Donald Johnston and Donald Trump: Europe and Russia

Donald Johnston and Donald Trump: Europe and Russia

by

Howard Adelman

Russia and Europe are both in the headlines these days, Russia because of the probe into the connections with the Trump White House, and Europe because of the fallout from Donald Trump’s visit last week. “The American-German relationship has been the core of the transatlantic alliance for more than 70 years. It was in Berlin in 1963 that President John Kennedy uttered the phrase, “Ich bin ein Berliner” signalling the unbreakable link between the U.S. and Germany.

Following last week, that close relationship is now dead. At its centre were trade and a military alliance. With respect to the latter, Donald Trump refrained from endorsing Clause 5 of the NATO pact. Trump even lectured his European colleagues for their failure to pay their fair share of NATO costs. Yesterday we learned that most are expecting Donald Trump to withdraw from the Paris Accords.

German Foreign Minister Sigmar Gabriel rebuked the American leader. “Anyone who accelerates climate change by weakening environmental protection, who sells more weapons in conflict zones and who does not want to politically resolve religious conflicts is putting peace in Europe at risk.” Angela Merkel said that it was time for Europeans, “to take our fates in our own hands.” Given “what I’ve experienced in recent days,” the days when “we could completely rely on others are over to a certain extent.” “We have to fight for our own future, as Europeans, for our destiny.”

These statements, as much as one might deplore this extraordinary breach in the trans-Atlantic alliance, seemed to prove Donald Johnston’s conviction that Europe had to have strong, visionary leadership. Though he had not seen it yet when he wrote Chapter 3 of his book, “Europe Listing, but Afloat,” the statements of German leaders, the election of Emmanuel Macron as President of France, the prior rejection in Austria of a right-wing populist government, the rebirth of Greece and its rejection of a Greek Grexit, the solidification of the Spanish and Irish economic recoveries, all spoke to a revived Europe, and one without the UK which had voted to leave the European Union in the Brexit upset referendum.

The UK seems to be on a downward slide. London’s place as a world financial centre will begin a slow spiral driven by the gravity of less access to markets. Further, the UK faces the possibility of disintegrating into even smaller nation-states as Scotland looks forward to another vote for separation and rejoining Europe. While most Germans, Dutch and French identify as Europeans, the English still overwhelmingly identify their nationality with their little British Isle. Nevertheless, Johnston believes that the English will soon come to their senses, especially as the unravelling gets closer and more difficult. He believes that Brits will reverse course before it is too late.

One reason Donald Johnston offers is not only the difficulties in unravelling membership, not only the increasingly apparent high costs, but his belief that the Brexit referendum “was a vote of passion, not reason.” Rational self-interest would win out over identity politics currently manifest in the U.K.’s resistance to the influx of outsiders, even though two-thirds of migrants to the UK were not Europeans. Further, like populists on the right in the U.S., those supporting exit from the EU hated the Brussels bureaucracy and called for “independence.”

Nevertheless, Johnston believes that Brits will change their minds before the break is finalized. “What government would have the courage to sign off on Brexit if the polls show a large majority of electors opposed, which is likely to be the case when the consequences are well understood?” If they don’t, separation will take place “against the will of the majority of people in the United Kingdom.” How does he arrive at that assessment? He adds together those who voted against exit with those who did not vote at all on the assumption that 100% would oppose Brexit. Further, even if the divorce is concluded, he expresses the belief that Britain would remain in the European economic zone or, at the very least, forge a free-trade agreement.

Ignoring the statistical sleight of hand above, which Johnston rails against in his chapter on stats, for someone who supports democratic institutions, it reveals a strong distaste for populism and referenda, a dislike he repeatedly expresses in the book. The problem, of course, is that a united Europe is primarily a mandarin’s dream while people throughout Europe and not only in the UK resent the usurping of tradition, of national parliaments and national pride. Johnston believes in a federated state model for Europe. He is an unabashed supporter of multilateralism and globalization as he envisions an even stronger Europe with increasingly open markets, a diminution of trade subsidies, a supporter of structural reforms in the provision of labour and manufacturing. But without completing the mission of creating a united federal state of Europe, the prospect of it becoming the most competitive and dynamic knowledge-based economy in the world while ensuring social cohesion is, for DJ, iffy.

