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"Is It a Platform? Is It a Search Engine? It's Chat GPT!," by Prof. Beatriz Botero Arcila, just published in our symposium on Artificial Intelligence and Speech; more articles from the symposium coming in the next few days.

The long-awaited judgement of the Court of Justice of the European Union in Case C-333/21 - European Super League Company has finally arrived. There is a lot to unpack, especially with respect to developments in competition law. Constitutional lawyers will, however, find particular interest in how the Grand Chamber dismissed Advocate General Rantos' pitch for a constitutional recognition of the European sports model based on Article 165 TFEU. This post focuses on this aspect of the European Super League judgment. It argues that while the Advocate General's construction was rejected, the Court still used this judgement to further define its own constitutional understanding of the European sports model, as well as to solidify its role as the primary interpreter of that model.

The EU Regional Competitiveness Index provides a tool for comparing development across different European regions, but overlooks how such regional competitiveness is achieved, and the long-term implications. Pieter Vanhuysse and Maarten Wensink argue that we need more sustainable and holistic models of economic success. The latest edition of the influential EU Regional Competitiveness Index (RCI 2.0) is out. Across a long list of dimensions, it …

This post is from a set of comments I gave at the NBER Asset Pricing conference in early November at Stanford.  Conference agenda here. My full slides here. There was video, but sadly I took too long to write this post and the NBER took down the conference video. I was asked to comment on "Downward Nominal Rigidities and Bond Premia" by François Gourio  and Phuong Ngo. It's a very nice clean paper, so all I could think to do as discussant is praise it, then move on to bigger issues. These are really comments about whole literatures, not about one paper. One can admire the play but complain about the game. The paper implements a version of Bob Lucas' 1973 "International evidence" observation. Prices are less sticky in high inflation countries. The Phillips curve more vertical. Output is less affected by inflation. The Calvo fairy visits every night in Argentina. To Lucas, high inflation comes with variable inflation, so people understand that price changes are mostly aggregate not relative prices, and ignore them. Gourio and Ngo use a new-Keynesian model with downwardly sticky prices and wages to express the idea.  When inflation is low, we're more often in the more-sticky regime. They use this idea in a model of bond risk premia. Times of low inflation lead to more correlation of inflation and output, and so a different correlation of nominal bond returns with the discount factor, and a different term premium. I made two points, first about bond premiums and second about new-Keynesian models. Only the latter for this post. This paper, like hundreds before it, adds a few ingredients on top of a standard textbook new-Keynesian model. But that textbook model has deep structural problems. There are known ways to fix the problems. Yet we continually build on the standard model, rather than incorporate known ways or find new ways to fix its underlying problems. Problem 1: The sign is "wrong" or at least unconventional.The basic sign is wrong -- or at least counter to the standard belief of all policy makers. In the model, higher interest rates cause inflation to jump down immediately, and then rise over time. Everyone at the Fed uniformly believes that higher interest rates cause inflation to go nowhere immediately, and then gently decline over time, with "long and variable lags." Larry Ball pointed this out 30 years ago. The behavior comes straight from the forward-looking Phillips curve. Lower output goes with lower inflation, relative to future inflation. I.e. inflation rising over time. To be clear, maybe the model is right and the beliefs are wrong. It's amazing that so much modeling and empirical work has gone in to massaging theory and data to conform to Milton Friedman's 1968 proclamation of how monetary policy works. The "long and variable lags" in particular are a trouble to modern economics. If you know prices are going up tomorrow, you raise prices today. But that's for another day. This model does not behave the way most people think the economy behaves, so if you're going to use it, at least that needs a major asterisk.  Well, we know how to fix this. You can see that sneaking lagged inflation into the Phillips curve is going to be a big part of that.  Christiano Eichenbaum and Evans, 20  years ago, produced a widely cited model that "fixes" this problem. It has a lot of ingredients. Most of all, it assumes that wages and prices are indexed. Firms and workers that don't get tapped by the Calvo fairy to change their price or wage nonetheless raise by observed inflation. This gives a Phillips curve with lagged inflation. Moreover, in preferences, investment, and this Phillips curve, CEE modify the model to put growth rates in place of levels. (More review in a three part series on new-Keynesian models here.) The result: If the funds rate goes down (right panel) unexpectedly, inflation goes down just a bit but then turns around and goes up a year later. (Several other authors get to the same place by abandoning rational expectations. But that has its own problems, and it's going to be hard to incorporate asset pricing that way. Much more in Expectations and the Neutrality of Interest Rates) Great. But notice that neither Gourio and Pho nor pretty much anyone else builds on this model. We cite it, but don't use it. Instead, 20 more years of NK theorizing studies different extensions of the basic model, that don't solve the central conundrum. Problem 2: Fed induced explosionsThe standard new-Keynesian model says that if the Fed holds interest rates constant, inflation is stable -- will go away on its own -- but indeterminate. There are multiple equilibria. The standard new-Keynesian model thus assumes that the Fed deliberately destabilizes the economy. If inflation comes out more than the Fed wishes, the Fed will lead the economy to hyperinflation or hyper deflation. Under that threat, people jump to the inflation that the Fed wishes to see. But the Fed does no such thing.  Central bankers resolutely state that their job is to stabilize the economy, to bring inflation back from wherever it might go. Despite thousands of papers with new-Keynesian equations written at central banks, if anyone were ever to honestly describe those equations in the introduction, "we assume that the central bank is committed to respond to inflation by hyperinflation or deflation in order to select from multiple equilibria" they would be laughed out of a job. This has been clear, I think, since 2000 or so. I figured it out by reading Bob King's "Language and Limits." My  "Determinacy and Identification" in the JPE 2011 was all about this. We've also known at least one way to fix it, as shown: fiscal theory. OK, I'm a broken record on this topic. Instead, we go on with the same model and its underlying widely counterfactual assumption about policy. Problem 3: The fit is terribleA model consists of a set of equations, with the thing you want to determine (say, inflation) on the left, the economic causes described by the model on the right, plus "shocks," which are things your model can't capture. In the explanation part, there are parameters (\(\sigma, \ \beta, \ \kappa, \ \phi\)), that control how much the things on the right affect the things on the left. The fit of new-Keynesian models is usually terrible. In accounting for economic variables (\(x_t,\) \(\pi_t, \) \(i_t \) here), the error terms (\(\varepsilon\)) are much larger than the model's economic mechanisms (the \(x,\) \(\pi\) on the right hand side). Forecasts -- predicting  \(\pi\), \(x\) ahead of time -- is worse. For example, where did inflation come from and why did it go away? Expected inflation hasn't moved much, and the economy just plugged along. Most of the rise and fall of inflation came from inflation shocks.  