From the article: "Judges are a pampered caste of crooks, according to Poland’s governing Law and Justice party (PiS). On July 3rd its new law on the Supreme Court took effect, the culmination of a series of judicial changes pushed through by the party. The European Union has urged the government to back down, warning that it is undermining the rule of law. Poland represents a vital battle for Brussels. If the EU cannot defend its fundamental values, including the rule of law, within its own borders, other illiberal leaders will surely take note. The latest judicial reform lowers the retirement age from 70 to 65 for judges on the Supreme Court, which, among other responsibilities, rules on the validity of elections. As the law took effect on July 3rd, more than a third of its 72 judges were forced to step down.
The EU has failed to stop the Court purge. In December, citing “a clear risk of a serious breach of the rule of law” in Poland, the European Commission triggered action under Article 7 of the EU treaty, which could eventually result in the country’s voting rights being suspended. The chance of that happening is remote, however, because such a decision would require a unanimous vote by the other EU governments, and Hungary, for one, has vowed to stop it. Without the required support of four-fifths of the EU’s countries even to get to an earlier stage of condemnation, the procedure has reached an impasse. In a last-minute effort, the commission on July 2nd launched a separate infringement procedure against Poland for violating EU law with its changes to the Supreme Court. The Polish government now has a month to respond. After that, Poland could face a case before the EU Court of Justice, which can impose large fines but which cannot strip Poland of its voting rights."
Poland is an example of how illiberal groups consolidate their power in a democratic state, by weakening institutions that check and balance political power. And Poland is also an example of the core weaknesses built into the European Union, which is powerless to stop PiS from gutting the Court.
The alliance between the US and Europe helped created NATO and the European Union. After the collapse of the USSR in 1991, this alliance promoted the creation and secured the existence of democracy in eastern Europe. The current tensions: Trump accuses the EU of engaging in unfair trade practices and threatens tariffs. Trump wants all European nations to live up to their NATO defense spending pledges (2% of GDP - Germany now at 1.22% and Italy at 1.13%). Europe supports the Iran deal (they helped create it) - Trump does not. Europe supports the Paris climate accords - Trump does not. The rise of authoritarian illiberalism in Hungary, Poland and Turkey is troubling to Europe - Trump encourages and embraces these autocrats. And now Italy has a new populist coalition in charge of its government that is pro-Putin.
Solutions - NATO needs to sharpen its response to cyberwarfare and misinformation so beloved as tactics by Putin’s Russia. Yes, European military spending must increase and should focus on R&D and yes, NATO and the EU can take on a new role to help combat the spread of illiberal authoritarianism.
In the "What If?" section of the July 7, 2018 issue, there is an article that looks at what will happen if Europe's divides, driven by the rise of illiberalism and anti-migration nationalism, continue. Here, the assumption is that the recent purging of Poland's courts by the ruling PiS party, results in the EU Courts of Justice declaring Polish court decisions illegitimate. The EU needs unanimity to remove voting rights from a member state. Its easier to discipline a state through the EU budget. Illiberal countries like Hungary are net recipients of EU funds (Hungary gets the equivalent of 6% of its GDP from the EU). Shutting off the funds however, makes exit from the EU on the part of these nations more likely. In the case of a country like Italy, the prediction is that to remain in power, the populists will boost government spending and cut taxes so that Italy exceeds the 3% of GDP budget deficit limit imposed by the EU.
And again, from the "What If" section of the July 7, 2018 issue, another article - this one hypothesizes growing Chinese power in the years ahead as a direct result of the Trump-led weakening of the West. As the Trump-led trade disputes weaken the World Trade Organization, then a vacuum is created and perhaps China could start their own trade court. From the article: "An obscure Chinese arbitration panel, originally created to hear disputes linked to the Belt and Road Initiative, was rebranded in 2022 as the Global Infrastructure Tribunal. With its first cases this embryonic trade court has offered glimpses of how a Chinese-led commercial order might work. Unlike the WTO, it draws no distinction between nations with state-directed and market economies. Its judges take a benign view of subsidies that claim to support national development. And though they talk a good game about intellectual-property protection, they have consistently taken the view that sovereign governments, rather than individual businesses, should have final say in patent disputes." China could also create an alternative system for international payments in Chinese yuan, euros and Russian roubles, aimed at the Eurasian countries that form the backbone of the Belt and Road Initiative. Suh a system would be immune to dollar-based economic sanctions from the United States.
