A.S.E.A.N The Long Game: ASEAN, China’s Charm Offensive and the South China Sea Dispute Hisyam Takiudin Brown University Author David Golden Orwa Mohammad Sean Sullivan Editors Spring 2018 Identifying why multilateralism is weakening in Southeast Asia in the wake of the South China Sea Maritime Dispute. The South China Sea (SCS) is a 3.5 million-square-meters body of water within the rims of Southeast Asia. It contains islands, reefs, and low-tide elevations that are mainly grouped into the Spratly and the Paracel Islands. The SCS is of strategic importance as it is a trade route carrying $3.4 trillion worth of goods every year – an equivalent to 21% of global maritime trade – and boasts strategic sea lanes whose blockade could disrupt entire economies (O’Rourke, 2015). Recent studies estimated the SCS to contain 11 billion barrels of oil and 190 trillion cubic feet of natural gas (Fisher, 2016). It also accounts for over 10% of the global fishing trade. While its value is undisputed, determining who owns what in the SCS gets very complicated. There are overlapping claims between China, Japan, Taiwan, and several Southeast Asian states which has led to military standoffs, international court arbitrations, as well as disruptions to revenue-generating activities in the waters (O’Rourke, 2015). To understand the root causes and find potential solutions to the SCS dispute, this paper argues a focus on two key players: China and the Southeast Asian states. Beyond China’s lofty ambitions to become the de facto power center in the region, there needs to be a consideration of China’s modus operandi. In July 2016, the Permanent Court of Arbitration (PCA) rejected China’s ‘nine-dash claim’ in the SCS. China responded by discrediting the ruling and continuing to assert its claims by adding sediments to low-tide elevations to build artificial islands, chasing out non-Chinese vessels, and engaging in military exercises (Fisher, 2016). This is a precedent-setting behavior, and the potential for additional players to follow the same law-defying strategy should sound an alarm for increased checks on Chinese influence in the region. More explicitly, other SCS claimants should create a more united front with the collective goal of upholding international law. Secondly, Southeast Asian states technically operate within a regional bloc called the Association of Southeast Asian Nations (ASEAN). ASEAN is primarily an economic bloc, but that is precisely why it is crucial to solving the dispute. A study of the economic relationship between the claimants in the dispute reveals a two-faced nature. There is a clear pick-and-choose strategy by more developed claimants (e.g. China, Japan) towards Southeast Asian states which are largely emerging markets. Capital flows can thus be an influencing instrument by more developed claimants to steer negotiations in their favor. The Southeast Asian claimants then could benefit from a more integrated economic strategy via ASEAN to ensure a level playing field. The question that remains then, why has the status quo persisted? Why is it that seemingly logical strategies such as the above not followed? Perhaps more constructively, what incremental steps are realistic and feasible for stakeholders to take in line with these big picture strategies? The rest of this paper will expand on the contexts of these observations, use data to justify the need to change the status quo, and outline potential strategies that can maximize the long-term outcome for stakeholders. The core argument will be this: a combination of ASEAN’s flawed structure, inefficient nature of international law, and the economic-incentive dependent nature of ASEAN claimants all lead to a political scenario where free-riding on other parties’ confrontations with China while reaping China’s economic incentives will bring about the best individual outcome. This is what is called a collective action problem, a Marcus Olsen (1965) notion that stresses the inability for individual actors to achieve a goal in providing a public good – in this case, a buffer against Chinese bullying (Oatley, 2016). There is then a recognition of a larger Chinese strategy to dismantle ASEAN and to shift Member States into China’s sphere of influence. Solving the SCS conflict is then not quite the priority ASEAN Member States should be giving. ASEAN as an organization is an important medium to balance against China’s creeping influence, and its Member States will need to see past the short-term benefits of China’s handouts and consider the long-term consequences of the current free-riding strategies. This paper will reveal how following a long-term strategy focusing on building ASEAN’s internal capabilities can be instrumental to maximize individual interests while ensuring China’s actions are checked. I. ASEAN and the SCS Dispute ASEAN is a regional bloc consisting of 10 Southeast Asian states and aims to promote economic, political, and security cooperation amongst its Member States. Its biggest achievement is first and foremost its ability to rally an economically, politically, and culturally diverse group of nations. By promoting regional dialogue, ASEAN, in turn, promotes regional peace and stability, a no easy feat for a group of post-colonial states (except for Thailand). However, it is important to note that in practice, ASEAN focuses on economic cooperation more so than others. This is because ASEAN decision-making is on the basis of consensus, meaning the controversial nature of political and security cooperation is by default constrained. While ASEAN managed to eliminate significant amounts of trade tariffs, no military agreements have been signed beyond joint exercises or on matters of illegal migration between its Member States. In context of the SCS dispute, the most important fact is how ASEAN as an organization has never been mandated to resolve the dispute; this responsibility falls under the claimants themselves “through legal arbitrations or political negotiations, bilaterally or multilaterally,” (Storey, 2017). In a rare exception, however, ASEAN and China did sign the non-legally binding Declaration on the Conduct of Parties in the South China Sea (DOC) in 2002, which entails the promotion of “confidence-building measures”, engagement in “practical maritime cooperation”, and “the discussion and conclusion of a formal and binding Code of Conduct (COC).” The COC is intended to be a formal, legally binding document that would facilitate maritime engagements in the SCS. The signing of the DOC is a remarkable achievement because it also acts as a litmus test for ASEAN’s ability to act as a political unit. The decision to partake in the COC negotiations is in line with China’s current charm offensive strategy in the region –explained further in Section IV, but negotiations have been significantly delayed, so much so that even the basic provisions of non-violence and non-disruptive clauses in the DOC have not been implemented (ASEAN, 2012). The DOC also created the opposite of its intended effect: creating distrust and discouraging further cooperation. This is because the DOC lacks an enforcement mechanism, leading to rampant and unchecked interpretations, where claimants have accused each other of violating the document (Storey, 2017). China sees the Philippines’s decision to take up the case to the PCA violates Article 4 which stipulates conflict resolution “through friendly consultations and negotiations by the sovereign states directly concerned”, while other claimants see China’s sand dredging to build islands fit for military use do not exemplify an act of “self-restraint” (Storey, 2017). It was not until September 2013 – a full eleven years since the DOC was signed – when the first China-ASEAN Senior Officials’ Meeting on the COC was held (Storey, 2017). Talks remained slow until after the 2016 PCA ruling, in a move believed to be China’s way of deflecting criticisms it received from rejecting the Tribunal’s result. More strikingly, the draft contents of the COC, as of November 2017, is devoid of the term “legally binding”, raising doubts whether countries should be invested in the COC at all (Storey, 2017). Even if the final version of the COC does come with a binding clause, a few things are still worth noting. First, the insistence to take time to negotiate could mean the region remains at risk of violent escalations – there is an immediacy to have the COC passed soon considering the ongoing military installations by China and Vietnam. Secondly, the COC will not mean an end to the dispute since it will not include mechanisms aimed to do so –it will not be equipped to resolve existing conflicts. Most importantly, the DOC experience and China’s precedent-setting decision to ignore the PCA ruling calls for caution whether signatories would even honor it. Internally, cracks in ASEAN solidarity towards the SCS dispute are becoming clearer. In 2011 the ASEAN Summit failed to issue a joint statement on how to approach the dispute and in 2017, it failed to mention the dispute altogether (Hutt, 2016). President Duterte of the Philippines made the surprise move to set aside the PCA ruling – in which the Philippines was overwhelmingly favored – and strengthened ties with China through trade deals worth $13.5 billion (BBC, 2016). Malaysia held joint military exercises and signed big budget infrastructure projects with China (Permal, 2017). Vietnam, on the other hand, is in a ‘cold war’-like state with China, with both parties actively participating in reclamation efforts in the region. Vietnam has also increased strategic cooperation with the United States and Japan who both condemn China’s activities in the region, further increasing tensions (Ives, 2017). The final twist: apart from Singapore, other Southeast Asian states remained quiet on the matter altogether. The key observation here is how increasingly divergent individual ASEAN states are towards the SCS dispute. As per above, the spectrum ranges from outright confrontation to normalization and all the way to blatant disregard of the issue altogether. All things considered, it seems a balancing-against-China strategy is no longer a possibility – a clear indication of the collective action problem discussed earlier. Why then, should any stakeholder in the dispute care about ASEAN? Would it not be more productive to shift the conversation towards the maximizing the interest of an individual claimant? The following sections will peel away these questions to arrive at a two-fold argument: 1) disregarding the importance of a regional Southeast Asian strategy undermines the relevance of ASEAN as a regional bloc, and 2) ASEAN is an instrumental medium in limiting China’s questionable and precedent-setting actions in the region. II. Why Bilateralism (and Limited Multilateralism) Is Preferred To understand why and how ASEAN’s relevance could be compromised, we need to look at both internal and external factors guiding ASEAN’s current principles, and then tie these to how they play to China’s best interests instead of the ASEAN region. Internally, the baffling puzzle is why has Southeast Asian multilateralism in solving the SCS dispute been limited to the flawed DOC and COC. A good way to study this is to deep dive into why bilateralism is heavily preferred. On a surface level, the obvious explanation is because not all ASEAN states are involved in the conflict. Only five Southeast States are technically involved in the dispute – the Philippines, Vietnam, Malaysia, Brunei, and Indonesia. Others are either more involved in territorial disputes with each other or are geographically irrelevant to the dispute. As Section IV will argue, it may well be the case that there are strong incentives for individual states to maintain an amicable relationship with China. Still, what this argument does not explain, is why individual ASEAN states refuse to forgo these incentives for the greater good of the regional bloc, especially in light of China’s devious actions in the SCS. One explanation could be how bilateralism has worked to solve past disputes in the region. When oil and gas reserves were found in the 70s, the Philippines moved in first in 1976, establishing a commercial field in the Reed Bank near its Palawan Island. This received strong opposition from China, Taiwan, and the newly reunited Vietnam, who all claimed the Reed Bank to be within their territories (Muscolino, 2013). Bilateralism took center stage, with each claimant stressing the importance of a peaceful resolution. Negotiations with each claimant avoided escalations for the rest of the decade (Muscolino, 2013). More recently in 2008, Malaysia and Brunei agreed to resolve their dispute by demarcating the land and maritime boundaries, while also collaborating in the exploration of hydrocarbon resources. These became resounding evidence amongst ASEAN leaders that bilateralism could prevent escalations while still maximizing the interests of all parties involved (Roach, 2014). The preference for bilateralism is perhaps better explained by the oddest feature for a regional bloc: a non-interference policy where member states could not interfere with the affairs of another. In context of the SCS dispute, it effectively means that there are no binding mechanisms for the more confrontational Vietnam to coerce the more pro-China Malaysia into shifting its policy stances, for example. The non-interference policy is a result of a shared trauma from colonialism (9 out of 10 ASEAN states are former colonies), with the idea of self-governance becoming a centerpiece when state leaders signed the ASEAN Bangkok Declaration in 1967 (Molthof, 2012). It means there is a heavy reliance on political goodwill for any regional level cooperation to work. It is not surprising then, that the multilateral-centric strategies outlined earlier in this paper remain unrealistic under current conditions. A united front between ASEAN states on the SCS dispute will first require internal disagreements to be solved, which will require a regional supranational body that could fairly rule over the overlapping claims. Amassing enough political goodwill to do this considering the already contentious internal maritime politics is nearly impossible. The practical short-term solution then, as per evidenced by current strategies, is to rely on micro-level, government-to-government negotiations. III. The Role of International Law The second dimension that explains the Southeast Asian states’ current strategy is the complications brought about by international law. The earlier discussion on the DOC and COC was only one part of the legal dimension in the SCS dispute. The United Nations Convention on the Law of the Seas (UNCLOS), intended to mitigate disputes over maritime claims such as in the SCS, exacerbated the situation in the region. This is a two-part issue: 1) vagueness in UNCLOS language allows for different interpretations, and 2) opt-outs from arbitration processes defeat the mechanisms that could have overcome the vagueness. For there to be a universally recognized dispute settlement mechanism, there also needs to be a universally recognized set of definitions for what is being disputed. UNCLOS stipulates legal definitions for the rights of states over waters beyond their shore, most controversially the provision of Exclusive Economic Zones (EEZs). It legally gives states the right to exploit resources 200 nautical miles off their shores (The Economist, 2012). There was no practical need for this beyond an incentive for states to sign onto UNCLOS, and that short-term incentive backfires. There is a two-part implication: 1) the importance of owning physical features in the SCS becomes of a strategic importance since EEZs establish a sizable control over a revenue-generating region, and 2) signatories regardless of size and military strength are now able to join