| | | | Fareed on What Britain's Election Tells Us About 2020 | | Note: The Global Briefing will be on hiatus for the next two weeks, but we'll bring you a few updates during that time, including what you can expect to see on Fareed Zakaria GPS on the next few Sundays.
"Impeachment is big news—justifiably so—but the battle cries around it have drowned out another momentous event, with important lessons for the 2020 campaign: last week's seismic British elections," Fareed writes in his latest Washington Post column.
The Labour Party collapsed, thanks in part to muddled views on Brexit and leftist ideology that went too far for voters, while Prime Minister Boris Johnson offered a clear message ("get Brexit done") and cannily abandoned free-market orthodoxy, shifting his party to the left on economics and broadening the Tories' appeal. Labour's losing extremity and Conservatives' winning flexibility offer some insights for the US, Fareed suggests, as President Trump mixes ideologies and as some Democrats embrace far-left positions on things like immigration.
"The irony, thus, is that the Republican Party, like the Tories, has become ideologically a big-tent party, while the Democrats—historically defined as a large coalition—are ideologically narrow on the issues that might well define the 2020 election," Fareed writes. | | "It was a year of fragmentation and fightback, of progress and decline, of fear and resolution," The Economist writes. "Europe, in short had a mixed 2019." The economy regressed into stagnation as German output slowed, massive gilets-jaunes protests rocked France, Brexit was all but assured, and Spain failed to solve Catalonian separatism—but far-right populists witnessed a setback in EU elections, Europe met its 2020 emissions-cutting targets, and ambitious climate goals were touted (notably, carbon neutrality by 2050) in a 24-page EU Green Deal.
As the new decade approaches, Janka Oertel of the European Council of Foreign Relations identifies one major, unsolved challenge looming over the continent: how to deal with China. Europe lacks a unified approach to China's rise (and its 5G technology); it will have to find answers without the UK's political leadership, and as Britain seeks trade and investment after Brexit, it's possible London will go its own way. | | American and Chinese Capitalism Are Locked in a Duel | | After the fall of communism, capitalism is unrivaled as an economic model, Branko Milanovic writes in the current issue of Foreign Affairs. A new contest has emerged, this time between two capitalistic variants: liberal capitalism and "political capitalism." The latter, exemplified by China, involves a technocratic bureaucracy, a powerful state legitimized by economic growth, and weak rule of law that privileges elites.
That model is on the rise, and Milanovic argues the West needs to evolve. If inequality persists, Western capitalism will begin to resemble the Chinese model, he suggests, as top earners will continue to dominate politics and write the rules in their favor. Liberal capitalism needs to "move toward a more advanced stage, what might be called 'people's capitalism,'" Milanovic writes, in which inequality is addressed through modestly redistributive policies and more limits are placed on political money. | | With President Trump's United States-Mexico-Canada Agreement (USMCA) gaining House Democrats' approval, the Peterson Institute for International Economics calls it a modest improvement on NAFTA but argues it will still drag down the economy. USMCA's most notable provision deals with auto components ("[n]ot only must 70 percent of the steel purchased by vehicle assemblers originate in the region, but virtually all of the steel must be processed entirely within North America"), and authors Mary E. Lovely and Jeffrey J. Scott argue it'll mean higher auto prices and fewer exports.
Democrats like new labor and environmental provisions, but overall, they write, USMCA's "regulatory mandates, especially in autos, will restrict trade and hurt US industry, confirming the assessment by the US International Trade Commission earlier this year that the pact will cause US growth to decline by 0.12 percent." | | How Much Is the Digital Economy Worth? | | Digital services like Facebook and Wikipedia surely are worth something, Erik Brynjolfsson and Avinash Collis write in the Harvard Business Review—and yet, their value doesn't fit into GDP statistics, because no one pays for them. To remedy this, Brynjolfsson and Collis conducted a study, asking subjects how much they'd have to be paid to stop using some free online services.
The results for Facebook: "Some 20% of the users agreed to stop using the service for as little as $1; an equal proportion refused to give it up for less than $1,000. The median compensation our Facebook users were willing to accept to give up the service for one month was $48. On the basis of the survey and the follow-up experiment, we estimate that U.S. consumers have derived $231 billion in value from Facebook since its inception in 2004." Subjects said they'd give up Wikipedia at a median rate of $150 per year, for $42 billion in total value.
It's not a perfect measurement, Brynjolfsson and Collis write, but it's a reasonable way to think about the value of public goods. | | | | | | |