Related, the fit of the models is about the same amount of terrible for different values of the parameters. That means the parameters are "poorly identified" if identified at all. That means that the mechanisms of the model -- say, how much higher interest rates lower output, and then how much lower output affects inflation -- are weak, and poorly understood. In part this isn't often noticed because we got out of the habit of evaluating models by fit in the 1980s. Most models are evaluated, as I showed above for CEE by matching select "identified" impulse response functions. But as those response functions also explain small variances of output and inflation, it's possible to match response functions well, yet still fit the data badly, i.e. fit the data only by adding big shocks to every equation. I don't know of good fixes here. Old fashioned ISLM models had similar problems (See Sims 1980). But it is a fact that we just ignore and go on. The Phillips curve is a central problem, which has only gotten worse lately. Unemployment was high and declining throughout the 2010s, with stable inflation. Inflation came with high unemployment in 2021. And inflation fell with no high real interest rates, no unemployment, and strong growth in 2022-2023. But what will replace it? So where are we?Macro is surprisingly un-cumulative. We start with a textbook model. People find some shortcomings and suggest a fix. But rather than incorporate that fix, the next paper adds a different fix to the same textbook  model. One would think we would follow the path on the right. We don't. We follow the path on the left. This is common in economics. The real business cycle literature followed much the same path. After the King Plosser Rebelo stochastic growth model became the standard, people spent a decade with one extension after another, each well motivated to fix a stylized fact. But by and large the next paper didn't build on the last one, but instead offered a new variation on the KPR model. Posteriors follow priors according to Bayes' rule, of course. So another way of putting the observation, people seem to put a pretty high prior on the original model, but don't trust the variations at all. I sin too. In Fiscal Theory of the Price Level  I married fiscal theory with the new-Keynsian IS and Phillips curve, exactly as above, despite problems #1 and #3. Well, it makes a lot of sense to change one ingredient at a time to see how a new theory works. I'm unhappy with the result, but I haven't been able to move on to a new and better textbook model, which is what has occasioned several of these related posts.  Wę need a digestion. Which of the new ingredients are reliable, robust, and belong as part of the new "textbook" model? That's not easy. Reliable and robust is very hard to find, and to persuade people. There are so many to choose from -- CEE's smorgasbord, capital, financial frictions, heterogeneous agents, different expectation formation stories, different pricing frictions,  and so on. What's the minimal easy set of these to use? Part of the trouble lies in how publishing works. It's nearly impossible to publish a paper that removes old ingredients, that digests the model down to a new textbook version. The rewards are to publishing papers that add new ingredients. Even if, like CEE, everyone cites them but doesn't use them. I've asked many economists why they build on a model with so many known problems, and why they don't include known fixes. (Not just fiscal theory!) The answer is usually, yes, I know about all these problems, but nobody will bother me about them since every other paper makes the same assumptions, and I need to get papers published.     I went on a bit of a tear here as I referee lots of great papers like this one. Every part of the paper is great, except it builds on a model with big flaws we've known about for 30 years. It feels unfair to complain about the underlying model, since the journal has published and will publish a hundred other papers. But at what point can we, collectively, scream "Stop!" The new-Keynesian model has been the standard model for an astonishing 30 years. None of ISLM, monetarism, rational expectations, or real business cycles lasted that long.  It's even more amazing that it is so unchanged in all this time. It is definitely time for a better textbook version of the model! Maybe this is a plea for Woodford, Gali or one of the other NK textbook authors, which much better command of all the variations than I have, to bless us a new textbook model. Or, perhaps it's time for something totally new. That's not fiscal theory per se. Fiscal theory is an ingredient, not a model.  You can marry it to new-Keynesian models, as I, Leeper, Sims, and others have done. But you can also marry it to old ISLM or anything else you want. Given the above, maybe there isn't an existing modification but a new start. I don't  know what that is. (My comments also have some similar comments about term premiums and how to think about them, but this post is long enough.) Update:Twitter correspondents Stéphane Surprenant and Tom Holden point me to The Transmission of Monetary Policy Shocks by Silvia Miranda-Agrippino Giovanni Ricco in the AEJ Macro, and Inflation, output and markup dynamics with purely forward-looking wage and price setters by Louis Phaneuf, Eric Sims, and Jean Gardy Victor in the European Economic Review. The former is a VAR with high frequency measurement of the monetary policy shock. And.. Source: Miranda-Agrippino and RiccoThe price level as well as the inflation rate can jump down immediately when the interest rate rises! (I think the graph plots the level of CPI, not growth rate.) That's even stronger than the baseline model in which the price level, being sticky, does not move, but the inflation rate jumps on the interest rate rise. The latter is a nice theoretical paper. It adds a lot of the CEE assumptions.  I overstated a great deal that others have not used these ingredients.  They are used in these "medium scale" models, just not in "textbook" models. However, it gets rid of indexed prices and wages with purely forward looking Phillips curves. It adds intermediate goods however. This makes prices changes work through the network of suppliers adding interesting dynamics, which has always struck me as a very important ingredient. And...Source: Phaneuf, Sims ,and VictorThe main estimate is the dark line. Here you see a model with the conventional response: inflation does not move on impact, and increases some time after the interest rate rise.  So, we can switch places! Estimates can replicate the conventional model, with an instant inflation response. Models can replicate the conventional estimates, with a slow inflation response. This one is much prettier than CEEs. 

