Misguided approaches to the Cold War and the authoritarian regimes supported by both Washington and Moscow abound. My hope that this volume would do a better job were disappointed.
In the wake of the recent Hobby Lobby decision by the US Supreme Court readers may be interested in my earlier take on the corporate personhood debate published on line at Dissent Magazine here.
I drafted a new foreword for the book but it is otherwise unchanged from the original ms. which Hal and I finished in the late 1980′s in the wake of the defeat of the ERA. There has been some research on the Amendment since and certainly some important developments with respect to the rights of women but the publisher and I thought it important to retain the argument as it was completed then, more or less contemporaneously with the end of that era of the women’s movement. We did, of course, try to get it published then but ran into roadblocks which I describe briefly in the foreword.
The history we examine in detail is very much in the news today as this essay by Louis Menand in a recent New Yorker suggests. Menand gets some important aspects of the story wrong, however. I have sent the magazine a short letter in response and will wait to see if they print it before laying out my comments here.
I posted this originally last August only when the MSM showed no interest in it as an op-ed. I wonder if they share my regrets about the accuracy of my prediction?
Officially, the Obama Administration is firmly behind Syria’s democratic revolution organized to oust the brutal authoritarian Assad regime. If that were indeed the case it could, under certain conditions, represent an important step to assuring a bright future for Syria. There reportedly remains, however, substantial opposition inside the Administration and in Congress to the intervention.
Some of these opponents of U.S. involvement are invoking the problematic policies of the Reagan era when the United States created and armed Nicaragua’s counter-revolutionaries, or contras, to overthrow the Sandinista Government there in the mid-1980s. This is a misleading and cynical maneuver. In fact, Nicaragua offers a very different lesson when it comes to Syria.
There is little doubt that the intervention of the world’s sole superpower into a complex national conflict is fraught with challenges. In the wake of a decade of war, few Americans are enthusiastic about yet another intervention in the Middle East. And there are, naturally, suspicions in the region about the actual goals of U.S. policy. To be successful the strategy that guides the United States in Syria must reflect our democratic values, both to engender domestic U.S. support and to insure a successful transition to post-revolution stability in Syria.
In the wake of the battle of Qusayr, it is clear the rebels face daunting odds. We must recall, though, the rebels did not ask for war. The movement began peacefully, yet another chapter of the rolling social process know as the “Arab Spring.” But the Syrian dictatorship knew that a peaceful “civil rights” style challenge undermined their legitimacy and it began a brutal crackdown that forced the opposition to take up arms. While they have been joined by some dissident military figures, these ordinary Syrians are also now competing for leadership of their revolution with hard-core Islamic fundamentalists, some of them mercenaries from surrounding states, who are well organized and well armed.
That competition is, in fact, reminiscent of the Nicaraguan experience, but not of the contra war of the 1980’s that failed to oust the Sandinistas. Rather, as I show in my recently published book Rights and Revolution: The Rise and Fall of Nicaragua’s Sandinista Movement, the situation is analogous to the earlier 1970’s insurrectionary period that led to the ouster of the brutal and authoritarian Somoza regime. In that insurrection, the United States took a largely hands off stance, only distancing itself from Somoza very late. As a result, a democratic mass movement of ordinary Nicaraguans was, as in Syria, pushed into armed conflict by a violent dictator. Then, as may happen in Syria, that same movement turned to the small but well armed and well-organized neo-Stalinist Sandinista Front, or FSLN, the only alternative leadership force available.
When the Somoza regime fell at great human and social cost it was those disciplined FSLN cadre who took the reins of the state. They promised to rule democratically, but then delayed elections and set up new authoritarian institutions, using the credibility that their leading role in the insurrection had won them. It took a brave population, which knew the revolution belonged to them, too, a decade to reemerge and oust the FSLN peacefully and democratically. The armed contra force organized by Somoza era figures backed by the United States actually worked to undermine and delay that peaceful effort. The FSLN was able, skillfully, to use this U.S. proxy war as an excuse to crack down on peaceful domestic opponents. It should be recalled that such regimes are artful at exploiting foreign intervention against their domestic opponents.
In other words, the Syrian situation is most similar to what happened in Nicaragua before the FSLN took power. That period offers a lesson about the risks of not intervening, instead allowing a well-armed and disciplined minority to hijack a democratic revolution. In such a case, the fervent authoritarianism of the Islamic forces works in their favor. After the FSLN took power, on the other hand, there was sufficient democratic space even at the peak of the FSLN’s power for the population to turn against it peacefully. The Nicaraguan contras had only limited support among the population. This is the opposite of the situation in Syria where the opposition clearly has no choice but to defend itself and its movement with arms.
