287 | Jean-Paul Faguet on Institutions and the Legacy of History

0:00:00.0 Sean Carroll: Hello everyone, welcome to the Mindscape Podcast, I'm your host, Sean Carroll. Colonialism is an idea that is bandied about in the discourse these days, usually with the subtext that colonialism is bad. It is bad for the powerful, rich country to impose its will on some smaller, less well-equipped-to-defend-itself part of the world. But it wasn't always thus that colonialism was thought of as bad, maybe in the United States it has a bad rep.

0:00:34.8 SC: We started out as colonies and we needed to have a revolutionary war to overthrow the yoke of the British Empire. But there are other countries where they wanna make an argument that by going into other parts of the world that are less enlightened, less developed, less rich than they are, they can bring an element of civilization or they can spread laws or institutions. And even if it wasn't quite fair all the time, it wasn't all peaches and cream, maybe there's some lingering good effect.

0:01:05.3 SC: Now, let me not be ambiguous here. Colonialism is bad, I think it is bad. I think you could easily argue that it's bad purely on sort of moral ethical grounds. There should be a right of self-determination of countries, you can help them, but maybe you can help them without taking them over, would be my perspective. But as a scientist, you also want to be careful and nuanced and empirically based and say, okay, maybe some bad things happened in the past, under the name of colonialism or whatever, were they entirely bad or were there aspects that actually were good?

0:01:42.1 SC: Was civilization actually brought or was literacy or better roads or something like that to a different part of the world? Well, guess what? You can do some of that, you can ask these questions. The answer is, are that it's complicated. Lots of things go into these questions and so there's no clean and crisp answer to be had.

0:02:01.8 SC: But it's also a very difficult question to ask because if you talk about the different experiences of different countries, different countries have a lot of ways in which they're different, geographically, in terms of resources, in terms of the culture and the institutions that are already there before the colonizers come in. So it's gonna be hard to get very specific answers. Today's guest, Jean-Paul Faguet, is a political economist at the London School of Economics with a particular emphasis on Latin America, but he's interested in how different countries have developed over time and the legacy of history in playing out to the extent where we are today, right? We have all sorts of things going on in the world, different countries are different from each other. How much does it matter what the situation was 50 years ago, 100 years ago, 500 years ago for that matter? How much is there a lingering historical impact?

0:03:00.0 SC: Whether it's from colonialism or anything else? And I think that this is a great topic to talk about here on Mindscape for a couple of reasons. One is that the questions are super important and difficult to answer. Like we think we each have experience growing up in whatever country we grew up in. It's when you talk about the successes of government or of other social institutions, it's too easy to generalize from an N equals 1 kind of data set, right? You know your experience and you wanna go from that to theorize about how things must be more generally. But science isn't like that, you gotta actually dig into the data and you have to be able to compare differences from place to place. And that's exactly what Jean-Paul's work allows us to do.

0:03:51.1 SC: And the other thing that is fascinating about it is the methodology, I love the how good social scientists are at striving against the difficulties that you have in not being able to do controlled experiments. Like social scientists are not gonna found a country and give it some terrible history just so they can actually figure out the impacts of that history hundreds of years later.

0:04:15.3 SC: So we'll talk about two specific case studies here. And as I said, Jean-Paul specializes in Latin America, South America. So we'll talk mostly about Colombia where there is a long colonial history going back to the 1500s and the Spanish conquistadores. And the great thing about this in terms of modern day social science is that some areas of what we now call Colombia were in fact governed by the Spanish, others were not. So you can ask the question, did that legacy of colonial domination in early Colombia in the 1500s, does it still manifest today? Are there still differences from place to place? And the answer interestingly enough is yes, and there are many positive results of that colonial history era in Colombia.

0:05:07.7 SC: The areas where there were Spanish Conquistadores doing... The technical term is encomiendas, that's what these little areas were called where the Spanish had their fiefdoms. They set up infrastructures institutions that helped those areas still get better, still improve historically over the five centuries to come. But of course, there's also downsides, there's also plenty of historical examples where it doesn't work.

0:05:36.6 SC: So that's why social science is complicated and physics is much better. The other example we'll look at is in Bolivia, a much more recent phenomenon where there was a political party system that was weirdly persistent in Bolivia from let's say the second half of the 20th century. Which is it's weird because Bolivia was not stable or persistent at all, there was constant economic fluctuations and coups and there were votes and then dictatorship for a while and back and forth.

0:06:06.0 SC: But the same kind of political parties seemed to persist and then they collapsed. They collapsed in the early 21st century. So Jean-Paul asks, why is that? And I won't give away all the answers right here, but the answers are kind of relevant for political issues going on in other countries right now, including the US, Western Europe and elsewhere. So it's a wonderful little exploration of the dynamics, the complicated, rich, super-duper fascinating dynamics of human beings trying to govern themselves. It's a miracle we do it at all.

0:06:40.1 SC: There are a lot of the kind of pessimistic lessons from this podcast, but that's the one optimistic lesson that we human beings despite all the weirdness, we do manage to govern ourselves a little bit. Maybe by being good scientists, we can learn how to do it better. So with that, let's go.

[music]

0:07:14.4 SC: Jean-Paul Faguet, welcome to the Mindscape Podcast.

0:07:17.8 Jean-Paul Faguet: Thank you very much. It's a pleasure to be with you, Sean.

0:07:19.2 SC: Now, we're gonna get into a couple of papers you've written recently. And I love the fact that we're gonna get into sort of the nitty-gritty of what it means to be a modern social scientist. Yeah, it's very different than being a physicist where we build a piece of equipment and then smash things together, whatever. But let's start with very, very broad issues to get the audience kind of grounded. While reading your papers, I can't help but come away wondering how is it that human beings are ever able to govern themselves?

[laughter]

0:07:56.5 SC: Do you get that feeling by doing this work at all?

0:08:00.7 JF: Yeah, absolutely, absolutely. And the simple one sentence answer is nobody really knows. Sometimes it goes well, and very often it goes badly, and kind of the big intellectual project is to try to figure out when and why and how and what variables you can dial up and dial down to generate better governance for better outcomes. And we still don't really know. We have very highly contingent hypotheses with some bits of evidence for certain cases. But what happens to be working in modern Germany, but definitely did not work in Germany from the end of the 19th century to the 1940s. Or what's been working, at least until recently in the US, doesn't give you very much information about the rest of the world.

0:08:47.0 SC: Well, and the history matters. And I get the impression that a lot of pundits and commentators, probably not professional academics. But they like to look at what's happening in their country and then propose theoretical explanations for it. But this idea of looking at different areas, looking at different countries, that actually is hard work.

0:09:06.7 JF: Yeah, it's hard work, it's hard work empirically and it calls for very different sorts of tools across in my field, across both heavy econometric quantitative sorts of evidence, but also qualitative evidence. Where you might go and spend weeks or months in the field interviewing people and observing communities and trying to get qualitative sources of information on things like why some people managed to govern themselves well or badly. At the really micro level, like in a village, can they solve collective action problems around the agricultural cycle? Or the macro level, like what's going on to democratic institutions of the US today?

0:09:45.5 SC: One thing I gotta ask about because we recently had Daron Acemoglu on the podcast and he is someone who...

0:09:51.0 JF: Oh.

0:09:51.7 SC: Has been...

0:09:52.4 JF: Fantastic.

0:09:53.0 SC: Thinking... Yeah, he's fantastic, but he's also been thinking hard about this idea of institutions and exclusive institutions and inclusive institutions or extractive, I should say, versus inclusive institutions. And one of your goals is to kind of go a little bit more deeply than that.

0:10:10.5 JF: Yes, yes, absolutely. So Acemoglu and his co-authors, Robinson and Johnson, wrote a paper that re-kicked off, so to speak. It kicked off again, a new literature in the political economy of development that had kind of been forgotten. Nobody was working on this in the 1980s and 90s, when I was a graduate student in the 90s, for example, people were doing much more kind of traditional economics sorts of things and they brought it back. Now kind of a fun fact, I don't know if Daron would agree with this. I kind of think he might over a beer, but I don't know that he'd want to agree with it publicly in a public lecture. Is that he and Jim Robinson in particular, because they've worked together longer in this train of research, they've kind of brought Marxism back into the discussion. I don't mean Marxism as in Leninism and the Soviet Union.

0:11:01.9 JF: I mean more like classical political economy where economic factors tie up with power and who has power and how that gets expressed in government patterns. And the two kind of feed back to each other all the time, as opposed to modern, especially North American political economy that tries to maintain the two things distinct. It says you get rich or you don't, and you're a legislator who gets lobbied or not, but the two things don't blend that much. And part of what these guys are saying is these things are completely intertwined and we can't ignore it.

0:11:35.0 SC: Yeah. Well, it's interesting that you think of that as somewhat Marxist. I guess I'm very much an outsider here, but when I hear Marxist, again, in the non-USSR sense of the word, I think of kind of economic class determinism. But and I think that in what you're saying and in what Daron's saying, ideas matter a lot, right?

0:11:58.0 JF: Oh yeah, yeah, absolutely. Yeah, so they're not doing that, they're not doing the... They're not following down the Karl Marx line of economic determinism or material dialectics. They're... What I'm saying about them, and again, they may not agree with this characterization, is that they're just showing that institutions are at some level the expression of economic power applied to politics, which then feeds back into economic power and the two is a continuous cycle. And if we try to ignore that or keep these fields too distinct, then we're missing possibly the key part of what's going on in the world.