It is not that Johnston has not considered the reasons for populism – the suspicion of remote bureaucracies or the desire for greater parochialism. He has, but only to dismiss such approaches and to double down in defence of globalization. Nowhere in the book could I find an analysis of the effects of restructuring and globalization on workers. Further, and this is most surprising, though he applauds the goals of the Lisbon Declaration in support of education, research and innovation, research and innovation are not included in his graphic summary of his moral economics. Nor is his support for representative democracy and his fears, even hatred, of referenda and populism. The latter just provide grounds for demagogues and irrational passions displacing the task of rational decision-making. DJ quotes Edmund Burke with enthusiasm for parliamentarians who offer unbiased opinions, mature judgement and an enlightened conscience applied to political decision-making. Even those who have a deep faith in rational decision-making can be romantic visionaries.

What remains wrong in Europe? No equivalent to a European-wide securities and exchange commission, no EU-wide drug or food agency, no effective common immigration and refugee position, if only to counter-balance population decline, no formula for redistribution and strengthening weak regions. These unachieved goals, not identity politics, are responsible for the reassertion of populist, irrational, ill-informed and volatile popular will.

Donald Johnston presents himself as the antithesis to Donald Trump. Except he thinks Recep Tayyip Erdoğan is an effective leader in Turkey and only became a radical pro-Islamic politician because Europe procrastinated and dithered on Turkey’s application to join the EU. Turkey’s flaws are largely the product of that rejection, even though he concedes that many who suspected his demagoguery and counter-democratic tendencies may have been correct. What he writes abut Russia offers a test of whether he can reconcile his support of parliamentary representative democracy and admiration for strong, effective leaders, for the latter is the trait he unabashedly shares with Donald Trump.

That, however, does not seem to be the case when he begins his chapter on Russia. “Putin’s personal agenda is totally incompatible with democratic ideals, free markets, freedom of expression, and even human rights.” Sounds pretty much like Erdoğan. Both men came to power with a very specific goal – to make their respective countries great again. Both used democracy to advance their own popularity and agenda. Both are economic mercantilists. And both are enemies of freedom and human rights. So why is Johnston so favourable to Erdoğan but critical of Putin? The sentence that follows partially answers the question. “His popularity is founded on hostility and aggressive policies towards the west.” (p. 41)

But what is the difference between the two leaders of Turkey and Russia respectively? Both disappeared adversaries, Erdoğan blatantly, openly and extensively. Putin was more surreptitious, but only Putin is accused. The difference seems to be that people eliminated in Russia included technocrats who Johnston knew – Boris Nemstov, for example.  Erdoğan only wiped out Kurds, jailed journalists and rounded up tens of thousands of members of his own party, civil servants and members of the judiciary, or anyone he thought might be opposed to his increasingly autocratic rule. The only substantive difference: Turkey had a much longer period as a democratic state.

But the causes are the same. Western failures. “Putin [like Erdoğan] is a product of Western blindness.” The stimulus may be different – the closure of the EU to Turkey versus the resurrection of the Cold War in a new form against Russia. The EU dithered on admitting Turkey. OECD procrastinated with Russia’s application to join.

Look at DJ’s answer to Putin’s query to him for an example of bad practices that OECD could help eliminate. Johnston replied, with only the slightest hesitation: “In Canada, which is a vast and diversified country and has similarities with Russia, we committed many mistakes. We pushed local development policies that were more tailored to positive political outcomes than to economic ones.” His reaction to Putin’s impassive response is even more interesting, explaining that passivity because Putin recognized that, “in democracies, placating local constituencies with public funds is an odious, yet obvious (my italics), by-product of the election process.” (p. 45) That says very little about Putin, but a great deal about Johnston’s cynicism and very guarded qualified defence of democracy, which seemed to boil down to the less you consulted your constituents, the less you tried to placate and cater to them, the better leader you were.

