Is American democracy in peril?

Claudine Gay says U.S. is dealing with historic levels of political polarization, but there is reason for hope
by Colleen Walsh Harvard Staff Writer

Political scientist Claudine Gay said her interest in the field developed out of a desire to understand what motivates the political choices and behaviors of ordinary people and “how well those perspectives are represented in national politics.” Since the Capitol riots on Jan. 6, 2021, Gay, the Edgerley Family Dean of the Faculty of Arts and Sciences and Wilbur A. Cowett Professor of Government and of African and African American Studies, has found herself rethinking how she approaches the discipline and reconsidering the foundational norms, values, and institutions long considered central to American democracy. She shared some of those thoughts in a recent exchange with the Gazette. This interview was edited for clarity and length.

 

Q&A

Claudine Gay

GAZETTE: American democracy appears to many to be on shaky ground right now. How does that affect your work/scholarly perspective?

 

GAY: As a scholar, I feel challenged in bringing the normal paradigms and theoretical frameworks we rely on in political science to understanding the conditions that we face right now in the U.S, because so many of the assumptions that typically ground our thinking have been upended. This crystallized for me as I witnessed the aftermath of the Jan. 6 attack on the Capitol. Here was a moment when thousands of people turned against American democracy itself, choosing violence as the way to achieve their aims. I thought a threat that profound would shock and unify us. But it, instead, has generated as polarized a response as any other issue or event. That reality has disrupted my thinking, and it forces us all in the discipline to consider anew the basic norms, values, and institutions that we’ve taken for granted as stable (and stabilizing) features of American political life.

 

GAZETTE: Can you talk a bit more about your reaction to Jan. 6? Has it evolved since the event itself?

 

GAY: Before I became the dean of FAS, I taught a course titled “Democratic Citizenship,” the study of public opinion and political participation in contemporary American politics. The question we kept returning to is the basic premise of democracy, whether ordinary people can be trusted to make consequential decisions. And as we interrogated that idea over the course of the semester, we would focus increasingly on the conditions that enable ordinary people to make consequential decisions, realizing that context matters.

 

Since Jan. 6, I have been thinking about how many of those conditions are directly under assault. One of those conditions is access to a common foundation of facts, which play a central role in the functions of a democratic society. But with a fractured media landscape, as well as the echo-chamber-like quality of social media, Americans now live in separate “factual” universes.

 

Another important contextual factor is equal access to a transparent, secure electoral process. Our democracy is made better the more we all participate, not when fewer people participate. And yet nearly two dozen state legislatures are working with relentless energy to erect barriers that will make it even more difficult to vote. If successful, these measures may have the effect of erasing whole groups of people from American political life.

 

Another condition that we talked about was the confidence that your voice will be heard and represented, which is the most basic expectation of democracy. A sense of political efficacy, reinforced by evidence of democratic responsiveness, is in part what motivates people to participate. From extreme partisan gerrymandering to the continuing attempts to discredit the 2020 election, all of these efforts give citizens ample reason to question whether their voices are heard and represented.

 

GAZETTE: Do you think we can take some comfort in the idea that democracy is always somewhat in flux, that we are always somewhat more or less democratic?

 

GAY: I’m not sure if I take “comfort” in the idea, but it does help to put this moment in perspective. Multiracial democracy is a work in progress for the U.S. — that’s undeniable. But a sense of alarm about signs of democratic backsliding, given what is at stake (including our credibility in the world), still feels appropriate.

 

GAZETTE: How do we ensure that democracy survives in this country?

 

GAY: One answer might be a bipartisan consensus and commitment to re-establish a common foundation of facts (for example, about the outcome of the 2020 presidential election), and to reaffirm the importance of broad-based democratic participation. But such consensus is elusive. If it were a fringe movement outside of politics that aimed to sow distrust in our electoral system and limit access to the vote, then it would be easier to see how we might find our way to a solution. But this is not happening outside of the political system; rather, it finds expression mainly through the Republican Party. That is what makes this so alarming. It is so hard to see how to break through in any kind of bipartisan way.

 

GAZETTE: The nation has endured deep divisions before. Why is this moment different?

 

GAY: The existence of different views and positions, hotly debated and fought over, is normal and, in many ways, is a strength of democracy. But the polarization that exists now is unprecedented in its intensity. It’s reached levels that are toxic when it comes to the ability to come together on any issue. When you have a situation where substantial majorities of Democrats and Republicans view the other party as “immoral” and a “threat to the U.S.,” that is not ordinary political and policy disagreement. There’s no room for even a conversation across partisan lines, let alone compromise.