0:12:33.0 SC: And that kind of sort of feedback interplay mechanism is very much in line with the attitude of the Santa Fe Institute. Where I first ran into you and where you are sitting right now, even though I'm in Baltimore, while we're having this discussion. [chuckle]

0:12:45.5 JF: That's right, that's right, yes, absolutely.

0:12:47.7 SC: And a particular kind of idea that you've emphasized is the role of culture in development. That it's not purely economic determinism, that human beings have attitudes that we get from psychology, from our other fellow human beings in a society, and those also help influence the development of institutions and their success.

0:13:14.8 JF: Yeah, that's right, because the institutional literature has been on a long journey, and when the ideas first came up... So one of the earliest but very clearest statements of what our institutions came from Douglass North around 1991, where he published a very famous book, the great Douglass North, recently deceased. He said, institutions... What are they? It's this fuzzy word that means everything and nothing at the same time.

0:13:42.5 JF: So he said, let's say institutions are the rules of the game. So an institution, for example, is football, let's say, like as in soccer or American football or any sport. And then particular teams are organizations that are operating within the framework of the rules that define a particular game where it clearly delineates what is fair and what is unfair play and how you win the game. So you try to get the lowest number of strokes in golf or the highest number of goals in football or whatever it is.

0:14:11.5 JF: And so then you get a nice delineation between institutions and organizations. And what we saw almost immediately, and there's a French theorist called Pierre Bourdieu, sociologist, operating at about the same time, the 80s and early 90s. Is that given rules that you can write down in black and white, like the rules of football or the institution of marriage, my family and your family are organizations within the broader institution of marriage. Which are the rules about how people relate to each other and how families interact and so on and so forth.

0:14:43.4 JF: That you transfer these rules in black and white from one context to another country and other cultural contexts and they don't work or they have completely different outcomes. The rules are the same, right? So to give you two examples of that, most of the Latin American countries essentially copied large amounts of their constitutions from the American constitution, right?

0:15:05.8 JF: So we go back in history, the first American Articles of Confederation were a dismal failure, the US was falling apart, not working. And then you got a second convention and you got the current American constitution before all of the amendments, and this has been a great success up until now. So the Latin American republics come up a little bit later in the early 1800s and they basically copy large amounts of it and these institutions in Latin America do not work the same way that they work in the US, even though articles are copied almost verbatim. Or in Africa, you have countries that were... Large numbers of countries colonized that had been colonized by the French and the Brits and when they left, they basically left similar public administrations and constitutions that were written in a great rush in the late 50s and early 60s that looked very similar to one another.

0:15:57.5 JF: But man, these institutions work in very different ways. Some of them are stable, some of them are horrifically unstable, some are actually pretty honest and straightforward, others are massively corrupt, but you look at the black and white and it's almost identical or very similar.

0:16:12.0 SC: Right, so you start asking why it's different. One of the things you've looked at a lot is the legacy of colonialism, people coming in and pushing other people around, how that affects things. Before we get into your work, what is the conventional wisdom about that? Is the thought that where there is some colonial past that makes development faster or slower or better or worse?

0:16:40.0 JF: Sean, this is about as charged a question as it's possible to ask these days.

0:16:44.7 SC: So I'll be paying you the big bucks.

[laughter]

0:16:49.4 JF: So I've got a two-part answer to that. On the first level, it kind of is a normative issue. I don't think anyone really thinks or certainly no one is willing to say out loud that colonialism was a good idea and we should repeat it.

0:17:03.0 SC: Sure.

0:17:03.4 JF: In the sense of foreigners taking over foreign society, foreign people and pushing them around and making them do things that they don't wanna do. Nobody thinks this is a good idea. And although there are many... So nobody I mean academics and researchers working in this field. Partly you can't say it because you'll be pilloried, but also I would never say that and I don't know anyone serious who would say that in the way that people did until fairly recently, as late as the 70s, there were still academics holding forth that, thank God for all of these countries that were colonized by the British and got civilization. People would make that argument, nobody says that anymore. Now there is a separately a series of interesting questions about what were the empirical effects of colonialism because it did happen and it had lots of effects.

0:17:53.7 JF: And the best statement, the sort of the cutting edge of the field today is that colonialism was a complex treatment that did a number of different things, many of them bad, some of them absolutely horrific, immoral, et cetera. But others had good effects, like the colonies without doubt built some infrastructure and as between in places that didn't have paved roads and didn't have railroads as between having them and not having them, it was better to have them. So the process of generating that was awful and illiberal and abused human rights, et cetera. So that's not to say, thank God for colonialism because now India got railroads. Like no.

0:18:30.0 SC: Sure.

0:18:30.3 JF: That's not the argument. On the other hand, you can try to separate what is the incremental effect or the marginal effect of having the railroads. And without doubt that led to economic integration and lower transport costs and makes it easier to have a national economy than before when these places just operated as separate sort of economic spheres and fiefdoms.

0:18:51.0 SC: Yeah. Yeah, I think that that makes perfect sense. I'm glad that the field has gotten to that point. I mean, it's certainly not an argument about whether or not colonialism is good or bad, if only because there's a moral argument there, right? Like people should determine themselves. But we can still, as social scientists, ask, okay, what are the specific long-term legacy impacts of having that colonial background?

0:19:14.0 JF: Yeah, exactly. Exactly. So that's the way in which the field has moved. And that sort of ties back to your previous comment about as Acemoglu, Johnson, Robinson's work and that whole stream, not only them, people like Engerman and Sokoloff or North Wallace and Wine Gast have a major, or Besley and Pearson have major books and major streams of research trying to answer questions along these lines.

0:19:37.7 JF: And now what my co-authors and I, and a couple of other people, but literally a couple of other studies are trying to do is break up this idea of institutions as high level national complexes in multidimensional space that are either extractive or inclusive. We think that's just like way too high level of aggregation in multiple ways in terms of space institutions that are not only national, you have a country like India or Brazil or the US for that matter.

0:20:06.3 JF: And there's a lot of institutional variation beneath the national level, right? Mississippi is not the same as Massachusetts in lots of important ways. And also, separating it in terms of dimensions because a set of institutions, you can break it down into the legal system, separately from that policing, separately from that electoral norms, separately from that political party system and it's dynamics, operating within a set of electoral rules, for example, like, is it first-pass-the-post or is it proportional representation?

0:20:42.4 SC: Right.

0:20:42.5 JF: And on and on and on and on. And so we start looking at particular institutions and how they vary across space, and then we actually come up with very different answers compared to the big extractive versus inclusive argument.

0:20:55.3 SC: I mean, it's almost inevitable when you start looking more closely, you're going to find all sorts of little structures that were glossed over by the big picture that had been put forward. Right?

0:21:06.6 JF: Yeah, and I wanna say I'm grateful to Daron and others for the big picture because maybe quite part my view is without that we wouldn't be having these discussions now. It's sort of, it brought so much interest to the field that then helped generate data that then pushed people like us to go, well, hang on a minute. You know what, if we go deeper? Which is really all we're doing.

0:21:24.2 SC: So let's go deeper. Let's go to Colombia. I mean, let's go back to the 16th century, which is kind of amazing that we can ask questions about the impact of the 16th century and what was going on today. So what was going on in Colombia back in the 1500s?

0:21:38.8 JF: Okay, so, fantastic. Thank you for that. I love talking about this, and I tend to go on, so you should interrupt me.

0:21:44.4 SC: Please. We're here to go on.

0:21:49.3 JF: So the Columbus sails over and discovers Espanola, which is now Dominican Republic in Haiti. And pretty quickly they kind of run out of room in the sense of an empire that can sustain itself. And there's not that much gold there. Columbus dies thinking he made it to India, right? He's convinced he's in the Indies as in Asia. So he never actually realized where he was. And that kind of ignorance is shot through this whole project for the first a hundred years at least.

0:22:15.8 JF: Now, from there, the colonialists go to Mexico and they start making their way down through Central America, and they make it to Colombia. And they have an outpost in a place called Santa Marta, which today is an important city on the Caribbean coast of Colombia. And this colonial outpost is a little place. It's got about 40 soldiers and maybe maybe 800 or 900 people, Spaniards who are living there.

0:22:42.9 JF: And the indigenous people that they're predating on are fierce, they have poison arrows. They know the geography and the flora and the fauna way better than the Spanish do. Half the Spanish were there are still convinced that they're on the coast of India and they started to suffer from their... Their clean water gets contaminated. They're running, there's no... They've been marauding around digging up graves to steal the gold and ship it back to Spain. But that's running out. They're not really finding any more graves. The Indians already have decided, at the beginning they were kind of hedging the wrestling, can we work with these people who are these weird people? They saw the Spaniards a Spaniard night mounted on a horse and thought this was one animal.

0:23:21.3 JF: They thought it was a godlike messenger, literally, because their cosmology predicted that the gods would send messengers who would have some sort of fantastical form. And they thought these people were some other kind of, either a spirit or a new animal that they've never seen. But by the 1536/37, they figured out they don't like the Spaniards and they're not cooperating, and they're often killing them. And the whole colony is on the verge of collapse. And in order to say... So that the... Which means that the entire colonial project in northern South America is on the verge of collapse. And in order to try to save colonialism and save these Spaniards from basically being wiped out, there's a guy called Jimenez Casala who decides to lead an expedition south trying to get to Peru because they've heard news of fantastic riches, like unbelievable amounts of gold that Europeans and possibly in the world had never been seen before, that are coming out of Cuzco and the Inca Empire.

