This is the 11th anniversary of the Albies; I started when I was writing at Foreign Policy. Eleven years is a long time, and as tempting as it is to institutionalize this process more, this list still represents my own idiosyncratic opinions. So blame me if I missed something.
Here are the 10 Albie winners for 2019:
1. Olivier Blanchard, “Public Debt and Low Interest Rates,” American Economic Review 109(4): 1197-1229. I am old enough to remember all of the caterwauling during the Great Recession about how the explosion of public borrowing in the developed world would lead to sky-high interest rates, stagflation and the end of days. That last part might still happen, but it seems like the era of low interest rates is going on a lot longer than most economists would have predicted a decade ago. Consider Blanchard’s presidential address to the American Economic Association the formal disciplinary acknowledgment that the conventional wisdom on this subject a decade ago was wrong.
The stability of this new normal is also open to question. The 2020s will be a decade in which public debt in the developed world goes from high to astronomically high. Still, the political implications of a world in which governments can borrow cheaply without constraint need to be puzzled out. A low-interest-rate world could lead to greater investments in necessary public goods. My confidence in that outcome is, shall we say, not high.
2. Josephine Cumbo and Robin Wigglesworth, “ ‘Their house is on fire’: the pension crisis sweeping the world,” Financial Times, Nov. 17. All economic shocks have distributional consequences, and the world of low interest rates is no different. Governments are winners because of a less stringent budget constraint. Pensioners, on the other hand, face new constraints, as Cumbo and Wigglesworth note: “Plunging interest rates since the financial crisis wreak havoc on the funding of [retirement] schemes. As average life expectancy increases, pensions have become a defining political issue in countries as diverse as Russia, Japan and Brazil.”
The 2010s have been defined by cleavages that have redefined politics across the globe: cosmopolitan versus nationalist, urban versus rural, etc. Consider the demographic divide this article presents as the “OK boomer” of international political economy.
3. Catherine Rampell, “The GOP has become the Soviet party,” Washington Post, Jan. 21. 2019 was the year in which the last remnants of the old GOP either departed the political stage or unconditionally surrendered to Donald Trump’s vision of the party. The government shutdown was the last stand of the old guard. Mitch McConnell forced Trump to accede to defeat during the showdown, but then backed the president when he declared a bogus state of emergency to bypass the will of the legislative branch. Rampell presaged the effects this would have on the GOP and the federal government. The parallels she invoked with the Soviet state are disturbing, and will likely persist into 2020. It is possible that one could have taken any of Rampell’s columns from this year and subbed it in for this one — she’s been that acute in her analysis.
4. Henry Farrell and Abraham L. Newman, “Of Privacy and Power: The Transatlantic Struggle Over Freedom and Security” (Princeton University Press); Farrell and Newman, “Weaponized Interdependence: How Global Economic Networks Shape State Coercion,” International Security 44(1): 42-79. Talk about having a year. Most political economy scholars would be happy to have one standout publication in a year. Farrell and Newman produced two distinct pieces of scholarship, both of which deal with the less anticipated ramifications of deepening economic interdependence. “Of Privacy and Power” explains how the United States was able to get the European Union to adopt some (but not all) of its post-9/11 security measures on issues ranging from airline passenger data to finance. Interdependence empowered newer, nontraditional actors, creating new cross-national bargains.
“Weaponized Interdependence” examines the ways in which being at the center of global economic networks facilitates an actor’s ability to engage in both surveillance and coercion of allies and adversaries alike. The United States has been the chief exploiter of weaponized interdependence in the past. I guarantee that fears of China doing this in the future will dominate policy debates in Washington and Brussels for the next several years.
5. Nils Gilman, “Beware the Rise of Far-Right Environmentalism,” The WorldPost, Berggruen Institute, Oct. 17. Right-wing skepticism of climate change is centered in the United States but hardly exclusive to this country. An unspoken assumption among many policy wonks and activists has been that as the effects of climate become more and more undeniable, conservatives would recognize the need for concerted action. Gilman’s essay explains that some far-right conservatives have had this epiphany, but their concerted action focuses far more on adaptation than mitigation, and nationalist forms of adaptation at that. The policy implications of such ideas make current variants of populist nationalism look tame by comparison.