in the conversation, which is good, but convolutes the already messy conflict by adding more players to the mix. Note also that Southeast Asian states are primarily emerging markets, and the opportunity to reap benefits from riches of SCS can be vital growth drivers. There is also a more patriotic perspective to this; states could also be pursuing purely nationalistic campaigns to enforce historical claims. The Singapore-Malaysia dispute over Pedra Branca and China-Japan dispute over the Senkaku Islands are prime examples. Irrespective of what motivates the states to enter the dispute, the demarcation process would be delicate as the SCS outlines the shores of at least nine states. Even so, a fair and peaceful delimitation of boundaries would be possible if the arbitration process is thorough all the way to the enforcement stage. This is unfortunately not the case with UNCLOS. Article 298 in UNCLOS gives signatories the option to be excluded from arbitrations of “sea boundary delimitations”, “military activities”, and those within the allowable functions of the Security Council (United Nations, 1982). This clause is effectively an ‘opt-out’ from the very legal proceedings UNCLOS was built for. It allows UNCLOS signatories to circumvent the accountabilities that come with violating the document. China, as expected, opted out of Article 298, giving it the legal backing to not have to act on the 2016 PCA ruling. Consider Section II’s discussion on ASEAN states’ preference towards bilateralism. Government-to-government negotiations can be effective if and only if both sides agree to make themselves accountable to the outcome of those negotiations. Once this accountability becomes optional, it begs the question whether it is still wise for ASEAN to rely heavily on bilateral talks. Another way to put it, what are the consequences of ignoring the apparent systemic flaws in the way ASEAN operates? IV. China’s Golden Paradise A good way to understand the full consequences of the systemic flaw referred in the previous section is to study how that flaw has been used against ASEAN. Again, China is a key player here. With ASEAN preferring bilateralism over multilateralism, there is an opportunity for China to tailor its strategy to individual ASEAN countries. Furthermore, with non-interference policy in full effect, any bilateral relationship an ASEAN country builds with China cannot be questioned even if that relationship adversely affects ASEAN as an organization. While this may not necessarily be the case, it will be argued that China’ current strategy suggests it may be pursuing a Southeast Asian political realignment to Beijing. On ASEAN’s part, with its Member States focusing on building a closer relationship with China, there exist trade-offs in capacity building an already fragile ASEAN, whose social, economic, and political linkages remain underdeveloped. In context of the SCS dispute, this could mean a chipping away of the very foundation of ASEAN as a potential balancing power. A grimmer picture could be that, in the long term, the very existence of ASEAN may be endangered, should its weak organizing power falter under a Chinese realignment. To capture how this can play out, one needs to first understand how China specifically has come to hold the bargaining chip it currently has. The obvious is China’s economic strength; with a gross domestic product (GDP) of $11.2 trillion (2016), China dwarfs even the that of a combined ASEAN at $2.6 trillion (2016) (Asian Development Bank, 2017). As primarily developing markets, Southeast Asian countries are right to leverage on larger economies such as China or the United States, where injections of investments can help speed up their development process. Nonetheless, China’s economic strength does not explain why Southeast Asian governments are leaning heavily towards China more so than the region’s traditional hegemon, the United States (US). A traumatic colonial experience for most ASEAN Member States towards the West, in general, could partially explain this (Wilson, 2017). More recently in 1997, the International Monetary Fund (IMF)’s unpopular austerity policies in Thailand and Indonesia lead to disastrous results. This tattooed skepticism among Southeast Asians on long-term relationship building with the West, chiefly the US which holds the IMF’s largest voting power. An even more recent development is unrelated to ASEAN public sentiment at all; the United States is seeing a wave of populism that is pressuring both ends of the political spectrum to be more inward-looking. The election of conservative populist Donald Trump as president further solidified that the US may no longer focus on Southeast Asia. The final confirmation was in Trump’s decision to pull the US out of the Trans-Pacific Partnership (TPP), history’s largest regional trade accord (Granville, 2016). The vacuum created by a receding US adds to the already favorable conditions for Chinese dominance in Southeast Asia. All that is left is an execution plan that avoids painting China as another superpower taking advantage of weaker nations. In a 2004 speech, China’s Prime Minister Wen Jiabao made a compelling remark, stating that China’s rise “will not come at the cost of any other country, will not stand in the way of any other country, nor pose a threat to any other country” (Kurlantzick, 2007). This was in the wake of China’s Peaceful Rise strategy, when it realized that its aggressive, military-centric and coercive tactics backfired badly (Kurlantzick, 2007). This is what is called a charm offensive. The strategy draws from a concept political scientist Joseph Nye calls ‘soft power’, “the ability to shape the preferences of others...It is leading by example and attracting others to do what you want,” (Kurlantzick, 2007). To exercise its soft power, China needs to first change the rhetoric surrounding China’s position in Southeast Asia. The turning point was the 1997 Asian financial crisis, where China made the smart move to lessen the devaluations of the Thai baht and the Indonesian rupiah by refusing to devalue its own currency. The decision was publicized as an Asian solidarity measure, which reframed the conversation on China in the region. China’s charm offensive was then timely; it quickly moved to establish relationships with each Southeast Asian country through cooperation in cultural, educational, and business spheres. China invested heavily to improve its diplomatic outreach, visiting its Southeast Asian neighbors twice as many times as its US counterparts (Kurlantzick, 2007). China has also integrated Southeast Asia into its larger plan to create “the world’s largest platform for economic cooperation”, the Belt and Road Initiative (BRI). BRI is an ambitious modern iteration of the Silk Road trade route, and it aims to promote physical, economic, and social connectivity (Jinchen, 2017). China’s $113 billion pledge in infrastructure building along the proposed trade route is a catnip for ASEAN states who, according to The McKinsey Global Institute, need over $2 trillion investments between 2016-2030 “in road, rail, port, airport, power, water, and telecommunications infrastructure across ASEAN to maintain economic growth,” (McKinsey Global Institute, 2016). This is the key dilemma created by China’s charm offensive: there is a clear need to address its questionable actions in the SCS dispute, yet the allure of Chinese economic incentives is at the same time too good to ignore. While China continued to deny any geopolitical agenda behind BRI, two observations seem to imply otherwise: 1) the timing of BRI coincides with China’s increasingly aggressive position in the SCS, and 2) selective awarding of valuable economic packages to pro-China ASEAN Member States, most evidently the Philippines $13.5 billion pledge upon President Duterte's U-turn from the PCA ruling. The latter observation is further supported by a tripling of Chinese investment value in Malaysia between 2014 and 2015, curiously coinciding with Malaysia’s refusal to answer calls by the Philippines’ then-President Benigno Aquino III to stand up to China. This sparks speculation that the fluctuating Chinese investment value in Vietnam is a means of Chinese retaliation towards Vietnamese reclamation efforts in the SCS (Cheok, 2017). Therefore, ASEAN states tiptoe the line between maintaining their sovereignty in the SCS and appearing favorable to China to exploit its generous handouts. On the one hand, maintaining control over geographical features in the Spratlys and Paracels could come with additional revenues through EEZs, but cost-benefit analyses could prove economic ties with China to potentially bring in much higher revenues. At the core of this argument is the fact that the commodities at stake in the SCS are primarily in oil and fishing stocks. Consider the difficulty of extracting oil, its price volatilities, and its grim long-term prospects: in 2016 BP estimated that the global oil reserves will last only for the next 53.3 years. A recent study by the OceanAsia project estimates depletions of up to 59% in key fishery stocks by 2045, putting the value of controlling fishery areas at stake (Sumalia and Cheung, 2015). Even in the potential unsustainability of income streams in the SCS, nationalism is such a big part of ASEAN – evidenced by an earlier discussed non-interference policy– that it begs a closer study on whether economic incentives are all it takes for China to assume a winning position in the SCS dispute. Earlier, it was argued that ASEAN’s non-interference policy creates a collective action problem where strong forms of multilateralism are hindered. This argument is also applicable to ASEAN’s inability to achieve the level of market integration required for a seamless intra-ASEAN trade and capital flows. ASEAN’s single market initiative, the ASEAN Economic Community (AEC), has made way for tariff reductions of 99.2% in ASEAN-6 (Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore, and Thailand) and 97.52% of tariff have been reduced to 0-5% in others (ASEAN Economic Community, 2015). Albeit slow, this is a remarkable achievement and signals a strong ASEAN solidarity in spite of its shortcomings. However, a closer look reveals a different story: there is almost a four-fold increase in non-tariff barriers and measures (NTB/NTM) from 1,634 measures to 5,975 leading up to AEC’s launch in 2015 (Zulfakar, 2017). Essentially, while ASEAN Member States markets their tariff reductions as proof of their commitment to ASEAN, the apparent shifting of potential loss of income to NTB/NTM suggests a collection of countries focused on individual economic gains more than Southeast Asia’s collective wellbeing. And by virtue of non-interference policy, ASEAN Member States cannot pressure each other to change their policies, at least not within the ASEAN framework. The inference is that yes, China may have struck gold through its charm offensive strategy. V. A Chinese Takeover – Blessing or Curse? As each ASEAN Member States form a closer bilateral relationship with China, it effectively means China will compete with ASEAN to become the common denominator in the Southeast Asian region. Should it succeed, it theoretically would put the entire region under its sphere of influence. The key puzzle this section will answer is whether a pivot to China would be detrimental to the development of ASEAN. Measuring this will first require a modeling of what a Chinese ‘takeover’ of the region would look like. One way to do that is to look at Member States who are now already highly dependent on China; a good example is Cambodia whose Chinese FDI amounts to 61% of its total FDI inflows. The fascinating aspect of the Cambodian example is that its Prime Minister, Hun Sen, has not always been friendly to China, once calling the country “the root of everything that is evil”. Within twelve years, Hun Sen altered the description to “Cambodia’s most trustworthy friend”. China covered Cambodia’s shortages in aid during a 1997 coup. This has led to an over-reliance on Chinese aid, which in turn prevents Cambodia from doing anything that may irk China. One expert describes Cambodia “as an extension of China’s foreign policy,” (Hutt, 2016). This is proven by the country’s constant blocking of official ASEAN statements on the SCS dispute, all while using the term ‘neutrality’ to justify its position. Drawing a parallel to ASEAN, the Cambodia model could very well be China’s vision for the whole Southeast Asian region. Unlike the European Union (EU), ASEAN’s highest decision-making power remains at the state level, hence the logic should follow that individual Member States’ interests precede regional goals. Therefore, consider the endgame following a Chinese takeover as the region’s de facto common denominator. China’s ability and willingness to fill in investment gaps, the considerations towards ASEAN’s inherent flaws, and the realization that resources in the SCS are unsustainable all points to the perspective that China may be an ASEAN alternative Southeast Asia needs. Beyond the push and pull of power play between China and its Western counterparts, what then, is wrong with Southeast Asia embracing China? For one, several red flags exist in the Chinese brand of regionalism. Firstly, China’s ignorance of the PCA ruling – a rejection of its ‘nine-dash’ claim in the SCS – sets a precedent of disrespect towards the international law. Secondly, there are contradictions in China’s narrative to create a harmonious cooperative environment while at the same time aggressively building up military capacity in the SCS, creating an environment of skepticism and distrust. Last and perhaps most dangerously, China’s support of authoritarian regimes such as in Cambodia and Laos does not bode well for human rights improvements. A Chinese sphere of influence appears to promote norms contrasting to that of ASEAN Member States at large. Should the consensus model remain a feature of Chinese-led regionalism – which it realistically will – the aforementioned norms would not promote healthy intergovernmental relationships. To prove this point, it is appropriate to use game theory to compare Southeast Asian cooperation between ASEAN’s framework and a Chinese-led regionalism. This is because Southeast Asian regional cooperation much resembles cartels seeking oligopolistic profits; the consensus model mirrors a similar decision-making process in a cartel where each firm’s decision could not be questioned by another. Collusion returns a higher producer surplus than a market competition would. In Southeast Asia’s case, economic benefits from free trade agreements (FTA) outweigh trade without barriers eliminated. However, cartels are generally unstable due to strong incentives to deviate. Without going too much into the underlying mathematics, the price or quantities set in a cartel, while bringing overall higher profits to the market, do not follow the best response possible for each firm. This is already happening in Southeast Asia: the AEC’s effort to eliminate trade barriers. Section IV outlined that while ASEAN Member States made significant inroads to eliminate tariff barriers, it was found that non-tariff measures and barriers (NTB/NTM) had in fact increased, signaling a mere shift income stream rather than a thorough elimination. This increase in NTB/NTM is a form of deviation, following obvious calculations that Member States stand to enjoy above average benefits through NTB/NTM while still reaping from the advantages of an FTA. Game theory states that for collusion to be sustainable, it requires for there to be: 1) only a few actors in the cartel, 2) a multi-market competition, 3) a transparent market for detection of deviations, and 4) symmetry between the firms (Policonomics). ASEAN Member States violate three of these conditions. With ten