In these circumstances, the principles and conditions that accompany U.S. aid are crucial. Not the principles and conditions that we impose on the Syrians, rather those we impose on ourselves. We got it wrong not once but twice in Nicaragua. The lesson we should have learned is that the way in which we aid those fighting for freedom in other lands is critical to their success. We cannot let the fact of our aid be used propagandistically by either Assad or al Qaeda to undermine the Syrian democrats. That is what we did in Nicaragua and only the FSLN gained as a result.
The support we give should, therefore, be given openly not covertly and the process by which we do it should be transparent. Our engagement with the Syrian people should be open to monitoring on the ground by both Congress and representatives of our civil society, including labor, religious and community groups. It must be clear to all that our aid is aimed only at facilitating the success of a new Syrian democracy not at advancing a narrow self-interest. We must commit to long-term support because the country will require an extensive period to rebuild once peace is established.
The mistake we made in Nicaragua was to leave behind our own long-standing commitments to democracy, sustainable development and human rights. We ended up on the side, first, of a hated dictatorship, and, then, of death squads, as the Nicaraguan contra war spread throughout Central America. In Syria we have a chance to rewrite our past and help Syria write its future.
This post is co-authored by Stephen Diamond and Jennifer Kuan. Jennifer is an economist based at the Stanford Institute for Economic Policy Research. The post is based in part on an event study we conducted on the impact of Reg. NMS. We will be presenting the paper at the meetings of both ISNIE (Duke) and SASE (Northwestern) this summer.
A firestorm erupted on Wall Street recently sparked by author Michael Lewis’ accusation that the stock markets are “rigged.” Mr. Lewis’ bases his claim on the allegedly manipulative behavior of so-called “high frequency traders,” or HFTs, in today’s financial markets.
Our own study of the changing structure of those markets over several years leads us to conclude Mr. Lewis is correct when he contends many investors trade at a disadvantage to HFTs. We found a significant widening of “spreads,” and therefore costs to investors, following rule changes by the SEC in 2007. Significant structural reform will be needed to restore transparency and fairness to our financial system.
While the issues at stake are complex, the heart of the matter is that HFTs have largely replaced stock exchange “specialists” as intermediaries between buyers and sellers of shares. HFTs trade large volumes of stock, so they claim to provide “liquidity” to the markets. This sounds reassuring to investors who think they can easily buy or sell at reliable and visible prices.
In fact, HFTs are largely free of the obligations and oversight once imposed on specialists by the New York Stock Exchange. HFTs are not mandated to maintain an orderly market like specialists and often disappear at the very moment they are so desperately needed. There is evidence this kind of behavior contributed to events like the “flash crash” of May 2010 as well as the failed IPO of Facebook in 2012.
Exchanges are now eager to profit from HFTs’ vast trading volumes so they help HFTs exploit advantages over other investors, allowing the use of complex and arguably manipulative order types as well as selling them access to data about other investors’ orders. Other enablers of HFTs include the telecommunications firms that allow the HFTs to engage in “fiber arbitrage” to gain privileged high-speed access to data and markets. HFTs use these advantages to move more quickly and flexibly than other investors and thus to trade ahead of ordinary investors at a profit.
The most important enabler, however, is the federal government itself. In 1975 Congress mandated the creation by the SEC of a “national market system.” Congress decided that if the SEC could create computer-based competition with the long dominant New York Stock Exchange’s manual trading floor then costs for the average investor would fall.
The SEC implemented a wave of new rules over the next thirty-five years that did, in fact, reduce trading costs. New electronic markets such as the Nasdaq now compete effectively with the NYSE. Smaller startup companies like Intel, Apple and Microsoft, which did not meet the stringent listing standards of the NYSE, were able to access investor capital on the Nasdaq.
But this was not enough for the SEC. Their goal was an end to the NYSE’s dominance of trading in blue chip firms listed on the NYSE. As the Charlie Sheen character Bud Fox would famously say in the film Wall Street, they were “going after the majors.” One backer of the new approach was Bernie Madoff, who led the automation of the Cincinnati Stock Exchange in the 1980s to draw trading volume away from the NYSE.
The NYSE and the large banks that dominated its board resisted these efforts for many years. But new demand for faster trades from institutional investors provided the political support the SEC needed to push through Regulation National Market System, or Reg. NMS, in 2007.
This was the straw that broke the camel’s back.