 

If we exist in a moment when bipartisan collaboration and compromise are impossible and in some ways anathema to partisans, then we are not well-served by decision-making systems that require supermajorities. If being a Republican now means that you minimize — even embrace and normalize — the Jan. 6 attack, if it means that you continue to discredit the 2020 election, if it means that you believe the problem with democracy is when too many people vote, if that is all part of the identity of being Republican now, how do you engage those partisans in the urgent work of protecting our democracy?

 

GAZETTE: Can you give me some examples of that work?

 

GAY: We need federal legislation to protect voting rights, such as the two bills now stalled in the Senate. These bills alone won’t entirely undo all the damage that’s been done through state-level action over the last year and a half, but some of the restrictive measures now in place would be rolled back. Federal legislation is impossible, however, without the elimination of the filibuster, given the Republican party’s commitment to making it maximally difficult to vote.

 

GAZETTE: Is there anything you look to that gives you any hope?

 

GAY: What gives me hope is that even as difficult as we make it to vote, so many people persevere and turn out. In the 2020 presidential election, more than 159 million Americans voted, many for the first time. That’s the largest total number of ballots cast in U.S. history, by a wide margin. Citizens overcame all of the obstacles we put in front of them — sometimes waiting in poll lines for two, three hours — to demand that their voices be heard. That to me is the clearest expression of the continuing faith in the power and promise of multiracial democracy, in the belief that ordinary people can be trusted to make consequential decisions. Many advocacy groups are engaged in deep organizing and grassroots mobilization to register new voters and ensure their access to free and fair elections. These efforts were pivotal in 2020 and will continue to be. An expanding electorate, millions of citizens newly awake to the transformative power of the vote, and more determined than ever to be part of the democratic process and to be equitably represented in government — that’s what gives me hope.

 

The Real Economic Story of Our Time

Robert Reich's video speaks for its self!

Winners Take All - Anand Giridharadas

An acclaimed writer and journalist who reported on a changing world in an eleven-year tour at The New York Times, Anand Giridharadas has emerged as a compelling voice for finding common ground in divided times. An Ohio native of Indian parentage who has lived on three continents and reported from five, Giridharadas speaks of and to an ever more diverse, globally entwined, yet alarmingly polarized America. From telling his unforgettable “Tale of Two Americas” on the TED main stage to earning presidential praise for his inspirational opening address to the inaugural Obama Summit, Giridharadas explores the anger and promise of our new American moment, sharing thought-provoking insights on what got us here and what lies ahead.

Trump’s true talent isn’t negotiating. It’s marketing. By Fareed Zakaria

By Fareed Zakaria

Donald Trump’s recurring criticism of his predecessor is that he just didn’t know how to make a deal. “Obama is not a natural deal maker,” he tweeted in 2016, complaining that there was no accord on Syria. “Obama will attack Iran because of his inability to negotiate properly,” he predicted incorrectly back in 2013. Trump was scathing about President Barack Obama’s lack of legislative success, pronouncing him “unable to negotiate w/ Congress.” “We need leaders who can negotiate great deals for Americans,” Trump tweeted in 2015, and the implication was obvious — he was the ultimate dealmaker. 

It is nearly 500 days into the Trump administration. Where are the deals? Where is the renegotiated North American Free Trade Agreement , the bilateral trade agreements that were going to replace the Trans-Pacific Partnership, the new and improved Iran nuclear pact, the China trade deal? Trump’s record in working with Congress is even less impressive. He has not been able to strike an accord with Democrats on anything, from immigration to infrastructure.

The world is laughing at us, he would often say. Well, what must the world be thinking now, as it watches the Trump administration careen wildly on everything from North Korea to China? What must it have thought as it watched the master negotiator in a televised session with congressional leaders on immigration, where he seemed to agree with the Democratic position, then agree with the (incompatible) Republican position, all the while asserting they were going to make a deal? They didn’t.

By now it is obvious Trump is actually a bad negotiator — an impulsive, emotional man who ignores briefings, rarely knows details, and shoots first and asks questions later.

Consider how the administration has handled the North Korea summit. First, the meeting was announced with great fanfare, with Trump soon lavishing praise on North Korean leader Kim Jong Un. Agreeing to the meeting was an enormous symbolic concession to Pyongyang, while getting almost nothing in return. This was to be a head-of-state summit, though there was little preparation and no determination that the two sides were close enough to have a serious negotiation at that level.