players, an often-opaque regulatory framework that makes detection of NTB/NTM difficult, and diverse economic strengths, from a game theory perspective it makes perfect sense that multilateralism is weak within ASEAN. However, at least within the ASEAN framework, there is a conscious effort – a strong political goodwill – to address the issue of NTB/NTM, so much so that the AEC Blueprint 2025, a 10-year action plan for the area, includes a focused and detailed effort to tackle this very issue (ASEAN, 2015). Consider this case in a Chinese-led regionalism, with the norms of disrespect towards international law and untrustworthy narratives coming into play. In a framework that relies so much on political goodwill, an air of distrust not only discourages cooperation to solve the underlying issue, but it further incentivizes deviations in a cartel-like arrangement. There is the true danger of a Chinese realignment in Southeast Asia. While the short-term economic incentives may be attractive and essential to fill in Southeast Asia’s infrastructure gap, there may be significant losses in economic benefits of an integrated Southeast Asian region compared to a bilateral-focused, Chinese-led model. VI. Moving Forward The previous section provides a strong case for there to be check and balances in China’s charm offensive in Southeast Asia. Analyzing the root causes of the SCS dispute’s prolongation revealed China’s apparent strategy to engulf the Southeast Asian sphere of influence into its own. Any strategy moving forward then must go beyond the SCS dispute; it also needs to address China’s long-term strategy in the region. In a way, China’s charm offensive has been a blessing because it also revealed what needs to be done to counter China’s rise. The crux of the strategy should be to look for economic-incentive driven strategies to encourage multilateralism in ASEAN, thus balancing against China. There are three ways to do this: 1) diversifying FDIs, 2) creating an ASEAN investment distribution mechanism, and 3) capitalizing on state strength to engage in less lucrative, intra-ASEAN investments. For starters, there needs to be a paradigm shift from the hunt of immediate gains that appeals to voters. This refers to China’s hefty financial investments, which, as shown, in states like Cambodia, Malaysia, and the Philippines, had apparent geopolitical agenda behind them. Cambodia especially, perhaps because it has no conflicting interests in the SCS as a landlocked country, is now practically a proxy for China in the region. It was the reason behind the failure for ASEAN to issue joint statements in recent years. With the Cambodian case in mind, the logical step would be for individual ASEAN Member States to be careful not to let China be in a dominant position in any form of monetary assistance. The guiding strategy here is then to diversify the pool of incoming capital, be it in terms of FDI, aid, or trade. There are two ways ASEAN Member States can diversity, by increasing their extra-ASEAN and/or intra-ASEAN sources. In the extra-ASEAN strategy, the impending puzzle would be to find other partners as able and as willing as China in handing out economic incentives. The best alternative is perhaps Japan, another Asian economic power which, despite stagnating FDI contribution to ASEAN, remains the Chinese amount in net terms ($17.6 billion compared to China’s $8.2 billion in net inflows at 2015 levels). What needs to change in Japan’s strategy is the distribution of its investments in the region. Japan’s investments are focused on manufacturing, the largest in the region by far, which does imply that it is playing a role in filling in the infrastructure gap required by the industry. However, Japan’s factories are highly concentrated in Thailand and Indonesia, and are highly insignificant in the CLMV (Cambodia, Laos, Myanmar, Vietnam) countries, with FDI shares in the single digits (ASEAN, 2017). The CLMV countries are key because their low-income status creates an easier path for China to supplant its influence. Apart for Vietnam’s historical adversity towards China, the country holds a giant’s share of FDI inflow into Cambodia and Laos – 22% and 66% respectively – and is currently Myanmar’s largest trade partner at a third of its total (ASEAN, 2017). The key difference between China and Japan is their motivation behind investing heavily in Southeast Asia. While both seek to balance each other out with regards to the SCS dispute, Japan does not have an apparent geopolitical agenda comparable to that of China. At least from an investment perspective, it appears Japanese companies are flocking for its economic incentives, and not for any Japanese-government mandated charm offensive. CLMV states will need to provide better economic incentives to Japan than the ASEAN-6 (Malaysia, Thailand, Singapore, Brunei, Indonesia, the Philippines). At the moment, this is unrealistic because even with their high growth rates –averaging at 6.1% compared to 4.1% in ASEAN-6 in 2016, GDP per capita in CLMV remains 2.7 times lower than the ASEAN-6. Should ASEAN Member States fail to find a suitable substitute for China’s inflowing capital, an alternative proposal could instead be to create a regional-level capital distributing mechanism. The idea is to have all capital inflows to ASEAN to first go through a central collecting agency, which will then distribute them to areas of the highest need. An advantage of this strategy is in eliminating the ‘carrots and sticks’ strategy China currently employs in the region. China can then no longer reward obedience and punish confrontations. The strategy also encourages a more equitable development within the region, which, as stated previously, remains disparate between CLMV and the ASEAN-6. As compelling as this idea may be, it faces several challenges. First, it will face an uphill battle from ASEAN Member States because a centralized collection agency essentially implies a violation of the non-interference policy. Given ASEAN’s diverse economies with varying returns to investments, a central collecting agency may deter potential investors since they will not be able to control where their investments go. The final caveat is that the political feasibility of this strategy, given China’s charm offensive, nears impossibility. China will likely use its leverage in Cambodia and Laos to veto any binding decisions on the strategy. Taking such roadblocks into consideration, perhaps a modification of this idea can work. Instead of a centralized collection agency that becomes the middleman for foreign investments, ASEAN Member States can opt to create their own version of the ASEAN Infrastructure Fund (AIF), an initiative under the Asian Development Bank (ADB) that gives financial assistance for infrastructure building. AIF on its own is insufficient because it remains capped at $300 million a year, far below the what is needed by the region. Indonesia, for example, needs $358 billion worth of investments in infrastructure spending by 2019 to keep pace with its targets (ASEAN, 2017). More tellingly, AIF funds are tied to projects endorsed by the ADB, in which China holds the largest voting share amongst Asia-Pacific shareholders. The proposed ASEAN Regional Fund (ARF) ought to be within the full jurisdiction of ASEAN, where it can dispense funds without having to answer to China or other superpowers. It will become obvious that ASEAN governments will not be able to gather the funds necessary on their own. One possible model to follow is to engage in a public-private partnership (PPP), only instead of a single company doing a joint venture with a particular ASEAN Member State, the proposed ARF will be responsible to pool money by their relevant sectors. Any infrastructure building projects will then be on a shared value basis. That way, state-owned companies cannot exert any geopolitical agenda behind proposed projects. In 2016, intra-ASEAN investments accounted for a quarter of FDI flows in the region ($24 billion), a 500% increase from 2003 levels where an upward trend has been observed since. What is more compelling is how intra-ASEAN investments in CLMV are also getting the lion’s share of total investments (ASEAN, 2017). These figures show an increasing regionality of ASEAN businesses, and that an ASEAN-led ARF may not be far from reality. In terms of feasibility, it is to be expected that ARF’s implementation will take a long time since there remains the issue that ASEAN Member States possess varying regulatory frameworks. It would require some minimal level of harmonization to avoid issues such as double taxations. As far as short-term strategies go, ASEAN Member States are fairly limited by the constraints echoed throughout this paper. A viable short-term strategy has to navigate through the inability to legally coerce other ASEAN Member States, an international law framework that does not have a real enforcement power, and high reliance on economic incentives. Therefore, it can be argued that a state-level solution remains the most viable option. The explicit suggestion here is for Member States to individually forgo trade deals with China, and signing less lucrative deals with other external partners or other ASEAN Member States. What the strategy aims to do is to capitalize on ASEAN Member States’ incentive-driven nature to promote multilateralism. How is this politically viable on a local level? Intuitively speaking, foregoing valuable financial assistance may paint incompetence to local voters, thus potentially costing elections. ASEAN Member States, however, are ‘strong states’, where “policymakers are highly insulated from [domestic interest-group pressures]” (Oatley, 2016). It suggests that ASEAN governments have significant room to follow policies that the public may not agree with, which includes the proposed strategy above. The core logic of the strategy is the following: increasing intra-ASEAN trade and capital flow to facilitate capacity building in ASEAN. These intra-ASEAN investments will help to create formal and informal linkages that intertwine Member States’ interests beyond their own geographical border. These newfound linkages may pressure Member States to also think about their regional investments on top of China’s investments, especially as China becomes more fearless in exercising its ‘carrots and sticks’. In the long run, this could mean a greater need to align policies, hence promoting more multilateral dialogues. In context of the SCS dispute, this could also encourage the option of joint explorations in the waters, solving the dispute at least between ASEAN Member States. The three strategies outlined above focus heavily on trying to balance against China’s creeping charm offensive, but it requires a closer look to determine whether they would automatically solve the SCS dispute. On the one hand, each of these strategies seeks to cripple China’s ability to use money to pressure its ASEAN dependents to respect its interests. On the other, a decaying Chinese influence is not an easy solve; it merely equates to a leveling of the playing field. Another dimension remains unsolvable: the failure of current legal frameworks to fairly arbitrate the dispute. Unless China submits itself to the binding mechanisms under UNCLOS, or voluntarily respects the original PCA ruling, the SCS will remain a contentious issue. A further argument could be made on the possibility that the SCS is not a fight worth fighting. This is in consideration of an earlier cost-benefit analysis of maintaining EEZs in the SCS. The natural resources, namely oil and fish, are unsustainable and are expected to deplete in the near future. Beyond the pretense of sovereignty, it seems clear cut for ASEAN Member States to abandon an unwinnable battle to focus on more actionable strategies. VII. Conclusion A study of the South China Sea maritime dispute requires focus on two key players: China and ASEAN. A surface level observation sees China engaging in questionable behavior in the SCS through its aggressive militarization, island building, and blocking of fishing activities. As for ASEAN, it is striking why there is not a strong multilateral opposition against China, given the high-stakes nature of the disputed areas. A preliminary analysis of how China and ASEAN have approached this dispute so far reveals an insufficient Code of Conduct, where recent negotiations indicated China’s unwillingness to succumb to rule of law at its own expense. There is also the observation that an increasingly diverging ASEAN Member States position also weakens multilateral approaches to solve the dispute. On reasons why the boundary delimitation process has been slow, the argument is two-fold. First, the preference for bilateral process stems from a historical success of such dialogues in the past. Digging deeper, ASEAN’s own structure appears to be at fault. By having a consensus model, and a non-interference policy towards Member States, ASEAN lacks a punishment or coercion mechanism. It means that any regional-level initiatives will require the political goodwill of all Member States. A second dimension that explains the SCS dispute’s prolongation is in the role of international law. UNCLOS, designed to mitigate disputes such as in the SCS, is found to be inherently flawed in two ways. First, UNCLOS’s legal definitions for what states can claim complicates the SCS dispute; the unnecessary inclusion of EEZs contributed towards increasing competition to take control of features in the SCS. Secondly, the use of opt-out clauses from certain parts of the arbitration process defeats the whole purpose of the arbitration process altogether. Another catalyst for Chinese domination in the region is in a receding US trend, at least in terms of its soft power. China recognizes the weakness of its hard power; hence, it exercises its soft power through a charm offensive strategy. This entails changing China’s rhetoric among ASEAN Member States as well as handing out generous economic incentives. The observation that China channels capital to Member States that protect its interests, and pulls out of those who do not, showcases the country’s ‘carrots and sticks’ gameplay to become the region’s new common denominator. Between the fight for sovereignty and economic incentives, it was shown that fighting for sovereignty in the SCS may not be the best strategy after all. Depleting fisheries and oil reserves does not amount to the same long term economic benefits of a Chinese infrastructure splurge. Also, the increase in non-tariff measures and barriers (NTM/NTB) upon the launch of the AEC in 2015 shows that ASEAN Member States are inherently incentive driven. Therefore, a Chinese-led regionalism is clearly the profit-maximizing outcome. In exploring the downsides of a Chinese-led regionalism, comparing the operation of ASEAN to a cartel, leads to the equilibria where Member States are strongly incentivized to deviate from a cartel-like arrangement. The difference from an ASEAN-led regionalism is in the norms China practices. China’s rejection of the PCA, for example, shows brazen disrespect for international law. Norms practiced by China does not promote healthy intergovernmental relationships moving forward. There is now a recognition that the SCS maritime dispute is only a small part of a larger, more existential threat towards ASEAN. Strategies moving forward should not then be short-sighted to any single aspect such as the SCS dispute alone. The first recommendation would be to diversify the sources of foreign investments in the region. Japan was given a suitable alternative, but a balancing against China can only happen here if Japan invests in the same sectors and locations, which is unfortunately not the case in such a segmented region. The second strategy is to create a capital distribution mechanism to promote equitable development hence reducing the ability of external powers such as China to influence the foreign policies of any Member State. A central collecting agency may prove to be too intrusive, hence a modified version centered on pooling money through public-private partnerships (PPP) may be a good way to do this. The only downside of this strategy is that it requires significant advances in ASEAN’s regional regulatory framework. One potential short-term solution to the existential threat posed by China would be to capitalize on ASEAN Member States’ ability to pursue sometimes unpopular policies in their respective countries to encourage intra-ASEAN investments. The whole point of this strategy is to further intertwine Member States’ interests within the region, but beyond their own national borders. These will create formal and informal linkages which will pressure governments to protect their now far-reaching investments. This is a form of an economic incentive-led way of encouraging multilateralism. All in all, as the strategies proposed show, ASEAN remains an essential medium in managing internal and external threats to Southeast Asian nations. ASEAN’s flaws are being used against it, but it also exposes where it can improve on moving forward. That is good progress. Endnotes 9To meet its energy demands, China imports 54 percent of its oil from the Middle East, 80 percent of which passes through the southern SCS passage. 