mov- ing their own capital from Ramallah to East Jerusalem. The reason is that they know that this simple concession contains the necessary implication that Israel, with a capital in West Jerusalem, is entitled to retain the legiti- mate occupation of at least some land within its current borders. Yet until that acknowledgement is made, it sounds as if the Palestinians’ sole object in any negotiation is driving all Israelis out of greater Palestine. The rest of the pieces quickly fall into place. The Palestinians demand the right of return for those (and their descendants) who were displaced from their homes during the chaotic events of 1948. There is no easy resolution to the question of whether the Palestinians were driven from their homes by the Israelis, or whether they were urged by their own leaders to flee momentarily to make it easier for the invading Arab armies to isolate and kill the Jews who remained. But whatever one thinks about that question, the passage of time means that a right of return for several million people and their descen- dants cannot realistically be on the table as part of a comprehensive settle - ment. Just exactly where would these returnees go? Would they be entitled to displace Israelis from their current homes? Take the reins of local govern- ment? Run the army? These issues would remain even if, by some miracle, Palestinians were prepared to issue paper guarantees of Israeli safety. To put this issue on the table is to end the discussion before it begins. The remaining question is whether at this point there is any opportunity for a two–state solution, in which Palestinians gain sovereignty over their own land in the West Bank and Gaza. The answer is no, and will remain so unless Israel receives more than paper guarantees that the new Palestinian state would not raise an army of its own (by turning its police force into one, for example) or invite its allies’ military forces (such as the Iranian Revolutionary Guards) to set up camp within its borders. Such threats would make an invasion of Israel inevitable, for even if the current leaders were to oppose it, nothing would prevent their successors from walking back any agreement. It would therefore

take an act of faith by the Israelis to allow the formation of a Palestinian state without some Israeli military presence on the ground, requiring a status-of- forces agreement, the precise terms of which would be difficult to negotiate.

NO END OF DEAL BREAKERS

The list of deal breakers does not stop here. When the Jordanians occupied the West Bank between 1949 and 1967, they desecrated every Jewish temple and burial site and expelled all its Jewish residents before annexing the territory in 1950. Is there any reason to doubt a repetition? It is also surely fair to ask: what will be the status of Jews who desire to remain in the West Bank if the area is turned over to a new Palestine? No one expects that they will be admitted in the Palestinian army or security operations; Israeli Arabs face similar restric- tions. But will Jews living under Palestinian rule be able to own property, vote, obtain an education, or work in government as Israeli Arabs do in Israel today? The question seems to answer itself. Residual hatreds burn deep. Better to flee than to face loss of privileges, imprisonment, or even death. In the end, the Gaza unrest pushed any feasible solution even further into the distance. The 2005 Israeli withdrawal from Gaza has offered a glimpse of what a two-state solution might look like. Thirteen years of strife rule out any comprehensive two-state solution. Ordinary people in Gaza now sense this gloom. Listen to Abdul Rahman, age fifty-nine, a vegetable trader. His assessment of what the protest accomplished, as reported in the pages of the Sydney Morning Herald, was this: “Zero. Less than zero.” War does that. The Palestinians’ only hope for peace is to renounce violence and to expand cross-border trade within boundaries, which might lead to cooperation, inter-

dependence, and then trust. Trump is said to have a Mideast peace plan up his sleeve. He has his work cut out for him.

take an act of faith by the Israelis to allow the formation of a Palestinian state

Reprinted from Defining Ideas (www.hoover.org/publications/defining- ideas), a Hoover Institution online journal. © 2018 The Board of Trustees of the Leland Stanford Junior University. All rights reserved.

take an act of faith by the Israelis to allow the formation of a Palestinian state
take an act of faith by the Israelis to allow the formation of a Palestinian state

Available from the Hoover Institution Press is Russia and Its Islamic World: From the Mongol Conquest to the Syrian Military Intervention, by Robert Service. To order, call (800) 888-4741 or visit www.hooverpress. org.

EASTERN EUROPE

Where Is Poland Heading?

A new populist party aims to tighten its grip on institutions—and on Polish history itself.

