Keller and Krugman

Mr. Keller is in Johannesburg.  In “Inventing Democracy” he says South Africans have some advice for Egypt, Libya and other countries trying to emerge from oppressive rule.  In “Robots and Robber Barons” Prof. Krugman has a question:  Why are workers being left behind?  He offers several possible answers, and suggests that a conversation needs to start…  Which, of course, never will because it would inconvenience the robber barons.  Here’s Mr. Keller:

This is a great vantage point for watching the Arab world struggle to tailor itself a set of new democracies. It is nearly a generation since South Africa assembled its warring peoples and wrote what is certainly the most progressive constitution in Africa, perhaps on the planet. It prescribes all the safeguards of a democratic, humane and inclusive society. Its experience should be a shining model for the aspiring democracies at the other end of the continent as they fabricate basic laws and institutions.

I wish I could say the lessons from here are easy. But it is becoming clearer by the day that a glorious constitution carries you only so far if its values have not taken root in the culture.

So South Africa has an exquisite balance of powers on paper — but is, in effect, a one-party state, riddled with corruption. It has a serious independent judiciary — but is now contemplating loopholes to let tribal courts practice South Africa’s version of Shariah. This country was years ahead of the United States in recognizing the rights of homosexuals, including same-sex marriage — yet there is no openly gay leader in the ruling African National Congress, and lesbians have been targets of punitive rape and murder. It has a vibrant, diverse press — and a president who keeps trying to muzzle it.

As a witness to its birth, I would not say the thrill of South Africa’s democracy is altogether gone. South Africans are resilient, blessed with tourist-alluring beauty and abundant natural wealth; there is a growing black middle class and a robust civil society. And 18 years is still young. But I imagine that some days the news — if it penetrates the fog that I’m told enshrouds the 94-year-old Nelson Mandela — must break his heart.

In the course of a reporting trip for a forthcoming article, I’ve been asking some of the authors and guardians of South African democracy what advice they would offer to an Egypt, a Libya, a Tunisia and other places that are struggling to emerge from various forms of oppressive rule. Here’s how I’d sum up the best suggestions.

Take your time, talk to everyone and don’t be too proud to borrow.

For South Africa, there were five exhausting years — from the first talks, through statements of principle and interim versions — before its democratic Constitution went into force. The negotiating included 19 parties, factions and tribes, a huge public comment effort and copious study of the experiences of countries around the globe.

“We were shameless,” said Nicholas Haysom, a legal adviser to President Mandela in the ’90s who now works for the United Nations. “We looked at everyone. We took jurisprudence from Canada. We took power-sharing from Germany. We took constitutional principles from Namibia. The true exercise of sovereignty is in how one adapts these institutions to your own country, not in confining one’s imagination to one’s own limited constitutional traditions and experiences.”

Not everyone has that kind of patience. Egypt’s constitution-writing assembly, stampeded by President Morsi’s Islamist majority, has spawned a mess of boycotts, street clashes and confusion where consensus and legitimacy are desperately needed. (Iraq, stampeded by President George W. Bush’s desire to demonstrate the flowering of freedom, had a similar farce when it rushed its version of democracy.)

Peace before justice.

South Africa set out to heal the deep wounds of a ferociously cruel regime by creating a Truth and Reconciliation Commission. Those who tortured and killed for any cause could, by fully disclosing their offenses, win an amnesty. The result was not invariably full truth or full reconciliation, but by and large it worked. Alex Boraine, who ran the commission under the flag of its revered chairman, Archbishop Desmond Tutu, has spent the ensuing years traveling to other countries that want to copy the South African model.

Often, his advice is: not so fast. In some cultures the urge for vengeance is too strong to be curtailed by confession. Efforts to emulate South Africa, he said, have been pretty successful in Peru and Mauritius, but failed in Guatemala and Liberia. He expects that much of the Middle East is too raw for a truth commission. But he advises new democracies that there are other ways to slow the cycle of revenge, build confidence and secure a stable foundation for a new order. For example, should Syria’s opposition succeed, Boraine said, there will be a clamor to take President Bashar al-Assad before an international criminal court. “Another view would be: give him safe passage to Moscow. It’s not fair. it’s not just. But you’ve got to start somewhere, to stop the killing.”

Activist judges are not so bad.

South Africa’s Constitution is in several respects more liberal than South African public opinion. Because the drafters included admirers of Western liberal democracies, and because they emerged from a regime that treated its citizens as essentially chattel, the Constitution is expansive in bestowing rights. It prohibits discrimination based not only on race and gender, but also on “sex, pregnancy, marital status, ethnic or social origin, color, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.” The Constitutional Court has been similarly expansive in its interpretation of this language. The court outlawed capital punishment in 1995 and ruled in 2005 that gays and lesbians are entitled to marry. Neither of those outcomes would likely survive a popular referendum, even today. (South Africa, white and black, is socially conservative.) If proposed laws expanding government secrecy and empowering tribal justice pass the legislature, the high court will be the last line of defense. In America we disparage “activist judges,” but the willingness of South African courts to be assertive on matters of rights seems to have won the judiciary tremendous respect and moved this fledgling society toward greater tolerance. President Morsi, take note.