6. The US-China Trade Policy Working Group, “US-China Trade Relations — A Way Forward,” Oct. 18. Begun, the trade wars have. The hawk consensus in Washington on China is both strong and not terribly sophisticated. This joint effort by U.S. and Chinese economists and lawyers suggests ways in which the two economies do not need to decouple, while also recognizing that economic convergence between the two systems is less likely to happen. Their paper was a rare break in the path toward an economic divorce and suggests a way out of the current morass if there is different leadership in the United States in 2021.
7. Ben Casselman, “The White-Collar Job Apocalypse That Didn’t Happen,” New York Times, Sept. 27. Hey, remember 10 to 15 years ago, when everyone was freaking out that the offshore outsourcing of jobs would cause more than a quarter of American jobs (upward of 40 million) to disappear? I sure do, having argued that outsourcing was being turned into a boogeyman and that the estimates of job disappearance were wildly inflated.
Casselman’s story compares some of those predictions made in the aughts and more recent research by Adam Ozimek that finds that job loss estimates were not even remotely close. He quotes some of those who made the predictions more than a decade or so admitting that the effects were much smaller than expected. To be fair, many of these jobs did prove to be portable. In most instances, however, the outsourcing stayed within the United States, particularly for the jobs that required more real-time interaction. Still, this story is a worthwhile reminder that not every prediction pans out.
8. Dexter Filkins, “Blood and Soil in Narendra Modi’s India,” The New Yorker, Dec. 2. One of the truly awful developments about writing commentary in the United States in the Age of Trump is how the Toddler in Chief crowds out attention that should be paid to the rest of the world. Full disclosure: This has affected me far more than I’d realized until recently. Among other things, a more disciplined focus on comparative political developments allows one to see how Trump is as much a symptom of global forces as he is a cause.
Filkins’s piece charts the rise of Modi and the Bharatiya Janata Party (BJP) in India. There are many reasons for the BJP’s rise, including the Congress Party’s incompetence and arrogance, as well as economic proposals that legitimately appealed to many Indians. Hindu nationalism, however, was also a crucial factor. Modi has fomented and weaponized that particular ideology. What Filkins clarifies for readers is how Modi’s 2019 reelection enabled him to take even more authoritarian actions that, among other things, hollow out the national bureaucracy.
9. Thomas Oatley, “Toward a political economy of complex interdependence,” European Journal of International Relations 25(4): 957-978. Let’s close with two entries that throw up some existential challenges to the entire field of political economy. The most important implication of Oatley’s paper is that, as I wrote back in May, “the half-life of our findings is much shorter than we realize. The work only lives on for a little while. After that, we might have to erase the board and start over again. And again. And yet again.”
10. Lukas Linsi and Daniel K. Mügge, “Globalization and the growing defects of international economic statistics,” Review of International Political Economy 26(3): 361-383; Jannick Damgaard, Thomas Elkjaer and Niels Johannesen, “The Rise of Phantom Investments,” Finance & Development 56(3): 12-14. Analysis is only as good as the theory and data being used. If the previous Albie winner suggested the limitations of theory, these two winners suggest that the data needs to be improved as well — or at least acknowledged to be imperfect. This holds with particular force for figures on foreign direct investment. The IMF paper reveals that close to 40 percent of what is being measured today is not actual FDI but rather the use of tax havens. As Linsi and Mügge note in their paper, “rather than assuming that some numbers are better than no numbers, the burden of proof that data is appropriate for analytical ends rests with analysts themselves.”
That is the perfect line to close out this humbling decade. Happy New Year!
[EDITOR’S NOTE: This post has been updated to note that Nils Gilman’s essay was published in the WorldPost.]