EASTERN EUROPE Where Is Poland Heading? A new populist party aims to tighten its grip on

By Norman M. Naimark

D uring the forty-five painful years of communist rule, Poland’s

economy was overwhelmed by shortages, low productivity,

and debt. Today, the country is booming; by most measures it

represents one of the eight strongest economies in Europe and

certainly the biggest in the former Soviet bloc. Unemployment is down from double-digit numbers to 4.1 percent; growth is steady at 4 percent a year. The infusion of investment and aid to the country’s infrastructure from the European Union has translated into urban and even rural prosperity. Since the collapse of communism, GDP per capita has almost tripled from $5,510 in 1990 to $15,049 in 2016. Not only is Poland prosperous, but for one of the few times in its long and frequently tragic history, the country is relatively secure. It has been a stalwart member of NATO since 1999 and of the European Union since 2004. Poland would like greater guarantees for its security from the United States, including the permanent stationing of US troops, for which it has offered the funding. But in lieu of that, there have been serious joint operations between

NATO and Polish forces, like the June 2018 Operation Saber Strike 18, involv- ing over eighteen thousand NATO troops in Poland and the Baltic region. Ongoing problems with Brussels and the European Union over rule-of-law issues should not obscure the reality of Poland’s sense of place in Europe and its role as one of the United States’ strongest allies in the world. Despite unprecedented prosperity and a firm grip on the country’s secu- rity, Poland has been susceptible to the siren call of populism, as have many other countries in Europe, both east and west. The ruling party, Law and Jus- tice, known as PiS (pronounced “peace”), has developed its own particular version of Polish populism that leans heavily on traditional Polish conserva- tive Catholic thinking and shares the anti-globalization, anti-immigrant, anti- abortion, and anti-gay rhetoric of similar parties in Europe. It also leads a highly nationalistic government, more in the traditions of Roman Dmo wski’s National Democratic Party of the nineteenth and early twentieth century than those of the interwar populists of Wincenty Witos’s Peasant Party.

WHERE THE PARTY’S APPEAL LIES

PiS is inspired and led behind the scenes by Jarosław Kaczyński, who founded the party in 1990 with his twin brother, Lech, the former president of Poland. Lech Kaczyński died tragically in an airplane accident at Smolensk on April 10, 2010, along with ninety-five others, including the crew and promi- nent representatives of the Polish government, military, and society. Brother Jarosław and many in PiS refuse to accept that the crash was a simple acci- dent caused by pilot error, the conclusion of an independent investigation, but insist that Russian manipulation and even the machinations of the former government of Donald Tusk were involved. The ruling party’s support is mostly in the countryside and in smaller cities, especially in eastern and central Poland, where the progressive platforms of former presidents Lech Wałęsa, Aleksander Kwaśniewski, and Donald Tusk (president of the European Council since 2010) are denounced as “post-com- munist,” excessively subservient to the European Union, and unworthy of the new Poland of the new Fourth Republic that PiS seeks to construct. But it is also the case that PiS has broad support among many young people, business- men, and pensioners throughout the country. PiS recognizes few enemies on the right, and instead, through its rhetoric and public stances, has empowered Polish neo-fascists and anti-Semites to spread their ideas and take their pro - tests against gay rights, abortion rights, and globalization to the streets. At the same time, PiS has won considerable domestic acclaim for its social

programs, especially for the direct monthly payment of 500 zlotys (about

RULE OF LAW: A demonstration in Krakow opposes the ruling party’s moves to control Poland’s judiciary. Both Polish protesters and the European Union have opposed the efforts, with the EU saying they violate European core val-

ues. [Omar Marques—ZUMA Press]

$135) to Polish families for additional children. The amount may not seem like a lot, but it provides just enough extra cash for families to allow for many women to afford to stay at home with their children. Promises of increased pensions and early retirement policies have also garnered PiS the kind of popularity that made it possible for it to overwhelm its primary opponent, Civic Platform, in the 2015 elections and control the politics of the national assembly, the Sejm, together with several small conservative and right-wing parties. PiS’s assault on liberal Poland began in 2016 with a partly successful attempt to “reform” Poland’s Constitutional Tribunal, which the party claimed was in the hands of judges appointed in the communist era. It also sought to empower the minister of justice to replace the justices with those friendly to the party. In these plans, the National Council of the Judiciary, an independent body that deals with appointing justices and reviewing their performance, would have been subordinated to the parliament and therefore to PiS. Recently, the government took on the Supreme Court, passing a law

that would force nearly a third of its seventy-three judges into retirement. Professor Małgorzata Gersdorf, the chief justice of the Supreme Court and a

special target of PiS, has so far refused to vacate her position as demanded by the parliamentary law. The ruling party’s attempts to transform the judiciary in its own image have been countered by sporadic demonstrations in Warsaw and elsewhere in the country and by