10 Southeast Asia technically consists of 11 countries, with Timor-Leste remaining as an observer of the bloc 11 Cambodia, widely considered as China’s “most faithful client state”, has been behind the blockade of at least two post-summit statements; their position could be because China remains Cambodia’s largest aid provider, an incentive the low-income state sorely needs to catch-up with other ASEAN Member States. 12 Malaysia’s military exercise is part of a growing bilateral military cooperation between the two countries. It has grown from cooperation in disaster relief towards sea lane protections in Straits of Malacca. China also signed a ~$13.5 billion contract to build a rail link that will cut cargo shipping by 30 hours. 13 Vietnam began dredging its military-controlled Ladd Reef in 2016, and signed a gas-drilling venture with ExxonMobil due to be in full operation by 2023. 14 Singapore is in an ongoing dispute with Malaysia over Pedra Branca and South Ledge; Thailand and Cambodia both dispute overlapping claims over Koh Kut; Myanmar does not have shore in the SCS; and Laos is a landlocked country. 15 “In the mid-1990s, China had tried to use military strength to intimidate other countries in Asia, by aggressive moves like sending ships to unoccupied, disputed reefs in the South China Sea. At the same time, Beijing called on other nations in the region to abandon their alliances, mostly with the United States, arguing that these had been made obsolete by the Cold War. This strategy backfired. Countries across the region condemned Beijing’s aggressive behavior and solidified their military links with the United States, drawing the US armed forces closer into the region, and closer to China—exactly what Beijing did not want.” 16 The FDI is on a net basis, and computed as follows: Net FDI = Equity + Net Inter-company Loans + Reinvested Earnings. The net basis concept implies that the followings should be deducted from the FDI gross flows: (1) reverse investment (made by a foreign affiliate in a host country to its parent company/direct investor; (2) loans given by a foreign affiliate to its parent company; and (3) repayments of intra-company loan (paid by a foreign affiliate to its parent company). As such, FDI net inflows can be negative. 17 Japan’s FDI share in 2016 are as follows: Vietnam, 10%; Myanmar, insignificant (collapse into Others; Lao PDR, 4%; Cambodia, 9%. 18 In 2016, intra-ASEAN investments account for: Cambodia, 28%; Laos, 18%; Myanmar, 58%; Vietnam, 18%. 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Financial Literacy, Credit Access and Financial Stress of Micro-Firms Evidence from Chile Lucas Rosso Fones University of Chile Author Christopher (Casey) Lingelbach Emily Belt Orly Mansbach Editors Fall 2019 Download full text PDF (23 pages) Abstract In Chile, as well as in the majority of the economies in the world, there exists a wide range of programs targeted towards the support of micro-entrepreneurs, providing either funding for their projects or business training. Using the 2006 and 2009 Chilean Social Protection Survey (EPS) dataset, data from the Superintendence of Banks and Financial Institutions (SBIF), and using an instrumental variables (IV) approach, this article presents evidence against financial literacy training programs as it finds no significant relationship between financial literacy on credit access or financial stress of micro-firms. Moreover, using a subsample of the data, this article shows that the results must be interpreted as an “upper bound,” thus strengthening these conclusions. I. Introduction In Chile, as in most of the world, micro-firms—firms with 10 or fewer employees—play a substantial role in the performance of the economy by their contribution to production and employment. Therefore, over the last few years, authorities have developed several policies targeted to encourage entrepreneurial activities. These policies include business skills training, asset transfers and credit subsidies. For example, since 2010, a large-scale government program run by the Chilean Ministry of Social Development offers an in-kind transfer of start-up capital plus 60 hours of business training to approximately 2,000 micro-entrepreneurs each year. Due to this governmental interest in micro-firms, there is a wide literature that has studied the effect of micro-firm support on growth, unemployment, poverty, productivity, and other economic variables. Overall, the evidence leans toward a positive and statistically significant effect of credit-access programs on these variables; however, the evidence with respect to business skills is weaker. Conversely, other studies have linked financial literacy with the probability of having access to credit and the level of debt, though these studies are usually at the individual or family level. For instance, Alvarez & Ruiz-Tagle provide evidence that financial literacy is positively related to credit access, but they find no significant evidence for financial stress. Economic models of investment often rely on the assumption that firms decide the amount of capital and labor that maximizes their profit. This assumption is called the rationality of firms. Furthermore, these models evaluate the present value of the expected cash flows in relation to the initial investment. From the work of Modigliani & Miller it follows that, in a world with taxes, levered firms (companies with more debt than equity) have a greater value than non-levered firms, at the expense of a higher bankruptcy probability. However, under the assumption of rationality of firms, these models are unable to take into account the lack of financial skills of those who run the firms, which might affect their decision-making and lead them to choose sub-optimal levels of debt. This issue is especially important in micro-firms due to the often limited human capital of their owners. Thus, it is likely that micro-firms with limited financial skills hold high levels of debt or fail to renegotiate their debts, which can affect the individuals’ utility through larger levels of poverty or unemployment, among other effects. From a policymaker’s standpoint, there are two possibilities to support entrepreneurs: business training or funding support. On the one hand, business training intends to provide skills for better management of the business. For example, such training programs may provide client negotiation skills, marketing skills, working capital management, growth strategies, and more. On the other hand, funding support seeks to fix liquidity constraints which diminish the rise of new business and the prevalence and growth of existing ones. This paper intends to establish a causal relationship between financial literacy and both credit access and financial stress of micro-firms. Evidence in favor of a causal relationship would encourage the design of business training programs as a complement to the existing asset-transfer programs for micro-entrepreneurs. Using data from the 2006 and 2009 Social Protection Survey (EPS) and information from the Superintendence of Banks and Financial Institutions (SBIF) this paper presents evidence against financial literacy programs for micro-firms given that it does not find statistically significant coefficients for either credit access or financial stress. Nevertheless, a sharp reader may have concerns about the internal validity of the results as data restraints do not allow an experimental design for a specific policy. However, this paper tries to provide evidence regarding the effect of greater financial literacy on micro-firm financial decision making, giving broad conclusions on this matter and contributing to future policy design. In addition, as there are very few financial skill programs, it is unlikely that this may drive this paper’s results. Additionally, due to the endogeneity of financial literacy (the correlation of the variable and the error term used in this model), this paper proposes an instrumental variable (IV) approach, using the number of banks at a township level as an instrument for financial literacy. As it will be argued later, this instrument satisfies both the relevance and exogeneity conditions. Likewise, given the limited amount of observations that this sample contains, it is not possible to estimate the coefficients using the fixed effects model, which may drive this paper’s results. For instance, it is reasonable to think that those who appear as micro-firm owners in both years are the ones with more financial literacy, causing biased coefficients due to a non-random attrition, the process by which the strength of the relationship gradually decreases. Hence, by comparing a pooled model with a subsample of individuals only from the EPS 2006, this paper establishes an “upper bound” for the estimated coefficients. Given that this paper finds no significant results, this work supports the evidence found on other business training studies, such as the results presented by Karlan & Valdivia. The rest of the paper is divided into seven sections. Section 2 carries out a brief literature review. Section 3 describes the data, defines the main variables and presents some stylized facts. Section 4 presents the underlying economic model that sustains this investigation. Section 5 presents in detail the empirical model and discusses the main estimation problems. Section 6 shows the main results and robustness checks. Finally, section 7 presents conclusions and public policy recommendations. II. Literature Review There is a rich literature related to studying the effect of micro-entrepreneur support on poverty alleviation, unemployment, and other variables, especially regarding the evaluation of financial aid programs (credit subsidies, asset transfers, and more) and business training programs. For instance, Bruhn & Love exploit the almost simultaneous opening of more than 800 bank branches in Mexico targeted to low-income individuals, using this event as a “natural experiment.” With this experimental design and using a difference-in-difference strategy (comparing areas that received banks to similar ones that did not across time), they present evidence of a positive relationship between credit access and poverty alleviation. In the same way, Beck, Demirgüç-Kunt & Levine, using a dynamic panel at country level, find a negative and statistically significant relationship between credit access and inequality. This relationship is due to the heterogeneity in the improvement of credit access, being low-income individuals the ones who benefit the most from improved credit access. Likewise, Levine, Loayza & Beck use both cross-section and dynamic panel approaches, as well as instrumental variables to find a negative relationship between financial intermediary development and economic growth. These results are in line with Aghion et al. which finds that higher credit restraints affect economies’ mean growth. We now turn our attention to the mixed evidence of business training programs for micro-entrepreneurs, which cover a wide range of useful managing skills such as promotion skills, working capital management, and negotiation strategies. The work performed by Karlan & Valdivia or Almeida & Galasso fail to find significant evidence of business training programs for micro-entrepreneurs in Peru and Argentina. In contrast, Berge et al. and Bjorvatn & Tungodden find positive effects of human capital accumulation programs for micro-firm owners in Tanzania, while Mano & Iddrisu find the same in Ghana. Moreover, considering micro-firm owners in Chile, Martinez, Puentes & Ruiz-Tagle use the MESP program and an experimental design to provide useful evidence regarding a positive relationship between a combination of an asset transfer and business training on employment and wages of low-income micro firm owners, most of whom are women. However, they are unable to study the effect of each component of the program by itself. Examining financial literacy levels, literature focuses mainly on individual or family level. For example, Alvarez & Ruiz-Tagle, using an IV identification strategy, find some evidence related to wider credit access for households with higher financial literacy; however, they find no evidence for the levels of financial stress. Regarding individuals, some evidence shows that lower understanding of financial concepts can trigger larger levels of debt and higher probability of default. Nevertheless, it is also important to consider that lower levels of financial literacy might suggest a lower propensity to sustain relationships with financial institutions. Finally, considering micro-firm support programs, the work performed by Drexler et al. studies the effect of two types of financial skill training programs in the Dominican Republic. The first provides standard classes covering accounting and financial contents while the second offers basic classes teaching rules of thumb of finance and accounting. Among their results, the authors conclude that lower-complexity courses are more effective on financial decision-making of the treated. Despite not finding significant effects on profit or sales of any of the programs, they find some evidence of an increase in bad week sales. Overall, literature tends to lean in favor of a positive relationship between credit access and different variables related to utility of economic agents. However, evidence is mixed regarding business training programs. Further, these programs rarely focus on financial literacy or link this variable to the probability of having access to credit (at least not at a micro-firm level) despite its potential relevance in explaining the firm's liquidity constraints. Therefore, this paper seeks to provide evidence for the relation between financial literacy and the two dependent variables of interest: credit access and financial stress, with the purpose of public-policy recommendations. III. Data and Stylized Facts The data used for this work comes mainly from the Chilean Social Protection Survey (EPS), specifically the surveys of 2006 and 2009. This paper also uses data from the Superintendence of Banks and Financial Institutions (SBIF), which provides information on the distribution of bank branches at a township level, to create the instrument proposed in this paper. In both the EPS 2006 and the EPS 2009, the surveys interview roughly 15,000 households with a total of 81,096 and 74,047 observations, respectively. That being