0:24:26.8 JF: And this sort of the flows of gold A, sustained the entire Spanish empire, and B, was all that Europeans talked about for about a centuries, unimaginable riches. So they're on the northern coast, now those of you who know you're Latin American geography, they're on the northern coast of Colombia, which pretty much the northern tip of the continent, and they're trying to get down to Cuszco. And so they set off walking because they're gonna do this walking. And after 11 months, the 800 soldiers, the expedition of 800 people that left Santa Marta, after 11 months, they finally struggle up onto the Savanna of Bogota. And only 170 of them have survived. 630 have died of drowning, of diseases, of hunger and being killed by the Indians. Right? And they're really not very close to Peru at all.

0:25:21.6 JF: Like this idea, they're gonna walk there is just crazy. They had no idea where they were. Many of them thought that Latin... All the South America was an island, and that they could just sort of walk from one end to the other. And they get there and they meet a much, much, much larger force of indigenous warriors controlled by the the chief of Bogota, who is the top chief, the first chief in a confederation. It's not an empire unlike the Aztecs in Mexico. And unlike the Incas in Peru and Bolivia, it's more of a confederation of chieftaincies. But the one from Bogota is the biggest and most powerful one.

0:26:00.4 JF: And these guys could have crushed the Spanish, and somehow they didn't. And this is one of the great historical mysteries, no one knows, in Mexico, it was a closer run thing, and they were basically defeated and they came back and triumphed. In Peru and Colombia, no one can understand. In Cajamarca, Peru, where they basically... Where Pizarro defeated the Inca empire and in Bogota Colombia, nobody can understand how this happened because they had something like 30,000 warriors in Peru, and more than 10,000 warriors in Colombia. And in both places there were about 170 Spaniards 176 in Peru, 170 in Colombia.

0:26:38.4 JF: And they won because of the element of surprise, psychology. They had gunpowder and they had steel. And the indigenous warriors that they were fighting had slings where they threw rocks and they had clubs and bows and arrows, and that's all they had. They didn't have swords because they didn't have steel. So they had clubs. Right. But even so 10,000 people with these arms could've beaten 170, maybe many of them would've died, but they could have just destroyed them, and they didn't. And the answer has something to do with the psychology and also the cosmography in the sense that they were convinced, many of them were convinced that these people were from the gods, so they had to listen.

0:27:15.7 SC: And so yeah, I mean, I guess they could have defeated them if they had tried their best, but for whatever reason that we don't quite understand because the history is written by the winners, we're not exactly sure why they didn't try their best.

0:27:31.4 JF: Yeah, exactly. And I mean, the history is written by the winners. The only written records we have is from the Spaniards.

0:27:34.1 SC: Right. Okay. And so that means what? I guess it's tempting to think that now the Spanish rule over Colombia, but it's more complicated than that. I mean, they're not actually... There's not enough Spanish to really rule over Colombia.

0:27:51.0 JF: Yeah, that's right. So it's hard to think ourselves, it's a big exercise to think ourselves back into the 16th century because the entire world was different. Right? It's like all of our norms and expectations about individualism, about the kind of things that motivate people to do the things that we do, about how people relate to each other were completely different. The Spaniards that were conquering Colombia were basically coming out of a late medieval culture where they were intensely religious. They really believed in God. They believed that the Christian and Catholic God was superior. You know, the one true God. And if you didn't believe you're going to hell, and that the Spanish emperor was the agent of the one true Catholic God and so on and so forth. And that's just like, that's so alien to the world that we live in today, that it's kind of hard to think ourselves back.

0:28:43.7 JF: Now, the Spanish American Empire was something like 50 times the size of Spain, and they're trying to run it from across the ocean with 16th century technology, right? So imagine that. It was not the Spanish army, like the US Army goes and conquers Afghanistan or conquers Iraq. That's not how it happened. These were privateers that had a license from the emperor to come and explore. And they got that legal right. And the support of Spain on the high seas against English and other pirates, et cetera. But basically they came here, they mounted their own expeditions with private investment, and they were gonna get to keep... The explicit terms of these legal agreements with the crown is that they would get to keep 80% of all the treasure, et cetera, that they found, and 20% had to go back to the crown.

0:29:36.3 JF: So the license was in exchange for La Quinta, which is a fifth of everything. So the Spanish come, they conquer, they take over the whole Savanna around Bogota which is the major population center in what is today, Colombia. And so then these conquistadores who have been risking life in limb, 630 of them died just in the expedition from Santa Marta, not including those who never made it to Santa Marta from Spain.

0:30:03.5 JF: It's incredibly risky at huge cost to themselves. They have invested directly in this, their own money, the senior people, and huge amounts of effort in risk, the more junior people. They also have other investors back in Espanola, back in the Canaries and back in Spain, who have also invested in this expedition a bit like you invest in a company, right?

0:30:24.5 JF: So the way they're gonna make it pay for all of them is that the Conquistadores divide up the indigenous people and they divide up the land. The more senior ones get large numbers of indigenous people, the less important ones get smaller plots of land and smaller numbers of indigenous people, and they basically force the indigenous people to work for them. And they then, because their goal, unlike colonialism in say, Massachusetts or Ontario or Virginia, right? Where if you and I got on the boat from England, let's say you and I are in Liverpool or Southampton, and we got on the boat and we're thinking, should I go to Virginia or should I go to Colombia?

0:31:01.6 JF: Well, you probably couldn't go to Colombia if you weren't Spanish. But leaving that aside, then you're gonna go to Massachusetts or Virginia, and you're gonna get a small piece of land and you're gonna work it with your family, right? And you and your wife are gonna have children. And you're gonna work the land. And so you're gonna have a few acres, right? That's not what the Spanish were doing. The Spanish wanted to set themselves up as lords with hundreds or thousands of people working for them so they could live this great, this grand life and they would never work again. Having risked it all to get there in the first place.

0:31:33.7 SC: And did most of the Spanish conquistadores imagine going back to Spain at some point, were they purely just trying to extract and leave or were they setting up a new life?

0:31:41.5 JF: The idea that... The objective was to set up a new life and be great lords in South America. So sharp parenthesis that among Latin Americans today, and my mother's from Colombia, I have a huge Colombian family. The kind of story that Colombians and Latin Americans like to tell ourselves is that it was these great lords who came from Spain to conquer Latin America, because this makes us the descendants of great people. Like no, the great lords were living in their castles in Spain. Why would they go to Colombia in 1530? Like, no, I mean, they're probably not gonna survive for starters.

0:32:20.3 JF: So the people who went were the second, third, and fourth sons of the minor nobility who didn't have that much to inherit because the first son was gonna inherit what there was, and there probably wasn't enough to share. So we were getting the second, third, and fourth class of... Now, you know, these, these were people who were educated in the main, not all of them, but in the main and who had some means, 'cause they had to finance themselves to get to Colombia, but they weren't the great dukes and lords of Spain. So what they wanted was to set themselves up in Colombia to live a better life than they could have had back in Spain. Many of them became so wealthy that then they went back and forth.

0:32:55.4 SC: Okay, I see.

0:32:56.3 JF: I think the objective was to capture resources, build a grand house and have hundreds or thousands of people forced to work for you.

0:33:03.6 SC: But fortunately for the modern social scientist, there were not enough of them to comprehensively take over the whole country. So we have a situation where some locations had this system, which is basically slave labor, right? And some were left more or less alone by the Spanish.

0:33:23.5 JF: Yeah, that's right. That's right. So to give you rough numbers, there are about 1,120 municipalities in Bolivia today just to use a standard modern unit of territory. The Spanish made it to now, obviously, they weren't working in municipalities, but they made it to about 350 modern Columbian municipalities. They didn't even fully occupy all of the... Each of those municipalities, they did some of the central ones around Bogota, some of the more distant ones, they only made it to one or two points in those municipalities. But they never made it to the other two thirds at all in 300 years of colonialism.

0:34:01.0 JF: They might have walked through it, but they never established a presence. Right? One of our findings is about sort of to give you the bottom line of the paper is about the importance of building institutions of the state. And the kind of shocking thing is that Colombia became independent in 1821. Today, it's been independent for more than 200 years. And we, the Colombians, including partly myself, have yet to finish fully occupying this space 'cause there are places today in 2024 where the Colombian state has yet to arrive in the sense that there's no police station, no local mayor's office, no school and no hospital. This is...

0:34:38.3 SC: But there are people?

0:34:39.7 JF: There are people living there. Oh, yeah, yeah, sure. There are poor farmers living there and they're kind of self-organizing and trying to solve their own problems and maybe provide some potable water or deal with where should we throw the garbage? But the Colombian state is not present. Like, so if you and I get on a plane and go to Bogota now, I just came back from there a few days ago. It's a modern, incredibly sophisticated city. And the government is big. The municipal government in Bogota, let alone the national government is big and does amazing things. But in other parts of the country, it's just absent. It's just like not there.

0:35:12.3 SC: Right. And so that's something that we who grew up and are familiar with the United States are just not quite familiar with, like the US government governs the whole country one way or the other.

