Edward Luce Discusses His New Book "The Retreat of Western Liberalism"

LuceEdward Luce's new book, The Retreat of Western Liberalism, is getting a lot of attention lately and for good reason. At the least, it's an informative look at the current state of world politics and economics. But it's also a thought-provoking warning that history is not guaranteed. We picked the book as a Best Book of June, and a few weeks ago we reached out to Luce to speak to him directly. Here's a partial transcript of our Seattle to London conversation:

Chris Schluep – Were you at all thinking about Hillbilly Elegy when you wrote your book?

Edward Luce – No. I thought of incorporating some actual reportage that I was doing—in other words, plagiarizing myself—during the campaign trail. And one of them was an extended piece called "The Boy Who Escaped Trump Country,” which came out about a year ago. And then Hillbilly Elegy came out and I thought there’s no point. Everybody’s read Hillbilly Elegy. I should just write what I’m going to write and not bring all the grand stuff into it.

Schluep – So when did you start to write the book? Did you start after President Trump was elected?

Luce – [My publishers] came to me in early December and asked if I could write a book on the collapse of western liberalism, or something along those lines, and "collapse" is too Cassandra-ish, it’s wrong, so I decided I could write a book on the retreat of western liberalism. Because retreat implies the ability to regroup.

Schluep – Why do you think there’s this rise in populism?

Luce – I think that what happened in 2016, first of all in Britain, and then of course in November in the States, took a lot of people by surprise, and it shouldn’t have. There is a deep structural trend that I write about in this book of the rise of the rest, the others catching up—China, India, increasingly Sub-Saharan Africa, Central Asia, Bangladesh is now joining the party—there are vast parts of the world that are lifting themselves out of poverty as the productivity and technological methods that have enriched the west spread and globalize, and this is a natural process and in some ways, well, in most ways, it’s an incredibly positive process. This is the fastest rate at which people have fallen out of poverty on this scale ever in human history, and it’s going to continue short of some cataclysmic interruption. And it’s been going on since the 1960s/1970s. With the rise of Southeast Asia and South Korea and Taiwan, and of course Japan after the war, and China in the 1980s really began to make it a global phenomenon; and India has now overtaken China; in fact, it’s the fastest growing large country in the world. And that’s probably going to remain the case for the next twenty or thirty years. Again, this is assuming no cataclysm. And so I think the impact of the rise of the rest, the convergence of the global economy, is a very positive thing that poses acute challenges to the middle-skilled, who are relatively expensive in terms of their salaries and wage rates, in the developed world. In that twelve to fifteen percent of the world that we call the west. And that this has been a long time in baking, and it’s producing a slow motion crisis in our politics that had gotten used to a rising-tide-lifting-all-boats economy in the post-war decades. And so in that respect there’s nothing new about this. Economists tend to divide globalization and technology into separate silos, but they’re really the same thing. You’re not going to be having all these different supplies with global supply chains feeding into whatever tablet is being made or iPhone is being made unless there is the technology to enable that supply chain to be global, so it’s technology-enabled globalization, and of course vast and vast container shipping is a technology, too. As is intercontinental flight between global cities. All of this is part of technology-enabled globalization, which is accelerating and integrating at a kind of hyper-globalized speed compared to thirty years ago. But it’s been a long time in coming. It’s been all of my lifetime. This conversation isn’t new. And the impact on the middle-skilled, the middle-waged in the west is not something that should remotely take us by surprise. That’s the essential backdrop to what’s happening.

Schluep – You’ve described the rise of the rest as a restoration, not a revolution.

Luce – Yes, There are some very good numbers that express that on a historic scale. And also—I hate to use the word inevitable, because there’s nothing inevitable in life, except death and taxes—but this is pretty close to inevitable.

Schluep – So this is a crossroads, is what the book is arguing, and we can go a number of different ways.