Trump got excited enough to start hyping the prospects for a breakthrough agreement despite little evidence of any movement in the North Korean position. Next, Trump’s advisers embarked on a strange series of comments that seemed designed to threaten, scare and intimidate North Korea. Was this the plan? Did the administration regret its early overtures? Or was this all just incompetence? Is it any wonder the whole thing has collapsed? 

Trump has been even more ham-handed in his dealings with China. Just before entering the White House, he dangled the possibility of recognizing Taiwan. Beijing quickly shut down contact with the United States and, humiliatingly, Trump had to walk back his comments in a phone call with President Xi Jinping.

The current trade talks with China are a case study in bad negotiations. It is difficult to know where to begin. The U.S. government does not seem to know what it wants. Some days, it appears Washington is fixated on the size of the trade deficit. Other days, it focuses on technology transfer and the theft of intellectual property. The White House began its attacks by imposing tariffs on steel, which mostly affected American allies, ensuring that it had no partners in its attempt to pressure the Chinese. After insisting no countries would be exempted, the administration once again reversed course and doled out exemptions to the top five steel exporters to the United States, though it threatens to reverse itself again.

American negotiators have leaked furiously to the press to undermine each other’s positions, and even squabbled among themselves in front of a Chinese delegation earlier this month. Trump himself seems to switch gears repeatedly. After his administration announced it would punish ZTE, a huge Chinese tech company that committed serious trade violations, Trump suddenly changed his mind, citing concern for the impact on Chinese jobs. Imagine the outcry if Obama had backed away from putting pressure on the Chinese to help their economy!

On the legislative front, Trump chose to begin his presidency with the divisive issue of health care rather than a unifying one such as infrastructure — and failed to get Obamacare repealed anyway. Oh, and don’t forget, he and son-in-law Jared Kushner were going to broker the ultimate deal: peace between the Israelis and Palestinians. How is that going?

As talks fail, deals collapse and negotiations founder, Trump continues to tweet triumphantly about his great success. It makes one realize the president’s true talent. He has the confidence, bravado and skill to market failure as success. He can take a mediocre building, slap some gold paint on it and then convince people it’s a super-luxury condominium. Call it the Art of the Spin.

DNC leaders call for rules reform after 2016 primary revelations

By David Weigel

The top two officials in the Democratic National Committee have pledged to reform the party in the wake of revelations that Hillary Clinton’s presidential campaign got a special joint fundraising agreement before she won the 2016 nomination. Yet even as they tried to get past the story, kicked off by former DNC chair Donna Brazile’s upcoming memoir, DNC Chairman Tom Perez and Deputy Chairman Keith Ellison took slightly different views as to what needed to change.

In an email to DNC members last night, Perez said that the party had already begun reforming its primary rules to ensure “that 2020 will be a transparent process,” and that “even a perception of impropriety — whether real or not — is detrimental to the DNC as an institution.” The DNC’s charter, he pointed out, required total neutrality in primaries.

But Perez sidestepped the growing criticism of the 2016 JFA for Clinton’s campaign — which, according to Brazile, allowed the Democratic front-runner’s campaign veto power over some party decisions.

“The joint fundraising agreements were the same for each campaign except for the treasurer, and our understanding was that the DNC offered all of the presidential campaigns the opportunity to set up a JFA and work with the DNC to coordinate on how those funds were used to best prepare for the general election,” Perez said. “Since then, both of those joint fundraising committees have been shut down.”

Perez did not respond to the criticism of former staff and supporters of Sen. Bernie Sanders (I-Vt.), who argued yesterday that the JFA was slanted toward Clinton, and that the party gave her special treatment. In an interview, former Sanders campaign manager Jeff Weaver said that the JFA, by its nature, benefited the candidate who could set up high-dollar fundraisers, and that the DNC did not help Sanders organize large donors.

“Who are the wealthy people Bernie was going to bring to a fundraiser?” Weaver asked. “They never set up a single event.”

In his statement, released separately from Perez’s, Ellison did not get into the weeds of the 2015 arrangement. But he did call specifically for the DNC to change its rules to specify that no future campaign could get a favorable JFA.

“We must heed the call for our party to enact real reforms that ensure a fair, open and impartial nominating process in elections to come,” Ellison said. “I’m committed to working with Chairman Perez to make the DNC more transparent and accountable to the American people, whether that’s by ensuring that debates are scheduled far ahead of time or by guaranteeing that the terms of joint fundraising agreements give no candidate undue control or influence over the party.”