Putin could ignore proposals to liberalization of trade, effective taxation, privatization and methods for attracting foreign capital investments. Why? Because the West had made him justifiably wary because of the advance of Western missile defence systems eastward and NATO expansion to the borders of Russia. Those missile defence systems and the move of NATO eastward were not because former satellites had learned to distrust Russia throughout their history and needed reassurances if they were going to embrace the West.

Whether the problem was Crimea, the Ukraine or Syria, the answer is always the same: the mindblindness of the West. The West had failed to provide, in a timely way, healthy market-oriented and properly regulated economic nostrums in the nineties so that Russia could have avoided the depredations of corruption and kleptocratic oligarchs. Why? Because “the Harvard boys” with their unboundaried faith in self-correcting free markets got to Moscow before the OECD boys and their ethical economic doctrines. Russia could and should have been made part of the EU community earlier and history would have run a different course. The IMF got it wrong. OECD had it right.There are vast differences between DJ and DT: DJ’s high regard for civil servants and DT’s contempt for them; their joint appreciation of free markets, but Trump for unregulated ones and DJ’s belief in moral boundaries to them; DJ’s and DT’s contempt for the populace, but with Trump gleefully manipulating the public while DJ did so with his head down and with no sense of self-satisfaction. However, look at the similarities. Both support military withdrawal from spheres of Russian interest. Both share a belief in the power of personal diplomacy. Both respect strong leadership. Trump crusaded against corruption while openly admitting he was part of the corrupt system. DJ, though critical, was more accepting of corruption in its institutionalized democratic forms.

With respect to the latter, there is a major difference. DJ believes in consulting, placating and catering to constituents as little as possible. Trump does not exactly consult them, but psychologically he needs their approval and applause – look at how he is handling the abrogation of America’s signature to the Paris Accords.

DJ and DT are not the same. They are in many ways opposites. However, they are twins, though DT is the hairy one prone to mistakes, governed by instinct and unabashedly frank and even trusting. DJ is cautious, reads his briefing papers diligently and, even more importantly, appreciates others who do the same. Both have strong opinions and both offer very weak defenses of them. Trump’s are almost non-existent or simply products of his imagination.  But DJ respects mandarins. DT despises them. DJ is a globalist and cosmopolitan. DT is a nationalist. DJ is the epitome of civility. DT disses his opponents.

But both believe that history can be commanded and controlled – DJ through thoughtful and careful deliberation, DT through instinct and unabashed self-trust.

With the help of Alex Zisman

Donald Johnston and his Hairy Twin, Donald Trump

Donald Johnston and his Hairy Twin, Donald Trump

by

Howard Adelman

Donald J. Johnston (2017) Missing the Tide: Global Governments in Retreat, McGill-Queens University Press.

The evening before last, I attended a book launch at Massey College of Donald J. Johnston’s new book chastising the international community for missing the opportunities over the last quarter of a century and for failing to take advantage of unprecedented opportunities to significantly advance both global social and economic progress. The book is a lamentation with a very loud wail. For there were many opportunities, Johnston argued. ALL were missed. It is also a paean, not so much to freedom from the classical laws of economics, but a cri de coeur to impose an ethical regime in control of the economic realm.

That regime required offsetting any rise of a monolithic dominant state in favour of a newborn vision of a balance of power among states using the leverage of international institutions, but without any international agreed-upon economic standard, such as the now ancient international gold standard. The “self-regulating market” with its unprecedented record of wealth creation had to be wedded to national and international political regulation which had produced “unheard-of material welfare.”  Johnston want to update the moral economics of Karl Polanyi, but with a full acceptance of the market without its neo-classical lack of moral boundaries.

For Johnston, global free trade is in retreat and, with it, the chance to extend increased prosperity to the developing world. Further, since both economic growth and social cohesion rest on a foundation of proper respect for mother earth that provides the wherewithal for both prosperity and social cohesion, the failure to adequately reduce the dangers of climate change may be the most serious missed opportunity.

