Liveblogging World War II: August 7, 1946: Eleanor Roosevelt

Must-Read: Note that it is not so much inequality that backlash is a backlash to. It is, rather, disappointment with what were previously-thought to be reasonable expectations--the breaking of the social contract that you believe the market economy has made with you:

Kevin O'Rourke: Brexit Backlash Has Been a Long Time Coming:

Globalisation in general, and European integration in particular, can leave people behind... ignoring this... can have severe political consequences...

Since 23 June, this has even become conventional wisdom. While I welcome this belated acceptance of the blindingly obvious, I can't but help feeling a little frustrated, since this has been self-evident for many years now.... The main point of my 1999 book with Jeff Williamson was that globalisation produces both winners and losers, and that this can lead to an anti-globalisation backlash.... We argued this based on late-19th century evidence... European landowners, who found themselves competing with an elastic supply of cheap New World land... across the Atlantic... workers found themselves competing with European migrants coming from ever-poorer source countries....

You may argue that the economic history of a century ago is irrelevant.... But ever since the beginning of the present century, at the very latest, it has been obvious that the politics of globalisation today bears a family resemblance to that of 100 years ago....

For a long time, conventional wisdom ignored these rather large straws in the wind – after all, the Irish could always be asked to vote again, while the French could always be told that they couldn't vote again. And so the show could go on. But now Brexit is happening, and the obvious cannot be ignored any longer.... This is where Dani Rodrik's finding that more open states had bigger governments in the late 20th century comes in (Rodrik 1998).... Michael Huberman showed that this correlation between states and markets was present before 1914 as well....

If the Tories had really wanted to maintain support for the EU, investment in public services and public housing would have been the way to do it. If these had been elastically supplied, that would have muted the impression that there was a zero-sum competition between natives and immigrants. It wouldn't have satisfied the xenophobes, but not all anti-immigrant voters are xenophobes. But of course the Tories were never going to do that, at least not with George Osborne at the helm....

here are also lessons for the 27 remaining EU states (28 if, as I hope, Scotland remains a member). Too much market and too little state invites a backlash. Take the politics into account, and it becomes clear (as Dani Rodrik has often argued) that markets and states are complements, not substitutes.

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