William D. Ferguson: The Political Economy of Collective Action, Inequality, and Development

Transcript

Marshall Poe:

Welcome to the New Books Network. Hello everybody, This is Marshall Powell. I'm the editor of the New Books Network and you're listening to an episode in Grinnell College's Authors and artist podcast. And today I'm very pleased to say that we have William Ferguson, who goes by Bill, and we're going to be talking about his book, The Political Economy of Collective Action Inequality and Development. And it's out from Stanford University Press in 2020, I think. Is that right, Bill?

William Ferguson:

That's correct, yes.

Marshall Poe:

Yes. Anyway, welcome to the show, Bill.

William Ferguson:

Yes, thank you. Thank you, Marshall.

Marshall Poe:

Absolutely, my pleasure. Could you begin the interview by telling us a little bit about yourself?

William Ferguson:

Yeah, sure. Yeah, so I was actually born in Southern California and we moved around a lot when I was a kid. And I ended up going to Grinnell College as an undergraduate in the early 1970s. I was actually a history major at Grinnell College, and I graduated from Grinnell in 1975.

After graduation, I ended up moving to Seattle, Washington where I worked for six years on and off as a neighborhood community organizer. And toward towards the end of that stint, I started realizing that the part I liked best about the job, the job or jobs I'd had was doing the research. And then I realized, well, if I like research so much, let's go back to school.

So I decided to go back to school, and I will mention that my father was an economist. And so somehow his influence, I guess, made its way into my brain. And I decided to go back to school. But to go to school in economics. And so I had to bone up a little bit. And I ended up going to the University of Massachusetts at Amherst to get my Ph.D. in economics. And then by mostly by a coincidence of the job market, Grinnell happened to have an opening in exactly the fields I was ready to teach the year I was on the job market. So I sent them my resume figuring, well, at least they'll read it.

And sure enough, I got the interview and I ended up getting the job. So I've been teaching back at Grinnell since 1989. And since the fall of 1989. And I sort of progressed through the ranks, assistant professor, associate, all that stuff. And currently I'm the Gertrude B Austin professor of Economics. I started out mostly teaching labor economics, macroeconomics, a little bit of statistics, intro, econ and a few other things like that.

And then shifted kind of mid-career into game theory and notions of collective action. And then I redesigned my seminar to be a seminar on political economy, and it was really out of the combination of teaching a course and applied game theory, which is really how we think about strategic behavior. And it's got multiple applications to economics, by the way. But anyway, how we think about the relationship between applied game theory and political economy.

And that's where my first book came from, called Collective Action and Exchange: A Game Theoretical Approach to Contemporary Political Economy published by Stanford University Press 2013. And then what happened was the last chapter of that book kind of takes big picture questions, how do we think about relationships between the spread of knowledge, power, and institutions and economic growth and development? And really, my second book, this 2020 book, starts off with, it's kind of a sequel to the first book. It starts off on the last chapter of the first book and goes deeply into the political economy of collective action inequality and development.

Marshall Poe:

Well, thank you very much for that. What is it like to be back at Grinnell having been an undergraduate there? That is, as a professor?

William Ferguson:

It's actually quite nice. I was gone for 14 years. I graduated in '75 and started fall of '89. And I think having a long interview for me anyway, worked... Interval rather for me, worked quite well, because I had some distance and then I came back. But it was great coming back to a place because I knew it. And I already felt comfortable here. But also I saw it from a different perspective for two reasons. Obviously faculty's perspective is very different from a student's perspective. And also I'm housed in the economics department, whereas an undergraduate, my major was history. So a different perspective for that reason. I'll mention by the way that my wife also graduated from Grinnell. So it made let's say a familiar move for us in some respects.

Marshall Poe:

I want to ask you, in that 14-year interim, did a lot change or do you not want to talk about that?

William Ferguson:

Well things changed. It was no longer the 1970s, and so the culture definitely changed some. On the other hand, in some respects it was, and always has been Grinnell. It always had this sort of deep engagement with the liberal arts, inquisitive students asking tons of questions. And this foundational notion that spans a lot of the college and interest in social justice issues. I mean, that didn't change at all. The content changed. The student body is more diverse than it used to be in many respects, both internationally and domestically. And I think the other big change is that students pay much more attention to what job they're going to get after they graduate.