Thus, the wreckage is economic. The wreckage is social. And the wreckage is environmental. But Donald Johnston is both a small “l” and a large “L” liberal and Liberal. If you do not know who he is, chances are that you have not yet reached your sixtieth birthday. In 2008, the Honourable Donald J. Johnston could add OC after his name for he was made an Officer of the Order of Canada, both for his contributions to public service within in Canada and as the first non-European secretary general of the Organization for Economic Cooperation and Development (OECD), a position he held for ten years from 1996 to 2006, just before the great economic crash of 2007-08. He not only played a signal role in those so-called missed opportunities, but had a bird’s eye view of what happened in that fateful decade.

Further, he came to that position with enormous accomplishments behind him – as a gold medalist in law from McGill in 1958, as a founding partner of the legal firm, Heenan Blaikie, in 1964, where he worked alongside my next door neighbour, also a tax and business law specialist. Johnston was first elected to the Canadian Parliament in 1978 and quickly assumed a place in the sun as President of the Treasury Board, Minister of State for Science and Technology and subsequently for Economic and Regional Development. In addition to these positions between 1980 and 1984 in the Trudeau government, he was named Minister of Justice and Attorney General in the short-lived Turner Liberal government. For, if you are old enough, you might best remember him as the candidate who ran third in the leadership race behind John Turner and Jean Chrétien in 1984 and then broke ranks when his friend and colleague, John Turner, then leader of the opposition, opposed Brian Mulroney on free trade, specifically the Canada-U.S. free trade agreement, but supported the PCs on the Meech Lake Accord. Johnston supported free trade and opposed Meech; he resigned from caucus and became an independent Liberal.

However, it is for his term as OECD Secretary-General that he will be best known. What a bird’s eye view! What an opportunity to influence the direction of history! But if you are looking for an account of his failure, forget it. For the failures were not his. They were the international community’s. There was George W. Bush’s misbegotten invasion of Iraq which initiated the undermining of the U.S. as the world’s leader with the initiation of positions and policies that were frugal on truth, disrespectful of science, expansive on pride and hubris, and thoroughly permeated by corruption and a disrespect for the small “l” liberal values of human rights.

From reading Johnston’s book, the politics of salesmanship, once slick versus the current display of vulgarity, the economics of favouring the 1% and ignoring the well-being of the remainder, promoting the military and foreign adventurism while undermining the welfare needed to hold society together, began much earlier than the ascension of Donald Trump as President. If the slick version of chicanery missed the opportunity to make Russia a full partner in liberal progress, the contemporary much crasser version is nostalgic with its outreach to a kleptocratic and autocratic Russia.

In the nineteenth century, the poor were severed both from the land and their access to charity. Trump will strip them of any possibility of realizing the dream of home ownership and, at the same time, of any right to access state welfare while promising the opposite.  In contrast, for Johnston, good governance on both the national and international level was and remains needed as an offset of once vibrant communities of reciprocity.

What happened? The U.S. was only ostensibly a proponent of free trade, but actually promoted bilateral trade and investment agreements, the forerunner of Trump’s policies without his frank openness. Why did this happen? Because the U.S. was a behemoth which operated to promote its own advantage. (p. 11) Why take on the Lilliputians collectively when you could pick them off one at a time? However, if that is the explanation – the inevitability of the exercise of uneven power – why declaim opportunities missed? If that norm was truly a universal law of behaviour, then there were really no opportunities. It was all a chimera.

Therein lies the contradiction. Forces are at work that overwhelm the liberal agenda of uniting economic growth and wealth creation with policies promoting social stability and cohesion through good governance at the top and a respect for nature at the base. The laws of “power corrupts and absolute power corrupts absolutely” were reinforced by national predispositions. “Americans would never (my italics) accept the taxation levels of many European countries where there is a cultural tolerance for higher taxation to support public funding for education, health, and social safety nets.” (p. 14) But that meant the trajectory in the U.S. would always favour the rich at the expense of the middle and under class and would need foreign adventures to distract the populace through patriotic appeals and circuses.