Luce – We can go a number of different ways. So, to bring it to the immediate, away from the supra-historical, to the immediate this week, I wrote a column yesterday about Trump’s budget proposal. And I don’t blame him for launching his budget while he was in the Middle East because it’s a pretty hard budget to justify. He has come to power on a great return to the golden age of the American middle class theme, and is carrying out the greatest bait and switch in modern electoral history. Now, I’m not saying I believed he would actually put in place intelligent policies such as a Marshall Plan for the middle classes—the training, the investment, the upskilling that is needed—I’m not suggesting for a moment that I believed that’s what he’d do. But he signaled very clearly that the forgotten American man and woman would be at the heart of his economic agenda, and the budget barely even includes a nod to infrastructure investment—the rest it cuts. It cuts training. It cuts school scholarships. It cuts loan subsidies for higher education. The list is endless and I'm sure you're familiar with the outlines of his budget. This is the wrong direction very rapidly. In terms of the kind of intelligent response that America needs to help stabilize and retool its middle income people, regardless of what race they belong to, whether they’re white, blue collar, or whether they voted for Trump or not. America as a whole would benefit from, as I say, a Marshall Plan for the middle classes. And so I don’t find it difficult, and I don’t think most people who thought a little bit about the global context for populism, I don’t find it that difficult to come up with abstract remedies. They might not be complete. They might not be Hail Mary solutions for everything. But they might be a dramatic improvement on the status quo. What I do find hard to imagine—and this is why I’m so worried—is a politics that will implement these solutions. Because, as I say, it’s not just Trump that’s taking America further away, it’s Theresa May’s government in Britain, and we’re in the midst of a general election here, in which these issues are not really being addressed at all. There are all kinds of identity questions and the usual sort of politics sports commentary atmosphere around this election. But the grand debate about Why is it that Brexit happened? What is it we need to do to make people feel they belong to this society and that they have a future, and they’re children have a future. That’s not the debate in this election. And it’s clearly not Trump’s priority. He very skillfully used that sentiment to win. But as I say there’s a grand bait and switch going on in terms of what he’s doing in practice.

Schluep – And yet you point out that for the middle class, it’s not about a decline in material comforts, it’s more about dashed expectations.

Luce – A lot of it’s about dashed expectations. Look, it’s clearly a male problem. There is a gender dimension to this. So America has 77,000 jobs in the steel sector, and it has 84,000 coal mining jobs. And these are male jobs, but there aren’t that many of them left. There used to be hundreds of thousands in both categories. It’s got 810,000 people working as home health aides. Their future, their security, did not feature in the general election. What featured was this great nostalgic pitch that we can go back to those very male jobs of the past that used to guarantee a stable living. You could afford to send your kids to college, etc.: A nostalgic Make America Great Again. It was very backward looking. A practical look at the future of work, of the labor force as it is, would tell you that since Trump came to office, almost 100,000 people have lost their jobs in the retail sector. The retail sector employs 15.6 million people. This is where we should be focusing. How are we going to retrain them? What’s there economic future going to be? Those 77,000 people working in steel—actually, some of them are really well paid, some of them have post-graduate degrees; there are some really high tech jobs there—but it’s a capital intensive sector nowadays. They’re not going to be employing on a mass scale in the future. As for coal mining, that’s going out. We know it’s going out. So where is the focus on what’s really happening now in the economy, as opposed to what people are nostalgic for, that was the case thirty years ago? It’s not practical, what Trump is offering, and it’s highly misleading to pretend that we can go back to that.

Schluep – And I think it’s easy to be nostalgic about a past that might not even have existed. It will never disappoint.

Luce – Yes, that’s quite true.

Schluep – You say that, in the presence of a reduced U.S., China isn’t necessarily going to fill that void. You think chaos will. Can you talk a little about that?