Drawing on the findings of a workshop on making translational research design principles the norm for European research, Gabi Lombardo, Jonathan Deer, Anne-Charlotte Fauvel, Vicky Gardner and Lan Murdock discuss the characteristics of translational research, ways of supporting cross disciplinary collaboration, and the challenges and opportunities of adopting translational principles in the social sciences and … Continued

The decarbonisation of Europe must be accelerated—which requires a new European social model.

In a ruling issued on April 17, the European Data Protection Board (EDPB) issued a decision that could unravel the very viability of social media company business models.

Since March 2024, the undertakings Alphabet/Google, Amazon, Apple, Byte-Dance/TikTok, Meta, and Microsoft must comply with the obligations of the Digital Markets Act (DMA). Within the first month after the 6-months implementation period has ended, the European Commission opened investigations against Alphabet/Google, Apple, and Meta for non-compliance with the obligations in the DMA. All proceedings can be traced back to related competition law cases. However, only two proceedings follow the same reasoning as their competition law role models, while the case against Meta reveals that the approaches under the DMA can and will deviate significantly to those under competition law and data protection law.

This blogpost unpacks some of the 'democratic paradoxes' that come with the 'Defence of Democracy' package (DoD package), which the European Commission published on Tuesday, 12th of December. While a Recommendation on promoting civic engagement and citizen participation (Civil Society Recommendation) reflects positive changes in the Commission's conception of democracy, the 'Directive establishing harmonised requirements in the internal market on transparency of interest representation carried out on behalf of third countries' (Foreign Funding Directive) directly contradicts this emphasis on a more citizen-centred model and is illustrative of a broader dilemma: how to defend democracy in the EU's multi-level constitutional space, while keeping the sensitive legal tools for doing so out of the hands of the enemies of democracy that are already – and for the time being irreversibly – on its inside.

On 6 November 2023, the Italian Prime Minister Giorgia Meloni and the Prime Minister of Albania Edi Rama announced the signing of the Agreement for Strengthening of Collaboration in the Field of Migration. The agreement proposes a relocation of asylum seekers who are rescued at sea by Italian vessels to two centres that would be built in Albania and could host up to 3'000 people. This is part of a broader trend whereby European governments seek to move asylum procedures outside of their territory. At the same time, the agreement contains some innovations compared to previous proposals. Indeed, this move has been hailed as a "model and example for other collaboration agreements of this kind" by the Italian Prime Minister. This article contends that this is unlikely to be the case: the legality and feasibility of offshoring asylum procedures remain dubious at best.

Bertrand Badie on the Trump Moment, the Science
of Suffering, and IR between Power and Weakness



Lire en français




IR retains a traditional focus on the
game of power between states as its defining characteristic. But what, so asks Bertrand
Badie, if this means that our discipline is based on a negation of our humanity?
A giant in Francophone IR, Badie has labored to instead place human suffering
at the center of analysis of the international, by letting loose sociological
insights on a truly global empirical reality. In this Talk, Badie—amongst others—challenges the centrality of the idea of
state power, which makes little sense in a world where most of the IR agenda is
defined by issues emanating from state weakness; argues for the centrality of
suffering to a more apt IR; and uses this to contextualize the Trump Moment.




Print version (pdf) of this Talk



What is (or should be), according to
you, the biggest challenge / principal debate in current International
Relations? What is your position or answer to this challenge / in this debate?



Unquestionably, it would be the matter of change. It is time to conceptualize,
and further than that, to theorize the change that is happening in the field of
International Relations (IR). Humans have always had the feeling that they are
living in a period of upheaval, but contemporary IR is really characterized by several
landmarks that illustrate the drastic extent of change. I see at least three of
them.



The first one concerns the inclusive nature of the international system.
For the first time in the history of mankind, the international system covers
nearly the whole humanity, while the Westphalian system was an exclusively European
dynamic in which the United States of America entered to turn it into a system,
that I would call, Euro-North-American.



The second element, around which publications abound (see notably Mary
Kaldor's work, Theory Talk #30), is the deep mutation of the nature of conflict. War used to be, in
the Westphalian model, a matter of competition between powers. Today we have
the feeling that weakness is replacing power, in that power cannot any longer
function as central explanatory term of conflictual situations, which are
rather manifestations of state weakness. Think of 'failing' or 'collapsing'
states, which refers to the coming apart of nations that have been built badly
as well as the deliquescence of social ties. This new form of conflictuality
completely turns the international environment upside down and constitutes a
second indicator of transformation.



The third aspect concerns mobility. Our international system used to be
fully based on the idea of territory and boundaries, on the idea that fixity
establishes the competences of States in a very precise way. In this
perspective, the state refers to territory—as the definition given by Max Weber
states very clearly—but today this territorial notion of politics is challenged
by a full range of mobilities, composed of international flows that can be
either material, informational, or human.



These are three indicators illustrating a deep transformation of the
inner nature of IR that encourage me to speak about 'intersocial relations'
rather than 'interstate relations'. The notion of interstate relations no
longer captures the entirety of the global game. Our whole theory of IR was
based on the Westphalian model as it came out of the peace of Westphalia, as it
was confirmed by the accomplishment of the nation-state construction process
and as it dominated the historical flow of international events until the fall
of the Berlin wall.