Marshall Poe:

Is that right?

William Ferguson:

Than we did in the 1970s. Yeah.

Marshall Poe:

I didn't pay any attention to that, honestly.

William Ferguson:

Yeah.

Marshall Poe:

For good or ill, I didn't pay any attention to it. So this is a book about economic development. Maybe you could begin by explaining what economic development is and what questions it asks.

William Ferguson:

Yeah. Okay. So development, and I'm actually going to talk about political economic development. So I'm going to use a definition from economist Amartya Sen, and that is the, it's a capability approach. In other words, development, economic and political development means a broad spread inclusive expansion of economic and political capabilities of members of a society.

So on the economic side, we're not just talking about growth and income, income per capita, which matters, but it's not the only thing. We're talking about spreading that income across the society. So some degree of equity, and we're talking about foundations of economic capability. So where do you get economic capability from? You get it from education, you get it from quality healthcare, you get it from provision of basic infrastructure. It's hard to develop if your highways are all dirt roads. And you get it from provision of other relevant services.

So all of that needs to be widespread. And then on the political side, you need to have, same thing, capabilities. How can people learn to participate in making decisions about governance? Well, they need to have access and they need to have input, and they need to have experience. So that's one level of political capability. And then another level is accountability. Is there a manner that the public can hold government agents accountable? And then another dimension would be impartiality. Can you generate some sort of standardized rule sets that does not just favor the most powerful and so forth.

Marshall Poe:

Would you say that the fundamental question in development economics is... Well, I don't know if it's a fundamental question, but certainly one that's interesting is why some societies seem to develop relatively well... Again, I don't want to get into value judgments. They seem to be more prosperous and free. I guess I put my cards on the table there. And some don't.

William Ferguson:

Yes. And I would argue that in some respects, that is a fundamental question. In fact, the introduction of the book, I ask a version of exactly that question. Why are some societies pretty prosperous and have relatively open avenues for political participation, whereas other societies seem to be stuck in what we could call poverty traps?

Marshall Poe:

And you mentioned this in the book. The obvious example. Everybody will know is North and South Korea, one of them seems to be trapped, and the other one seems to have done pretty well. I don't know enough about South Korea to say, but they're pretty prosperous and I think they're pretty free. And so we want to explain exactly what it is that enabled South Korea to prosper and become free.

William Ferguson:

Yeah, that's a big part of the question. And I would argue they did a good job, comparatively speaking anyway, of building capabilities amongst their public. [inaudible 00:09:57].

Marshall Poe:

So you do offer a theory, and I really like that theories are testable as they should be. So the evidence matters. So what is a development theory and what does it try to explain? We've kind of already answered that question, but what are the aspects of a development theory?

William Ferguson:

Yeah, okay. So what I'm trying to do in this book here is to develop what we could call a conceptual framework for development theory. And the idea is that I want to think about what the relationship is between specific types of social context and prospects for political economic development. And to do so, what I need to do is develop a set of categories. In other words, I need to be able to think of, okay, what are some certain basic categories of political economic context?

And how do societies in one or another, those categories, what kinds of problems of development, which I'm going to call collective action problems, are more or less implied by that particular context. And the idea then is to use that framework to guide theoretical inquiry and empirical inquiry. In other words, to generate a set of testable hypotheses and also to generate a set of questions to ask and avenues to explore and ways to think about things that can guide developmental policy-making as well.

Where, from my point of view, again, I'm interested in inclusive development, capability building, as we already talked about. So I regard my approach here as trying to bridge a gap that I often see in the literature between what you could call a one size fits all approach to developmental policy. And an example of that would be what used to be called the Washington Consensus, where in the 1990s where the idea was, well, to develop what you've got to do, countries that need to develop, what they have to do is adopt market procedures, deregulate.

