How Economic Ideas 15 years ago created Trump

By Margot Marston

In Great Transformations, Mark Blythe explains the importance of ideas in shaping our interests and the power they have to transform institutional order: both an empowering and terrifying thought, depending on the idea. It can be argued that through the ideas of the Republican party 15 years ago, interests were altered and gave rise to the most polarising figure in US politics today: Donald Trump. 

The Republican party, a strong adherent of free trade and neoclassical economic thought ensured the passage of a bill in 2000 which extended the status of permanent normal trade relations to China. Its aim was to to target the comparative advantage of cheap labor and promised greater economic prosperity for Americans. As a result of the expanded trade, the US outsourced, which economists estimate cost the US at least 2 million jobs in the first decade. Those mostly affected were men with high school level education that saw their wages fall by 15% (adjusted for inflation). A group today that firmly stands behind Trump and his anti-trade ideas and most importantly, more jobs. The initial idea of free trade has been cornerstone of Republicanism, but when this had unintended consequences and yielded economic uncertainty, a form of populist protectionism promising employment and anti-trade, a reversal of former “Washington mistakes,” took its place. “Make America great again,” the slogan ofTrump, the front-runner of the GOP uses the fear and anger harboured after the economic crisis in combination with antagonistic feelings towards China to his advantage to shape interests, and to promise an alternative solution: a change to existing institutions.

The Pseudo-family phenomenon in female prisons

By Margot Marston

In The Social Order of the Underworld, David Skarbek explains the rationality with which prison gangs emerged in male US prisons to provide governance and protection where established institutions failed. In the face of an exploding prison population, as more young, ethnically diverse, and violent men began to enter prisons the unwritten rules of the “convict code,” the prisoners had previously lived by, began to fail and extra-legal governance through gangs began to take its place. Female prison populations are generally far smaller and less violent than their male counterparts, yet does that necessarily mean in the absence of female prison gangs that there aren’t similar informal institution that maintain social order in female prisons?

Interestingly, a similar governance structure has emerged in female prisons, namely: pseudo-families. Pseudo-families are structures of social relationships formed among women in prison, which mirror family structures in broader society. Many of these familial groups co-exist and  provide comfort and protection amongst female inmates. Distribution of contraband among the  “family members” is common, as is protecting one another from intimidation and forced sharing of one’s resources. Leaders can be found within these pseudo-family structures and often take on the  more aggressive role of “husbands” and “fathers”, whereas more nurturing roles are taken on by “mother” figures.
These pseudo-families provide material and emotional support, a coping mechanism for women to navigate an unnatural and often temporary environment. The rationality hinges on the basic fact that all humans are social animals, to endure the feelings of humiliation, helplessness, and deprivation in prison these pseudo-families can provide some sense of normalcy and stability. Pseudo-families, like gangs, fulfil needs that the formal institution of the prison can’t provide them.

The Informal Institution of Guanxixue in China

By Margot Marston

In their study of informal institutions, Helmke and Levitsky (2004) explain the emergence of blat in the USSR which is often compared to a similar practice in China: guanxi. Both highly flexible idioms are defined as the use of personal networks for getting things done. Guanxi and blat are similar in their re-distributive functions in a state centralised economy, co-dependency with the condition of the shortage and ambiguity between social and instrumental use of the networks (Ledeneva 2003).

Guanxi, like blat proliferated under a communist/state-centralised systems as an accommodating informal institution. It created incentives for behaviour to alter the substantive affects of formal rules, contradicting the spirit, but not the letter of the law (Helmke & Levitsky, 2004).  However the tradition of guanxi, unlike blat, has a longer history. Guanxi can be traced back to Confucianism and carries with it a moral force of reciprocity and codifies the relationship and strengthens trust, kinship and social harmony. The observance of social form, loyalty, and emotional feelings carry further ethical dimensions associated with guanxi that have laid down the foundation for its persistence in the new consumer economy and are tied to a deeper sense of Chinese culture. 

However, guanxi’s recent shift into corruption has halted the universality of its beneficiaries flourishing in the nexus of the public and private, maintaining an inner circle of political and business elite as its primary beneficiaries.  This marked shift of the informal institution under market conditions has had harmful effects, as the highest social class has quietly accumulated public wealth and has subverted an institution that was initially aimed at compensating for formal order and aided in the manufacturing mutual exchange and manoeuvring through difficult circumstance in the Maoist era and 1980s. Trust and social capital in China carries great weight in the functioning of the Chinese economy, yet have also created an exploitative dimension of corruptive behaviour that brings into question whether guanxi has become a competing rather than accommodating informal institution.

Helmke, Gretchen, and Steven Levitsky. "Informal institutions and comparative politics: A research agenda." Perspectives on politics 2.04 (2004): 725-740.

Ledeneva, A. (2008). Blat and Guanxi: Informal Practices in Russia and China. Comparative Studies in Society and History, 50(1).