Until the fall of the wall, all that was not related to Europe or to the
United States of America, or more precisely North-America, was simply called 'periphery',
which says enough. Today, by contrast, the periphery is central at least
regarding conflictuality. We should therefore drop our Westphalian prism and
build up new analytical tools for IR that would take these mutations as their
point of departure. Doing away with our Westphalian approach to IR would mean
questioning both our classical IR theories and questioning the practical models
of action in international politics, which means the uses of diplomacy and
warfare.





How did you arrive at where you
currently are in your thinking about International Relations?



You know when we write, when we work, we are first of all influenced by
our dissatisfaction. The classical Westphalian approach to IR, as I said
earlier, did not satisfy me as I had the feeling that it was focusing on events
that no longer had the importance that we kept giving them—for instance the arms
race, great power politics, or the traditional diplomatic negotiations—while I
was seeing, maybe this was the trigger, that the greatest part of suffering in
the world was coming from places that IR theory was not really covering.



I have always told my students that IR is the science of human suffering.
This suffering exists of course where we are—in Europe, in North America, they
exist everywhere in the world—but the greatest part is outside of the
Westphalian area, so the classical approach to IR gives a marginal and
distorted image. Africa and the Middle East seen through the Westphalian prism are
a dull image, strongly different from the extraordinary wealth, both for good and
bad, that these areas of the world have. I've also always held that in a world
where 6 to 9 million people starve to death each year, the main foci of traditional
IR were derisory. Even terrorism, to which we collectively attribute so much
importance, hardly comes near how important a challenge food security is.



My three latest books take a stand against traditional IR theories. In Diplomacy of
Connivance (2012) I tried to
show that the great power game is really a game way that is much more
integrated than we usually say and that this game plays out in all multilateral
fora. There is indeed a club, and that is precisely what I wanted to describe,
a club of powers—one which results to the detriment of less powerful members in
the international system.



In Le Temps des humiliés ('the
era of the humiliated', 2014), I tried to crystallize what the classical theory
could not express, which is domination seen through the lens of the dominated,
humiliation as felt by the humiliated, violence as experienced by the
desperate. For instance, even if we look at powers as accomplished as China
today—sharing the first place with the USA in terms of GDP—we have to admit
that their historical experience of humiliation constitutes a huge source of inspiration
when it comes to the elaboration of its foreign policy.



And then, in my last book Nous ne
sommes plus seuls au monde ('we are no longer alone in the world', 2016), this
critique was even more explicit. We are writing an IR that encompasses only about
one billion of human beings, while forgetting all the others. Today it is
simply no longer true that these old powers are setting the international
agenda. Global politics today is written by the little, the weak, the dominated;
often with recourse to extreme forms of violence, but this needs to be analyzed
and understood, which would mean to totally change the IR theory.



We should not forget that in large part, IR theory was a given as the USA
triumphed in 1945. The well-known 'great power politics' that dominates
traditional IR theory, inaugurated by Morgenthau and supported by so many others,
described what was true at that time: the ability of American power to set us
free from the Nazi monster. Today the challenge is strongly different, and it
is by the way meaningful that two of the greatest American internationalist
political scientists, Robert Keohane (TheoryTalk #9) and Ned Lebow (Theory Talk #53),
have both written books that elude to the end of this global order
(respectively After Hegemony and Goodbye Hegemony). Well what interests
me is exactly to dig into what comes after hegemony.





What would a student
need to become a specialist in International Relations or understand the world
in a global way?



First of all, I would advise them to rename their science, as I said
earlier, and to call it intersocial relations. The future of what we call IR
comes down to the ability to understand the extremely rich, multiple and
diversified interactions that are happening among and across the world's
societies. It does not mean that we have to completely abandon the state-centric
perspective, but rather dethrone states from the middle of this multiplicity of
actors in order to realize how very often these states are powerless when faced
with these different actors. That would be my first advice.



My second advice would be to look
ahead and not back. Do not let yourself be dominated by the Westphalian model,
and to try to build up what we need—since almost nothing has been done yet
today to construct this post-Westphalian, meta-Westphalian model. Beyond power,
there are things that we still misidentify or overlook while they are the driving
forces of today's and tomorrow's IR. From this point of view, sociology could
prove particularly useful. I consider, for instance, that Émile Durkheim is a very important inspiration to understand the
world today. Here is an author to study and to apply to IR.



The third advice that I would give them would be to not forget that IR
or intersocial relations are indeed the sciences of human suffering. We should
be able to place suffering at the core of the thinking. We've lost far too much
time staring at power, now it is time to move on to place human suffering at
the center. Why? First of all because it is ethically better; maybe will we be
able to learn from it? But also because in today's actual international
politics suffering is more proactive than power, which is not necessarily
optimistic but if recognized, would allow us a better questioning of new forms
of conflictuality. Perhaps unfortunately, the international agenda is no longer
fixed with canons, but with tears. Maybe this is the key point on which we
should concentrate our reflection.



Your insistence on placing suffering at the center of
IR scholarship seems to place you firmly alongside those who recognize "grievance" ratherthan "greed" as a central logic of international politics. What do you make of this parallel?



You are right: the idea of grievance, of recrimination, is a structuring
logic of the international game today. We did not see it coming for two
reasons. First of all because our traditional analysis of international
politics presupposed a unity of time, as if the African time, the Chinese time,
the Indian time and the European time where all identical. Yet this is
completely wrong because we, in our European culture, have not understood that
before Westphalia there were
political models, political histories, that profoundly marked the people that would
then shape contemporary politics. Remember that China is 4000 years of empire,
remember that precolonial Africa was composed of kingdoms, empires,
civilizations, philosophies, arts... Remember that India also is multi-millenary.
The Westphalian time came to totally deny and crush this temporality, this
historicity, almost in a negationist way, which means that, in the spirit of
those who were defending the Westphalian model, only this model was associated
to the Renaissance; and that the age of enlightenment and reason with a big R
had a calling to reformat the world as if it were a hard drive. This was a
senseless bet, a bet for which our European ancestors who led it had excuses
because at that time we did not know all these histories, at that time we did
not have all the knowledge we today have of the other and thus we simply
resolved it, through the negation of alterity. Yet, IR ought on the contrary aspire
to the accomplishment of alterity. Inevitably, all those who saw themselves
denied their historicity, over several centuries and even several millenaries,
accumulated a feeling of recrimination, of particularly deep grievances.