Like many other European countries, Poland has been attracted to the siren call of populism.

serious opposition from

European Union officials. The EU has discussed PiS’s actions as a poten-

tial breach of Article 7 of the 2007 Lisbon Treaty, meant to uphold European “core values” such as democracy, human rights, and the rule of law. The penalties for such a trans- gression could be to suspend membership rights in EU organizations, to cut off EU subsidies, and to deny access to the single market. Neither the Poles nor the EU are anxious to reach the stage of this “nuclear option.” Thus, there have been ongoing talks between EU Commission First Vice President Frans Timmermans and the Poles about how to defuse the crisis and reach a compromise. Similar problems regarding rule-of-law issues in Viktor Orbán’s Hungary have frustrated EU politicians, who have problems enough with Brexit, refugee issues, and a looming trade war with the United States. The trans- gressions of populist politicians, of course, are not just an issue of Poland and Hungary. The governments of Austria, Slovenia, and now Italy have

also adopted populist platforms that challenge the progressive policies of Brussels.

MONITORING HISTORY—AND SPEECH

Poland’s populist government has also made serious attempts to revise what it characterizes as “un-Polish” views of the past, using appeals to national- ism to unseat political opponents and Polish cultural critics. There was a determined and ultimately successful attempt to remove the director of the new World War II Museum in Gdansk at the beginning of 2017 and replace him with a more politically friendly director because the museum did not sufficiently represent the narrow Polish nationalist view of bravery and suffering during the war. The director of the museum had made a concerted effort to couch Polish wartime history in the larger context of the genuinely global conflict, which the government critics condemned as anti-Polish.

The concluding film depicting the international character of the war and the struggle for peace has now been removed from the exhibit and a Polish patriotic film put in its place. It is unlikely that the rest of the exhibition will be kept intact. The former director has filed suit to prevent the government from taking such action. More recently, in February 2018, the government passed a law that sought to restrict how scholars and journalists talk and write about the Holocaust. Poles are justifiably frustrated by the fact that the Nazi death camps located in Poland during the war are sometimes referred to, especially in the West, as “Polish death camps.” But the new law threatened those who use the term, almost always out of ignorance, with three years in prison. (US President Barack Obama made that same mistake in 2012 and apologized to the Polish government as a result.) With even worse implications for unfettered historical scholarship, the law stated that those who suggest that “the Polish nation or Polish state” collud- ed in the Holocaust were also subject to three years in prison. Although some Poles did collude with the Nazis in the persecution and killing of the Jews and others turned over Jews to the authorities or refused help to them—to be caught protecting Jews could result in execution by the Germans—this was not a matter of the Polish state (there was no Polish state at the time) or of the nation as a whole. As many critics of the law pointed out, the slippage between characterizations of individual Poles and the Polish nation could have been used to intimidate researchers and commentators. The law itself was poorly conceived and carried out. PiS’s attempt to gain support from Pol- ish nationalist circles

backfired diplomatically. It immediately raised the ire of one of Poland’s closest allies, the state

Former governments are denounced as “post-communist,” excessively subservient to the EU, and unworthy of the new Poland.

of Israel, which was otherwise deeply appreciative of Poland’s support for moving Israel’s capital to Jerusalem. Prime Minister Benjamin Netanyahu was particularly sharp in his criticism: “One cannot change history, and the Holocaust cannot be denied.” The new law also prompted protests from the US State Department, which is itself very sensitive to Jewish issues in Poland. Perhaps most signifi- cant, especially given the recent “détente” of sorts between the world Jewish community and the Polish government, were critical reactions from Jewish

organizations. One video, sponsored by the Ruderman Family Foundation

(and subsequently withdrawn), melodramatically denounced what it repeat- edly referred to as “the Polish Holocaust,” a completely inappropriate term sure to offend the Poles. Yet PiS might count this conflict with Jewish organizations as a domestic

political victory, since it could then pose as the defender of Polish national honor against international Jewish circles that supposedly denounced the country’s wartime record.

The head of a new World War II museum was ousted because it didn’t reflect the narrow Polish nationalist view of bravery and suffering.