The DNC will meet next month to hear recommendations from a “unity commission” that has met four times, in four cities, to research problems with the primary process and debate reforms. Multiple state Democratic chairs are lobbying specifically for new language in the party bylaws about JFAs, an issue that might be forced at a later meeting.

Economist Joseph Stiglitz: Trump's Budget Takes a Sledgehammer to What Remains of the American Dream

AMY GOODMAN: On Tuesday, the Trump administration unveiled its $4.1 trillion budget. The plan includes massive cuts to social programs, while calling for historic increases in military spending. The budget proposes slashing $800 billion from Medicaid, nearly $200 billion from nutritional assistance programs, such as food stamps and Meals on Wheels, and more than $72 billion from disability benefits. The plan would also completely eliminate some student loan programs. It would ban undocumented immigrants from receiving support through some programs for families with children, including the child care tax credit. On Tuesday, Senator Bernie Sanders of Vermont slammed Trump’s budget.

SEN. BERNIE SANDERS: This is a budget which says that if you are a member of the Trump family, you may receive a tax break of up to $4 billion, but if you are a child of a working-class family, you could well lose the health insurance you currently have through the Children’s Health Insurance Program and massive cuts to Medicaid. At a time when we remain the only major country on Earth not to guarantee healthcare to all, this budget makes a bad situation worse in terms of healthcare. In other words, this is a budget that provides massive tax breaks for billionaires and corporate CEOs, and massive cuts to programs that tens of millions of struggling Americans depend upon.

When Donald Trump campaigned for president, he told the American people that he would be a different type of Republican, that he would take on the political and economic establishment, that he would stand up for working people, that he understood the pain that families all across this country were experiencing. Well, sadly, this budget exposes all of that verbiage for what it really was: just cheap and dishonest campaign rhetoric that was meant to get votes, nothing more than that.

AMY GOODMAN: That was Senator Bernie Sanders of Vermont. The ACLU, NAACP and Planned Parenthood have all come out criticizing the budget. Some conservatives are also criticizing the budget. Republican Congressman Mark Meadows of North Carolina told The New York Times, "Meals on Wheels, even for some of us who are considered to be fiscal hawks, may be a bridge too far," unquote.

The budget also calls for an historic 10 percent increase in military spending and another $2.6 billion to further militarize the U.S.-Mexico border, including $1.6 billion to build Trump’s border wall. In a rare proposed benefit for families, the budget allocates $19 billion for six weeks of paid parental leave for new families—a project that’s been spearheaded by his daughter and senior White House adviser, Ivanka Trump. The budget projects 3 percent economic growth, which economists say is widely unrealistic.

Unlike previous presidents, Trump is unveiling his proposed budget while he’s abroad. David Stockman, former budget director for President Ronald Reagan, said, quote, "This budget is dead before arrival, so he might as well be out of town," unquote.

Well, for more, we go to Joe Stiglitz, Nobel Prize-winning economist, Columbia University professor, chief economist for the Roosevelt Institute. He’s the author of numerous books, most recently, The Euro: How a Common Currency Threatens the Future of Europe.

Joseph Stiglitz, welcome to Democracy Now!

JOSEPH STIGLITZ: Nice to be here.

AMY GOODMAN: Can you respond to the budget that’s just been revealed?

JOSEPH STIGLITZ: It’s like everything else: It’s made up. You could say it’s a collection of lies put together. It doesn’t make any economic sense. I don’t think anybody who’s looked at it has—can fathom the economics. I mean, you mentioned one thing, the 3 percent growth rate, which is the largest deviation in estimate relative to the CBO on record. You know, when I was chairman of the Council of Economic Advisers, we wanted to be responsible, and we always were conservative and were very careful, getting the views of everybody, wanted to make sure that our numbers were reasonable. He’s made no pretense to be reasonable.

In fact, what’s striking is, while he assumes that there’s going to be more growth, if you look at the budget, it’s designed to reduce growth. He cuts out support for science, for R&D, which is the basis of productivity growth. He cuts out support for job retraining, so when people leave one job, they can be trained for the next job. He cuts out support for Pell grants, so those who have low income can get the education so they can live up to their potential. All these are things that actually lower economic growth. So I would say this is not a growth budget, this is a no-growth budget.

And then he has the numbers, you know, the gall to have things like—you know, just mind-bending. He says he’s going to—elsewhere, he said he’s going to eliminate the estate tax. And his budget says that he’s going to raise several hundred billion dollars’ more money from an estate tax that is zeroed out. Now, you can make a statement that if we lowered the estate tax a little bit, maybe people will be induced to die more, and maybe we’ll get more revenue. You could make that kind of statement. But one thing you don’t need a Ph.D. is, zero times any number is zero. So if you have a zero estate tax, no matter how many people are dying and how wealthy they are, you’re going to get zero revenue.