Until 2007, despite the earlier rule changes by the SEC, the NYSE still handled more than 80% of the trading volume of companies listed there. The NYSE was a monopoly but it stabilized price changes with narrow spreads using a self-regulatory framework crafted over its 200-year history.
Two features were key to that framework. First, because large underwriting firms wielded significant influence at the non-profit member-owned NYSE, they could and did impose stringent standards on firms that wanted to list their shares on the Exchange. Second, to attract investors to trade on the Exchange those same underwriters insured that floor brokers and specialists behaved fairly. The result was good quality information about listing firms as well as orderly pricing facilitated by specialists in both bull and bear markets.
But Reg. NMS uprooted that system. Brokers could now route their clients’ trades to any electronic venue even if it meant that the client did not get a better price available on the NYSE floor. As a result, the volume of NYSE shares traded off the NYSE exploded. The motivation to own the Exchange in order to attract investors with orderly prices was gone and the underwriters quickly sold the Exchange to public investors.
With stock prices no longer kept in check by the NYSE’s longstanding rules, our study found that spreads widened, volatility increased and the cost to the average investor went up. Congress had a useful idea in 1975 when it helped create a market for risky technology start-ups and other small firms. They need to step in again to deal with the unintended consequences of that important innovation.
National elections for the American Association of University Professors are now underway. An incumbent slate called Organizing for Change is being challenged by the Unity slate which is led by AAUP figures who used to be in power. I am voting to re-elect the Organizing for Change slate and I think if you are an AAUP member in good standing you should do the same.
The reason I support OFC is straightforward. The challenges facing faculty across all sectors of higher education are dramatic and are taking on a momentum that we have probably never experienced in this country. We need a national advocacy group that wants to respond to those challenges aggressively and with creativity. Most importantly we need the AAUP to have real meaning and impact on the ground where it really counts. I think that is the basic goal of OFC and it represents an important and relevant shift in the orientation of the organization. I think for the first time in many years (I have been an AAUP member since I joined my faculty as a junior professor in 1999) the AAUP feels like a real presence not just in Washington but on our campuses where it counts.
Part of what OFC is trying to do is strengthen the collective bargaining arm of the organization. That likely creates some tension in the AAUP because it means a shift in culture and even resources. There is a suggestion by some that this means giving less attention to academic freedom, the issue for which AAUP is best known historically. In reality these two efforts are two sides of the same coin.
This does not mean that collective bargaining is always the right approach or even necessary but it must be a viable part of what we do if we take academic freedom seriously. Why? Because the greatest challenge we face in academia today, whether at the junior college level, or at Berkeley and Harvard, is the change in organizational structure of the university.
A permanent new administrative, if not bureaucratic, caste is taking hold of managerial authority in the universities. Instead of an experienced faculty member spending a few years as a dean or even provost or president and then returning to the teaching faculty, today individuals who take on those positions have almost uniformly left teaching and research behind forever.
Inevitably, these individuals develop a skill set and outlook that matches that of the corporate executives who now control most university boards of trustees. In turn the trustees and administration increasingly treat faculty not as partners in the governance of an academic institution but as employees of a giant corporation. And indeed as government funding for higher education has receded corporate and foundation spending has ramped up making it appear as if we do work for corporations. Corporate executives, of course, feel more comfortable with deans, provosts and presidents who can talk their language and that often means reassuring the trustees that they can get their faculty “under control.” That has led to a wide range of conflicts with faculty as well as to developments like the widespread use of contingent faculty and the waning of the tenure track.
This turn of events is not healthy for the fundamental purpose of our system of higher education: to generate knowledge in order to help solve social problems while preparing young people to join our society prepared to confront those same problems. Employees or, worse, automatons are not good at original thinking. Control and creativity rarely go well together.
In such a situation the AAUP needs to be a living, breathing organization that has a meaningful presence on campus. In my experience with the OFC leadership they have been successful at helping build that kind of presence. I teach at a relatively small and private institution. While collective bargaining might be helpful there it is not a likely outcome given the legal and political constraints we face. But there is a role for our chapter to raise that issue and even pursue it if our colleagues wish to do so. And a “union outlook” on issues is not a bad way to motivate fellow faculty and stir up discussion of important issues even shy of actual bargaining.
At a minimum AAUP chapters can play an advocacy role that makes issues clear and signals to the administration the limits of their ability to manage the institution without robust shared governance. Right now on our campus it is the only forum for just faculty members to assemble and discuss important issues independently of the administration. And the OFC leadership has been very helpful to me and my fellow AAUP chapter members in understanding how to play a constructive role in an ongoing governance crisis on the campus. They have been there when it counted several times in the last two years.