And it could be more elaborate than that, of course, or slightly more broadly, to adopt what you could call best practice institutions imported from reasonably successful developing countries. So that's one approach. On one hand, the quote, one size fits all. On the other extreme is a case study approach. And it's an idea that says, well, every society and every subgroup and every society is unique.

And if you want to understand how that operates, you've got to go there and look at the details, the intricate details. So my approach here says, well, let's take a middle ground. In other words, yes, of course the social context matters, obviously, but let's draw some themes across different types of social context, and let's try to put certain types of political economic context into categories. And then we can argue that each category faces a certain type of obstacles or what I'm going to call collective action problems that can in fact, impede development. And then an understanding of the relationship between the context and the collective action problem can generate testable hypotheses and can inform policy analysis.

Marshall Poe:

You've kind of touched on the eternal battle between the area studies people and theoreticians. The area studies people are always go there and live and you'll figure out what's going on. And then the theoreticians usually use the comparative method of some sort to try to create much broader categories that work across these various cultures.

And there's always been this tension. I remember reading Economy and Society by Max Var, and it's a whole bunch of abstract typologies of various different things, which are very illuminating until you get on the ground. And they're not quite as illuminating as they were when you were reading the book in your study. So I'm trying to think about, you just mentioned the Washington consensus, but there have been a lot of developmental theories, and one of them, I was a Russian historian, or I guess I am a Russian historian. And one of them comes to mind is Marxism a developmental theory?

William Ferguson:

It-

Marshall Poe:

I'm trying to think of something-

William Ferguson:

I would say that it's an approach that can generate developmental theories.

Marshall Poe:

Yeah, right. Yeah, exactly. So was, and I suppose that in some sense it was tested or some version of it was tested. But it does prescribe a series of stages and inputs and then outputs and so on and so forth. And this is the kind of thing we're looking for.

So you make an analogy in the book between the problems that biologists face when trying to explain what they see in nature and the problems economists face when trying to explain different outcomes in economies. And key to this is the notion of complexity, which I don't think we pay much attention to. Can you talk a little bit about, I would call it the problem of complexity, because you're dealing with, if you think just simple multivariate analysis, you soon have more variables than what to do with.

William Ferguson:

Yeah, you do. That's right. I mean, I suppose we could say ultimately everything in the world is a complex system, but that's very hard to digest. So the approach that I'm trying to take is, okay, let's think of some fundamental categories and some fundamental relationships.

And I'm going to argue that one of the fundamental relationships is this notion of collective action problems. I'm going to argue that all societies, I guess this is a slightly one size fits all notion, all societies face collective action problems, but the nature of those problems differs tremendously and depends on the local context.

So one way to think about complexity is to say, okay, can we understand what collective action problems might be interfering with development in this society? And can we get some sense of where they're going to come from? The other thing that I'm going to argue is fundamental here, and I get to this in the latter part of the book, is the notion of a political settlement.

And this is going to have to do with the distribution of power amongst parties that are actually in a position to exercise power. And the degree to which those parties have come to some sort of an understanding that they will use politics of one sort or another to resolve their disputes rather than organize violence.

And so what I end up doing is saying, okay, we can think of a couple of fundamental types of political settlements, which are based largely on distributions of power. And then we can say that each one of those types of political settlements has implications on collective action problems that would accompany and often get in the way of developmental processes.

So it's a way to try to take really a large set of variables. I mean, if you want to get down to really specific models here, you can throw a lot of variables in. But paint a broad picture first. If you want to do an analogy with art, start out with an impressionist painting. Get that notion right before you go down to realism. And that gives you some idea of where to focus your attention when you want to get down to a more detailed level of thinking about, well, what are the processes that really matter in let's say India or South Korea or Vietnam or wherever?

Marshall Poe:

So you talk about political settlements is it possible to sketch a brief typology for the listeners of what these are? Do they correspond with, I would almost call them cliche or folk notions. There's the communist one and the capitalist one, or there's the liberal democracy one, or there's the authoritarian one. Do they correspond with these kind of everyday concepts?

William Ferguson:

No.

Marshall Poe:

That's the answer I wanted to hear.

William Ferguson:

They're related, but they do not correspond. I mean, we can go into that. In terms of the progression of the book, I talk about collective action problems and what they are first, before I go into political settlement.