And remember, what he’s doing, he’s cutting out the estate tax that benefits 0.2 percent of the economy—of our society. You know, you have to have an estate of more than 10 million, if you’re a married couple, in order to pay anything on the estate tax. And meanwhile, he’s cutting benefits for ordinary Americans—education, health, as you mentioned, food, nutrition. It’s not just the system of social protection that we’ve created, but even the bottom safety net that is—catches people when they’re in trouble.

AMY GOODMAN: Let’s go to Donald Trump two years ago, speaking—this is May 21st, 2015—to the right-wing outlet The Daily Signal.

DONALD TRUMP: I’m not going to cut Social Security like every other Republican, and I’m not going to cut Medicare or Medicaid. Every other Republican is going to cut. And even if they wouldn’t, they don’t know what to do, because they don’t know where the money is. I do.

AMY GOODMAN: So, he has said, when he was campaigning—actually, he was campaigning against other Republicans when he made the point, "I’m not going to cut Medicare, Medicaid or Social Security." I mean, we had endless choices of clips to choose from. Joe Stiglitz?

JOSEPH STIGLITZ: He lied. He is cutting Medicaid, the largest cut to Medicaid, even beyond what was in his repeal and replace, that didn’t get very far. These are even bigger Medicaid cuts. In terms of so Social Security, one important part of Social Security is disability payments.

AMY GOODMAN: SSDI.

JOSEPH STIGLITZ: And, you know, that’s really important. People do get to say, well, they have auto accidents, they get sick, they get cancer—you know, all kinds of things that make them unable to work.

AMY GOODMAN: They get hurt at work.

JOSEPH STIGLITZ: They can’t work. And he’s cutting that. It’s an important part of our Social Security, of security that people—we provide, as a society, as a basic system of social protection. He’s cutting back on those expenditures. So, all I can say is, you look at that clip, and what he’s doing today is just the opposite.

AMY GOODMAN: So you’re talking about cutting—I mean, already the proposed budget from the House was massive when it came to cuts, something like $880 billion in Medicaid cuts. He’s suggesting $616 more billion—$616 billion more, which would basically gut Medicaid.

JOSEPH STIGLITZ: That’s right. And remember, it’s not just for poor people. It’s a major problem for our elderly, who have to go into old age homes, hospice, you know, all—so, it is an extraordinarily important program. Another way of seeing the massiveness of these cuts is that, if you look at what we call a non-defense discretionary—that is to say, you take out Social Security, you take out Medicare, and you take out military—he’s proposing a 40 percent cut in all these programs. And remember, these programs have been cut year after year for the last 25 years, under both Democrats and Republicans, so it’s not like there’s a lot of fat on this. These are already fairly lean. And what he’s doing is just taking an ax to them, a 40 percent reduction.

The consequence of his proposal, I don’t think even he fully understands. For instance, we would lose the vote at the U.N. if he carried out his programs. I mean, so, basically, we’re—we’re saying to international—

AMY GOODMAN: What do you mean we’d lose the vote at the U.N.?

JOSEPH STIGLITZ: Well, because he’s cutting out all support for international organizations. And if we don’t pay our dues, our core dues, to the U.N., we lose our vote. And they’re an important source of our influence in international politics. So, you know—and this is a consequence of what he is proposing. There is no discussion of what the implications of this 40 percent cut in government. You know, there are some programs that can be cut. That’s clear. But he hasn’t gone pruning. He’s taken an ax and said, "Oh, I can get a balanced budget, if I make up numbers about growth and if I just pretend that I’m going to take a 40 percent cut from somewhere."

AMY GOODMAN: Let’s go to Mick Mulvaney, director of the White House Office of Management and Budget.

MICK MULVANEY: I think, for years and years, we’ve simply looked at a budget in terms of the folks who are on the back end of the programs, the recipients of the taxpayer money. And we haven’t spent nearly enough time focusing our attention on the people who pay the taxes.

AMY GOODMAN: Mick Mulvaney. Your response, Joe Stiglitz?

JOSEPH STIGLITZ: Oh, totally wrong. I mean, I was in the White House for four years. And we did a very, very careful analysis of the benefits and costs, how it would affect taxpayers and ordinary consumers, the rich, the poor, the middle class, when we evaluated the program. We were very, very aware that this was money that people had worked for, earned, and that, on the other hand, they need help in a whole variety of areas, help in sending their kids to college, in buying a home. You know, the—

AMY GOODMAN: This would drastically shrink low-income student loan program.