The G7 or Group of Seven includes the US, the UK, Canada, France, Germany, Italy and Japan. Together, these 7 nations account for about 60% of the world’s net wealth and about half the world’s GDP. In 2014, the G8 included Russia but Russia was suspended from membership after their annexation of Crimea. President Trump has disrupted the G7 by calling for Russia’s reinstatement; by withdrawing from the Iran nuclear deal; by threatening tariffs on steel and aluminum and by withdrawing from the Paris climate accords.
G7 leaders are concerned that Trump’s actions are not just the incidental and personal prerogatives of a President but indicative of a new strategic trend in which we see the first signs of a breakup of the Western political community, which the G-7 represents and informally leads.
From the article: "After eight years in power, and in his third stint as prime minister (he also governed from 1998 to 2002), Mr Orban seems a long way from his youthful dissident past. Critics accuse him of presiding over a centralisation of political and economic power unparalleled since the collapse of communism. Civic groups and NGOs say they are under siege, harassed by the authorities, subjected to mysterious dirty tricks and attacked by government politicians and loyalist media. State television is little more than a propaganda arm of Fidesz. Party allies have been placed in charge of independent institutions.
The funds Hungary gets from the European Union, say opposition politicians, are often channelled to Mr Orban’s cronies, including his son-in-law and the mayor of his home village, nurturing a new class of oligarchs. (They deny it.) The health-care and education systems are in decline, especially outside the capital. Hungary has the fifth-lowest life expectancy in the EU, at 76.2 years—lower than Albania’s 78.5. Education has been centralised with an old-fashioned syllabus that emphasises rote-learning over analytical skills. International test results show declines in science, mathematics and reading.
A stream of news stories, all furiously contested, allege high-level corruption in government circles. Mr Soros, now Mr Orban’s bitterest enemy, has accused his former beneficiary of running a “mafia state”. Mr Orban is “on an illiberal train and he cannot stop it”, says Viktor Szigetvari, of the progressive Together party. Another Fidesz victory, he says, will mean more attacks on civil liberties, the judiciary, the opposition and civic organisations.
Yet for many voters, none of this seems to matter. Mr Orban and Fidesz have focused on a single message: the need to stop migration and defend Hungary from outsiders such as Mr Soros, the UN, NGOs and the European Commission. The government accuses Mr Soros and his allies of planning to flood Hungary with Muslim migrants. (In 2015 he called for the EU to accept 1m asylum seekers a year; he later lowered the figure to 300,000.) For Mr Orban, this has been a political godsend. Speaking on March 15th, a holiday that commemorates the 1848 revolution, Mr Orban told an adoring crowd that Christian Europe and Hungary were waging a “civilisational struggle” against a wave of mass migration, organised by a network of activists, troublemakers and “NGOs paid by international speculators”.
Even if such a network existed, it would be hard-pressed to flood Hungary with migrants. The fortified fence on Hungary’s southern border has proved effective, and asylum claims have been reduced to a slow trickle. Yet Mr Orban’s bombast resonates with collective memory. The revolution of 1848 and the 1956 anti-communist uprising (crushed, respectively, by the Habsburgs and the Soviets) are central to Hungarians’ view of their own history, leaving them suspicious of foreign interference. The focus on migration is really about national security and independence, and who decides the fate of Hungary, says Agoston Samuel Mraz, of the Nezopont Institute, a think-tank close to the government. “This motivates not only Fidesz voters but also between a third and a half of opposition voters.”
This is the Trump blueprint - fire up the tradition-bound, authoritarian base with the boogeyman of immigration, then once in control of the government, loot it for the benefit of you and your cronies.
The term "Gorbachev's Grandchildren" refers to the generation born in 1985, the year Gorbachev came to power in the old USSR with his focus on human values, individual well-being, perestroika (restructuring) and glasnost (openness). This generation is the largest age group in Russia today and as they enter their thirties, they are becoming more politically active. They also have a generational identity based on a shared trauma (see German sociologist Karl Mannheim for more on this idea of generational identity). For Gorbachev's Grandchildren, the shared trauma is the reversal of Gorbachev's values when Putin came to power, and their replacement by propaganda, aggression and lies.
Putin runs what Douglass North calls a "natural state". Rents are created by controlling access to economic and political resources and the limits and restrictions are enforced by the security/police - what North calls "specialists in violence". Putin has ruled like a warlord. Boris Nemtsov, an early liberal challenger to Putin was killed in 2015. Current opposition leader Aleksei Navalny (also a member of the Gorbachev Grandchildren generation) was convicted on trumped-up fraud charges and barred from running in the 2018 election, where Putin achieved a 75% victory amidst charges of election fraud.