Marshall Poe:

Let's start there then. Why don't you describe what a collective action problem is?

William Ferguson:

Okay. So a collective action problem is a problem that occurs whenever individuals or organizations acting according to their own inclinations and their own interests, generate outcomes that are bad or undesirable let's say for some group, usually a larger group. So a traditional example of a collective action problem would be pollution. We all want certain types of goods.

Companies produce certain types of goods, and when they do so they emit pollution, okay, so is there some way to get around that? Other types of collective action problems would involve, how do you really provide certain types of public goods and services that economists call public goods, or they have public good attributes where once they're produced, anybody can have it.

Well, if anybody can have it, why pay for it? Why contribute anything to it? So that's the basic notion. Another collective action problem would be crime. It's certainly in some people's interests to commit crime, obviously not in other people's interests. Corruption would be a large scale, collective action problem. A global collective action problem, climate change, how do we deal with that and so forth.

Marshall Poe:

These are kind of zero some trade offs then? Like no,

William Ferguson:

They're not zero sum.

Marshall Poe:

They're not, okay. See I'm stepping in it here. Okay, I'm sorry.

William Ferguson:

If we're talking about trade offs, I'm going to argue that usually the interests are partially aligned. In other words, they're partially in conflict, but there are also potential rules for cooperation, which may or may not be taken, of course. So that's just sort of a side point.

I'll mention one other thing about collective action problems. I categorize them into two types. First order and second order, first order, pretty much what I just talked about, in other words, can be associated with what you could call a free rider problem. You produce the public good, I'll enjoy it. Thank you.

You limit pollution. I'll enjoy the cleaner air. Thank you. And so the resolution of a first order collective action problem tends to resolve on some sort of negotiated understanding, sometimes explicit, sometimes just implicit or written on how do you share the various costs and benefits of producing public goods or limiting pollution, something like that. But then once you have an agreement, a fundamental question arises. And that is, are the parties really going to honor the agreement? I mean, oftentimes it's cheaper and easier to cheat.

Marshall Poe:

Yeah, I think we see a lot of that in climate action actually these days with all the agreements that have been made by various countries.

William Ferguson:

Yeah, absolutely. We see it all over the place.

Marshall Poe:

They've agreed to everything, but they're not doing very much.

William Ferguson:

We can see it with climate agreements, we can see it with peace treaties, sometimes we can see it with negotiated settlements of various sorts. We see it a lot. And that's what I call a second order collective action problem. And the second order problem is arranging for the coordination and the enforcement that you would need for the parties who somehow agree on a first order problem to actually honor the agreement.

And my argument here is that the resolution of second order collective action problems has absolutely everything to do with the successful implementation of policy. If you're trying to come up with a policy, a policy can sort of be a statement, okay, here's what we're supposed to do. Well, is that really going to happen or not? Making that happen is frequently a second order collective action problem.

And I'll mention one other thing, and that is that because resolution of selective action problems involves enforcement, it always involves exercises of power. And so in my way of thinking that because contracts agreements have some enforcement for vision, economics and politics are intricately linked, even at the micro level of small agreements.

Marshall Poe:

Yeah. Well, I think, but also at the macro level, because as you mentioned, lots of governments have agreed to reduce carbon emissions. How do you enforce that? There's nobody to enforce these things. And so what your argument then is that if we get the policy right, then the enforcement won't be necessary.

William Ferguson:

Oh, no. The enforcement is a separate problem. It's a problem. And you can flip it around. If nobody expects the enforcement, why negotiate the policy? Which often happens, I mean, there are many problems that nobody even tries to address because they realize that there's no way to enforce an agreement about it. So why bother?

Marshall Poe:

Well, I think this is a nice segue into the political question that I asked. And if you think about COVID is kind of a collective action problem in the sense that we want pretty much everybody to get vaccinated, or we want to keep COVID away. The Chinese have tried to do this by implementing what we in the West would think of as drastic measures. And they can do that, I think because of their political settlement, to use your words. So there are a variety of these political settlements. Can you talk a little bit about them?