The second element is that all of this happened in a context of
disequilibrium of power resources, linked to different factors that reflected
indeed the fact that at a given moment of time western powers were both
literally and figuratively better armed than other societies. Abovementioned negation
of alterity was mapped onto, and amplified, by the forceful imposition of a
multilateral system that turned into the worst situation, into a proclaimed
hierarchy of cultures; as a result and there were, as Jules Ferry put it in the France
of the 19th century, 'races'; as in, 'We have the obligation to
educate inferior races'. It is not the beginning of history, but it is the
beginning of a history of humiliation. And through subsequent waves of globalization,
this humiliation has turned into a central nerve running through international
life. A nerve that has been used by both the powerful, who made a tool out of
humiliating the others to better dominate them (think here of the opium wars, colonization)
and simultaneously a nerve that fed the reaction of mobilization in the extra-Westphalian
world by those that had to stand up against those who were humiliating them. So
you see how it truly lies at the basis of IR. In my mind, it became a forceful paradigm,
it explains everything, even though others factors continue to weigh in on
actual dynamics.



In order to appreciate all this, we need a sociological approach, which
has for me two aspects. Both these aspects must be considered together for the
approach to be well understood. The first one is a timeless aspect, which is to
consider that everywhere and in all eras politics is a social product. Politics
cannot be understood as somehow outside society. This I would say contradicts the
majority of IR scholars, who believe excessively in the autonomy of politics
and of the state—even if only for analytical purposes. The second element of
this sociological approach is the historical or temporal component. That is
what I was talking about earlier: with globalization the social fabric strongly
progressed compared to the political fabric, and considering that intersocial
relations grew, we need a sociological approach to understand them.





Do you think that the Trump period constitutes a
fundamental break with the conduct of IR?



Trump himself maybe not, but what he represents certainly. If we look at
the USA today we see, since the new millennium, three models succeeding each
other. After 11-09 there was a time of neo-conservatism where globalization was
considered by American leaders as a means or maybe a chance to universalize the
American model, willingly or not. By force, as was the case in Iraq in 2003.
This model failed.



This lead to a second model which I would describe as a liberal model,
neo-liberal, incarnated by Obama who learnt from the lessons of the failure of neo-conservatism,
and had the courage to question the hypothesis hitherto considered as indisputable
of American leadership in the world, and who considered that the USA could win
only through soft power or smart power or free-trade. That is the reason why
Obama was just a little bit interventionist and was counting a lot on the TTIP
and on all these transregional agreements.



With Trump we arrive at a third model, one that I would call
neo-nationalist, that looks at globalization in a different way. In his perspective,
globalization constitutes a chance to satisfy the national American interests. The
idea of the national comes back after a long interlude of a globalizing vision.
It does not mean that we are not interventionist anymore. What happened in
Syria proves it. It means that we will intervene not according to the needs of
globalization but rather to American interests. It is about sharing a strong
and powerful image of the USA on the one hand and on the other serving the
concrete interests of the American people and nation.



This neo-nationalist model is not defended only by Trump, that is the
reason why I was saying that we should not consider Trump individually. We find
it exactly the same way with Putin. We find it by many other world leaders,
such as Erdogan or Duterte or Victor Orbán—really different figures—or Marshal
Sissi in Egypt.



We find it as well in attitudes, for instance Brexit in Great Britain, in
right-wing neo-populism in Europe: Ms. Le Pen, Mr. Wilders...  or in a certain left-wing neo-populism as
Mélenchon in France. It is in the air, seeming almost a passing fad. But it
constitutes perhaps a double rupture within IR. First of all because since the
emergence of globalization, let's say around the 70's, the national interest as
a thought category was bit by bit replaced with approaches in terms of collective
goods. Today by contrast we witness the abandonment of this image of collective
goods for a return to the national interest. This is very clear in Trump's renouncing
of the COP21 of Paris. At the same time, second, this constitutes some form of the
rehabilitation of the idea of power, which again seeps into the language of IR.




You know the IR scholar is not a neutral person, we have to use our science
towards positive action and for the definition of sound public policies. Going
against the idea of collective goods, casting doubt on the ideas of human
security, environmental security, food security, and sanitary security is
extremely dangerous because the composition of national interests and egoism
will never converge to a globally coherent policy. It is the weak that will
suffer first.



And the same time that power is reinstated as a driving principle of IR
praxis, the paradox is that great powers are becoming more and more powerless. If
we look only since 1989, and ask, when did state power ever triumph in IR?
Where did the strongest ever find a battleship enabling him to resolve a
problem to his benefit and according to his goals? Never. Not in Somalia, not
in Afghanistan, not in Iraq, not in Syria, not in Palestine. Nowhere. Not in
Sahel, not in the Democratic Republic of the Congo. Nowhere. So I am a little
worried, indeed, about this naive and old-fashioned rehabilitation of state
power.





Can we say that globalization, or rather the ambition of
integration at either the European or global scale, has failed? Can today be
considered a good moment to bury of the idea of integration?



I do not like burials, it is not an expression that I would use, but
your question is very pertinent. For around twenty years I have been saying and
teaching that regional integration constituted an intermediary and realistic
level of adaptation between the era of the nation state and that of globalization,
which means that I believed for a long time that regional integration was the
final step towards a global governance of the world.