0:35:21.7 JF: Yeah, yeah, that's right. Exactly. There were periods in American history during the expansion where there was a piece of land that... A big, like the state of New Mexico where I am right now, had been claimed, but it was in the process of being occupied. But at some point it got occupied. And the state of of America state is very strong. It's decentralized, it's federal, it's highly robust, and it's present. You may not like what it's doing everywhere, but it's present everywhere.

0:35:46.1 SC: So the wonderfully ambitious, audacious question you wanna ask is, can you go back into the historical record, look at where the Spanish were in control, where they weren't, and compare that to what things look like today. It would not be super surprising if the answer were, there's no relation. There's been hundreds of years since this has happened, but that's not exactly what we find.

0:36:09.8 JF: Yeah, exactly. So maybe I can illustrate this nicely if I just tell you this story of how this paper came about. My longtime co-author and one of my best friends in academia and beyond, he's just a wonderful person, is Fabio Sanchez, professor Fabio Sanchez, who's a very senior professor at Los Andes, which is one of the best universities in Columbia, especially in economics and political economy.

0:36:33.4 JF: He calls me up one day, we've been working together for years. He calls me up one day and he says you know about the Encomienda, this nasty institution. I'm like, yeah, yeah, I know it was bad news during colonization. He's like, we have preliminary evidence that it's tied to better development outcomes all over Columbia. I'm like, you're kidding me, this can't be true. Now, for context, this phone call happens in about 2016, early 2017, no, 2016.

0:37:01.7 JF: And this is a time when people like Nathan Nunn, who was then at Harvard and Leonard Wonk at Princeton, and a bunch of other people are putting out a lot of papers, really innovative, empirically sophisticated papers that show the horrible effects of slavery. Not just then in those places where slavery happened, but today in those places that had suffered slavery over the past 200 or 300 years. So the things like in places where there was severe slave trafficking on the western coast of Africa, today people trust each other less.

0:37:34.8 JF: And they can link that empirically to the fact that you had marauding slave parties and different ethnic groups that were pitched against one another by the English and Portuguese and others for the sake of trading slaves. And that has impacts today on people's intergroup trust like between different ethnicities in Africa, let alone things that easier to understand, like education and health outcomes are worse today in places that suffered a lot of slavery.

0:38:00.2 JF: So the Encomienda is not slavery, it's very broad similarities. It's also forced labor. But when you look at the specifics, it's quite different from slavery, but equally nasty, actually arguably worse than slavery in some ways. How could it be having positive effects on development outcomes today? And it's very strong effects, not just economic development as in GDP per capita or productivity or wages, but also health, education, infant mortality, literacy, also institutions like local institutions and places that did have Encomienda are stronger and more capable today in Columbia than comparable places that had no Encomienda.

0:38:40.3 JF: So I'm like, how can this be true? And so the story of this paper is that we spent the past seven years trying to break this down, like throwing everything we can, trying to make the result go away. And it's there regardless of what we do. And so we think it's a really strong empirical result.

0:38:53.8 SC: And it's interesting because, I mean, it's probably unfair. I can't help but think of the United States, right? Where to a very good approximation, states that had slavery are less economically developed, have worse universities, worse health care than states that did not have slavery or which abolished slavery relatively quickly. So I guess the moral is that it's complicated.

0:39:17.3 JF: It is complicated. Yeah, that's a fantastic. So part of the next frontier of research is to make those sorts of comparisons. But we're not there yet. And it would be methodologically complicated. But I mean, but hugely interesting as you lay out. Our answer, and it took us years to... We had an intuition about it, but it took us years to prove it, to really show it econometrically, is that, and I want to be really clear about this, the Encomienda, so let me say quickly how the Encomienda worked, because it's important to understand this.

0:39:51.0 JF: So Encomienda comes from the Spanish word encomendar, which is to recommend or to put in the care of. And so the deal with the encomienda is that you had a Spanish lord, a conquistador, who just finished conquering a bunch of indigenous people, and then he received a license from the empire to extract labor, to force them to give him labor on his farm, or in the mines, or in his household, like to cook his food and clean his house, work his fields.

0:40:18.5 JF: And in exchange for that, the Lord taught them the one true Catholic and apostolic faith, which meant that they had a chance of going to heaven. And this was seen as an exchange, right? I think I don't need to say anything more about that exchange. So this is what the word Encomienda means. So the way in which the Encomienda worked was that the Spanish Lord taught the indigenous people Catholicism and therefore gave them a chance to go to heaven, and they in exchange had to work for him. We're adamant in the paper that the Encomienda itself, this labor extraction institution is not what led 500 years ago, is not what led to better development outcomes today, but rather there's a chain, which is, I think, a nice, neat, logical chain that makes a lot of sense.

0:41:07.0 JF: The presence of Encomienda gave these lords a very strong incentive to set up local institutions to protect their property rights, one of which, one of the key ones of which was the Encomienda. So a lord arrives, they conquer the indigenous people, he has a thousand indigenous people working for him over the following hundred years who's to say that somebody else isn't going to come and grab them from him or his children. Right? He wants to maintain this. He wants his kids to inherit it so on and so forth along with the grand estate and the house and all of the goods and wealth that these indigenous people working for him have permitted him to accumulate.

0:41:46.5 JF: So the presence of Encomienda itself doesn't create great development outcomes 500 years later, it generates strong incentives to invest in local institutions. And then those local institutions, once they get going in a context of an empire that was very distant from Spain, where the imperial government in Bogota, in Lima, in Mexico was chronically weak forever, for the entire 300 years that the Spanish were in South America, then having a strong local institution really matters in terms of dispute resolution, protecting property rights of these Spanish lords.

0:42:19.7 JF: And then later on, they start doing other things almost immediately when they're set up. And this is very clear in the historical records. So one very SFI aspect of this paper is that it's multidisciplinary and it has lots of different kinds of evidence, including deep history from observers at the time in 1530 and 1560. And we're just quoting them alongside the econometrics.

0:42:43.1 SC: I do want to note that if it were true, a trade of eternal salvation for a few decades of indentured servitude would actually be a good trade.

0:42:54.5 JF: Well, yeah. So going back to medieval Spain, if you actually believe that, and I think some of them probably did, some of the Spanish probably did, but I'm sure many of them were cynical. But then exactly. Well, these guys are going to hell. At least we're going to save them from that.

0:43:07.7 SC: Right. Exactly. Okay. So but it's very interesting. So you're explaining what's going on here in the sense that it's not the indentured servitude that led to better outcomes centuries later. But in order to get that system off the ground, you had to lay some groundwork in terms of institutions and infrastructure that actually did kind of linger on for a long time.

0:43:34.9 JF: Exactly. So these institutions, another parenthesis, that when we talk in political economy or public economics about the state, the state in the sense that we know it today really only comes about in the 20th century in most of the world. It has its origins in the 19th century in Europe and North America. But in the rest of the world, the state is doing almost nothing, like the national state. It gets very few resources in terms of taxation and it just basically maintains an army. And in some countries, a currency, in other countries, not a currency. Colombia didn't have a single currency until about 70 years after its creation. I mean, it was unbelievable, right?

0:44:10.4 JF: So these local institutions in 1539, let's say, and thereafter, are doing important local jobs in terms of provision of potable water. So, for example, in Tunja, which is a second encomienda-based municipality that's founded in Colombia by the Spanish, they basically dig trenches in a canal and they bring potable water from the mountains into a fountain in the middle of town and in 1539 this is the source of potable water and then the Spanish Lords send their indentured servants out to like fill urns with water and take them back and that's what they drink.

0:44:50.7 JF: But it's the Encomienda based local government that's doing that. They manage waste, they regulate commerce. So if you're selling food or if you're tanning leather or if you're engaged in commerce more generally in the town, it's the local government that's regulating you and making sure that the food isn't unsafe, etcetera. So it's actually a more capable and more involved, more sophisticated local state than I certainly ever expected for 1500s. Full stop, let alone 1500s Latin America.

0:45:26.7 JF: And then these places, the state sort of grows in capacity. And I guess the simple baseline comparison is that where there was not Encomienda, there's no incentive for anyone to set up the colonial state. There had been indigenous institutions throughout Latin America, but especially in places like Colombia, they're just demolished because you have population declines in excess of 95%. So if 95% of the indigenous population has died, the institutions that they ran fall completely apart. And they're basically scattered people, like trying to run away from the Spanish, or a couple of tribes off in the Amazon or in the Sierra Nevada in the north. So institutions of government collapse.

0:46:09.1 SC: Well, that's, yeah, I mean, that's a very good point. So it's not necessarily that the colonialist institutions were better. It's that they were able to survive because the other areas were kind of run to the ground.

0:46:20.3 JF: Exactly. That's exactly right.

0:46:22.1 SC: And as a careful scientist, of course, I want to raise my hand and say, well, how do you know that the areas in which that you're getting better institutions and better development weren't just better places to live? I mean, maybe there's a confounding variable that explains both without giving colonialism the causal power here.

0:46:42.3 JF: Yes, very good. You put your finger on exactly the empirical challenge and the threat to our result, which is what economists call locational fundamentals. And so to expand a little bit on what you said, the argument would be, well, where did the Spanish go? The Spanish went to where there were large numbers of indigenous people because they wanted to enslave them and get them to work for them. Where were these indigenous people living? They're living in places that tend to be more favorable to development anyway, because the soils are better. There's a ready source of water. There's easy access to trade routes, rainfall, whatever it may be. Maybe there are subsoil minerals that they're exploiting. Whatever it may be, but there's some fundamental thing that's driving the modern day development outcomes. And the Encomienda is just sort of accommodating itself to that. It's not the causal factor.