William Ferguson:

Yeah. Okay. So let's go into political settlements. So again, the concept is the political settlement is a mutual understanding held among parties that have power, that they will rely on politics rather than organized violence to settle their disputes. And then I say that I develop a typology, all right, of political settlements. And I say that there are really two dimensions of the typology.

The first is what you would call the social foundation of the political settlement. And the social foundation means who's included in the settlement, which groups in society, which salient groups in society are part of the settlement. This can be political groups, it can be ethnic groups, it can be religious groups, it can be linguistic groups, and so on and so forth. Who's included, who's party to it? And the criterion for inclusion is does the group have disruptive potential? If the group has disruptive potential, meaning the ability to unsettle the agreement, then they need to be included in the understanding in some fashion.

Or to put it slightly differently, the included parties in the political settlements... This is not the governing coalition, this is usually a broader notion, is the set of groups that policy actually has to pay attention to. Whether or not they're part of any governing coalition. So the example I often give is, in China, the rural peasants, I would argue, have very little representation at the national level, yet they're still part of the political settlement.

The national government has to pay attention to them, even though it may not represent them in any direct sense. So that's part. And this social foundation can range from narrow to broad. It can be a spectrum. I categorize it in two, but really it's a spectrum. So that's one of the dimensions. And it's important because it influences the stability of the settlement. If you exclude a lot of people, it may be vulnerable.

But secondly, it influences the incentives of any ruling coalition on distribution of benefits. And if you have a broad settlement, you got to distribute those benefits broadly. If you have a narrow settlement, you do not have to. So that's one dimension. The other dimension I call the configuration of authority, and this has to do with the degree to which insiders in the settlement, and particularly the powerful among them, have come to a set of agreements on how to allocate decision-making authority.

Have they done so or not? Are they roughly coherent or are they incoherent? And so I'm going to argue that the configuration of authority ranges from what you could call multipolar, meaning scattered. Meaning that they don't agree on basic policies, they don't agree on fundamental policies like the relationship between the state and the market, or the relationship between the state and religion, so that they have to renegotiate little tiny details.

So that's multipolar on one hand. To unipolar on the other hand, where they've largely resolved these sort of broad-based collective action problems, doesn't mean that they always agree. They argue all the time over policy details, but they have some fundamental understandings that they agree on.

And I want to stress here that this is different, this is not the same thing as the distinction between autocracy and democracy. You can have unipolar, autocracies like China. They've got a pretty good idea where they're going. And you can have multipolar autocracies like the Philippines, pre-Marcos, Philippines, where they're going 20 directions at once. But they certainly weren't by any stretch of the imagination democratic.

Likewise, with democracies, you can have multipolar democracies. India would be a good example. We're hoping it hangs on to its democracy. But in any event, there are very many conflicting interests, and they always have to renegotiate the relationships with each other. You can have more polar democracies, certainly up until recent periods, at least Sweden, Norway, Denmark.

Marshall Poe:

Yeah, I was thinking about... Sorry to interrupt, but I was thinking how this relates to the idea of, again, a generic concept and not probably theoretically very apt, but homogeneity. I remember I had a conversation with a Japanese guy once, very nice guy. And I said, what happens when somebody wants to become Japanese? And he didn't understand the question. He's like, "That's not a thing."

William Ferguson:

Yeah, yeah.

Marshall Poe:

But Japan is reasonably homogeneous. And I don't know about South Korea, it's reasonably homogeneous. The Philippines is not. India is not, the United States is not.

William Ferguson:

Yeah. I mean, think it's more difficult, but not impossible if you have a heterogeneous society. I would argue that the United States was more unipolar than it is now 40 or 50 years ago. In other words, the United States has moved on the spectrum in the direction of multipolarity.

Marshall Poe:

I think that's right, too. I would agree with that. Well, to go back to what you said before, our political settlement has shifted a little bit. We now include a lot more people, at least I think we do. We're supposed to have.

William Ferguson:

We're supposed to have.