The book is permeated with various versions of this contradiction between the inevitable power of social forces and the faith in choice and taking advantage of opportunities to forge what my son, the Henry Charles Lea Professor of History and Director of the Global History Lab at Princeton University, calls the doctrine of moral economics, which he identifies with Karl Polanyi. (See Jeremy Adelman, “Polanyi, the Failed Prophet of Moral Economics,” Boston Review, 30 May 2017.) The connection need not be inferred. It is totally evident in the accomplishments at the OECD for which Johnston is lauded: establishing the world standard for the Principles of Corporate Governance, the revised Guidelines for Multinational Enterprises enunciating the norms of corporate social responsibility,  correcting harmful international tax practices; the international harmonization of competition policy, fostering sustainable development, and, as well, establishing the Education Directorate and the Program of International Student Assessment (PISA) for assessing educational comparisons. For unlike Karl Polanyi, an intellectual father, Johnston strove to institutionalize morality and not leave it as a moral cloud haunting the economic market.

Without apology or any self-critical analysis, Johnston was and remains a champion of one version of Polanyi’s moral economics and moral norms, that in both their moral and institutionalized iterations proved to be as weak a barrier to the floods produced by raw capitalism as the levees that promised to hold back the waters of the Gulf of Mexico in Hurricane Katrina from drowning New Orleans. For a number of years, I used Karl Polanyi’s classic, The Great Transformation: The Political and Economic Origins of Our Times (1944) in the general education courses that I taught at York University. As it turned out, it was my marked-up copy that Jeremy used in writing his article.

As Jeremy writes, Polanyi’s book is a “sacred text” for liberals unable to stomach the laws of inevitability espoused by both Marxists, on the one hand, and the worshippers of untrammeled markets and the invisible hand, on the other hand. Could liberalism counter “the iron broom of the classical economists”? He wrote a sacred text against a background when capitalism met its most profound economic crisis of the twentieth century, the Great Depression, and its most horrific political crisis, the rise of populist Nazism with its accompanying antisemitism in Europe.

Like Polanyi, Johnston is an “ethical stepchild of nineteenth-century liberalism, quick to condemn its shortfalls and determined to create a new moral order without the odor of Marxist class conflict.” However, unlike Polanyi, Johnston wanted to embed economic moralism in international institutions, for he accepted rather than rejected the globalization of consumption. Polanyi was a Puritan; Johnston is an Anglican or Episcopalian, at least in the secular economic religion. The market was not just a source of plutocratic enrichment at the expense of workers. It was the arena for creating wealth and it had to be tamed by rules and umpires and not treated as a circus for distraction.

Thus, Johnston’s book is timely and is part of a revivalist movement to beat back “the era of walls, visas, Eurofatigue, and slumping global trade.” He offers a moral counterpoint. Johnston writes about using good (my italics) governance to ensure the transfer of the benefits of growth to society as a whole. Could the OECD serve as an offset to the cult of stable money which was administered by states under a doctrine of state sovereignty, but where the forces at work lay “outside national boundaries, beyond the reach of community regulators”? Polanyi argued that markets had to be “embedded” within social norms to ensure the benefits served communal purposes.

I have written previously about the role of assimilated Jews who tried to address current economic and political issues with the moral lessons of the Torah, but where the Torah was only a silken thread connecting these modern “protestants” to their historic roots. Today is Shavuot that celebrates God’s giving of the Torah on Mount Sinai. Since I did not stay up this year to study Torah all night, it is convenient to refer to Julie Nathan’s essay, “The Gift of the Law: Civilisation, Shavuot and the Hatred of the Jews” (Religion and Ethics, 29 May 2017) Nathan wrote that the Jewish nation, which has had a lasting influence and impact on the human heart and mind rather than its institutions, unlike the great civilizations of the ancient world that grew up along major waterways,  “did not develop along a major river or amid lush vegetation, but was born in an arid desert, in a no-man’s land, and was founded not by kings and conquerors but by pastoral nomads and runaway slaves.” Polanyi may have left his shtetl Judaism behind, but he carried forward its emphasis on ideas, on values, on ethics and on laws to serve as a vision for humanity, but in a Christian form.