Putin runs a system in which entitlements, privileges and rents are allocated not according to law or merit but by access to resources and by position in the social hierarchy. From the article: "this system of conditional property rights has allowed Mr Putin’s friends and cronies to put their children into positions of wealth and power. Examples: the son of Nikolai Patrushev, the secretary of the National Security Council and former chief of the FSB, heads a state-owned bank. The son of Sergei Ivanov, another former KGB officer and old friend of Mr Putin, is the head of Alrosa, a state-owned firm which mines more diamonds than any other in the world. The son of Mikhail Fradkov, a former prime minister and intelligence service chief, heads a private bank which is the staple of the military-industrial complex. Many children of Mr Putin’s friends and cronies hold senior positions in Gazprom, Russia’s gas monopoly, or own firms that depend on its contracts. All of them enjoy positions and wealth thanks largely to their family names."
Gorbachev's Grandchildren started to get involved in the political process after the 2011 parliamentary election, seen as being rigged in favor of Putin and his cronies. This was also the year that Putin took back the Presidency in a trade with Medvedev. From the article: "Many care instead about what they can accomplish professionally rather than what they can get and about what they share, not what they own. They do not envy Mr Putin’s cronies who live behind high fences, fly on private jets and have built special rooms for their fur coats. They ridicule them. They hate the propaganda of state television, which for a long time was one of the main instruments of social control. It now irritates people more than the stagnating economy, according to Lev Gudkov of the Levada Centre, a think-tank. They live online in a world of individual voices. They speak a direct language. Hence the success of Yuri Dud, whose YouTube interviews of people with something to say, be they politicians, actors or rappers, are watched by millions. These are neither pro- nor anti-Kremlin but are simply outside the system."
From the article: "There are two parallel countries,” Mr Ovchinnikov says. “There is a country of smart and energetic people who want to make it open and competitive. And there is another country of security servicemen who drive in black SUVs extorting rents.”
Looking into the near future - Putin is barred from serving past 2022. How will he and his cronies maintain their access to rents and who will succeed him?
Overview of Orban's Hungary - he has put oligarch cronies in charge of major media outlets. He has rewritten the Hungarian Constitution and eliminated many checks ad balances. He has rigged the system (gerrymandering?) in favor of his Fidesz so that it controls two-thirds of the legislature while commanding less than half the vote. From the article: "Today Mr Orban, Hungary’s prime minister, is one of Vladimir Putin’s closest friends in Europe. His country is increasingly dominated by one party, his own. Elections may be free, but they are not fair. Mr Orban has rewritten the constitution, dismantled checks and balances (“a US invention” unsuited to Europe, he says), muzzled the press and empowered oligarchs. Refugees, who supposedly threaten Hungary’s Christian identity, are beaten by police and mauled by police dogs. Debates over values, Mr Orban thinks, “unnecessarily generate social problems”. He wants to fashion an “illiberal state” modelled on China, Russia and Turkey."
The EU has tools - economic ones - to help restrain the worst of Orban's illiberal excesses. Hungary gets $6.7 billion a year in EU aid and 95% of all publicly finance infrastructure) projects are co-financed by the EU. Further, 75% of all Hungarians want to stay in the EU. Note that Russia just loaned Orban $11.2 billion to expand a nuclear power plant
And a new opposition party, Momentum, is modeling itself after France's En Marche and rejecting left-right labels and rejecting establishment politicians as out-of-date ad corrupt. The leader of Momentum is Andras Fekete-Gyor. Momentum rejects the idea of allying with Hungary's major opposition party, the Socialists.
Navalny organized a nationwide protest on June 12, 2017 in Russia. The protests were held in some 170 cities across Russia, gathering a total of about 150,000 people, according to organisers. (An earlier round of protests on March 26th drew perhaps 100,000 people in about 90 cities.) About half of the protesters are aged between 18 and 29. “These have been the biggest protests since 1991,” says Leonid Volkov, Mr Navalny’s chief of staff. One reason for the unrest is economic. Russian real incomes have fallen by 13% over the past two and a half years, reaching the level of 2009. Retail consumption has shrunk by 15%. Investment has been falling for three years, reaching a cumulative decline of 12%. Natalia Zubarevich, an expert on Russia’s regions, says economic factors are amplified by frustration with the lack of political freedom and official hypocrisy.