Marshall Poe:

Notice, I was very careful about the way I put that. We're supposed to have included all of these voices, and that's been reflected. And then in the case of a place like the Philippines or India, it's not an insurmountable problem, but there's so many different groups. They do find themselves... There's a lot of things to negotiate. I mean, we have a channel on the new book's network called Indian Religions. That's because there are a lot of them.

William Ferguson:

Right. Yeah, I mean, I agree. I think it's more difficult and we can think of it as a collective action problem. It's not necessarily insurmountable, but it's not necessarily easy. And there are a whole series of things that are exacerbating that problem in the United States. It's not just-

Marshall Poe:

Can you talk a little bit about that?

William Ferguson:

It's not just broader inclusion, there's all kinds of other stuff going on there.

Marshall Poe:

Yeah. Can you talk a little bit about that?

William Ferguson:

Well, yeah. I mean, this is more where I'm going to go with my next book than where I've been with this book. We can think of... My next project is going to help head in the direction of subnational units. In other words, this book is largely though not entirely focused on societies as nations in some sense.

Although in a multipolar settlement, it's very clear that sub-regions are really important in multipolar settlements. Anyway, so the next book will go in the direction of, okay, well how do we think about subnational units, not just by region, but by social cleavages, which would be divisions, ethnic divisions, racial divisions, religious divisions, ideological divisions, and so forth.

How do we think about that? So one of the ideas that's going to matter there is more attention to understandings of the social context and the ability, and this actually goes back to my first book somewhat, but anyway, the ability to frame people's understandings of where they are, who they are, who they're engaging with. And we can posit a notion of what I would call political entrepreneurs, or what many people would call political entrepreneurs who are people who understand how to invest resources into shifting understandings of the way the world works on the sort economic political side, or who we are on a personal identity side. And I would argue that those dynamics are really powerful right now in the United States.

Marshall Poe:

I think you're exactly right about that. I think they think they are.

William Ferguson:

We have a political party identification with, do you wear a mask or not? How did that happen?

Marshall Poe:

I don't know. I don't know. Yeah, that's odd. But I think you're exactly right about political I or identities in the United States, because actually, I was just listening to this interview with a guy who immigrated from Afghanistan, and he said he loved the United States. He had to leave Afghanistan for various reasons, because you could be hyphenated.

He said, "This is great. I can be an African American in Afghanistan. There just isn't any such thing. And I can be who I am." But this also has a... There's an externality here. This also means that he's not an American because there's some people that just identify as Americans. So there's this tension, if you see what I mean, between these kinds of things.

William Ferguson:

And it's a tension that I would argue various types of political entrepreneurs exploit.

Marshall Poe:

Oh, in a big way.

William Ferguson:

In a big way. And in other words, they make the collective action problem of heterogeneity much more difficult than it has to be.

Marshall Poe:

Yes they do. Let's not be specific about this, but it happens all over the political spectrum. I think we can agree on that.

William Ferguson:

I'm not going to name names, but anyway. So anyway, the idea then, again, is to systematically relate these types of social contexts, collective action problems. So back to the political settlement typology, you can have a multipolar settlement that has a broad social foundation.

And I would argue that's basically what you've got in India. They're paying attention to an awful lot of people there, but they're not very unified about what they're doing. And that has a series of implications. Okay, well what are the developmental collective action problems here? Well, roughly speaking the ideas, is there a way to make them more unipolar without throwing people out of the social foundation?

Marshall Poe:

Right, exactly.

William Ferguson:

So how do you do that? In other words... And the idea this of the book is these are the big questions that you need to work on before you can come up with specific policy prescriptions.

Marshall Poe:

You kind of have to lay the foundation. And India is completely remarkable in that way. And because it has... Many people don't know this, but it's about 10 times as diverse as Europe. People just don't know this. And it's an incredibly complicated place. It's amazing they can do anything there.

William Ferguson:

It's amazing that they have a democracy for so many decades.

Marshall Poe:

But they have developed a kind of foundation. There is an Indian identity, and they have a constitutional framework and they seem to stick to it, which is again, very remarkable given the experience of a lot of other places that have not had this kind of success.

William Ferguson:

Absolutely. Yeah.