0:47:30.6 JF: So what we do, and I'm going to get a little bit into the nitty-gritty of the methodology. We use a method called neighbor pair fixed effects. So the idea here is that all else equal, any two neighboring municipalities in Colombia are going to tend to be similar in terms of these locational fundamentals. They're going to have similar soil, similar rainfall, similar amounts of gold or absence of gold or whatever it may be. And so we're going to use a methodology that compares neighbor pairs where one did and the other did not have Encomienda. And so ideally, these things should be similar in every way that we can't measure. We're also going to control in our regressions for all the things that we can measure.

0:48:14.6 JF: So we have a ton of... Colombia has very good quality data. One of the nice things about working in Colombia is that it's one of the best qualities of data of any Latin American country, and amongst developing countries generally, data is held to be good quality in places like India, Brazil, Mexico, and also Colombia. So we have lots of data on locational characteristics that can be measured. And then we look at neighbor pair differences where anything that is not measured is presumably controlled for just by virtue of being a neighbor, where one has Encomienda, the other doesn't.

0:48:50.3 JF: And so this is one means of identification. But many people say, well, okay, that's okay, but it's not good enough. So then we take one additional big step, which is what in econometrics is called instrumental variables, where we come up with an instrument, which is ideally highly correlated with the thing that we're trying to pin an argument on, which is the Encomienda. So our instrument is highly correlated with the presence or absence of Encomienda, but it should be uncorrelated with the outcome variable that we're trying to ascribe to the Encomienda, which is modern development outcomes, like health, education, GDP per capita, et cetera.

0:49:28.0 JF: And so we've tried different instruments. And one of my junior colleagues, a Colombian called Laura Soto, I mean, this was a team effort and everybody contributed to it. But I think she had the fundamental spark, the initial idea, which was she was reading the accounts of a guy called Tomas Lopez from 1560, who was an imperial agent sent by the crown to gather information to allow for better taxation of the Spanish lords who are making like, you know, good modern day businessmen and trying to evade taxes like crazy, right?

0:50:05.7 JF: And again, with 16th century technology, evading taxes wasn't that hard. This guy was sent by the crown to just like take a census, a catalog, as it were catalog, how many Spaniards were where, how big their farms were, how big their houses were. And crucially for us, how many Encomienda Indians they had working for them. How many pigs, how many horses, all this kind of stuff, but crucial for us, how many Encomienda Indians they had working for them.

0:50:32.1 JF: And what Laura, what my colleague saw, is that this guy describes exactly the route that he took through Colombia. And he says, I'm going to try to find where all these conquistadores are. How am I going to do that? Well, the best way I can come up with is just to try to retrace their steps. Because wherever they got to was via their path. So I'm going to try to take the same path that they all took to get where the places are that they found towns and villages or where they have Encomiendas.

0:51:00.3 JF: And so we then combine that, this is another very SFI thing, we combine that with modern data from the NASA mission that is mapping the geography of the planet. We take the subset of data on Colombia that measures and catalogs all the ravines, the rivers, the forests, the valleys, all of this geographic stuff, and we use that to calculate the least cost path between all the places that we know this 1560 imperial agent went to who was trying to recreate their steps.

0:51:32.4 JF: So a very long-winded way of saying that our instrument in this case is the path of the conquistadores through Colombia that they took founding all of these Encomiendas. And then we measure the distance from each municipality to the closest point on that path. And that's our instrument, which we argue is highly correlated to where the Encomienda is or was in 1560. But it should be, the distance to the path should be uncorrelated to education, health, infant mortality, or GDP per capita. There's no reason for that distance variable to map onto modern development outcomes.

0:52:10.3 SC: And then the answer is that when you control for all these things, yes, the Encomienda did have a noticeable effect on modern development outcomes.

0:52:18.0 JF: It's a very strong statistical correlation across 20 different measures of development outcomes, human capital, social capital, institutional development, and crucially economic outcomes today. And all of these outcomes today are around 2005-2010. So modern 21st century outcomes are being driven by the Encomienda in 1560. And this by itself is a kind of a stunning outcome because you think, okay, this thing in 1560 was really important and it structured the Spanish Empire in lots of important ways in 1560. How can it be having an effect in the 21st century? And yet, this is what we find. And again, seven years trying to break it down and make it go away, and it doesn't go away regardless of what we throw at it.

0:53:06.3 SC: Well, I mean, I'm sure there's many more things to say about this, but I don't want to miss the opportunity to also switch to your Bolivia paper, which is in some senses completely different, but in some sense there is absolutely a similarity of sort of both spirit and answer. In the case of Bolivia, we're asking a much more modern question, and not even about... Well, about political parties, I guess is the short way of saying it.

0:53:32.1 JF: Yeah, so that paper is about the stunning collapse of Bolivia's political party system around 2003-2004, which was a political party system in a country with chronically weak democratic institutions and many coups and generally, general institutional instability, but a political party system, meaning a set of political parties competing in a given ideological and political space against each other, that was remarkably stable between 1952 and 2002.

0:54:05.0 JF: This system got set up after the revolution of 1952, and the system persisted. The same political parties came back after coups, after macroeconomic shocks, after guerrilla uprisings. Che Guevara didn't die in Cuba and he didn't die in Argentina. He died in Bolivia where he was trying to stoke revolution. And the political party system was completely robust to this. And after he was killed...

0:54:30.3 SC: Even if it was not a democracy, even in those moments when Bolivia was a dictatorship, we still had these political parties.

0:54:40.2 JF: Yeah, exactly. You still have the political parties that were still there. Some of them would have been cooperating with the [0:54:44.4] ____, the dictator who happened to be there in power at the moment. And in any event, when the dictator fell, the same parties, even the same individuals would come back. So, you know, if you trace Bolivia's presidents and cabinet ministers who then ascend to presidents, it's just remarkably stable for 50 years after the sorts of shocks that would have, and in fact, in other countries did bring down entire political systems and the Bolivian parties were robust to this.

0:55:11.7 JF: And then suddenly the whole system falls apart in 2003, according to popular understanding. It's the kind of thing that you read even in the educated press like the New York Times or The Economist or whatever. It seems to be caused by a series of demonstrations against water privatization in Cochabamba and then against provision of construction of a gas pipeline to Chile, to the historic enemy Chile. They fought a war in the 19th century. The idea that a couple of demonstrations in Cochabamba and La Paz brought down political party systems that have withstood 50,000% inflation and something like 15 coup d'etat is absurd, right? No, it can't be. So it's...

0:55:57.5 SC: I'm sorry, but it seems like there are kind of two mysteries. One mystery is how that political system, party system, I got to be careful. It's not the political system that survived. It's the party system that survived.

0:56:08.4 JF: A party system, yes exactly.

0:56:11.3 SC: And so both how it survived for so long and then why it collapsed are kind of both interesting questions.

0:56:15.9 JF: Yeah. Yeah, that's right. So I can answer the first question better if I answer the second one first. And then the first one becomes quite kind of clearer. So the theory that I use in this paper is something that was created by a couple of very smart political scientists who did political sociology in the mid-20th century called Martin Lipset and Stein Rakan, and they were analyzing Western Europe. And their theory is that a political party system will operate in an ideological and programmatic space. Now, by programmatic space, I mean, what are the issues and how do you combine different issues, right? So it's not obvious, for example, that if you're pro-business, you're going to be, I don't know, anti-LGBTQ or something like that. That happens to happen in a number of countries. In other countries, it doesn't necessarily. Those issues don't combine in a particular way. Or if you're right-wing, you're going to be pro-farmer. It's not obvious that that would be the case, but it does happen in some places and it doesn't in others.

0:57:22.6 JF: So what they say is that a political party system should have main characteristics that map onto the main political cleavage, and they coined this term, a political cleavage, which defines the society. And so through a series of historical processes in Western Europe, you get a party system that's left versus right where left is pro-worker, pro-larger government with bigger taxes in a bigger welfare state that's in favor of the little guy, as it were, and right wing is pro-capital, pro-business. Capitalism, the owners of capital, right? The owners of businesses, factories, etcetera. Pro-business, lower taxes, a smaller state.

0:58:00.6 JF: And in Europe, this also maps into center versus periphery because of the nature of the national revolution that happened, typically like in Germany and Italy in the 19th century, in the 1800s, for example. So without getting too much into detail on Europe, what I find for Bolivia is that Bolivia had kind of the wrong political party system built on a false cleavage that did not define the Bolivian society and wasn't reflected by Bolivians, by who they are, by the main things that do actually characterize Bolivian society. Bolivia also had a version of the European and North American left versus right.

0:58:42.8 JF: The problem is that Bolivia never had an industrial revolution. Bolivia, to this day, is still a country that is predominantly an agricultural and then also a natural resource exporter, where the working class, the self-identified working class that thinks of itself as a class, like people who vote labor in the UK, or especially if you go back to the 1950s, 60s and 70s, people who voted labor in the UK, people who voted social democrat in Germany, for example, or Holland, or a number of European countries, people who voted for the socialists in France, were a self-identified working class who in 1950s, Britain, for example, spoke with similar accents, wore flat caps, tended to live in similar neighborhoods, dressed in a similar way, had a similar accent, in opposition to people from the right wing, who tended to be richer, who were educated in a different way, who used different clothing and had a different accent.