So, in sum, I think OFC has breathed new life into the AAUP. It does not have all the answers and I have a great deal of respect for the traditions of the organization. I hope that the Unity slate will continue to be an active force but for now I think OFC deserves more time to help move us ahead as we confront the significant changes impacting higher education today.
It was clear enough during the 2008 campaign but many ignored it. It became more clear as Obama took office and attempted to “engage” with authoritarian regimes all around the world. Even then the commentariat, particularly on the left, did not understand what was going on. One by one the left ignored the implications of Obama’s approach – in Tibet (snubbing the Dalai Lama, in Iran (snubbing the Green Revolution), in Venezuela (cozying up to Chavez), in Cuba (cozying up to Raul Castro), in Egypt (standing by the military), in Syria (erasing his own red line).
But now with the invasion of Ukraine by Putin the results of five years of Obama foreign policy are undeniably clear.
Obama has thought all along he could appease authoritarian regimes and lure them into a fantasy world of global trade and governance. The fact is that despite the end of the cold war more than 20 years ago authoritarian regimes persist and have shown incredible resiliency. China’s neo-stalinist model is working, for the party and its allies in the new entrepreneurial class. And in Iran, Syria and elsewhere, authoritarianism continues to draw widespread support. These authoritarians have no interest in neo-liberal fantasies about free trade and free markets. The volatility and instability of those markets, brought home to hundreds of millions when the western financial system collapsed in 2008, is fuel for the fires of the authoritarian alternative.
To this alternative Obama has no answer. He rode the wave of naive liberal left distaste for global war and politics to office and now that political capital has exhausted itself.
This is a huge problem for the American national security apparatus and for American global economic power as well. The country is led by someone who does not understand what is going on in the world and cannot craft a coherent response to it. He is wedded to a relativist outlook born in the pro-third world neo-stalinist rhetoric of the late 1960s that helped shape his early world view. He will not be able to shed that history or outlook and it is extremely difficult for the institutional apparatus of US power to act coherently when the White House is led by a team that is so intellectually and politically stunted.
But it is an equally large problem for the global left. This global left emerged in the late 1990s, a product too of the end of the Cold War. There was hope in the protests against the WTO and globalization that a new democratic alternative could emerge from below, linking the workers movements of Poland with those of Brazil, the environmental movements of the first world with the movements for agrarian reform in the third world. But since 9/11 that nascent left has spun this way and that completely disoriented by the continued health of authoritarian regimes. Thus the left has become largely only an anti-war left and sometimes worse, offering apologies for the behavior of regimes like those of Syria and Iran and no doubt now in defense of Putin. So much for the defenders of Pussy Riot.
The left must firmly declare its opposition to authoritarianism wherever it appears. To do so is not to give comfort to the war mongers on the right. Instead it will help establish the left as a credible alternative to US unilateralism. From that position the left must then begin to articulate a new foreign policy for the US based in our own deeply held democratic instincts and institutions. I began one such approach with the call for a new “Solidarity Doctrine” here.
The risks of the new era are now clear to all – the statist authoritarianism is in a clash to the death with western market fundamentalism. Neither can win but they can both destroy.
As I said in 2012:
“We have the technological and economic resources to solve these problems and build healthier alternatives. We know the institutional framework – democracy and freedom – that must be in place for those resources to be effective. Instead of developing a foreign policy that matches our resources with that institutional framework, we have instead used the crude tools of neo-conservative intervention or the dangerously naive relativism of spent late-60s ideology. A “Solidarity Doctrine” offers a new approach.”
My spring seminar, Law and Labor in the Fields, is underway.
Our first guest speaker will be here this coming week, Thursday, January 30. He is Frank Bardacke, the author of a magisterial and award winning new history of the United Farm Workers called Trampling Out the Vintage: Cesar Chavez and the Two Souls of the United Farm Workers published by Verso.
The event is open to the public and will take place in Room 333 in Bannan Hall on the Santa Clara University campus, 500 El Camino Real, Santa Clara, CA 95053. It starts at 4:05 and runs until 5:45. The talk and discussion will be followed by a reception to which all who attend the talk are invited.
There will be several other public talks during the semester. The schedule for the entire semester can be found here: Seminar Schedule.
The seminar is dedicated to the memories of both Cesar Chavez, who passed away 20 years ago last year and the late Herman Levy, our Santa Clara Law School colleague who played a key role in drafting the Agricultural Labor Relations Act, who passed away ten years ago.