Marshall Poe:

Yeah. And in the United States, I think we had done that, or maybe we have done that. Again, I'm thinking about the idea of an American identity. What is it to be an American? But you're right about these political entrepreneurs are constantly hammering away at these differences.

William Ferguson:

I can posit two American identities immediately. Are we a nation of immigrants? Bring me your poor, bring me your, so on and so forth. Or are we a nation of, I don't know, European descendants of European settlers or something like that.

Marshall Poe:

And you'll find political entrepreneurs that will hammer away at both of those in search of votes.

William Ferguson:

Absolutely.

Marshall Poe:

Absolutely. I was thinking that in the case, I've spent a lot of time abroad and... Well, not a lot, but some time abroad. And people would ask me... It's strange in the United States, because people would ask me where I'm from, and I would always say, Kansas. They were completely... What does that mean exactly.

William Ferguson:

So I could give one more elaboration if you want.

Marshall Poe:

Please do. Yeah, absolutely.

William Ferguson:

Yeah. So one more elaboration that can fit into this typology is there are two other interesting questions. And one is access to point source resources. In other words, the whole collective action problem of political settlements can become even more difficult if you have broad access to easy point source resources. What do I mean by that? Lots of oil, lots of diamonds. In other words, types of wealth that essentially what you do is all you have to do is extract them and you've got a ton of it.

And so in those situations, you can end up with what a lot of people call a resource curse, which is the notion that, well, the ones with the most power grab the good resources, they can make themselves rich. And they don't really have to give much to anybody else. In other words, you can generate a narrow social foundation, a sustainable, narrow social foundation on the basis of extractable resources. And then use some of the money to fund a repressive army and so on and so forth.

Marshall Poe:

Yeah, I can tell you that with some confidence this has happened in Russia. I don't feel any hesitancy in saying that.

William Ferguson:

So you can say Russia has a bit of a resource curse with its mountains of natural gas and oil. So that's one dimension. Do they have access to that or not? And just to cite examples, South Korea doesn't have any [inaudible 00:38:23].

Marshall Poe:

Yeah, I was thinking exactly a South Korea, none of that stuff.

William Ferguson:

None of that stuff. A second question, is there a mutually understood and mutual understanding is really important here, a mutually understood threat to the political survival of ruling coalitions, or slightly more broadly insiders. And if the answer is yes, then they have to figure out a way to include enough people to ward off that threat. And that's exactly what South Korea did.

The north was always an existential threat to the political survival of any ruling coalition in South Korea. And therefore they had to gain the unity of the population behind their government. And in the fifties, this was seriously problematic. They just came out of a terrible war and they had to cobble that together in some fashion. And what's interesting... And so the mutual understanding is really important, the existential threat's not good enough. Case in point, COVID-19 in the United States.

Marshall Poe:

Yeah. Yeah. That's not enough. So then in the case of the South Koreans, they made the transition though from, what was it? Again, I'm using terms which you probably won't, like an authoritarian regime to a relatively democratic one. Am I wrong about that? They manage to make [inaudible 00:39:50].

William Ferguson:

No, those terms are fine. They're just not the same thing as political settlement. They're relevant terms and I'll lay my cards on the table. Part of political development is moving toward democracy. But that's not the same thing as political settlement. So yeah, you're right. They moved from to an electoral democracy with their strike wave in 1988. I'm pretty sure I got that year right.

Marshall Poe:

You know a lot more about it than I do. I watch a lot of Korean TV and movies. That's the extent of my knowledge of it.

William Ferguson:

Very interesting coalition between workers in the export industries and students.

Marshall Poe:

Talk a bit about that, because I know that there were huge student protests against the United States in Korea in the 1970s and eighties. Is that right?

William Ferguson:

Yeah. Now these ones were... I'm talking about late eighties. It was a general strike in the export industries. And that that's where they get half the revenue. Half is probably exactly. But anyway, I mean they need that export revenue in those manufacturing export industries. And so when the workers go on strike there, that's a serious threat.

Marshall Poe:

They need to be included.