Kaczyński and the PiS

leadership have unam- biguously denounced anti- Semitism. But they have played with a sensitive

issue, one in which they have no important stake, and thus they tried to back away from it as best they could without sacrificing the principle of historical truth they believe they have upheld. On June 27, the PiS backed down; the fight with the world Jewish commu- nity, Israel, and their allies on this issue was simply not worth it. The penal- ties that would have attended the supposed “crimes” were removed from the law. In a joint statement, Netanyahu and Polish prime minister Mateusz Morawiecki concluded: “Both governments vehemently condemn all forms of anti-Semitism and express their commitment to oppose any of its manifesta- tions. Both governments also express their rejection of anti-Polonism and other negative national stereotypes.” Yet the statement also provoked contro - versy when it suggested that during the war the Polish government-in-exile

and the Polish underground “created a mechanism of systematic support for Jewish people,” which Yad Vashem, the Jewish Holocaust memorial in Israel, condemned as historically inaccurate and one-sided. As a result of the recent controversies, many Poles have become interested in issues of Polish-Jewish relations again. The 2014 opening of the magnifi- cent Polin Museum in Warsaw, dedicated to the history of the Polish Jews, reflected what had already been a modest but notable revival of the small Jewish community in Poland. The “noise” in the press and on television surrounding the law prompted Polish teachers to take their classes to the Polin Museum, a place flooded with Polish schoolchildren. It also encouraged volunteers among both Poles and Jews to participate in informational meet- ings and community initiatives to commemorate the Holocaust and clean up Jewish cemeteries in Poland. Traditional Polish anti-Semitism is still “in the air.” But the positive evolution of Polish-Jewish relations will continue.

A HARSH VIEW OF IMMIGRANTS

Typical of European populist parties, PiS’s attacks on the European Union’s refugee policies have been strident and borderline racist, even though there has been virtually no immigration to Poland from Syria or Africa. Like the rhetoric surrounding the issue of historical “truth” about the Second World War, PiS’s philippics against immigration are meant to bolster its nationalist credentials. Early on, Kaczyński warned that refugees would bring disease and crime to Poland and were to be avoided at all costs. Poland’s Christian purity would be threatened by an influx of Muslims, even though Poland already has a tiny minority population of Muslim Tatars, who are generally well integrated into the society. Yet these injunctions about migrants do not apply to Ukrainians, who are coming to Poland in huge numbers—between one and two million are in Poland, depending on the construction and tourist seasons—and are filling jobs that Poles are unwilling to take in the service and building industries. Many Poles prefer better-paying positions, sometimes in these same indus- tries, in the United Kingdom, Ireland, and elsewhere in Western Europe. In fact, it is a particular paradox that Poles, who have been a nation of emi- grants since the nineteenth century—in search of economic welfare, personal security, and freedom—are now proving to be among the most obdurate opponents of accepting immigrants into their fold. The future of Polish populism is extremely difficult to predict. PiS is involved in a balancing act. Poland needs the European Union and has profited financially from belonging to it as have few other countries. Public opinion polls indicate

that the Polish public is highly supportive of the idea of the European Union. But PiS is also

The ruling party’s complaints about immigration are meant to bolster its nationalist credentials.

determined to fight for its values against what it sees as the more cosmopolitan and liberal policies of Brussels and of the progressive Polish intelligentsia. The country is deeply polarized, seemingly more so every day, with PiS capturing a substantial seg- ment of public opinion that was deeply dissatisfied with the progressive poli- tics and free market economics of the Polish post-communist governments. Much of the media is now under PiS’s control, and it will be difficult to break its increasing monopoly on information. But it is also true that Jarosław Kaczyński is the heart and soul of the party, and his recent serious illness,

not fully reported in the press yet confirmed by party circles, has already

prompted speculation about whether PiS could survive his withdrawal from

politics. Since the formation of Solidarity in the 1980s (and, one could argue, deep into its historical past), the Polish opposition has developed an intimate understanding of the role of protest in civil society.

Poland needs the European Union and has profited from belonging to it as have few other countries.

PiS and its allies may be getting stronger. But it would be a mistake to

underestimate the ability of the opposition to protect Polish democracy. PiS will push as hard as it can to reform the judiciary and seize control of the country’s cultural policies. On the model of Viktor Orbán and his illiberal revolution in Hungary, Kaczyński and his party may well seek to alter the Polish constitution. Whether they will succeed in creating a Fourth Polish Republic in their nationalist image remains to be seen.

prompted speculation about whether PiS could survive his withdrawal from politics. Since the formation of Solidarity