JOSEPH STIGLITZ: Oh, some of the programs would be wiped out. So, you know, the American dream, we’ve gradually understood, is really a myth, the fact that anybody can go from the bottom to the top. This is, what is remnant of that American dream, he’s saying, "I’m going to hit it with a sledgehammer."

AMY GOODMAN: Under Trump’s budget, the Environmental Protection Agency faces a 31 percent cut, the steepest cut of any agency or department across the government. Well, during a press conference on Tuesday, a reporter asked White House budget director Mick Mulvaney about the EPA cuts.

REPORTER: Can you characterize the treatment of climate science programs and cuts to those? And do you–do you describe those as a taxpayer waste, if you do cut them?

MICK MULVANEY: You tell me. I think the National Science Foundation last year used your taxpayer money to fund a climate change musical. Do you think that’s a waste of your money?

REPORTER: What about climate science?

MICK MULVANEY: I’ll take that as a yes, by the way.

AMY GOODMAN: There’s Mick Mulvaney. Joe Stiglitz?

JOSEPH STIGLITZ: Well, you know, of course, every government program has the worst thing. The financial sector and the private sector makes a mistake. Remember we had a crisis in 2008? That was a misallocation of trillions of dollars. So, I don’t want to pretend that every program is perfect. But if you get rid of environmental protection, we’re going to be suffering from dirty air, dirty water, toxic waste, that lower our health. And here’s the point. He wants faster economic growth. A less healthy America is not going to be as productive.

AMY GOODMAN: And the massive increase in military spending? I mean, you’ve written books about this, about the wars and what they cost us.

JOSEPH STIGLITZ: That’s right. And we’re fighting, we might say, a war on terrorism. But another aircraft carrier is not going to win—help us in the war on terrorism. You know, the Cold War, that fight with Russia, in the form that it was, ended a quarter-century ago, and yet we’re spending money as if it hasn’t ended. So we’ve been spending lots and lots of money on weapons that don’t work, against enemies that don’t exist. If he used that criteria that he said for shutting down a department, the Defense Department would have been shut down long ago. You know, the $1,000 toilet, the hammers that cost $100 or things like that—if we used the criteria of misspending, the Defense Department is illustration number one.

AMY GOODMAN: So we just have a minute right now. Republicans have joined with Democrats in condemning this, saying that this budget is dead on arrival. He has it released when he’s out of town. What actually happens here? You were a chief economic adviser in a White House, under President Clinton. What happens next? What happens to this budget?

JOSEPH STIGLITZ: Well, actually, the House Budget Committee starts putting together their own budget. You know, this will be a little bit in their background. It will give a little bit of impetus to the extremists. You know, it’s so ironic. He’s talking about Islamic extremists while he’s in Saudi Arabia, and here we have budget extremists back home, really extremist. And so, it is giving a license for that kind of extremism in thinking about the social fabric in our country. But they will go ahead on their own and try to structure. The House, led by Ryan, is going to come up with a more extreme budget than I think is going to be acceptable to the American people. Fortunately, the Senate will try to be—tame it in and bring it in. A good chance that they won’t be able to compromise. That is to say, they won’t be able to put together the numbers that work. And what happens then is, the government operates on a continuing resolution, where what you say is, "We haven’t figured out how to make a new budget. We’ll keep the old budget for another three months or six months, until we can reach an agreement."

AMY GOODMAN: Well, I want to thank you very much, Joseph Stiglitz, Nobel Prize-winning economist, Columbia University professor, chief economist for Roosevelt Institute, served as chair of the Council of Economic Advisers under President Bill Clinton, author of numerous books, most recently, The Euro: How a Common Currency Threatens the Future of Europe.

Peter Eigen: How to expose the corrupt

I am going to speak about corruption, but I would like to juxtapose two different things. One is the large global economy, the large globalized economy, and the other one is the small, and very limited, capacity of our traditional governments and their international institutions to govern, to shape, this economy. Because there is this asymmetry, which creates, basically, failing governance. Failing governance in many areas: in the area of corruption and the area of destruction of the environment, in the area of exploitation of women and children, in the area of climate change, in all the areas in which we really need a capacity to reintroduce the primacy of politics into the economy, which is operating in a worldwide arena. And I think corruption, and the fight against corruption, and the impact of corruption, is probably one of the most interesting ways to illustrate what I mean with this failure of governance.
 