Look at Polanyi’s norms: human brotherhood, the sanctity of life, respect for individual dignity, the role of conscience, the upholding of social responsibility, respect for human rights, equality before the law, and a vision of the world guided by justice in pursuit of peace. Jeremy was named after Jeremiah, the prophet of peace.  Nations “shall beat their swords into ploughshares and their spears into pruning hooks. Nation shall not take up sword against nation. They shall never again know war” (Isaiah 2:4). More generally, “Justice, justice shall you pursue” (Deuteronomy 16:20) and, “Love your neighbour [and] the stranger as yourself” (Leviticus 19:18, 19:34)

These were the values of Karl Polanyi. These remain the basic values of Donald Johnston. For Nathan, “Jews are targeted because they are the bearers of these values, the living affirmation of a universal message of a humanitarian and ethical world. Will Donald Johnston also be reproved for trying to revive this ancient message? Or will he be ignored and his analysis relegated to the dust heap of history because it fails to engage self-critically to truly understand why those norms could not succeed against the forces of Mammon?

Assimilated Jews cast adrift from their moral bearings, tried to resurrect and concretize them in international institutions. Donald Johnston, an archetypal WASP and visionary Canadian, emerges as an honorary Jew. As Larry Zolf used to say, “When you are in love, the whole world is Jewish.” Alternatively, one could be Jewish like Polanyi who eschewed knowledge of his origins and opted for resurrection without history. Polanyi claimed that Jews “were guilty, not for the death of Jesus, but for ‘rejecting the teachings of 4520885018036092Jesus, which are superior’.” Polanyi championed a new Christian unity superimposed on free markets and expressing the importance of a political balance, in the Aristotelian sense, set in place by these overarching values.

This is self-evidently a romantic view of Judaism and of the world. Polanyi was an heir to that romanticism. Whereas, both are proselytizers of a sacred secular economic and political religion wherein liberals in a confessional mode flagellate themselves for the failures of their liberalism, Johnston is an Orthodox rabbi in comparison. But both were blind to the real dangers of populist nationalism. “Now, will the Trump administration correct this crumbling once-great democracy or will it, like others, be seduced by the extraordinary wealth of some Americans instead of being motivated to address the poverty and disillusionment of millions who supported Trump?” (p. 16) To even pose this as a question, to even ask whether Trump and Trumpism will be seduced by money, to even hold out the possibility that Trump will convert to the religion of economic moralism, is to expose the emptiness of this economic dream world and suggest why it stood powerless in the face of opposing forces.

Further, there is a failure to grasp Trump’s policies of railing against currency manipulation, implicitly favouring managed currencies, his national protectionism opposed to globalized economic forces, and make-work in industries such as coal mining. All these policies merely demonstrate that Trump, rather than Johnston, was not the usurper of Johnston’s birthright, but rather the true wished-for heir of the small “l” liberal tradition, Jacob (Johnston) longed to steal the birthright of Esau (Bush/Trump), but without Jacob’s mother’s wile. Polanyi was Johnston’s intellectual father, but Trump was the natural heir, not moral economic globalism embedded in institutions.

Johnston ends with this assertion, “I think it will happen.” It reveals the triumph of hope over reality, belief over facts, faith over skepticism, in fact, the very same foundation of charlatan Trumpism’s cynical evangelism based on faith rather than truth, founded on a lavish lifestyle, the Benny Hinn of American secularism. As Jeremy asked, is the search for the middle but a cover for the intellectual, economic and political misery of a muddle?

Lamentations focus on the gore of history. Charlatans nostalgically appeal to past glory. But both were conceived in the same womb.

To be continued.

With the help of Alex Zisman