William Ferguson:

That's exactly right. They have to be included. And then you've got a... They were developing prosperity, developing a middle class. The middle class wants their kids to go to college. They figure out how to do that.

They were really quite successful in educational policy. But that's another story. And so you ended up with this coalition of students who of course are often, let's say, dissatisfied with the existing regime. Workers particularly in the export industries. And the students' parents who said, no, really we should have this stuff. So you have this broad coalition, and I'm not a super expert on this, but this is one-

Marshall Poe:

Sure. But it's very interesting. And I did wonder how they made the transition.

William Ferguson:

Essentially the regime had to give in.

Marshall Poe:

Yeah, that's remarkable, I wonder-

William Ferguson:

And it was a peaceful transition.

Marshall Poe:

Yeah, it was absolutely a peaceful transition. Well, Bill, we've taken up a lot of your time and I really appreciate it. I think we could go on for another hour or two. I don't think I would have any problem with that. We have a traditional final question on the New Books Network. And you've hinted at this a little bit. What are you working on now?

William Ferguson:

So yeah, I do have an idea that I've developed somewhat for what I would say the third book in the series. And that would be to take the collective action problem, political settlement framework that I've developed in the second book and say, okay, now I want to look in much more detail at the subnational level. And at the subnational level, I will talk about both region and what I mentioned earlier, social cleavages with a fair amount of attention to ethnicity, ethnicity, race, religion, language with those kinds of cleavages.

Marshall Poe:

And this will be cross-cultural as well, or cross state? We're talking about the United States here. We're talking about...

William Ferguson:

Oh no, yeah, no, I mean, I'm talking... The idea is, yeah, you can think about India, you can think about South Korea, you can think about China, so on, so forth. In other words, all of these endeavors are meant to be very broad, comprehensive theory that could be applied to more or less anywhere. Maybe that's a bold statement. But anyway, so that's the direction I want to go in.

And to think about the social cleavages, I'm going to go back to kind of a micro level and talk about identity. Identity, and there's actually a couple of economists, Sokoloff, Cranton and a few others, who have developed some papers on what we call identity economics. Might seem unusual, but you can think of that. So we can think of identity economics, we can think of the politics of identity, and we can talk about, well, how does that operate?

And then we can throw in this notion of political entrepreneurs and what they're going to do, what the successful ones can really do two things. They can, one, manipulate understandings of the economic environment. And we see lots of that. That's what a lot of the policy debate is about. But they can also work on understandings of who you are, who is what, and what are the classifications. And in particular, what they can do is they can increase the salience of certain types of identities. Because after all, we all have lots of identities.

Marshall Poe:

We do, yes.

William Ferguson:

I could probably list 10 or 15 off the top.

Marshall Poe:

David Hume pointed this out in the 18th century, really.

William Ferguson:

But in certain periods of time, and this is Amartya Sen again, a singular identity becomes prominent, dominant, overwhelming, and very demanding. And for Sen, at least, that's when ethnic violence erupts. When the identities become singular so that there's no bridges. We no longer belong to the same sports club. We're just, I don't know.

Marshall Poe:

Well this is... I don't want to make this sound flippant, but it kind of relates back to what you said about the class of people that wear masks and don't wear masks. These have become very strong identities for some weird reason. Yeah.

William Ferguson:

And the [inaudible 00:45:32]. I mean, in Grinnell anyway, they're neighbors.

Marshall Poe:

Yeah, right. I know. Yeah.

William Ferguson:

You see them on the street. It's like, well, okay, let's identify as neighbors and a little bit less as mask wearers or non-wearers.

Marshall Poe:

Yeah. Yeah. Well, from your lips to God's ears, let say. Yeah. All right. Well, let me tell everybody that we've been talking to William Ferguson, who goes by Bill about his book, The Political Economy of Collective Action Inequality and Development. It's out from Stanford University of Press. I've really enjoyed my time with you, Bill, thanks for being on the show.

William Ferguson:

Okay. Yes. Thank you very much, Marshall.

Marshall Poe:

Bye bye.

William Ferguson:

Good to talk to you. Bye.

 

Listen to more episodes of the Grinnell College Authors and Artists Podcast.