0:59:38.8 JF: So this whole complex of things, which is reflecting the key divide in that society, which is, are you a worker or are you an owner of capital or owner of land? Right? So that divide just didn't mean anything in a country like Bolivia, which never had an industrial revolution, didn't have a self-identified working class.

0:59:56.4 JF: And I stress that Bolivians work really hard and poor Bolivians work really, really hard, right? But they see themselves as farmers or as Quechua and Aymara speakers, as members of the Ayu or the Maku, if they live in rural Bolivia, or they see themselves as migrants or the children of migrants to the city who might live in peri-urban areas, but they don't see themselves as a working class. That's just not who they are. And it didn't have, on the right side of that divide, it didn't have a lot of capitalists who own a lot of capital because again, there's not that much industry in Bolivia.

1:00:33.4 SC: So I'm sorry, so the pre-2003 party system did reflect that kind of familiar European left-right divide.

1:00:42.2 JF: Exactly.

1:00:42.7 SC: But Bolivia didn't.

1:00:46.2 JF: But the society didn't, exactly. So now, why was this the case? So I've kind of gone halfway to answering the second question, so let me flip back to the first one. Why was this the case? Well, I think the people who made the revolution in 1952 were the illustrated sons of the upper middle class, the bourgeoisie, not the richest people in the country, because the revolution was against them, but it was sort of middle-class professionals and educated people.

1:01:13.6 JF: And so I think there are two things. One is that it was aspirational. What they wanted was a state- driven industrialization program that was rapidly gonna industrialize the economy and create a working class. So you're gonna have capital. The capital was gonna be largely in the hands of the state, but that's all right, and you were gonna have a working class. And also because I think they looked around in 1952 and they thought, what is the leading edge of what we want our society to look like? Where do we want to go towards? They looked to the US, Germany. Who were the leading... I guess Western Europe was rebuilding. So all of these countries have left-right political systems, and so it's aspirational. It's like, "Okay, we're not there yet. It doesn't quite fit now."

1:01:52.0 SC: Okay.

1:01:52.3 JF: But hopefully soon if we succeed, so we may as well start with that now. The other thing, of course, is that the real cleavage in Bolivia is ethnic identitarian, because for all the stuff that we were talking about in the first part of this chat, what Bolivia did not have was an industrial revolution. What it did have was 300 years of Spanish colonialism that completely remade the society from its genetic stock outwards.

1:02:20.3 SC: Right.

1:02:22.8 JF: Right? And so the key divide. Bolivia, unlike Colombia, unlike most of South America, but like Guatemala and to a lesser extent Ecuador, Bolivia has a large number of indigenous people who self-identify as indigenous people, who look and sound like indigenous people, dress like it. Their first language that they speak at home is a non-European language. It's typically Quechua or Aymara, those are the dominant two, or Guarani or any of another 30-some much smaller indigenous languages, especially in the Amazon region. And this is roughly people, there's not a good measurement of this different censuses if there are different numbers, but it's between 55 and 60 percent of the population, roughly, consider themselves to be indigenous.

1:03:03.3 SC: As compared to Colombia, for instance?

1:03:05.8 JF: Oh, it's three.

1:03:06.8 SC: 3%, okay.

1:03:06.9 JF: 3%, yeah.

1:03:07.0 SC: Very different.

1:03:08.6 JF: Yeah. So, and in Mexico and in Argentina, Chile, the numbers vary, but they're low single digits, whereas in Bolivia and in Guatemala, the indigenous people have really endured. Also in the highlands of Peru, but the lowlands of Peru are all, everyone's mixed up. So Colombians are all mixed up in one way or another. It's basically mestizo, some blend of indigenous people with Spaniards, and then with some inclusion of Blacks, all the slavery in Colombia, in terms of numbers, it was a horrible institution, but in terms of numbers, there were never nearly as many slaves as in the American South, for example. It just, it wasn't that big a deal.

1:03:47.3 SC: So in modern Bolivia, are there political parties just organized along different cleavages?

1:03:53.7 JF: So that's what happened. What happened with the collapse of the political party system is that a couple of institutional struts that had been sustaining the old system were pulled away in the turmoil around the time that Gonzalo Sánchez de Lozada was chased out of the country. Because of these demonstrations, there was a big demonstration in La Paz in particular, where something like 60, 65 people were killed by the police and the armed forces trying to repress the demonstration. And you just, you can't do this in Bolivia.

1:04:23.4 SC: Right.

1:04:23.9 JF: You can actually do this in some countries, but killing 60 people is not acceptable in Bolivia. And the whole society rebels against it. And so the president had to flee. And then you got a period of turmoil where you got the rise of Evo Morales. So what we all know, if you read the popular press about Bolivia, is that the first indigenous president in the history of Latin America, and that's completely true. But that's not the story.

1:04:46.5 JF: The story is the collapse of the previous elite-led left-right system that just did not represent Bolivia. And then, largely because of decentralization, and when you created all these local governments, you got a new class of politician competing for local government jobs, positions that you didn't have before, because before the local governments literally didn't exist. Everything was run out of La Paz. And with a lag of about 10 years, they realized, wait, we don't have to join these elite political parties led by the rich, white people who live in the expensive suburbs of La Paz. We can form our own political parties.

1:05:22.9 JF: And then when they started doing that, it's like, what kind of political party should we have? And they form it based on the real cleavage that actually defines the society which is ethnic, identitarian, and geographic.

1:05:35.2 JF: Bolivia is a relatively big country by world standards. It's twice the size of France, which is the biggest country in Western Europe. And it's geographically and ethnically very, very diverse. So then, who you are, what ethnic group you're from, whether you're from the highlands or the lowlands or the jungle, is the big thing that really matters. And it kind of determines your worldview, not capital versus labour, because there is no labour, and there's no... There are very few capitalists. And so then a new political party system springs up that's basically that. And the new divide is basically your ethnic and regional identity.

1:06:11.4 SC: I can't, of course, help but relate this to my local parochial concerns, as a citizen of the United States. I think that a lot of Americans would profess to not like political parties or the two-party system in the United States. I also suspect that it's mostly 'cause they don't like politics, and then the fact that you have to sort of agree or at least work with people you don't agree with everything about.

1:06:35.0 SC: I mean, the idea of a political party, especially in a presidential system like ours, where only two can be viable at any one time, is asking a lot. I mean, why should, like you said, why should our opinions about economics line up, correlate with our opinions about cultural issues or international relations?

1:06:55.6 JF: Yeah, yeah. No, I think that's true. And so I wrote another paper for an academic outreach journal called the Journal of Democracy that's trying to speak to the profession, but also to people beyond political scientists. And what I argue there is that Bolivia, because it was an institutionally weak democracy, but it's subject to many of the same international pressures that we're seeing play out in the US in the current election, in Europe, in Britain with Brexit or the rise of the far right in France and Germany, and all over Europe. The same kinds of things, issues to do with immigration and identity, are the migrants a threat to the English identity in the countryside when suddenly you get a bunch of people from Afghanistan or Somalia in little quaint English villages in the countryside, and the people who live there are completely shocked. This is so foreign to them.

1:07:46.4 JF: These sorts of things hit Bolivia harder because it's an institutionally weak country. And so it's a canary in the coal mine, in the sense that we see the effects there first. I think in a different form, Brexit, the rise of Trumpism in the US and MAGA republicanism, or the rise of the far right, and the collapse of the traditional left in Europe.

1:08:08.1 JF: The traditional left in Europe is really based on workers parties and unions. The left-wing parties are tied umbilically to the union movement, in the sense that they're financed largely by union-paying members, and their dues go to the union and get transferred to the left-wing political parties. And all of that is falling apart.

1:08:24.5 SC: Right.

1:08:25.3 JF: And is falling apart for some interestingly similar reasons as to what happened in Bolivia, because people work hard in Britain and Germany and France today, but they don't see themselves as a working class. That's not how they conceive of themselves. They don't wear the flat cap, they don't speak with the accent, they don't eat the same food as all the other people who work in the... Partly because they don't... Their conditions of work have changed, right? You're not working in giant factories that employ thousands or tens of thousands of people, where you go to the same place and you clock your card, and you work on an assembly line next to 500 or 1000 people who are just like you, right? So now you're an Uber driver, and you think you're an entrepreneur, right? And you're gonna get rich one day.

1:09:07.3 JF: You're an independent businessman who's subcontracting to Uber, and maybe you're driving your own car, or maybe you're driving a car that belongs to another entrepreneur, but you don't think of yourself as a working class. And so that left-right politics is in steep decline all over the West, and the question is what is going to replace it?

1:09:24.7 SC: Yeah.

1:09:25.5 JF: And from my point of view, the scary thing, and again, this is linked to Bolivia, is that if it gets replaced by identity, identitarian politics, meaning in Europe, white Europeans who have been there for a long time and are Christian and speak the language versus brown or black-skinned people who come from further away, who have a different language, a different religion, different food, if that's what it gets to be about, then this is really dangerous. Or in some countries, Protestants versus Catholics, there's still a really big divide, for example, in countries like Holland, for example, or for that matter, Germany.