… Up to a point.

The relatively high esteem accorded the courts and the increasingly widespread disdain for the other branches of government have made South Africa’s courts the destination for disputes that have no business there: should Johannesburg install electronic tollgates on a stretch of highway? How many days should the Parliament be allowed to wait before voting on a no-confidence motion?

“People use these lawsuits as a substitute for political engagement,” said Steven Friedman, director of the Center for the Study of Democracy here. Politicians will never become good at their jobs if courts take their place.

Make citizens.

The curse of many transitional states is that they have no cohesive sense of nationhood, no common sense of purpose or responsibility. Instead of Iraqis or Syrians or Afghans or Egyptians, you have Sunnis and Shiites and Copts, Alawites and Kurds, Pashtuns and Tajiks. A generation past liberation, South Africa has had inspiring moments of unity, but it still has not fully coalesced. A new survey finds that fewer than 1 in 10 adults — and even fewer young people — identify themselves as “South Africans first,” over language, race or ethnic group. The country’s many peoples are equal under the law, but in some ways as “apart” as under apartheid.

Mamphela Ramphele, a wise and nonpartisan anti-apartheid activist and academic, attributes this in part to the sense of impotence that infected South Africans — and not just blacks — under the bleak tyranny of apartheid. And it is partly due, she says, to the cynicism generated by pervasive corruption under the African National Congress government. She has launched a new movement aimed at awakening a sense of citizenship, including through some institutional reforms, such as having most members of Parliament accountable to specific districts rather than answerable only to the ruling party. Freedom, she would advise the founders of new democracies, has to be won over and over.

“South Africans liberated themselves,” she told me, “and now they must do it again.”

Now here’s Prof. Krugman:

The American economy is still, by most measures, deeply depressed. But corporate profits are at a record high. How is that possible? It’s simple: profits have surged as a share of national income, while wages and other labor compensation are down. The pie isn’t growing the way it should — but capital is doing fine by grabbing an ever-larger slice, at labor’s expense.

Wait — are we really back to talking about capital versus labor? Isn’t that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy? Well, that’s what many people thought; for the past generation discussions of inequality have focused overwhelmingly not on capital versus labor but on distributional issues between workers, either on the gap between more- and less-educated workers or on the soaring incomes of a handful of superstars in finance and other fields. But that may be yesterday’s story.

More specifically, while it’s true that the finance guys are still making out like bandits — in part because, as we now know, some of them actually are bandits — the wage gap between workers with a college education and those without, which grew a lot in the 1980s and early 1990s, hasn’t changed much since then. Indeed, recent college graduates had stagnant incomes even before the financial crisis struck. Increasingly, profits have been rising at the expense of workers in general, including workers with the skills that were supposed to lead to success in today’s economy.

Why is this happening? As best as I can tell, there are two plausible explanations, both of which could be true to some extent. One is that technology has taken a turn that places labor at a disadvantage; the other is that we’re looking at the effects of a sharp increase in monopoly power. Think of these two stories as emphasizing robots on one side, robber barons on the other.

About the robots: there’s no question that in some high-profile industries, technology is displacing workers of all, or almost all, kinds. For example, one of the reasons some high-technology manufacturing has lately been moving back to the United States is that these days the most valuable piece of a computer, the motherboard, is basically made by robots, so cheap Asian labor is no longer a reason to produce them abroad.

In a recent book, “Race Against the Machine,” M.I.T.’s Erik Brynjolfsson and Andrew McAfee argue that similar stories are playing out in many fields, including services like translation and legal research. What’s striking about their examples is that many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers.

Still, can innovation and progress really hurt large numbers of workers, maybe even workers in general? I often encounter assertions that this can’t happen. But the truth is that it can, and serious economists have been aware of this possibility for almost two centuries. The early-19th-century economist David Ricardo is best known for the theory of comparative advantage, which makes the case for free trade; but the same 1817 book in which he presented that theory also included a chapter on how the new, capital-intensive technologies of the Industrial Revolution could actually make workers worse off, at least for a while — which modern scholarship suggests may indeed have happened for several decades.

What about robber barons? We don’t talk much about monopoly power these days; antitrust enforcement largely collapsed during the Reagan years and has never really recovered. Yet Barry Lynn and Phillip Longman of the New America Foundation argue, persuasively in my view, that increasing business concentration could be an important factor in stagnating demand for labor, as corporations use their growing monopoly power to raise prices without passing the gains on to their employees.

I don’t know how much of the devaluation of labor either technology or monopoly explains, in part because there has been so little discussion of what’s going on. I think it’s fair to say that the shift of income from labor to capital has not yet made it into our national discourse.

Yet that shift is happening — and it has major implications. For example, there is a big, lavishly financed push to reduce corporate tax rates; is this really what we want to be doing at a time when profits are surging at workers’ expense? Or what about the push to reduce or eliminate inheritance taxes; if we’re moving back to a world in which financial capital, not skill or education, determines income, do we really want to make it even easier to inherit wealth?

As I said, this is a discussion that has barely begun — but it’s time to get started, before the robots and the robber barons turn our society into something unrecognizable.

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