said, this paper only considers individuals that declare being owners or partners of some business. Furthermore, defining micro-firms according to the amount of workforce, this paper drops every business with more than 10 workers. Ultimately, after cleaning the database, 935 observations remained, of which 575 come from the EPS 2006 and 360 from the EPS 2009. One of the greatest strengths of the EPS is that it has a section of questions related to financial knowledge and the risk aversion of the individual. That section allows this paper to develop a Financial Literacy Index (FLI) and a risk aversion index, both in line with the ones presented by Flores, Landerretche & Sanchez. Moreover, consistent with Alvarez & Ruiz-Tagle, this paper defines financial stress as the debt to income ratio. In this matter, financial stress is defined as the total amount of debt related to business reported by the interviewee, divided by his mean annual income. Moreover, a proxy for the formality of the business is created by generating a dummy variable that takes the value of one when the firm declares sales taxes and zero if not. In Table 1 there is a summary of the main variables used for this investigation. Regarding FLI, on average, individuals interviewed answered correctly to 41 percent of the questions. Table 2 shows the distribution of correct answers. Surprisingly, just 1.07 percent of the sample answered correctly to the six questions of basic financial concepts and less than 25 percent of those interviewed responded correctly to more than half of the questions. Moreover, regarding the compound interest rate question, which is arguably the most important question when establishing a relationship with a financial institution because loans are calculated over a compound interest rate, just a 2.78 percent answered correctly. This number is considerably lower than the one found by Lusardi & Mitchell for baby boomers in the US, which was around 18 percent. Looking at credit access and financial stress, only 16 percent of the sample has some debt when interviewed, while the mean debt represents 19 percent of the individual annual income. Nevertheless, this last number is mainly driven by the relationship (or lack of relationship) with the financial institutions. Moreover, conditional on having a loan, financial stress rises to 14.3. However, despite the magnitude of the mean, it is important to consider that this debt considers long run loans such as land or equipment loans. Appendix 3 shows the means for these variables by sex and age, showing that individuals between 24 and 54 years old have greater levels of financial stress as well as the largest share of individuals that participate in the financial markets. Now this paper proceeds to look at the township-level distribution of bank branches. Townships have on average 36 bank branches. However, it is important—especially for a geographically unique country like Chile—to consider the heterogeneity of the data given the concentration of bank branches within the wealthiest, more urbanized and more educated townships, like the ones in the Metropolitan Region. Appendix 4 details the distribution of bank branches by regions. For example, there are 75.8 bank branches in each township from the Metropolitan Region, while in the third region the number goes down to 6.1. IV. Theoretical Framework For a better understanding of the empirical strategy, it is essential to rely on a theoretical model that provides an economic interpretation for the results obtained. As mentioned earlier in this paper, assuming that the firms evaluate business projects using a simple stochastic model of present value, this statement can be formalized with the following equation: (1) Yt=-I0+i=1niEtt Where Yt is the expected present value of the project in t, yt is the cash flow on period t, δ∈ (0,1) corresponds to the discount rate, and Et is the expectation operator, conditional on the set of information t. This expression is a simplification of the one proposed by Campbell & Shiller, which is very useful for the purposes of this investigation. If we assume that not all of the individuals have access to the same set of information t, or they do not understand completely all the information available, it is reasonable to think that some entrepreneurs might forecast their cash flows incorrectly. This will likely affect the expected present value of the project; thus, these estimations can compromise the firm’s liquidity or restrain their access to external funding due to lack of information. Likewise, wrong cash flow estimations might affect the firm’s decision whether to invest or not, as well as their growth possibilities given that projects are subject to the condition Yt > 0. A key assumption of this model is that individuals overestimate their cash flows as the result of a smaller set of information, which will be called t'. This can be taken from the evidence presented by Agarwal, Driscoll & Laibson who show that on the mortgage market, individuals fail to minimize their debt costs, which can be extensible to other types of debt. In that case, individuals underestimate the debt cost as they do not understand how much they pay nor their options associated with their loan. One clear example is that, on the compound interest question (see Appendix 1), 96.3 percent of those interviewed answered incorrectly and 29.3 percent of those interviewed answered as if it was a simple interest rate, which reaffirms the conclusions of Agarwal et al. Therefore, considering the assumptions mentioned above, we have that: (2) Yt-Yt'=i=1niEtt-Ett'<0 In which the right-hand expression would be the present value of the estimation error, which depends on the information gap t-t'. Thus, the bigger the information asymmetries, the less accurate the estimations for projects run by entrepreneurs with limited access to information—or in this case, entrepreneurs with low financial literacy—will be. In addition, this model, sustained by the evidence presented by Agarwal et al. predicts that the transmission channel for illiteracy will be related to costs, not income. Another important factor is the decision of individuals to increase their stock of financial knowledge. It is easy to see that increasing financial skills endowment has costs and benefits. On the one hand, benefits are related to the model shown above as they allow better access to information and hence allow the individuals to make better investment decisions. On the other hand, the process of acquiring basic financial knowledge takes time and resources, which implies costs. Overall, theory predicts that individuals optimally choose the stock of financial knowledge that maximizes their welfare, as formalized by Jappelli & Padulla. However, this model runs out of the main goal of this investigation. Finally, it is important to mention that, according to the theoretical model presented by Modigliani & Miller, in the presence of information asymmetries between firm owners and the market, levered companies are more valuable as they signal a low bankruptcy probability to the market. This would generate, consistent with the work of Ross, an incentive to be levered. This statement generates some concern regarding the prediction that firms with bigger financial stress have owners with lower financial literacy. V. Identification Strategy For the identification strategy, two models are estimated in parallel: one for financial stress and the other for the dummy variable of credit access. As such, this paper estimates the following equation: (3) Yit=Xitβ+δFLIit+t+it In which Yit represents the two dependent variables, financial stress and credit access, for each specification. Xit is a vector of individual control variables (such as education, age, or gender) and firm control variables as a dummy for formality, business age, and amount of workforce. t corresponds to a dummy variable that takes value 1 for year 2009 and 0 for 2006, to control for year-fixed effects. Our parameter of interest, FLI, corresponds to the financial literacy index, which consists of the amount of correct answers from the set of financial questions of the EPS (see Appendix 1 for more detail). it is the error term of the model. Finally, I use robust standard errors to control for possible heteroscedasticity. Regarding the variable of interest of this work, there are reasons to believe that it presents endogeneity issues due to measurement errors of the index or spillovers from those who participate actively in financial markets, as explained by Alvarez & Ruiz-Tagle. The first issue is a result of the noisy nature of financial literacy, while the second occurs because some financial concepts might be learned by participating in financial markets. It is well known that measurement errors on right-side variables will tend to bias the coefficients towards zero, while spillovers are expected to bias the FLI upwards. Therefore, given that both sources of bias operate on opposite directions, the end result will depend on which effect is dominant. In order to tackle the problem of endogeneity, this paper suggests an IV approach, using the amount of bank branches at a township level as an instrument for the FLI. This instrument can be considered exogenous for the financial stress variable as there is no theoretical reason to believe that this might correlate with the level of financial literacy of the interviewee. However, when analyzing access to credit, the relationship is more plausible, because micro-entrepreneurs can choose where to set up their business. That being said, the EPS dataset does not ask for the township in which the business is located, but for the township where the individual lives. Individuals likely did not decide to live in a township due to the supply of financial institutions, but rather due to the accessibility of the township, supply of education establishments, green area supply, compatibility with neighbors, and other variables. Thus, this IV fulfills the exogeneity condition on both specifications. Then, the first stage regressions can be written: (4) FLIict=Xitβ+δBct+t+ict In which Bct would be the number of bank branches on the township c. Another problem related to the estimations is that, when using a pool sample with observations of the EPS 2006 and 2009, it is likely that there will be non-random attrition bias if the reason to disappear from one survey to another is correlated with the FLI. Furthermore, one can think that those interviewed with lower financial literacy will have a higher bankruptcy probability and therefore lower probability to declare being a business owner on the EPS 2009, generating upward biases. The next section tackles this issue and reaffirms the robustness of the results obtained. VI. Main Results and Robustness Checks Table 3 shows the main results of both dependent variables. Columns 1 and 3 show the estimations using Ordinary Least Squares (OLS) with year fixed effects while column 2 and 4 show the results using IV. We notice that for none of the specifications is there a statistically significant coefficient for the FLI; however, in column 2, the coefficient is almost significant at a 10 percent level (p-value of 0.117). Also, we can see that coefficients are considerably larger when using an IV approach, which suggests that the attenuation bias (the underestimation of the absolute value of this data caused by errors in the independent variable) dominates the spillover effect of those who participate on the financial markets. These results are similar to the ones obtained by Alvarez & Ruiz-Tagle, in which they argue that the positive relationship between financial literacy and financial stress might be explained by greater credit access or overconfidence of the more literate individuals. The positive relationship between the FLI and the probability of having access to credit also has the expected sign; however, the significance is weaker than the one presented by Alvarez & Ruiz-Tagle. The lower panel of Table 3 shows the main results of the first stage. Shown in both models, the number of bank branches fulfills the condition of relevance as the F test is greater than 10 and the coefficients are highly significant in both specifications. Regarding the control variables, the reader can see that they all go in the expected directions. However, this paper believes it is important to discuss in detail the formality dummy variable, given that the coefficient is negative and statistically significant for credit access. At first, intuition would suggest a positive relationship between the formality of the business and the probability of getting a loan and its financial stress. Further, one would expect that formally constituted companies should have better access to request a loan on a financial institution. However, it is likely that for micro-firms as the ones studied in this paper, obtaining a loan as a formal company is more of a restraint than an advantage. The reason is very simple: an individual can leave personal assets such as his/her house or car as collateral, which reduces the bank’s risk, so unincorporated companies would take more loans than formal companies. Overall, these results suggest that business training programs related to financial skills would not be effective to diminish the financial stress (and with that the survival probability) nor the probability of having access to credit of micro-firms, as better financial literacy has no significant effect on either of these variables. Thus, a more effective policy design would be related to providing asset transfers and loan subsidies, consistent with the empirical evidence shown in the literature review. A. Robustness Checks Given that the pooled model presented in the previous subsection has observations for micro-entrepreneurs from years 2006 and 2009, it is likely that these results may be biased due to non-random attrition, in which the results gradually decrease in strength. Intuitively, it is reasonable to think that those who report themselves as micro-firm owners on both the 2006 and 2009 surveys are the ones with higher financial literacy levels (as financial literacy would be a useful tool for making optimal financial decisions and diminish the probability of bankruptcy), which would generate upward bias on the estimations presented in Table 3. In that case, results shown before should be interpreted as an “upper bound,” proving solid evidence against a causal relationship between financial literacy and the two dependent variables studied for this investigation. In order to test this hypothesis, this paper estimates again columns 2 and 4 of Table 3, but only for a subsample of year 2006 observations. If the hypothesis is true, both the significance and the coefficients must fall on this new specification. Table 4 shows the results obtained from this subsample, using the IV approach as on columns 2 and 4 of Table 3. From the table above, one can see that the results obtained are consistent with this paper’s hypothesis, as the coefficients (and their p-values) fall on both specifications when using the subsample of observations from 2006. For financial stress, the estimated coefficient falls from 3.899 to 1.698 (and the p-value increase from 0.12 to 0.36), while credit access falls from 2.693 to 2.117 (p-value changes from 0.21 to 0.30). One possible concern regarding these results is that they can be driven by the narrowing of the sample, as for the pooled model the sample was already limited on observations. However, one can see that the standard error falls when the regressions are estimated for the subsample of the year 2006, despite reducing the size of the sample. Furthermore, the instrument bank branches on township is still highly significant (at a 99 percent level for both specifications) and has an F test of 11.54. This implies that the results