Vladimir Putin’s backwards-looking regime, which legitimises itself by restoring the symbols of Russia’s imperial past, is being challenged by a new generation of Russians who feel that their future has been hijacked by the corruption, hypocrisy and lies of the ruling elite, whom Mr Navalny calls “thieves and scoundrels”. The symbol of the protests was a rubber duck, a reference to a documentary video Mr Navalny released in March that accuses Dmitry Medvedev, the prime minister, of corruption. (The video depicts Mr Medvedev’s immense estate, allegedly donated to him by an oligarch, which includes a house for a pet duck.)
Last year Putin created a National Guard, a force of some 400,000 troops headed by his former bodyguard and reporting directly to the president. Most of the troops on June 12th were about the same age as the protesters. In the words of Kirill Rogov, a Russian political analyst, the spectacle on June 12th looked like a rehearsal for a “civil war”.
Emmanuel Macron’s party, La République en Marche! (LRM) created just 14 months ago, took 32% of the vote, ten points ahead of the Republicans. This puts it on course to win a crushing majority at the run-off with more than 400 of the 577 National Assembly seats (see chart)—one of the biggest under the Fifth Republic—that would squeeze the Republicans, sideline the far right and far left, and all but wipe out the Socialist Party, which could lose 90% of its seats. Macron's underlying idea is that the big forces shaping the future—technology, the freelance economy, the environment—no longer fall neatly into the old ideological divide between left and right. By seeking out like-minded people across the spectrum, he has sought to realign politics along a new fault line: between those in favor of an open society, trade, markets and Europe; and, on the other side, nationalists advocating protectionism and identity politics.
Attitudes to Europe measure this new split. A recent poll asked if voters would regret the end of the European Union. As Gérard Grunberg, a political scientist, points out, a majority of Socialist, LRM and Republican supporters said they would; most of the far left and far right would not. The former, drawn from across the party divide, make up the backbone of Mr Macron’s post-partisan support. Dismayed by politicians’ failure to curb the rise of Ms Le Pen’s FN, he argued that confidence in mainstream politics would be restored only by closer, more meaningful links between deputies and voters. “What doesn’t work anymore is the party system,” he told The Economist last year: “We need to find far more direct forms of exchange with people.” He launched En Marche! last April to that effect, using social media to spread the movement, drawing people into politics who had previously been put off by the sect-like approach to party activism.
The campaign for Russia’s presidential election in 2018 has not yet begun. Once it does, Aleksei Navalny is unlikely to get on the ballot. A trumped-up conviction for embezzlement in 2013, though dismissed by the European Court of Human Rights, bars him from being registered. If that was not enough to put him off, he has already suffered a campaign of intimidation. On April 27th thugs threw green antiseptic mixed with acid in his face.
Over the past few months Mr Navalny has managed to mobilise volunteers, mostly through social media. His team boast they have opened 77 campaign headquarters in 65 regions. Such speed has caught the Kremlin by surprise. On March 26 2017 Mr Navalny brought thousands of people onto the streets in 90 Russian cities to protest against corruption. For now the government is trying to avoid further escalation. Physical attacks have mostly stopped. In the past Mr Navalny was pelted with eggs and tomatoes in nearly every town he visited. The aim was not simply to deter him from leaving home, but also to make him seem unpopular. The tactic failed. The protests in March were the largest since people took en masse to the streets 2011. This suggests that Mr Putin’s efforts to make voters forget about the national malaise by rallying them around the flag are not working as well as he hoped. Even after he annexed Crimea and started a war in Ukraine, Russians are still gloomy.
The political mood has changed over the past six years. The protests in 2011 were good-natured, mostly in Moscow, led by journalists and artists and lacked political leadership. Now the protest is angrier, geographically broader and involves younger people, many of them teenagers. Their main grievance is that the government offers them no appealing vision of the future. Protesters complain of the injustice, hypocrisy and cynicism of daily life. “Corruption steals our future” is their slogan. The new generation of protesters are hard for the Kremlin to win over. They eschew television in favour of YouTube videos and social media. Here, Mr Navalny has a clear advantage. He is banned from state television, but what of it? He rejects its output as propaganda and offers a digital alternative. His investigative film about the castles and yachts amassed by Dmitry Medvedev, Russia’s prime minister, has been viewed over 22m times. Even though he rarely appears on television, most Russians recognise Mr Navalny. For now, they largely disapprove of him, having been told by their government that he is a criminal. But this could change: in the most recent parliamentary elections 52% of Russians did not vote. If even a quarter of these abstainers chose to believe Navalny’s message that Russians can live better, the political landscape would shift dramatically
For 40 years, British politics has been dominated by the “neoliberal” consensus - the belief that the gains made under the classical liberalism of the 19th Century could be maintained in the 20th Century. The tenets of neoliberalism are privatization; the reduction of government regulation; the lowering of taxes, especially for the wealthy and by encouraging globalization. Where neoliberalism failed was in reducing widespread income inequality and in addressing a sense of British social disintegration.