1:10:00.7 JF: If politics goes from being left-right... So the thing about left-right politics is that it's always possible to find a positive, some solution that makes everyone happy, because you can expand the pie. Left versus right is basically about how do we divide profits between the owners of capital and the guys who make the stuff using that capital that makes the profits, the workers.

1:10:22.4 SC: It's economic at the end of the day.

1:10:24.3 JF: At the end of the day, right. So as long as we can keep the economy growing, we can give some to the capitalists, some to the workers, and maybe it'll fall apart, but there's at least a chance that we can find a solution because the pie keeps growing. If it's about who you are, then either one ethnic group is on top or the other ethnic group is on top, and if I'm a member of one, therefore I'm not a member of the other, I'm in or I'm out.

1:10:49.4 SC: Right.

1:10:50.1 JF: It's very difficult to find some sort of agreeable solution to that.

1:10:53.6 SC: Okay, that's a depressing thought.

1:10:54.5 JF: It turns positive-sum games into zero-sum games, and zero-sum games, in terms of political stability, are scary.

1:11:03.3 SC: Right, absolutely. I mean, and in the US, I can't help once again connecting it to polarization in the US. I mean, it seems, and I've had other previous podcast guests talk about this, that back in the day, the parties had more overlap, right? There were more socially conservative Democrats, there were more Rockefeller Republicans who were sort of socially liberal, and for whatever, a collection of reasons, dealing with geography and technology and politics, they're more effectively sorted now, right? It's clear what the difference is between the parties, and even if it's still mostly a political one versus an identity one, it still makes it harder to work together, to imagine that what we have here is a common project, we just differ on some strategic details.

1:11:49.1 JF: Yeah, that's exactly true. There was actually a fascinating visualization of this done by an undergraduate, I think at Harvard, a few years ago, when this began during, I think when Obama was president, when it began to be clear the extent of polarization in the US. And he would just sort of drew little circles and color them for each legislator in the House and the Senate, and colored them by their ideological leanings based on their roll call votes. So they had cast a vote in favor of this or that policy, and from that he mapped where they were in terms of left versus right. And what you see is that there's enormous overlap amongst the parties all through the 20th century, right?

1:12:28.5 SC: Yep.

1:12:29.9 JF: So there were many Republicans who were to the left of many Democrats. So you go back to the 50s and 60s, many Southern Democrats were actually fairly right-wing people, and many liberal Republicans from the Northeast were actually fairly left-wing people. And they belonged to one another party almost for tribal reasons or historical reasons, not for strictly ideological reasons. And what you see, when you see this visualization through time, they just separate.

1:12:50.4 SC: They just separate.

1:12:52.1 JF: And now there's no overlap. And that's also scary, because that's how you get...

1:12:55.6 SC: It is.

1:12:56.3 JF: The sort of dynamics in the House today, where they vote en masse in favor or against. And so there's almost no point in either having a vote in the House, 'cause you know, as according to how many congressmen there are, you know which way it's gonna go with almost 100% certitude.

1:13:10.0 SC: Yeah, and presidential elections, FDR, and then decades later, Reagan, on the other side, could win 48 states, right?

1:13:18.8 JF: Yeah.

1:13:19.9 SC: You can't imagine that now.

1:13:22.5 JF: You can't imagine that now. There's another really scary result. This is from a brilliant political scientist, one of the great lights of his generation, called Adam Przeworski, who's now at NYU. He's emeritus now at NYU, and he's done a bunch of brilliant comparative political scientists who studied democratic stability and instability across the world, but in particular across the well-established, highly institutionalized democracies. And what he finds is that the American-style system of presidentialism and separation of powers only really works in the United States of America. Many, many, many countries have copied this.

1:13:58.9 SC: If there.

1:14:00.9 JF: I told you. All of Latin America copied it.

1:14:01.3 SC: Yeah.

1:14:01.4 JF: And it doesn't work anywhere except for the US. So again, American exceptionalism, except, kind of in its dark form, because this system has only worked up to now in the US. Everywhere else in the world, Westminster style parliamentary democracy, where you have a really effective steam valve, sort of an escape valve, when conflict gets very high, you just have a vote of no confidence, you bring down the government, it triggers an election, and then you get a new constellation of parties, representatives, and either the same party comes back, but in a new form, or you get a coalition or the other party, Labour wins, as just happened now in the UK, thank God, because the old government was just a disaster.

1:14:42.3 JF: You don't have that in the American system, where a party that's hobbled, like, staggers on, and resentment builds up. And then finally, you get an election after four years, and God only knows what happened to them. And this is kind of scary, because this is not necessarily what he argued. I'm kind of bringing his argument to the current day. But this ideological overlap that we used to have, that you mentioned, between Republicans and Democrats, is part of what made this exceptional American system work.

1:15:12.6 SC: Yeah.

1:15:13.1 JF: And now they segregated. And I think now is an open question as to whether it can continue working, especially when the ideological polarization hits the Supreme Court, right?

1:15:23.6 SC: Exactly, yeah.

1:15:23.8 JF: It's absolutely everywhere.

1:15:25.6 SC: And I think you're... I mean, this is... You didn't quite say it, but with the example of Bolivia, where you had a system that worked pretty well for a while, and then suddenly collapsed, because it was unstable, and the pressures built up. I can imagine that the success of the American presidential system sort of, we lucked out a little bit. And now that they have sorted into two very, very different parties, it's gonna be harder. There's, it does this, would you make the argument that there is something simply objectively better about a more parliamentary system 'cause it sort of gives the possibility of a 10% third party still having viability in a way that in the United States is just impossible?

1:16:14.6 JF: Yeah. So there are two separate issues here. One is a parliamentary system versus an American style presidential system, and the other is a system of voting. So here compare the US at one end to Britain in the middle, to a continental European country on the other end where they have proportional representation, the UK still has first-past-the-post. So in any constituency, like in the US only one person is gonna win that seat. And if you get 20% of the vote you still lose the election and they elect somebody from one of the main two parties. So you're really penalized for being the third party. In Europe you have proportional representation. So if you win 10% of the vote, you're gonna get 10% of parliament, right?

1:16:56.9 JF: And then A, you're there, in the UK the liberal Democrats are nowhere. Well, they're not nowhere, but they're well below their... Or actually, the better example is the recent right wing reform party, which I don't like at all of Nigel Farage who won something I can't remember now. It was either 15 or 20% of the vote. I think it was around 15% of the vote. And I think they only got one or two seats in parliament in a parliament of 600 plus seats, right? So, I mean, they won out of all proportion to their representation, whereas in PR then you win 10%, you have 10% of representation, you have a voice in Parliament, and it's likely you're gonna be involved in some sort of coalition government. So the way political scientists think about this is that first-past-the-post takes relatively small electoral majorities and turns them into big legislative majorities.

1:17:50.6 JF: And so the Labor Party in this last election quite recently only won 35 or so percent of the vote, but they have a huge stonking majority, I mean a vast majority in Parliament. And so they can do all kinds of things and pass legislation. Walter Bagehot a constitutional thinker and one of the most important editors of the Economist Magazine called it an electoral dictatorship because there's so much power. It's interesting because it's much more powerful than the American executive, but it's also much more brittle and that it can fall. I mean, you've seen how many prime ministers cycled through just over the past couple of years in the UK when there was one American president. But then had each of those prime ministers could do things that are beyond the wildest dreams of an American president in terms of changing policy or passing legislation.

1:18:41.8 SC: Well, that's what makes it very interesting to me. I see lots of benefits of both a parliamentary system and proportional representation for people. But since I'm not... I haven't lived under those systems, I wonder about the hidden worries. Like the good thing about the American system is supposed to be checks and balances. We can have different control over the legislature, the courts, the presidency, and when the country is literally split, maybe that's a good thing. Whereas, like you say if you have the system where suddenly you have a big majority in parliament, there's not a lot that can stop you from implementing your agenda for better or for worse.

1:19:24.4 JF: Yeah. Well, your parliamentarians can stop you if they start words... Let's say things are going badly. So let's just like run the current experiment in the UK forward, and let's say that for whatever reason Keir Starmer and the new government becomes unpopular in a couple of years time, now they have a mandate for up to five years. The prime minister can choose when he calls an election. And so he has the power to choose an election at the moment that is best for him or her. But in principle is up to five years. But let's say he gets very unpopular because he makes some dumb policies and/or there are some macro shocks to do with the war in Ukraine or the economy or something along these lines. If his own parliamentarians start worrying that they're gonna lose their seat by continuing to support his government, they're gonna just turn against him. [laughter]

1:20:12.6 JF: And so you saw this when the shoe was on the other foot with the Tories during all of the morass, the debacle with Brexit debacle for the country, but also debacle for the Tory party that prosecuted it. And they brought down one after another of their own prime ministers that they had put in place because individual MPs thought, if I keep supporting Liz Truss there's no way I'm gonna lose the... There's no way I'm gonna get reelected in my constituency.

1:20:39.9 JF: So even there, there's this kind of escape valve within the party. If you have an unpopular or unsuccessful government. To complete the story, the thinking is that whereas first-past-the-post turns small majorities into big electoral... Into big legislative differences that then strong governments that can do what they wanna do. That's a good thing in the sense of getting a big change, sending a big signal and getting differences in policy.