shown on Table 3 should be interpreted as an “upper bound,” due to the attrition bias, presenting robust evidence against financial training programs, as there is no significant relationship between financial literacy and access to credit or financial stress of micro-firms. VII. Final Conclusions This paper intended to establish a causal relationship between the financial literacy level of micro-entrepreneurs, their probability of having access to financial markets, and their financial stress. Based on the literature regarding this subject and given the large empirical evidence in favor of financial aid programs for micro-firms, as well as the mixed results in business training programs, this paper intended to contribute new evidence relative to the effectiveness of policies that involve business training for micro-firm owners. By using an instrumental variables approach, this paper tried to tackle the endogeneity problems that the financial literacy index (created following Flores, Landerretche & Sanchez) is exposed to. This paper uses the number of bank branches at a township level as an instrument for the index, which fulfills both the exogeneity and relevance conditions. Overall, my results suggest that there is no causal relationship between financial literacy and the two dependent variables studied. Further, due to non-random attrition bias, these results must be interpreted as an “upper bound” which provides solid evidence against financial training programs. Finally, for future investigations, it would be useful to check the external validity of the model and see if the results hold for other datasets in Chile or other middle-income countries. It would be also relevant to know if the conclusion on financial training projects holds for other variables, such as the probability of default. Works Cited Agarwal, S., J. C. Driscoll & D. I. Laibson. “Optimal Mortgage Refinancing: A Closed-Form Solution.” Journal of Money, Credit and Banking, vol. 45, no. 4, 2013, pp. 591–622. Aghion, P., Angeletos, G. M., Banerjee, A., & Manova, K. Volatility and growth: Credit constraints and productivity-enhancing investment. National Bureau of Economic Research, no. w11349, 2005. Akerlof, G. A. “The market for “lemons”: Quality uncertainty and the market mechanism.” Uncertainty in Economics, 1978, pp. 235-251.Alvarez, R., Ruiz-Tagle, J. Alfabetismo financiero, Endeudamiento y Morosidad de los Hogares en Chile, University of Chile, 2016. Almeida, R. K., & Galasso, E. “Jump-starting self-employment? Evidence for welfare participants in Argentina.” World Development, vol. 38, no. 5, 2010, pp.742-755. Atkinson, A., & Messy, F. A. “Promoting financial inclusion through financial education.” OECD Working Papers on Finance, Insurance and Private Pensions, no. 34, 2013. Beck, T., Demirgüç-Kunt, A., & Levine, R. “Finance, inequality and the poor.” Journal of Economic Growth, vol. 12, no.1, 2007, pp. 27-49. Beck, T., & Demirguc-Kunt, A. “Small and medium-size enterprises: Access to finance as a growth constraint.” Journal of Banking & Finance, vol. 30, no. 11), 2006, pp. 2931-2943. Berge, L. I. O., Bjorvatn, K., & Tungodden, B. “Human and financial capital for microenterprise development: Evidence from a field and lab experiment.” Management Science, vol. 61, no. 4, 2014, pp. 707-722. Behrman, J. R., Mitchell, O. S., Soo, C., & Bravo, D. Financial literacy, schooling, and wealth accumulation. 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 The Brookings Institution, 2010. Gerardi, K., Goette, L., and Meier, S. "Financial Literacy and Subprime Mortgage Delinquency: Evidence from a Survey Matched to Administrative Data." SSRN Electronic Journal, 2010. Hansen, B., Econometrics, 2016. Jappelli, T. and Padula, M. ‘Investment in financial literacy and saving decisions’, Centre for Studies in Economics and Finance, University of Naples Frederico II, CSEF Working Paper no. 272, 2011. Karlan, D., & Valdivia, M. “Teaching entrepreneurship: Impact of business training on microfinance clients and institutions.” Review of Economics and Statistics, vol. 93, no. 2, 2011, pp. 510-527. Landerretche, O. y C. Martínez “Voluntary Savings, Financial Behavior, and Pension Finance Literacy: Evidence from Chile,” Journal of Pension Economics and Finance, vol. 12, no. 03, 2013, pp. 251-297. Levine, R., Loayza, N., & Beck, T. “Financial intermediation and growth: Causality and causes.” Journal of Monetary Economics, vol. 46, no. 1, 2000, pp. 31-77. Lusardi, A., & Tufano, P. “Debt literacy, financial experiences, and overindebtedness.” Journal of Pension Economics Finance, vol. 14, no. 4, 2015, pp. 332-368. Mano, Y., Iddrisu, A., Yoshino, Y., & Sonobe, T. “How can micro and small enterprises in sub-Saharan Africa become more productive? The impacts of experimental basic managerial training.” World Development, vol. 40, no. 3, 2012, pp. 458-468. Martínez, A., Puentes, E., & Ruiz-Tagle, J. “The effects of micro-entrepreneurship programs on labor market performance: experimental evidence from Chile.” American Economic Journal: Applied Economics, vol. 10, no. 2, 2018, pp. 101-24. Modigliani, F., & Miller, M. H. “Corporate income taxes and the cost of capital: a correction.” The American Economic Review, vol. 53, no.3, 1963, pp. 433-443. Ross, S. A. “The determination of financial structure: the incentive-signalling approach.” The Bell Journal of Economics, 1977, pp. 23-40. Saavedra, M. L., & Hernández, Y. “Caracterización e importancia de las MIPYMES en Latinoamérica: Un estudio comparativo.” Actualidad Contable Faces, vol. 11, no.17, 2008. Staiger, D. O., & Stock, J. H. Instrumental variables regression with weak instruments, 1994. Appendices Appendix 1: Creation of Variables (a.) Financial Literacy Index (FLI): Consistent with Flores et al., we designed an index following the next set of questions and the number of correct answers: • Question 1: Probability. If there is a 10 percent chance of getting a disease, How many people will catch the disease out of 1000? 
 • Question 2: Lottery Division. If five people hold the same winning ticket from a lottery of $2 million, how much will each receive? 
 • Question 3: Interest rate. Assume that you have $100 in a savings account and the annual interest rate that you receive for this savings is 2 percent. If you keep the money for 5 years on this account, how much money will you have in five years from now?
 a. More than $102 b. Exactly $102 c. Less than $102 
 • Question 4: Compound rate. Let’s say you have $200 in a savings account, which accumulate 10 percent in return each year. How much would you have after two years? 
 • Question 5: Inflation. Suppose you possess $100 in a savings account which gives you a return rate of 1 percent yearly. If the inflation is 2 percent, after one year you could buy:
 a. More than $100 b. Exactly $100 c. Less than $100 
 • Question 6: Risk diversification. Please answer if the next statement is true or false: buying a stock form a company is less risky than buying the same money on several stocks from different companies 
 (b.) Likewise, I use the following risk aversion index proposed by Flores et al. (2011). Risk aversion: 
 • Is 0 if the interviewee prefers a fixed and stable income for the rest of his life 
 • Is 1 if he/she prefers a job in which he/she can, with the same probability, have twice his income 
or 3/4 of his income for the rest of his life. 
 • Is 2 if the interviewed prefers a job in which he/she can, with the same probability, have twice his income or 1/2 of his income for the rest of his life 
 • Is 3 if the interviewed prefers a job in which he/she can, with the same probability, have twice his income or 1/4 of his income for the rest of his life 
 (c.) Type of debts considered for the Financial Stress variable: 
 • Machinery
 • Land and/or agricultural facilities • Animals (cattle)
 • Bank credit line
 • Other 
 Appendix 2: Financial Literacy Index Appendix 3: Descriptive Statistic for FLI and Dependent Variables Appendix 4: Bank Branches Distribution in Chile Appendix 5: Regressions for Financial Stress and Credit Access Detail Appendix 6: Regressions for Subsample Year 2006 Appendix 7: Instrumental Variables

Can You Rationally Disagree with a Prediction Market? Nick Whitaker Brown University April 2021 This paper brings together two literatures: That of the efficient market hypothesis in economics and the relatively recent literature on disagreement in epistemology. In economics, there has been a substantial discussion of how markets aggregate knowledge through prices. In the philosophy of disagreement literature, there is significant agreement that you should defer to those with more knowledge and better judgments than you. I argue that, given these two conclusions, we are epistemically bound to defer to prediction markets in most situations, though I discuss possible exceptions. On the website PredictIt, one can find betting markets for a number of future political events like “Who will be the 2020 Democratic nominee?”, “Will Maduro be in office at the end of 2019?”, and “Will Trump be impeached in his first term?” Shares can be bought at and sold at floating prices between $.01 and $.99, and pay out a dollar if the bet wins. Share prices can be converted into probabilities, i.e. a $0.25 share represents a P(.25). I pose the question of how a rational person must change their credence when they encounter a prediction market like those on PredictIt. I will argue that under almost all normal circumstances, it is not rational to disagree with a well-functioning market. In fact, one should adopt the credence suggested by the prediction market. As I argue, a well-functioning prediction market is, on a given issue, almost always one’s epistemic superior with regard to that issue because it tends to incorporate all available information and aggregate that information effectively in its suggested credence. Given that you are likely not incorporating all available information nor aggregating that information into your credence, you are in a worse epistemic position about a given issue than its prediction market is. Thus, upon encountering a prediction market, you are rationally bound to adopt the credence suggested by it. I see this conclusion as emerging naturally from the efficient market hypothesis (EMH) literature in financial economics and the burgeoning disagreement literature in epistemology, but I think the combined implications have been underappreciated. For example, together they imply that things which normally guide our credence on a given issue – like pundits’ predictions or our interpretations of poll data – ought to hold little influence, if any, over our credence relative to the credence suggested by a prediction market. In many cases, the suggested credence of a prediction market will be surprising. Often, one is inclined to reject it. After looking at enough prediction markets, on will almost certainly find a suggested credence that he or she is convinced is wildly wrong. Nevertheless, I will argue that we should adopt the credence implied by markets, despite how reluctant we may feel. Finally, as I will argue, if one refuses to adopt the credence implied by a betting market and they are not averse to betting, the most rational course of action would be to bet on that market. The Market as an Epistemic Tool: A Short History Markets are efficient. This is suggested by basic economic theory: Given competitive markets and free entry, if people knew the price of an asset would rise or fall, they would buy or sell the asset until the market price of the asset reflected that information. This obviously cannot be exactly the case in reality; no markets are perfectly competitive, and entry is never completely free. Yet just how efficient markets are has been surprising to many, as this fact has been established by over half a century of economic theory and empirical evidence. There are important outstanding questions about how strong a claim “efficiency” should imply, and whether there are times when markets are not efficient, referred to as market anomalies. But, let us begin by reviewing the history of the theory. Efficient Markets Hypothesis was popularized by University of Chicago economist Eugene Fama. The idea began as an outgrowth of his dissertation, published in The Journal of Business in 1965 as “The Behavior of Stock Prices.” The paper argues that stock prices are essentially a “random walk” in that the “patterns” perceived in the past performance of a stock in no way indicate the stock’s future performance. Thus, for asset price movement to be a random walk, the future price needs to be independent of past prices. As Fama writes: In statistical terms independence means that the probability distribution for the price change during time period t is independent of the sequence of price changes during previous time periods. That is, knowledge of the sequence of price changes leading up to time period t is of no help in assessing the probability distribution for the price change during time period t. (35) Given that future prices are independent from past ones, no amount of study of the past performance of a stock will allow one to predict future performance. To the extent that the future is known, we should expect that information to be already incorporated into the asset price. Thus, the question becomes: Why are future prices independent of past prices? It is this question that led Fama to his work on EMH. Roughly speaking, if markets are efficient, only what is truly unknown is not incorporated into an asset’s price, and thus future movements in that price are random. As investors with information about the future buy and sell a given asset, the price of that asset would come to reflect all available information about the future. In 1970, Fama published his most cited paper, “Efficient Capital Markets: A Review of Theory and Empirical Work” in The Journal of Finance. In the paper, Fama clearly defined the terms on which a market can be considered efficient: “A market in which prices always ‘fully reflect’ available information is called ‘efficient.’” As this cannot be exactly true, Fama proposes it rather as a null hypothesis in the paper. To test efficiency more precisely, Fama delineates three versions of the hypothesis: The weak form, the semi-strong form, and the strong form. The weak form states that markets are efficient if future performance cannot be predicted from past prices. The semi-strong form states that markets are efficient if future performance cannot be predicted based on any publicly available information. The strong form states that the future performance cannot be predicted even with insider information. As the title of the paper suggests, Fama discusses the theoretical and empirical foundations for our beliefs. The theoretical work is interesting, but perhaps not worth exploring here. Essentially, there are different mathematical models which are able to test different versions (weak, semi-strong, strong) of the hypothesis. As Fama explains, early studies mostly focused on the weak version, essentially testing for the independence of new prices from historic prices. As the weak version gradually became established, research turned to the semi-strong version, which can be thought of as the question of how quickly newly public information is incorporated into market prices. Fama finds that tests of the semi-strong EMH lend “considerable support” to the hypothesis (408). The strong hypothesis had not been extensively studied at the time, but limited evidence did show that insiders were able to generate super-normal returns, and thus asset markets are likely not strong-form efficient. As Fama concludes, “For the purposes of most investors the efficient markets model seems a good first (and second) approximation to reality” (416). Since its publication, Fama’s account of EMH has faced decades