Before neoliberalism and after WW2, there was “Butskellism”, named after moderate conservative leader RA Butler and moderate labour leader Hugh Gaitskell. After WW2, the moderates in both parties embraced a welfare state that could encourage equality of opportunity through free education and provide security in the form of old-age pensions and nationalized health care. Butskellism encouraged state ownership of companies, especially utilities and government intervention in the economy (Keynesian demand management). William Beveridge was a Liberal economist whose 1942 report formed the framework for the post WW2 welfare state in Britain. Beveridge identified Five “Giant Evils" in society: squalor, ignorance, want, idleness, and disease.
In the 1970’s, with rising unemployment and inflation, combined with half of Britain’s national income going into public spending, economic growth slowed. In the winter of 1979, the discontent reached a peak with multiple strikes and labor unrest shutting down entire sectors of the economy. Electricity had to be rationed. Margaret Thatcher and neoliberalism were seen as the cure for these ills. Government regulations were loosened, industries were privatized, global trade deals and the EU were embraced and the economy improved. Under Labour PM’s Blair and Brown, neoliberalism continued to be the dominant political ideology and their “New Labour” programs left Thatcher’s legacies intact while doing a better job of redistributing income.
Now in the post-Brexit UK, neither the Conservative nor the Labour Party embraces Thatcher-style neoliberalism. Real wages in the UK are down 10% since the 2008 financial crisis and it may be 2020 before they recover to 2008 levels. Workers on “zero hours contracts” (no benefits) numbered 100,000 in 2004 - there are over a million UK workers on zero-hour contracts today. As a result, even Conservatives like PM Teresa May are calling for government control over utilities and making statements that questioned belief in free markets is a mistake.
>Overview of the Ukraine crisis. Since the conflict began on April 12, 2014 when separatist Igor Girkin invaded Sloviansk in the eastern Ukraine, 10,000 people have been killed and 1.7 million people have been displaced. Ukraine says it is fighting against terrorists; Russia says brave Ukrainian separatists are fighting against a corrupt, fascist Ukrainian government. The conflict remains an undeclared war. Russia and the Ukraine are still trading partners.
> The long-term goal of separatist Girkin is a pan-Slavic state (“Novorossiya”) which would include Russia, Belarus and the eastern Ukraine.
Turkey’s President purges the judicial system. Recep Erdogan, the President of Turkey, survived a coup attempt from the Gulenists in July of 2016. Erdogan has removed one-fourth of Turkeys judiciary and prosecutors (over 4,000 people) for suspected Gulenist ties. Thanks to the new Turkish Constitution, narrowly ratified in April of ‘17, the executive branch selects the judges, instead of the prior system in which they were selected by a committee of fellow judges. The Constitution makes judicial selection a partisan process.
> Five years ago, large protests took place in Moscow and St. Petersburg over what was seen as a corrupt and fixed Parliamentary election. These protests were confined to the largest urban centers and were spontaneous (no central leadership). Putin’s response was to marginalize the protesters and distract the nation with nationalistic adventures in the Ukraine and Syria. It worked - Putin enjoys an 80% approval rating today. Now (March 26) there are new anti-corruption protests targeting Putin’s #2, Medvedev. These protests are different in that they are happening all over the country, in urban and rural areas and are centrally-led by prospective presidential candidate Aleksei Navalny.
> From the article: A group of anthropologists from the Russian Presidential Academy who have studied attitudes among young people say they lack the fear of authority instilled during the Soviet era, and are more attached than their elders to universal values such as honesty and dignity. The Soviet coping mechanisms of cynicism and doublethink are notably absent among the young. They see Russia’s current elite as financially and morally corrupt, and find Mr Navalny’s simple slogan, “Don’t lie and don’t steal”, compelling. Television, the medium which Mr Putin’s government uses to manipulate mass opinion, has little effect on the young, who mainly get their news from the internet. The power of the regime’s use of television relies on the majority of Russians choosing to be passive spectators of the political narratives which the government creates for them. According to the Levada Centre, most Russians believe that “nothing depends on us.” The younger generation appears to be different. “I need to exercise my civil rights if I don’t want to live my life complaining about the country in which I was born,” says a 20-year-old student in Moscow. “It is wrong to say that ‘nothing depends on us.’ Of course it does.”