 Let me talk about my own experience. I used to work as the director of the World Bank office in Nairobi for East Africa. At that time, I noticed that corruption, that grand corruption, that systematic corruption, was undermining everything we were trying to do. And therefore, I began to not only try to protect the work of the World Bank, our own projects, our own programs against corruption, but in general, I thought, "We need a system to protect the people in this part of the world from the ravages of corruption." And as soon as I started this work, I received a memorandum from the World Bank, from the legal department first, in which they said, "You are not allowed to do this. You are meddling in the internal affairs of our partner countries. This is forbidden by the charter of the World Bank, so I want you to stop your doings."

In the meantime, I was chairing donor meetings, for instance, in which the various donors, and many of them like to be in Nairobi — it is true, it is one of the unsafest cities of the world, but they like to be there because the other cities are even less comfortable. And in these donor meetings, I noticed that many of the worst projects — which were put forward by our clients, by the governments, by promoters, many of them representing suppliers from the North — that the worst projects were realized first. Let me give you an example: a huge power project, 300 million dollars, to be built smack into one of the most vulnerable, and one of the most beautiful, areas of western Kenya. And we all noticed immediately that this project had no economic benefits: It had no clients, nobody would buy the electricity there, nobody was interested in irrigation projects. To the contrary, we knew that this project would destroy the environment: It would destroy riparian forests, which were the basis for the survival of nomadic groups, the Samburu and the Turkana in this area. So everybody knew this is a, not a useless project, this is an absolute damaging, a terrible project — not to speak about the future indebtedness of the country for these hundreds of millions of dollars, and the siphoning off of the scarce resources of the economy from much more important activities like schools, like hospitals and so on. And yet, we all rejected this project, none of the donors was willing to have their name connected with it, and it was the first project to be implemented.
 

 The good projects, which we as a donor community would take under our wings, they took years, you know, you had too many studies, and very often they didn't succeed. But these bad projects, which were absolutely damaging — for the economy for many generations, for the environment, for thousands of families who had to be resettled — they were suddenly put together by consortia of banks, of supplier agencies, of insurance agencies — like in Germany, Hermes, and so on — and they came back very, very quickly, driven by an unholy alliance between the powerful elites in the countries there and the suppliers from the North. Now, these suppliers were our big companies. They were the actors of this global market, which I mentioned in the beginning. They were the Siemenses of this world, coming from France, from the UK, from Japan, from Canada, from Germany, and they were systematically driven by systematic, large-scale corruption. We are not talking about 50,000 dollars here, or 100,000 dollars there, or one million dollars there. No, we are talking about 10 million, 20 million dollars on the Swiss bank accounts, on the bank accounts of Liechtenstein, of the president's ministers, the high officials in the para-statal sectors.

This was the reality which I saw, and not only one project like that: I saw, I would say, over the years I worked in Africa, I saw hundreds of projects like this. And so, I became convinced that it is this systematic corruption which is perverting economic policy-making in these countries, which is the main reason for the misery, for the poverty, for the conflicts, for the violence, for the desperation in many of these countries. That we have today more than a billion people below the absolute poverty line, that we have more than a billion people without proper drinking water in the world, twice that number, more than two billion people without sanitation and so on, and the consequent illnesses of mothers and children, still, child mortality of more than 10 million people every year, children dying before they are five years old: The cause of this is, to a large extent, grand corruption.
 

 Now, why did the World Bank not let me do this work? I found out afterwards, after I left, under a big fight, the World Bank. The reason was that the members of the World Bank thought that foreign bribery was okay, including Germany. In Germany, foreign bribery was allowed. It was even tax-deductible. No wonder that most of the most important international operators in Germany, but also in France and the UK and Scandinavia, everywhere, systematically bribed. Not all of them, but most of them. And this is the phenomenon which I call failing governance, because when I then came to Germany and started this little NGO here in Berlin, at the Villa Borsig, we were told, "You cannot stop our German exporters from bribing, because we will lose our contracts. We will lose to the French, we will lose to the Swedes, we'll lose to the Japanese." And therefore, there was a indeed a prisoner's dilemma, which made it very difficult for an individual company, an individual exporting country to say, "We are not going to continue this deadly, disastrous habit of large companies to bribe."