Links to video of presentations can be found here.
As the ordinary Egyptian population stood up and said it was no longer willing to follow Iran and other middle eastern countries into the abyss of authoritarian and fundamentalist Islamist politics, the mouthpiece of western arch-conservatism, the editorial board of the Wall Street Journal, was thrown into a panic. In an editorial published, sadly, on our Independence Day, the paper called for the installation of a Pinochet-like General in Egypt.
Either the Journal has been struck by some kind of severe cognitive disorder that allows it to paint over the history of one of the most brutal regimes to have ever ruled or they really mean it. If the former, they owe their readers and the Chilean and Egyptian people an apology and should retract the statement. If the latter, then they are in fact the leading edge of a new fascism emerging here in America. Since I am not a medical professional, I will simply comment on what it means to suggest that fascism is the right outcome in Egypt.
First, for any of my younger readers, if you want a taste of what it means to be for a Pinochet then go to iTunes and download this week’s Editors Choice – the film “NO” which recounts the very final stages of the Pinochet regime, after the blood had been washed off the streets. If you have a stronger stomach, then find a copy of the magnificent Battle of Chile, an important long documentary film that includes amazing and disturbing footage of the Allende era and the imposition of the U.S.-backed brutal Pinochet dictatorship, now viewed as a political model for the middle east by such august figures at the Journal as Paul Gigot, Daniel Henninger and the recent Pulitzer winner Bret Stephens. (Stephens, the recent recipient of a Pulitzer, we have encountered before on these pages – it seems he looks for his ideas all over the place and is not always willing to give proper credit.) The Battle is hard to find but you can also look at Missing the fictional account of an American, Charles Horman, who was kidnapped and tortured to death by Pinochet’s thugs.
Here is a capsule summary of the Pinochet period, though, just so we are all on the same page: 3,000 murdered; 30,000 tortured; political parties outlawed; trade unions smashed; nearly two decades of brutal repression and fear. Two of those killed were blown up by Pinochet’s secret DINA police force on the streets of Washington D.C. The regime was installed with the not very covert support of Henry Kissinger and the Nixon Administration. Pinochet was feted by “Lady” Margaret Thatcher and other right wing thugs in order to burnish their own domestic reactionary politics. Pinochet’s regime was advised by economists trained in the shock therapy politics developed by Milton Friedman at the University of Chicago.
For brevity’s sake I will spare readers an account of the book burnings carried out by the regime.
Now that we are all up to speed on what one is talking about when one invokes the name of Pinochet, what does it mean that the Journal would react to the unfolding events in Egypt like this? It means, most likely, that American conservatives are in a full blown panic over the popular uprising we have witnessed there in recent days but not only there. It signals broader panic among the Wall Street and D.C. elite over what is known as the Arab Spring, the region wide unfolding of a new democratic era in a part of the world that has for many decades found itself in the grip of what ever great power rivalries were taking hold in Europe, first, and later, in the cold war, between the great US and Russian blocs. For the first time, the region’s own populations are speaking up independently and saying, as the Chileans did to Pinochet, No.
This kind of democratic uprising is, inevitably, messy and volatile. There is, undeniably, also the presence of opportunistic forces that are not democratic, most clearly the Islamists. That makes the situation particularly complex but does not mean that the overall direction is one we should fear or condemn. Chile was able to make a more peaceful transition but only because a pre-existing political culture that had thrived in a long period of relative stability and democracy prior to the Pinochet period was able to survive underground and re-emerge when the regime finally was pushed aside. Egypt, Syria and Libya do not have that luxury, as they have been either under the direct colonial thumb of imperial powers such as Britain or held down by the local thugs representing post-imperial powers for generations.
Since the great powers have invested billions and many decades in creating the authoritarian regimes now being challenged, it appears to the mouthpieces of those same forces, like the Wall Street Journal, that all is chaos. Even “liberal intellectuals” like Harvard’s Noah Feldman are frightened by the disorderly nature of the popular effort to recreate these long repressed societies. He condemned the Egyptian millions as a “mob” as I explained here.
No doubt, when one is threatened with the loss of a significant investment panic is a reasonable enough reaction. But should they really be surprised that the “order” they imposed on the backs of the middle east is now under challenge?
It is a sign of how the world is turning on its axis now that the Journal would go this far. The Egyptian people are to be congratulated for being among the first to put their shoulder to the wheels of history and pushing.
Let’s hope the American people will find the courage to join them. Then the Journal’s editorial writers can join their fascist comrade in arms Pinochet in the ash can of history.