Luce – One of the things that we keep thinking Trump might have learned from H.R. McMaster or Jim Mattis or maybe even Rex Tillerson or the cooler heads that have been advising him, is that there is such a thing as an alliance and that America has allies. And that’s a very strong word. It is a multiplication of America’s power that it has treaty allies that share values, that share goals, and that for all of the bumps along the road—more than bumps, the egregious detours like the Iraq War, which divided the American alliance—America’s power is magnified by the strength of its global alliances, all over the world. China doesn’t have one treaty ally, not one. So China is not going to replace the United States. It’s not a model in terms of a country that attracts mass integration. Now there are, increasingly, economic migrants who do go to China, because it’s a richer country than it used to be, and it’s got employment and it’s got opportunities, and there are students—tens of thousands from Africa, India, different parts of the world—that are studying at Chinese universities, so I don’t want to overlook that. But China is not claiming to be, and never will claim to be, a universal model in which all comers are welcome and anybody can be Chinese. China is China. In the States, if you’re not listening to Donald Trump, in its best form, it's a universal model in which anyone can imagine being an American. And that soft power—what America is like intrinsically, in its best self—enables America to provide a global leadership that has the kind of legitimacy no other power can really aspire to. So, nobody replaces America. China, as it gets bigger, will spout more and more fear and reaction from its neighbors. You can imagine if Trump does another sharp turn and undercuts alliances in Asia, as he’s sort of trying to do just today and yesterday in Europe with NATO, that Japan could go nuclear very quickly. It’s just a couple of tests away. It’s a turnkey nuclear program. The trial would not be like Pakistan or North Korea—it can go nuclear very quickly. And then if Japan goes nuclear, we get a completely different, very destabilizing, very, very worrying equation in east Asia. It already is, but this would be orders of magnitude higher. So, if America departs through its own volition because Trump thinks that all of America’s allies are free riders, or because it feels he can no longer bear the burden of upholding the global order, chaos will follow. It’s a huge, huge danger, and I think it’s no coincidence that the last great interregnum between great powers was in between the world wars. Britain was bankrupt and too exhausted to sustain Pax Brittanic power. Wilson had been rejected and the League of Nations had been voted down by the Senate, America wasn’t ready to take over the league. And so we had a vacuum, we had an interregnum, and chaos filled that vacuum. It’s chaos I worry about, not China.

Schluep – What is the most optimistic thing, outcome-wise, that you could tell the American or British middle class as far as our future? What’s the best outcome possible?

Luce – There are a couple. One is that we get used to low growth. We’ve had some time to get used to it, but for most of human history there’s been no growth. If we’re entering a period of lower growth, we’re doing so at a dramatically higher level of well-being in technology and health and so forth, than would ever have been imaginable. So partly it’s about adjustment of expectations. Now, that might prove to be wrong. It is quite possible that a spurt in productivity, and therefore growth, is around the corner. You can sort of feel it intuitively. But it just doesn’t show up anywhere in the numbers. And that’s why there hasn’t been wage growth; because there’s been no productivity growth. So the first is slightly a counsel of sobriety—not of despair—but sobriety. We adjust our expectations, and in so doing we hopefully adjust how we distribute wealth and opportunity in society. And we can do that for this level of growth—one to two percent a year—and be fine. As long as we have a sane politics.

The second thing is the bigger picture we started with. What’s happened to humanity as a whole is really quite remarkable. The reduction in child mortality rates, the rise in literacy, the lifting of people out of poverty, the brainpower that is being plugged into the global system, all the time adding to it, is creating unimaginable new ideas and solutions that we haven’t thought of. That’s the big backdrop to what’s happening around the world. It’s no consolation if you’re a middle class person sitting in Cleveland or Stainforth in England or Sunderland. Or in Reims in France. That’s no consolation. But I think that we are living in an age of abundance, objectively-speaking. We’re just having problems adjusting to how we distribute it and what we expect from it. So, it doesn’t sound like an optimistic answer, but the solution lies in politics. It’s how we distribute wealth and opportunity most importantly of all in our society. Many of the solutions are entirely within our means. And that’s why I call this book The Retreat of Western Liberalism, because there’s nothing predetermined—that we’re going to collapse into an insane politics, and we’re going to reclaim the 1930s—there’s absolutely nothing foreordained about any of this. History is made by human beings and it’s up to us. That’s not quite as soaringly optimistic as I could be, but if I were more soaringly optimistic it would just be fake.

 

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