I thought for a long time that what was not possible at the global
scale, a global government, was possible at the regional level and this would already
strongly simplify the world map and thus go in the way of this adhesion to the
collective dimension required by globalization. Nevertheless, not only Europe
suffers a setback, but all the regional constructions in the world are in a
similar situation. Mr. Trump openly shoves the NAFTA agreement, MERCOSUR is
down as every State that is composing it has recriminations against it, and we
could extend the list… All the forms of integration that have been set by
Chavez around his Bolivian ideal have ceased to exist; Africa progresses very
slowly in terms of regional integration; the Arab Maghreb Union, which is an
essential device, totally failed. Thus indeed the situation does not look good.



In the case of Europe there is a double phenomenon: on the one hand,
there is this really grave failure due to the secession of Great Britain from
Europe, and then there is a general malaise of the European model. Brexit is
really rare, if you look at the contemporary history of IR it is simply
unprecedented that a state shuts the door on a regional or global organization.
As far as I remember, it only happened a few times before, with Indonesia in
the UN in 1964, which lasted only 19 months. It happened with Morocco with the
African Union and Morocco is currently reintegrating in it. This British
situation came as a thunderbolt, worsened by the fact that paradoxically it is
not so much because of regional integration that the British voted against the
European Union. It was more from an anti-migration, xenophobic and nationalist
(in reference to that nationalism trend that I was earlier talking about)
perspective and what is dramatic is that we can clearly see that the
nationalist sentiment is really attacking the inner principles of regional
integration.



I was saying that in the European case there are internal problems which
run even deeper than the British defection, and I will underline at least two
of them. First of all there is a democratic deficit of Europe, meaning that
Europe was not able to match electoral spaces with the ones where decisions get
made; people still vote at the national level while the decisions are taken in
Brussels. In consequence, democratic control over these decisions is extremely
weak. How to resolve this equation? And here the breakdown is total since very
few people are coming up with suggestions. The other factor of this crisis is,
according to me, the fact that Europe has been built with success after World
War II in a progressive way around association and indeed, Durkheim proved it,
the integrative logic makes sense. Unity makes strength and it did make
strength once in Europe to prevent war, a third World War, and secondly to
encourage the reconstruction of European countries where economy was totally
collapsed. This time is now over and it is the fault of Europe to not have
known how to recontextualize itself, to react to the new contexts.



Paying one more time tribute to Durkheim who guessed it right, Durkheim
said that there are two ways of constructing social ties: around association
and around solidarity. I think that the time of association is now over, we
should enter in the time of solidarity, which does not consist in saying 'We
Germans are associated with Greece', but rather 'We Germans are joined together
with Greece because we know that if Greece collapses, in a long term
perspective, we will suffer the consequences'. Thus this idea of fundamental
unity is an idea that has been a little bit overlooked, abandoned by the
Europeans and now they find themselves in a complete paralysis.





Is the decolonization period still having an impact on
contemporary IR?



Oh totally, totally. I would first say because it is a major event in
the field of IR, which made the World switch from 51 sovereign States of the UN
in 1945 to 193 today but above all, a very aggravating circumstance, is that
this decolonization has been a complete failure and this failure weighs
enormously on international politics.



It has been a failure because decolonization assumed the format of copying
the western state model in countries that were accessing independence, while
this model was not necessarily adapted, which provoked a proliferation of
failed states, and these collapsed states had a terrible effect on IR.



Secondly because decolonization should have led to the enrichment and to
the substantial modification of multilateralism, by creating new institutions
able to take charge of new challenges resulting from decolonization. Yet,
except the creation of UNCTAD in 1964 and of
UNDP in 1965, there have been very little innovations in terms of global governance.
Thus global governance remains dominated by what I earlier called 'the club',
which means the great powers from the north, and this is very dysfunctional for
the management of contemporary crises. Then also because the ancient colonial
powers happen to find new forms of domination that did somehow complicate the
international game. Thus in fact decolonization is a daily aspect of the crisis
that the international system faces today.





In conclusion, which question should we have asked? In
other terms, which question have we forgot?



I found your questions very pertinent as it allowed the discussion of themes
that I consider essentials. Now, the big problem that makes me worry is the
great gap between the analysts and the actors in IR. I am not saying that the
analysts understood everything, far from it, but I think that IR theorists are
very conscious of some of these transformations I have mentioned. If you look
at some great authors such as James Rosenau, Ned Lebow or Robert Keohane, to
name just a few—there are way more—they all contributed to the reconstruction
of IR.



What truly strikes me is the autism of political actors, they think that
they are still at the time of the Congress of Vienna and that is an
extraordinary source of tension. Thus as long as this spirit of change does not
reach political actors, maybe Barack Obama was the first one to enter this game
and then the parenthesis was closed, as long as there will not be this move
towards the discovery of a new world, maybe as well through the inclusion in
our reflection about the international fabric such partners as China, it is not
normal that this very powerful China does not have any choice but to share the
paradigm and the model of action proper to occidental diplomacy, as long as we
would not have done this precise effort, well, we will remain in the negation
of the human, and that is the essential problem today, we are unable to
understand that at the end there is just one unity, which is the human being.



I had the chance to visit 105 countries and everywhere I met the same
men and the same women, with their pain, with their happiness, their hardship,
their joy, their sorrow, their needs that were everywhere identical. As long as
we will not understand that, well, we will be living in a world that is in total
contradiction with what it is truly and essentially. We will live in a world of
artifice and thus a world of violence.