1:21:10.9 JF: The opposite is the continental proportional representation system where you never really get a clean sweep of government or of political parties. Let's say that you have a new election and then some parties go up a few percentage points and other parties go down a few percentage points. And what happens is you get a minor reshuffling of the government. But often it's the same parties or all but one of the same parties in the new government, which looks a lot like the old government. And so the...

1:21:41.1 SC: Same people.

1:21:43.2 JF: The British and American system is like clean sweep. It's like get out of here. We're tired of Republicans, we're gonna have Democrats, we're tired of Democrats, we're gonna have Republicans. Right? If things are going pretty well, the continental system is better. Because it represents what people's honest, freely expressed sincere desires better because some people are really sincere green voters and that's what they care about. And some people are really hard. And they're there, they're not being repressed, their voices are being heard. When things go bad, what actually you need is a clean sweep and the continental system doesn't provide it and that things can get really bad.

1:22:18.2 SC: There's probably some Mathematical theorem to the effect that there is no system that works well all the time. [laughter]

1:22:27.1 JF: Yep. So I think I need someone like you to share that mathematically 'cause that's probably beyond my field.

1:22:34.4 SC: I'll get on...

1:22:34.5 JF: But yeah, that...

1:22:35.8 SC: Get to work on that.

1:22:36.6 JF: That's the general, yeah. That's the wisdom.

1:22:38.9 SC: Well, I know that it's late, but I can't let you go because one more question mildly relevant. We just had an "election" in Venezuela like days before...

1:22:51.9 JF: Yes. Oh my God.

1:22:52.0 SC: We were talking about this, and I'm sure that it's gonna be on the mind of some of our listeners. Now it seems like less of an interesting social science problem and more just like corruption and autocracy problem.

1:23:01.2 JF: Yeah. Okay. So a quick context. Venezuela was the most sophisticated, the richest, and the most politically stable country in Latin America. Venezuela and Argentina usually were competing to be the richest. But Venezuela has a fair claim for a large part of the 20th century. In the '50s, it looked like it was in GDP per capita terms 'cause it was only about 20 million people. It looked like it was gonna overtake the US.

1:23:29.1 JF: The wheels started falling off the cart in 1978, and then in the '90s things get worse. Hugo Chávez tries to mount a coup. He fails, but becomes a big figure. And then he actually gets elected president. And at that point, Venezuela goes into really steep decline because these crazy, what he calls 21st century socialism policies, it just like got... Venezuela had had a highly politically mobilized population where 90% of people were members of a party and 90% of... Well, sorry, were registered as voters and 90% of registered voters voted in elections.

1:24:05.1 SC: Wow.

1:24:05.8 JF: Which compared to the US or the UK is crazy. [laughter] I mean, it's wonderful. It's an unbelievable...

1:24:09.4 SC: It's great.

1:24:10.9 JF: Level of political participation and the wheels totally fall off the cart. He dies, Hugo Chávez dies and he has Nicolás Maduro who just makes things worse and the country's becoming an autocracy. The economy... It had a very sophisticated, productive sector in the sense of being an industrializing country where a lot of industries were located in Venezuela and made things that were consumed domestically. They were even beginning to export some industrial products. All of that gets gutted. And today it's oil and oil is around the government. The government sucks oil out of the ground, pays off members of the military to continue supporting it. If you're an elite tied in with the government, you do extremely well and everybody else is working in the informal sector, selling chewing gum or driving illegal taxis and just like trying to make ends meet. And about a third of the population has fled the country, the largest single number to Colombia.

1:25:04.3 SC: Wow.

1:25:04.3 JF: So the opposition says that they have clear evidence, voting evidence, because they were present in as many different voting locations as they could be, that they won and they won by large double digit majorities. They think that they won something like 70% of the vote. And that Maduro is just stealing it, which to me, it looks like that's happening. What it's not clear to me is how much evidence do they have? I'm sure they have some evidence, but is it anecdotal or is it really broad evidence? There's a nice parallel with the plebiscite that General Pinochet lost in Chile in 1980... When was I there? 1988.

1:25:50.7 JF: So I got there just in time for that, just after I'd graduated from an undergraduate. And he held a plebiscite and he was so arrogant, he thought he was gonna win it outright. And happily for Democracy, he allowed independent observers to be present at all the [1:26:07.4] ____ the places where people went to vote. And he allowed a process where each vote was opened and shown publicly to observers and then counted.

1:26:17.2 JF: And then what the Chilean Democratic opposition did was to organize a series of reporters who were just like reading out the results. And when each Mesa had finished counting, they gave the totals and they relayed this back to Santiago to an independent radio station that was just like calling it out. And so at some point he tried to steal the election when it became clear he had lost [laughter], he was flabbergasted.

1:26:42.3 JF: He had no idea he was gonna lose. When it became clear that he had lost roughly 60/40 then they turned out the lights on the electoral authority and they tried to steal the election, but by then it was clear because there had been independent observers at every single place where Chileans voted. So at this point it's just he's going against reality. And happily Chile is too sophisticated society with too many educated people to allow that to happen. So are we gonna get that kind of thing in Venezuela now or is it gonna be able to steal it? And I think it's all down to how much evidence they have.

1:27:15.0 SC: For what it's worth. And maybe not that much, I'm not gonna push this too hard, but Kieran Healy, who was a sociologist previous Mindscape guest, did the fun thing of... In the Venezuelan reported vote totals, he took the number that was reported as voting for a single party and just divided it by the total number of votes. And so you get a fraction, okay that's fine. Between zero and one. It's not that bad. But the fraction, which you would ordinarily expect to be like 0.54381, whatever it is, the fraction is 0.5430000000 which means that what happened is someone took the vote total multiplied it by 54.2 and made up the reported vote total from that, rather than...

1:28:06.2 JF: That makes sense.

1:28:07.1 SC: A regular number. So I don't know if... It's certainly not gonna hold up in a court of law, and maybe it actually just is a coincidence, but the chance of being coincidence is, you can quantify it, right? One part in 10 of the five or something like that. Yeah.

1:28:18.2 JF: Yeah, yeah. Vanishingly small. Exactly. Exactly. Yeah. No, I mean that's why my intuition is that they were cheating in all kinds of ways. And the question is, are they gonna try to... So in past elections, I think he would've freely... If they had been free and fair, he would've lost, but it was closer. It is one thing to cheat, if you're losing 55/45. It's something else to cheat, if you're losing 70/30 and having lost 70, like the people know, the Venezuelans know this. They know that in my community and in my neighborhood, in my town, they have a sense. Try governing a country where you just lost an election 70/30, and then you declaim that you won it.

1:28:56.2 SC: That's gonna gonna be tough.

1:28:58.9 JF: So anyway hopefully...

1:29:00.0 SC: Alright. So I'm gonna let you go, but very last question, very simple. Using all of the powers of your political science, developmental economics knowledge, how is democracy in the United States doing? Is it gonna last?

1:29:11.8 JF: Oh God, this is the scariest question of all in my field, Sean, because you try... I have a friend, a Brazilian friend who says, when he's in a seminar and people complain about... From developing countries, the US does this and the US does that. He says, yeah, absolutely. The US has done all kinds of things. It's made mistakes, it's done malicious things in Vietnam, et cetera, but you just try being a developing country in the world where the US is an autocracy or is a dysfunctional democracy, and then it's actually being run by China plus Russia by whom, right?

1:29:49.2 JF: So this is a terrifying question. We talked about the kind of very academic ideological segregation and... Not extremism, ideological separation that's happened in the country amongst voters and amongst legislators. There's something additional which is even more terrifying, which is that one of the two political parties has been taken over by frankly crazy people as far as I can tell, many of whom seem to want to degrade the institutions of democracy itself, break down the checks and balances and war up in really fundamental ways how democracy works.

1:30:27.2 JF: And this has never happened before in the American experience. You had Democrats and Republicans who often fought viciously, who accused each other of... In the 19th century of being child molesters and homosexuals and all the worst things you could say at the time. But they didn't actively try to degrade the institutions of democracy. There was respect the other guys won, that really sucked. But, oh, well, we're gonna continue playing fair because we'll get our chance four years from now.

1:30:53.0 JF: And some of these people at least are trying to degrade the institutions. And I fear if they get into power, then a system with all the problems that we talked about with ideological polarization, where additionally people are trying to break the rules or change the rules to systematically favor one side, the minority side over the other is not a system I wanna live in.

1:31:16.9 SC: Yeah, me neither. So I guess we gotta keep working to keep it a little bit better than that. And...

1:31:22.7 JF: Yeah, I don't wanna end on such a dark note.

1:31:25.6 SC: I know.

1:31:27.1 JF: I hope so if... And I don't want to speak ill of all Republicans, but I think the MAGA people are really toxic and really dangerous. And so I hope if this election is not won by them, then there is a generational change and an ideological change in the Republican party because then Trump and his followers will have lost too many elections and they'll say, okay, we have to try something different. And then hopefully the system reverts. The US has been in bad places before, but it hasn't been in this particular bad place and that's what's scary.

1:31:58.8 SC: Yeah. Well, something about crisis forging virtue or something like that. We'll have to see whether we can rise to the occasion or not. But you've given us a lot to think about. Jean-Paul Faguet, thanks so much for being on the Mindscape podcast.

1:32:09.8 JF: Sean, thank you so much. A real pleasure. Thank you so much.

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