 

So this is what I mean with a failing governance structure, because even the powerful government, which we have in Germany, comparatively, was not able to say, "We will not allow our companies to bribe abroad." They needed help, and the large companies themselves have this dilemma. Many of them didn't want to bribe. Many of the German companies, for instance, believe that they are really producing a high-quality product at a good price, so they are very competitive. They are not as good at bribing as many of their international competitors are, but they were not allowed to show their strengths, because the world was eaten up by grand corruption.

And this is why I'm telling you this: Civil society rose to the occasion. We had this small NGO, Transparency International. They began to think of an escape route from this prisoner's dilemma, and we developed concepts of collective action, basically trying to bring various competitors together around the table, explaining to all of them how much it would be in their interests if they simultaneously would stop bribing, and to make a long story short, we managed to eventually get Germany to sign together with the other OECD countries and a few other exporters.

 

In 1997, a convention, under the auspices of the OECD, which obliged everybody to change their laws and criminalize foreign bribery. (Applause) Well, thank you. I mean, it's interesting, in doing this, we had to sit together with the companies. We had here in Berlin, at the Aspen Institute on the Wannsee, we had sessions with about 20 captains of industry, and we discussed with them what to do about international bribery. In the first session — we had three sessions over the course of two years. And President von Weizsäcker, by the way, chaired one of the sessions, the first one, to take the fear away from the entrepreneurs, who were not used to deal with non-governmental organizations. And in the first session, they all said, "This is not bribery, what we are doing." This is customary there. This is what these other cultures demand. They even applaud it. In fact, [unclear] still says this today. And so there are still a lot of people who are not convinced that you have to stop bribing. But in the second session, they admitted already that they would never do this, what they are doing in these other countries, here in Germany, or in the U.K., and so on. Cabinet ministers would admit this. And in the final session, at the Aspen Institute, we had them all sign an open letter to the Kohl government, at the time, requesting that they participate in the OECD convention.

And this is, in my opinion, an example of soft power, because we were able to convince them that they had to go with us. We had a longer-term time perspective. We had a broader, geographically much wider, constituency we were trying to defend. And that's why the law has changed. That's why Siemens is now in the trouble they are in and that's why MIN is in the trouble they are in. In some other countries, the OECD convention is not yet properly enforced. And, again, civil societies breathing down the neck of the establishment.

  In London, for instance, where the BAE got away with a huge corruption case, which the Serious Fraud Office tried to prosecute, 100 million British pounds, every year for ten years, to one particular official of one particular friendly country, who then bought for 44 billion pounds of military equipment. This case, they are not prosecuting in the UK. Why? Because they consider this as contrary to the security interest of the people of Great Britain. Civil society is pushing, civil society is trying to get a solution to this problem, also in the U.K., and also in Japan, which is not properly enforcing, and so on.

  In Germany, we are pushing the ratification of the UN convention, which is a subsequent convention. We are, Germany, is not ratifying. Why? Because it would make it necessary to criminalize the corruption of deputies. In Germany, we have a system where you are not allowed to bribe a civil servant, but you are allowed to bribe a deputy. This is, under German law, allowed, and the members of our parliament don't want to change this, and this is why they can't sign the U.N. convention against foreign bribery — one of they very, very few countries which is preaching honesty and good governance everywhere in the world, but not able to ratify the convention, which we managed to get on the books with about 160 countries all over the world.

  I see my time is ticking. Let me just try to draw some conclusions from what has happened. I believe that what we managed to achieve in fighting corruption, one can also achieve in other areas of failing governance. By now, the United Nations is totally on our side. The World Bank has turned from Saulus to Paulus; under Wolfensohn, they became, I would say, the strongest anti-corruption agency in the world. Most of the large companies are now totally convinced that they have to put in place very strong policies against bribery and so on. And this is possible because civil society joined the companies and joined the government in the analysis of the problem, in the development of 

  Of course, if civil society organizations want to play that role, they have to grow into this responsibility. Not all civil society organizations are good. The Ku Klux Klan is an NGO. So, we must be aware that civil society has to shape up itself. They have to have a much more transparent financial governance. They have to have a much more participatory governance in many civil society organizations. We also need much more competence of civil society leaders. This is why we have set up the governance school and the Center for Civil Society here in Berlin, because we believe most of our educational and research institutions in Germany and continental Europe in general, do not focus enough, yet, on empowering civil society and training the leadership of civil society.

  But what I'm saying from my very practical experience: If civil society does it right and joins the other actors — in particular, governments, governments and their international institutions, but also large international actors, in particular those which have committed themselves to corporate social responsibility — then in this magical triangle between civil society, government and private sector, there is a tremendous chance for all of us to create a better world.

  Thank you.

  (Applause)