Related links  



Read Badie's
The Arab Spring: A starting point (SER
Études 2011) here
(pdf)



Print version (pdf) of this Talk

Much has already been written about the emergence of "fast fashion": clothing retailers that are able to translate trends seen on the world's fashion runways... to a store near you in a matter of weeks. The success stories of Sweden's H&M and Spain's Mango have become the stuff of business legend in upending the fashion industry in recent decades. It was probably only a matter of time that onetime suppliers in China would become the firms at the cutting edge of evolving to customer's whims and desires that move so quickly. Younger women should be familiar with China-based online retailer Shein. Reflecting the democratization of fashion brought by the online world, it's not the big fashion houses that set today's trends but rather posts on the likes of Instagram and Pinterest. In keeping with the times, Shein is almost entirely an Internet selling pure play instead of having bricks-and-mortar stores still like H&M or Zara. Rest of the World writes more about this emerging business success story:Shein eventually expanded to offer apparel for women, men, and
children, as well as everything from home goods to pet supplies, but its
core business remains selling clothes targeted at women in their teens
and 20s — a generation who grew up exploring their personal style on
platforms like Instagram and Pinterest. 



Its clothes aren't intended for Chinese customers, but are destined
for export. In May, the company became the most popular shopping app in
the U.S. on both Android and iOS, and, the same month, topped the iOS rankings in over 50 other countries. It's the second most popular fashion website worldwide.By 2020, Shein's sales had risen to $10 billion, a 250% jump from the year before, according to Bloomberg. In June, the company accounted for 28% of all fast fashion sales in the U.S. — almost as much as both H&M and Zara combined. The same month, a report circulated that Shein was worth over $47 billion, making it one of the tech industry's most valuable private startups.Think of Shein more as an Amazon-a-like instead of comparing it to the established fast fashion names in terms of its business model: At the heart of these issues is Shein's aggressive business model.
Comparisons to fast-fashion giants like H&M miss the point: it's
more like Amazon, operating a sprawling online marketplace that brings
together around 6,000 Chinese clothing factories. It
unites them with proprietary internal management software that collects
near-instant feedback about which items are hits or misses, allowing
Shein to order new inventory virtually on demand. Designs are
commissioned through the software; some original, others picked from the
factories' existing products. A polished advertising operation is
layered over the top, run from Shein's head offices in Guangzhou.Ethical concerns with work conditions in Chinese garment factories aside, Shein's advantage is being able to call on PRC suppliers to shift even more quickly than European fast fashion firms:For years, European brands like Zara and H&M have embodied fast
fashion, shortening the route from runway to storefront from months to
weeks. But Shein isn't chasing runway trends — rather, it often knocks
off items seen on TikTok and Instagram, where hype cycles move
significantly faster. Whereas Zara typically asks manufacturers to turn
around minimum orders of 2,000 items in 30 days, Shein asks for as few
as 100 products in as little as 10 days. "They want factories to be much
more nimble," said Lu.If speed is Shein's competitive advantage, it must adapt to even quicker cycles going forward. Or, will someone even speedier supplant Shein just as it has H&M and Zara (which outran department stores before them)? Something else I thought the article could have shed more light on is how Shein is working around supply chain snags like the US-China trade war, intermittent COVID-19 lockdowns in the PRC, and rising shipping costs.

Another UniversalismSeyla Benhabib and the Future of Critical TheoryEd. by Stefan Eich, Anna Jurkevics, Nishin Nathwani & Nica Siegel(Columbia University Press, 2024)446 pagesFrom the introduction:"For Benhabib, any universalism today must emerge from the concrete struggles of individuals navigating the fractured lifeworlds of our global society. Embracing that idea, the essays in this volume cover a broad terrain of debates that are the forefront of critical theory today: the relationship between democracy and cosmopolitanism, the role of law in emancipatory struggles, the task of deprovincializing the European approach to critical theory, man's domination of nature, and the ever-elusive relationship between Hannah Arendt and the Frankfurt School. It is a testament to the range of Benhabib's oevre that all of these themes should emerge from engagements with her work." (Anna Jurkevics)ContentsPrefaceIntroduction: In Search of Another Universalism - Anna JurkevicsPart I: Critique, Norm, and Utopia1. Benhabib and Habermas on Discourse and Development - Thomas McCarthy2. Normativity and Reality: Toward a Critical and Realistic Theory of Politics - Rainer Forst3. Loss of World, Not Certainty - Carmen Lea Dege4. Nature as a Concrete Other - Umur Basdas5. "To Burst Open the Possibilities of the Present" [paper] - Bernard E. HarcourtPart II: Thinking With and Against Arendt6. "Thinking With and Against" as Feminist Political Theory - Patchen Markell7. Arendt and Truth - Gaye İlhan Demiryol8. Understanding Eichmann and Anwar - Sonali ChakravartiPart III: Democratic Iterations and Cosmopolitanism9. Democracy Without Shortcuts - Cristina Lafont10. Another Republicanism: Dissent, Institutions, and Renewal - Christian Volk11. Three Models of Communicative Cosmopolitanism - Peter J. Verovšek12. At the Borders of the Self - Paul Linden-RetekPart IV: Jurisgenerativity13. Back to the Future? Critical Theory and the Law - William E. Scheuerman14. The Unfinished Revolution - Eduardo Mendieta15. Genocide and Jurisgenesis - Max Pensky16. Jurisgenerativity in the Age of Big Data - Matthew LongoPart V: Deprovincializing Critical Theory17. Pachamama's Rights, Climate Crisis, and the Decolonial Cosmos - Angélica María Bernal18. What Is the Other in Seyla Benhabib's Another Cosmopolitanism? - Drucilla Cornell19. Border Deaths as Forced Disappearances [paper] - Ayten Gündoğdu20. Gender Trouble - Shatema Threadcraft & Brandon M. TerryPart VI: Philosophy and Friendship21. Fragments of an Intellectual Autobiography - Seyla Benhabib22. Swimming - Carolin Emcke

Today we are joined once again by Colin Coulter, of National University of Ireland, Maynooth. You might remember Colin from way back in Episode 8. That was like. 3 years ago! I didn't even know I'd been doing this for three years!