of empirical scrutiny and has become a major topic of debate in finance. This is especially true as EMH challenges the value proposition of active money managers, who charge their clients fees to supposedly “beat the market.” According to EMH, their ability to do this is essentially as good as anyone else’s. Thus, many have sought to demonstrate market inefficiencies of which savvy investors could take advantage. There is a certain irony to this process, as whenever an inefficiency becomes known it becomes accounted for in the market prices and thus the prices cease to be inefficient. Conversely, in the event that everyone believed markets were efficient and invested passively, markets would become inefficient. A major meta-analysis of EMH literature was conducted in 2002 by Burton G. Malkiel, one of Fama’s coauthors. As Malkiel writes, if market anomalies were abound, we would expect that actively managed funds would be able to capitalize on these anomalies and consistently make supernormal returns. Thus, we can test market efficiency by looking at whether actively managed funds have been able to outperform diversified index funds. When fees charged by actively managed funds are considered, investment firms have actually underperformed relative to the market (Malkiel 2002). This suggest that even to the extent markets are inefficient, we are bad at consistently identifying these inefficiencies. Beyond Finance: Prediction Markets The key insight of EMH is an epistemic one: Markets tend to reflect all publicly available information. Though the theory has been traditionally framed as a theory of asset pricing, research was quickly done as to what information about the future could be gleaned from asset prices. In 1975, Fama published a paper on “Short-Term Interest Rates as Predictors of Inflation” to do just that. Since then, the idea has been taken further, to structure assets for the explicit purpose of efficiently aggregating information about the likelihood of future events. Economist Robin Hanson has been a major proponent of this, proposing that we develop “prediction markets,” sometimes referred to as “idea futures” or “information markets”. Typically, a prediction market is structured as a binary option that pays out either 0% or 100%. Thus, the price of bets can be converted into credence. If the prediction market is quickly incorporating all publicly available information, as EMH would suggest, then we can expect the credences suggested by the prediction market to be maximally informed. Relative Epistemic Positioning Given the epistemic power of prediction markets, we may ask how we should respond when we disagree with the credence suggested by the prediction market. Perhaps the initial question in any disagreement scenario should be: “Are you in a better position to judge B than your interlocutor is?” This question can be answered by considering a number of factors. Bryan Frances, in his book Disagreement, enumerates a number of considerations for epistemic positioning. Some of his main criteria are: • Cognitive ability had while answering the question • Evidence brought to bear in answering the question • Relevant background knowledge • Relevant biases After these factors, we can follow the disagreement literature in categorizing our interlocutor as being an epistemic peer, superior, or inferior on the given issue B. With this in mind, we can ask a central question: Given the efficiency of prediction markets, what is their epistemic positioning relative to us? If prediction markets are approximately semi-strong efficient, then, by definition, they are incorporating all public information into their implied credence. In most circumstances, one’s credence is formed with less information than all publicly available information. Depending on the topic, the difference in information between you and a given prediction market may be small or vast, but regardless, the prediction market is likely your epistemic superior in this regard. Additionally, a prediction market is almost certainly has better judgment than you do. We can think of good judgment as aggregating information in an accurate way. Implicit in any bet is the bettor’s weighting of his or her evidence. Just as a bettor would have an opportunity to profit on unique evidence they possessed, so to could they profit from weighting the evidence in a more accurate way than others. For example, we can imagine a prediction market on a mayoral race for a town. Let us assume that all of the relevant information about the race was comprised of three polls, and everyone betting in the market was aware of this information. Though there is no disparity between the bettors this information, a bettor could gain an edge by having the best sense of which of the polls were more accurate than others. By making these bets, he would push the betting market towards aggregating the poll results in the most accurate way. A better would be incentivized to do this, as they could profit off of a correct opinion until it was fully represented in the market price. Indeed, we could think of good judgement (or accurately aggregating information) as another type of information, higher-order information. So, we should expect a prediction market to not only to be incorporating more information, but also to be incorporating more higher order information leading to prediction markets aggregating that information more accurately. Thus, we can classify prediction markets as epistemic superiors on their relevant proposition under normal circumstances. Disagreeing with Epistemic Superiors In his paper “Reflection and Disagreement,” Adam Elga discusses how we should be guided by our epistemic superiors. He gives the example of the weather person, to whom we defer completely. If the weather person says there is a 60% chance of rain today, my credence that there will be rain today becomes 60%. Elga calls this treating the weather person as an “expert.” When someone is an expert with regard to weather, “Conditional on her having probability x in any weather-proposition, my probability in that proposition is also x” (2). As Elga writes, this means deferring to the expert on two accounts: Information and judgement. By deferring to the weather person with respect to information, we admit that she has more information (regarding weather) than we have. By deferring to the weather person with respect to judgement, we admit that she has a better manner of forming opinions (regarding weather) than us. Presumably, some people or things should be treated as experts and some people or things should not be. If a person or thing does deserve to be treated as an expert on a given domain, we should defer to their credence. If a person or thing does not deserve expert treatment, perhaps they or it should play some other role in our credence formulation. As Elga points out, there are two obvious ways the forecaster could cease to be an expert, either by failing to have more information or in failing to have better judgement. If I knew that the weather person’s radar was broken, and thus her information was corrupted, she would cease to be an expert. Similarly, if she were very drunk such that her weather judgment was inhibited, she would also cease to be an expert. Given the previous discussion of EMH and prediction markets, I will assume that they are, in general, incorporating more information and better judgment into their suggested credence than a given individual is. Thus, a prediction market is an expert with regard to its topic, and one should normally defer to it. However, just as there are situations in which a weather person fails to be an expert with regard to weather, we might expect that there are situations in which prediction markets cease to be experts. Let’s discuss a few potential situations. Information Errors For any market to function, it must be sufficiently thick, as opposed to being a thin market, one with few buyers and sellers. If I set up a prediction market on a subject and only allow three of my friends to bet on it, the market would have only as much information as the three of my friends have, and thus could not be considered an expert. For my purposes, I will limit the following discussion to thick, functioning prediction markets, though thin markets would constitute exceptions to my arguments here. One initial first information error is that you might be privy to important insider information that has not been incorporated into prediction market prices. If that were the case, the prediction market would cease being an expert to you on account of it lacking knowledge you have. However, whether there is insider information that has not been incorporated into the price is a question of whether prediction markets are efficient in the semi-strong sense or strong sense. As has been discussed, stock markets have not been found to be efficient in the strong sense. However, in the stock market, buying and selling stocks based on insider information is illegal under insider trading laws. In many prediction markets, which are not regulated by the US Securities and Exchange Commission, this is not the case. So, one might expect more insider information is incorporated. Indeed, there is a substantial question of whether the insider information you possess is not already part of the price. If it is, your disagreement with the suggested credence of the prediction market may not be justified. So, there is a substantial question of whether your “insider information” has not already been incorporated into the suggested credence of the prediction market. However, let’s assume that the information is actually something only you possess. How then, should the prediction market be treated? In this case, Elga argues that we can treat the prediction market as a “guru.” In guru cases, rather than accepting a credence unconditionally as we do with an expert, we can accept their credence conditionally. We can formalize this following Elga. Let H represent a given proposition and P’ represent the prediction market’s probability function. In the expert prediction market case: P (H| Prediction Market has P’) = P’ (H) In the guru prediction market case where “X” is your insider information: P(H|Prediction Market has P’) = P’ (H| X) Thus, Elga advises we conditionalize the guru’s probability on our unique information. So we truly have unique information, we can conditionalize the prediction market’s implied credence on it to form our optimal credence. How exactly this conditionalization should work could be simple or complex. If you were the doctor of a presidential candidate and, after an appointment with the candidate, you came to the conclusion that the candidate had a terminal illness and would die before the election, P’(H | X) would be near zero, as we would obviously expect the prediction market to suggest something similar if the information was known. However, if you were a friend of a presidential candidate, and the candidate told you: “I have just decided that tomorrow I will be announcing new policy X. I have not told anyone besides you.” How could you conditionalize a prediction market’s suggested credence on this information? It is hard to say. Perhaps you could see if any other candidate had announced a similar policy, or look at how the policy was polling, to try to get a sense of whether your candidate friend more or less likely to be elected after he or she announces the policy. Yet, this will always require some degree of guesswork and judgement. At the same time, this problem is common to conditionalizing on other types of evidence. Let us assume that your P(raintomorrow)=.5, and your friend said, “What would your credence be if I told you my Dad guaranteed it would rain tomorrow?” You might have some sense of this depending on what you knew about your friend’s father, but some degree of fuzziness here seems inevitable. Another possibility the market might have anomalies or biases which would allow for a rational disagreement with its suggested credence. The most commonly discussed bias in prediction markets is called “Favorite-Long-Shot Bias.” The bias is an empirical phenomenon; bettors have been known to over-value “long-shot” bets relative to favored ones. For example, the 1/50 horse at the horse race might actually perform closer to 1/100. Both rational expectations and behavioral explanations have been proposed to explain this phenomenon as it violates EMH. The nature of the explanations themselves is not relevant to the current discussion, but the existence of favorite-longshot bias does suggest that if a prediction market is suspected to be manifesting the bias, one should treat the market as a guru and conditionalize the market’s implied credence on the bias: P (Long-Shot | Prediction Market has P’) = P’ (Long-Shot | Long-Shot Bias) We may not be able to conditionalize perfectly, but we could look to the typical effect size of long-shot bias in similar prediction markets, and try to work towards the conditional probability from there. Thus, the bias can at least be mitigated. A final information error might be that a prediction market is being fed bad information by a manipulating bettor, who, knowing that people were using the prediction market inform their view about the future, seeks to manipulate the prediction market. Hanson discusses this potential problem in 2007 paper, “A Manipulator Can Aid Prediction Market Accuracy.” As the title implies, Hanson comes to the surprising conclusion that manipulators not only do not impede the functioning of a prediction market, they make it more accurate. As Hanson suggests, we can think of a potential manipulator as adding “noise” into the market. Because of this noise, the expected return on accurate information increases, thereby attracting more investors. With more investors, more information comes into the market, making it more accurate. However, if you did suspected that other investors were not capitalizing on the manipulator and correcting the market, you could also conditionalize on the suggested credence of the market towards what the suggested credence would look like without a manipulator. Though there are potential information related risks, they seem to be sufficiently uncommon that one should not expect them in normal circumstances. Insider information is possible, though may not actually be truly non-public. Prediction market biases may exist, but can be accounted for. Market manipulation seems counterproductive. Information related errors should be looked for, but they are not able to diminish the established informative power of prediction markets. Judgment Errors The second type of errors, judgment errors, relate to the ways in which information is aggregated. Markets are one way of aggregating information, but there are others, like deliberation. What if you came to your credence as part of a deliberating group, incorporating the knowledge of many into your credence? Let us even assume, for the sake of argument, that your deliberating group had access to all the same information as all of the bettors in a given prediction market. If your credence differs from the credence suggested from the betting market, would it be rational to conciliate? Cass Sunstein takes on this issue in a 2006 paper, “Deliberating Groups Versus Prediction Markets.” Sunstein points out that this is a particularly important case, as many of our decisions and credences come about through deliberation with others. Why should we expect this deliberative process to be desirable, especially relative to prediction markets? Indeed, as Sunstein argues, we should not expect deliberation to work better. We should actually expect it to be a less efficient way to aggregate information. Sunstein focuses primarily on two reasons: Group members failing to disclose what they know out of deference to the public information announced