But I wanted to ask Colin back on this week to talk about the recent election in Ireland. Because it turns out this wasn't any old election in Ireland! In a stunning result, Sinn Fein, a party which probably more than any other symbolizes the troubled history that many Irish people would sooner forget, surged from the 23 seats it won in the 2016 election, to 37 seats. Now, considering that prior to 2016, Sinn Fein typically never had more than 4 or 5 seats, the momentum here is clear. But it is now the second largest party in the Dail, just one seat behind Fianna Fáil (38 seats). Yet Sinn Fein isn't just a relic of Ireland's Civil War history. While it is a party with a complicated and often contradictory set of ideological commitments, the 2020 election result (ironically!) suggests a major realignment of the Irish political spectrum, away from Civil War politics, and towards something much more like the traditional European left-right model.



Colin Coulter is going to talk us through it all in just a moment. Before we get to the interview tho, Colin asked me to mention that he has a new article he has out, with Francisco Arqueros-Fernández, called "The Distortions of the Irish 'Recovery.'" You can find it in the Spring 2020 issue of the journal Critical Social Policy:



https://journals.sagepub.com/doi/10.1177/0261018319838912



As ever, if you have any feedback, you can reach us on Twitter @occupyirtheory. If you like this episode, please leave us a positive review on Apple Podcasts, or your preferred podcast provider. This is an occasional show. Its free. We never ask you for money. But we do want to spread the word.

 Each day brings news of a distressed US bank about to take leave for the Great Central Bank In the Sky. Aren't US banks supposed to be safer now with the advent of greater macroprudential regulation? A common way to gauge the soundness of banks is through the use of stress tests that simulate how these financial institutions would fare in the wake of financial, well, stress. While Americans bicker about whether the 2019 loophole exempting midsize banks holding between $100 to $250 billion in assets from stress testing led to their currently precarious situation, even that may not have saved them.Comparatively speaking, stress tests conducted Stateside may not be sufficiently rigorous in simulating scenarios that are detrimental to financial sustainability. It is fairly obvious that the higher rates we have these days are causing mismatches between what banks earn and what they must pay out. Oddly, however, recent US stress tests have not involved rising but rather falling interest rates. See the illustration above and commentary from the Peterson Institute:But it's not only for 2023 that this feature appears. Indeed, every
severely adverse scenario used by the Fed since 2015 has the 3-month
Treasury bill rate ending up at 0.1 percent. Many historic episodes of
severe economic downturn have indeed been accompanied by low interest
rates, as the Fed used its policy tools to support aggregate demand. But
it is a bit strange that not since 2015 has a stress test involved
rising interest rates.
One of the advantages of stress testing the banks every year is that
their robustness to a variety of contrasting stresses can be assessed.
Just repeating a broadly similar scenario year after year misses the
opportunity to provide supervisors with potentially important
information on vulnerabilities. It can also result in policymakers
assuming that the banks are robust to more types of shock than is really
the case.
Yet pointlessly repeating a broadly similar scenario each year is exactly what the Fed has been doing, as we can show here.Have other regulatory authorities been administering stress tests as lax and unrealistic as American ones? Thankfully for the rest of the world, the answer is no. The European Central Bank--and remember that Switzerland is not an ECB member for those thinking of a certain defunct bank--has done its homework by simulating interest rate rises just as we are experiencing now:Overall, our [ECB]  analysis shows that the euro area banking sector would
remain broadly resilient to a variety of interest rate shocks. That
would hold also under a baseline scenario of an economic slowdown in
2023 with the risk of a shallow recession, such as the scenario included
in the December 2022 Eurosystem staff macroeconomic projections.
Profitability would increase overall, driven by [higher] net interest income.
However, provisions would also increase, reflecting potential
difficulties for borrowers. Results for the overall impact on solvency
remain on average fairly muted with great heterogeneity across banks,
within and across different business modelsThe same hold true for Australian banks. Down under, their stress tests have likewise gamed out the implications of higher interest rates:Higher inflation and higher interest rates could lead to larger credit losses despite continued, albeit
slower, economic growth. The stress testing model can provide insights into the magnitude of potential
credit losses and how important they could be for the capital positions of large and mid-sized banks. The
model applies two principal stresses to examine the resilience of the banking system to higher inflation
and interest rates:
Higher inflation and higher interest rates on mortgages squeeze households' real incomes, making
it more difficult to service debt, which could lead to more defaults and larger credit losses for
banks. Similarly, higher input costs and higher interest rates passed onto business loans can make it
more difficult for businesses to service their debts, potentially leading to higher default rates
(see 'Chapter 2: Household and Business Finances in Australia'). Higher interest rates typically reduce the prices of housing and commercial property that are held as
collateral by banks against their loans, which increases LGDs as well as PDs on loans.  Having conducted these sorts of tests well before 2023, Australian banks look to be on firming footing. While we hope that contagion does not spread to the Eurozone and the land down under, it certainly bears questioning why US stress tests did not involve scenarios involving deteriorating financial conditions due to sustained central bank rate rises in the face of persistently elevated inflation. While the subject matter can come across as esoteric, such things do impact Joe Average since taxpayers will ultimately foot the bill for cleaning up the mess caused by unstressful stress tests giving false comfort to financial authorities about the soundness of banks they regulate.  UPDATE 1: Also see Krishna Guha's commentary in the FT. He warns that while the ECB did conduct asset side stress tests (e.g., holding low-yielding securities), it did not test how vulnerable Eurozone banks were to depositor flight like what has happened Stateside. That said, European depositors tend not to move their money around.UPDATE 2: Former Federal Deposit Insurance Corporation chief Sheila Bair says the same thing about the latest batch of stress tests that banks passed: They did not model rising interest rates.