by others and social pressures leading members to not dissent from the group. As Sunstein writes, “Groups often amplify rather than correct individual errors; emphasize shared information at the expense of unshared information; fall victim to cascade effects; and tend to end up in more extreme positions in line with the predeliberation tendencies of their members” (192-3). On the other hand, prediction markets provide potential financial reward for individually held information and contrarian opinions, succeeding exactly where deliberation fails. Indeed, the profit motives makes uncommon knowledge especially profitable, where social, deliberative situations make group approved, desirable information most valuable. Thus, deliberation is, on average, a worse method of aggregation. One still ought to defer to the judgment of the prediction market. What about if you create another information aggregating mechanism to inform your credence on a given issue that you think may outperform a prediction market? There have been two notable recent attempts at this: Nate Silver in his elections forecasting and Philip Tetlock’s Good Judgement Project. In 2008, Nate Silver rose to prominence by using Bayesian statistical techniques to aggregate poll results, leading to highly accurate electoral predictions. Silver’s work provides a case study in whether advanced statistical techniques can aggregate information more effectively a prediction market. In 2009, economist David Rothschild tested Silver’s prediction against those suggested by a leading prediction market at the time, Entrade. He concludes, “I demonstrate that early in the cycle and in not-certain races debiased prediction market-based forecasts provide more accurate probabilities of victory and more information than debiased poll-based forecasts” (895). Rothschild’s technique is interesting. When he debiases Silver’s results, they become more accurate than the raw prediction market results. But, when he accounts for the favorite-longshot bias discussed earlier in the prediction market results, the debiased prediction market becomes most accurate. To put this into Elga’s framework, the prediction market makes for a better guru than Silver. Silver addresses the study directly in his book, The Signal and the Noise. He takes some issues with Rothschild’s methodology, that he debiases the prediction market results, and, more importantly, that the prediction markets move in response to Silver’s poll aggregation. Yet nevertheless, as Silver writes, “Over the long run, however, the aggregate forecast has often beaten even the very best individual forecast.” Silver is skeptical of the current state of prediction markets, thinking that there is not yet enough competition and the markets are still relatively thin, but is open to their potential superiority. Thus, Silver asserts the earlier caveat, that the current set of prediction markets, given the current legal restrictions on them, may suffer from the market thinness discussed. Philip Tetlock’s work on forecasting has also become an interesting potential challenge to prediction markets. In Tetlock’s Good Judgement Project, he sought out people who were outstanding at predicting the future over a number if years. He called this group “superforecasters.” In his book on the subject, Superforcasting, Tetlock describes testing the results of teams of superforecasters against prediction markets. His results: “Teams of ordinary forecasters beat the wisdom of the crowd by about 10%. Prediction markets beat ordinary teams by about 20%. And superteams beat prediction markets by 15% to 30%” (207). The result is fairly surprising, given the power of prediction markets. But, it is perhaps not entirely fair. As Tetlock admits, “I can already hear the protests from my colleagues in finance that the only reason the superteams beat the prediction markets was that our markets lacked liquidity: real money wasn’t at stake and we didn’t have a critical mass of traders. They may be right” (207). Interestingly, the argument is very similar to that of Silver, that the relatively small scale of current prediction markets suggests they are not operating as well as they could be. So, if you are a superforecaster working with a team of other superforecasters, perhaps your group’s combined judgement is sufficiently better than current prediction markets that you need not defer to them. But, this may cease to be true if better prediction markets were developed. So even between the narrow cases of Silver and Tetlock, the practitioners themselves are skeptical of their own ability to beat more robust prediction markets. And, this makes sense. As soon as a strategy develops an edge on prediction markets, they are incentivized to bet on that information until their information is fully incorporated into the betting market’s price. Indeed, a betting market can, as is actually encouraged, to subsume all other deliberation mechanisms into it until it obtains maximal accuracy. Staying Steadfast Against Your Superiors Let us assume you do not adopt the credence suggested by a prediction market because you wish to remain steadfast and think the credence suggested by the prediction market is incorrect. Bryan Frances discusses a similar epistemic situation in his piece, “Philosophical Renegades,” where an amateur astronomer retains her belief that Jupiter has fewer than 10 moons even after the vast majority of professional astronomers have come to believe the planet has over 200 moons. The astronomer has no concrete reason to reject the opinions of the expert astronomer community, but perhaps would say she expects that the others are making a mistake. This is not unlike the situation one is in disagreeing with a prediction market, as the prediction market is likely aggregating all available evidence in an effective manner. To some extent, the rationality of retaining one’s credence in the face of this disagreement depends upon how much one knows about prediction markets. If he or she were unaware of their epistemic virtues, the disagreement may be justified. But, if he or she understood prediction markets, their disagreement may be blatantly irrational. There is another interesting dimension to disagreeing with prediction markets, whether that be because you remained steadfast or because you have conditionalized on the suggested credence of the prediction market. In either of these situations, you should see yourself as having the opportunity to arbitrage. Let us assume, for example, that a prediction market suggests that the chance of Donald Trump being elected is P(.42), as PredictIt suggests at the time of writing. Let us also assume that your credence in Donald Trump being reelected is (.1). Given your credence of (.1), you would be rational to take a bet at 9/1 odds or better that Trump is not reelected. A prediction market at P(.42) would offer odds at 11/8. Indeed, if you really believe your credence is (.1), this should be seen as a profitable strategy over the long run. If you do not have an adversity to betting, then you should bet. Even if you treat the prediction market as a guru and conditionalize against its suggested probability, rationality would still suggest you bet against the market, as it would have positive expected value. Conclusion The disagreement literature discusses the different ways in which we should engage with our epistemic peers, inferiors, and superiors. As I have shown, we should look to prediction markets as our epistemic superiors, and as experts or gurus in Elga’s sense. I see this as being action guiding in a number of ways. First, if we wish to have more accurate credences about future events, we should create larger scale prediction markets. Second, when we have access to sufficiently thick prediction markets, we should defer to their suggested credences. To the extent one disagrees with a prediction market suggested credence, they should bet in the market as they would have a positive expected return. Works Cited Christensen, David Phiroze, and Jennifer Lackey. The Epistemology of Disagreement: New Essays. Oxford University Press, 2016. Elga, Adam. “Reflection and Disagreement.” Nous, vol. 41, no. 3, Sept. 2007, pp. 478–502., doi:10.1111/j.1468-0068.2007.00656.x. Fama, Eugene F. “Short-Term Interest Rates as Predictors of Inflation.” The American Economic Review, vol. 65, no. 3, June 1975, pp. 269–282., doi:10.1787/157052064225. Fama, Eugene F. “The Behavior of Stock-Market Prices.” The Journal of Business, vol. 38, no. 1, 1965, pp. 34–105., doi:10.1086/294743. Fama, Eugene F., and Burton G Malkiel. “Efficient Capital Markets: A Review of Theory and Empirical Work.” The Journal of Finance, vol. 25, no. 2, May 1970, pp. 383–417., doi:10.2307/2325486. Frances, Bryan. Disagreement. Polity, 2014. Hanson, Robin, and Ryan Oprea. “A Manipulator Can Aid Prediction Market Accuracy.” Economica, vol. 76, no. 302, 2009, pp. 304–314., doi:10.1111/j.1468-0335.2008.00734.x. Hanson, Robin. “Decision Markets.” IEEE Intelligent Systems, vol. 14, no. 3, 1999, pp. 16–20. Malkiel, Burton G. “The Efficient Market Hypothesis and Its Critics.” Journal of Economic Perspectives, vol. 17, no. 1, 2003, pp. 59–82., doi:10.1257/089533003321164958. Rothschild, David. “Forecasting Elections.” Public Opinion Quarterly, vol. 73, no. 5, 2009, pp. 895–916., doi:10.1093/poq/nfp082. Silver, Nate. The Signal and the Noise. Penguin, 2013. Sunstein, Cass R. “Deliberating Groups versus Prediction Markets (or Hayek's Challenge to Habermas).” Episteme, vol. 3, no. 3, 2006, pp. 192–213., doi:10.3366/epi.2006.3.3.192. Tetlock, Philip E., and Dan Gardner. Superforecasting: The Art and Science of Prediction. Random House, 2016.

American Jews The Political Behavior of American Jews A Public Choice Approach to Israel-influenced Voting Jake Goodman Brown University Author Eli Binder Audrey McDermott Ethan Shire Editors Spring 2018 The paper analyzes the voting incentives created by the relationship between American Jews and American-Israeli foreign relations. At the founding of the Jewish State in 1948, the United States recognized the establishment of a Zionist state through a press release from President Truman on March 14, 1948 (U.S. Recognition of the State of Israel). The two main political parties in the United States— the Democrats and Republicans—have both since maintained consistent political, economic, and military support for Israel. This support has come to be viewed by American Jewish voters, most of whom desire support for Israel, as a public good provided by the United States Government. This public good has direct ramifications on voter incentives. However, despite bipartisan support for foreign aid to Israel, American Jews have remained consistently liberal. While social scientists have offered various theories of why American Jews became and remain Democratic, a cogent explanation can be offered through the lens of public choice economics. Indeed, Jewish liberalism demonstrates a political anomaly that can be explained through the framework of voter incentives. Before explaining the impact of pro-Israel policy on Jewish voting, it is necessary to identify some additional factors that evidence how Jewish voting behavior remains a political anomaly. American Jews, despite job and social discrimination, have become the highest per capita income of any religious group in the United States (Wright, Ethnic Group Pressures in Foreign Policy, 1982, 1655-1660). While affluence in America generally tends to correlate with Republican affiliation, this trend does not hold true for American Jews (Cohen, American Jewish Liberalism, 405-430). Steven Cohen and Charles Liebman, in their research, also noted that more religious Jews tend to be less liberal, inclining religious Jews toward conservatism. They identify only a few issues on which Jews assert themselves as decidedly liberal: political identity as liberal, church-state separation, social codes, and domestic spending. Cohen and Liebman’s research illustrated that aside from pro-Israel policies, Jews have additional incentives to shift to the Republican party, yet they have remained consistently Democratic. On the other hand, Jews have higher education levels, which correlate with liberalism, compared to the general populace provides a common explanation of Jewish liberalism. Thus, while Jews demonstrate anomalous behavior, they also demonstrate typical associations that explain Jewish liberalism. While many incentives influence Jewish political behavior, a single-issue factor that unites Jews remains the support of Israel from the United States government. Professor Lawrence Fuchs defined American Jews as an “ethno-religious group,” which forms attitudes on social and political policy that align group interests with national interests (Fuchs, The Political Behavior of American Jews, 1980). American Jews, as “partisans of Israel,” were thus instrumental in having the United States recognize the state of Israel (Fuchs, 1980). As Professor Steven Bayme noted, the pro-Israel consensus in the American Jewish community has been maintained remarkably well over the past sixty plus years, with the two primary oppositional sources, classical Reform and Satmar Hasidism, remaining largely uninfluential (Bayme, American Jewry and the State of Israel, 2008). To court the Jewish vote, Democrats and Republicans have functioned as “entrepreneurs selling policies for votes” — the policy, in this case, being bilateral economic assistance for Israel (Downs, An Economic Theory of Political Action in a Democracy, 1957). If we assume that American Jewish citizens behave as expected utility maximizers, Jewish voters gain extra expected utility from electing the more pro-Israel candidate, aligning with the Jewish voters’ preference for a pro-Israel public good. The gain to the Jewish voter would be defined as the preferred more pro-Israel candidate (Ferejohn & Fiorina, The Paradox of not Voting, 1974). Indeed, due to American Jewish attachment to Israel, there is a rational reason to vote; by voting for a more pro-Israel candidate in the political market, the Jewish voter ensures a higher quality public good that suits the Jewish voter’s preference for a more robust pro-Israel political platform. An initial investigation must depict the nature of the collective good thus described. As the natural monopoly on tax spending and military power, the government provides public goods to citizens. The United States government, having such a monopoly, becomes the sole provider of military and economic support to Israel for American citizens. Israel first received U.S. government assistance in the form of a $100 million loan from the Export-Import Bank in 1949 and aid remained modest for the next two decades (Sharp, Federation of American Scientists, 2016). After several consecutive Arab-Israeli wars, US aid to Israel increased dramatically, with Israel becoming the largest recipient of US aid in 1974. Middle East Specialist Jeremy Sharp reported that Israel is the largest cumulative recipient of US aid since World War II, receiving $124 billion of bilateral assistance in non-inflation adjusted terms (2016). An additional State Department directive this year has pledged $38 billion over the next ten years to Israel. The majority of this assistance has come in the form of Military aid, which has led to a qualitative military edge for the Israeli military, developing anti-rocket technologies such as the Iron Dome, Arrow I and II, and David’s Sling. The United States has also provided economic aid to Israel in the form of emergency aid packages during times of recession. Aid from the United States has thus allowed Israel to transition from a fledgling nation-state to a modern industrialized nation. (Sharp, Federation of American Scientists, 2016). While the United States government is not the sole supplier of aid to Israel, it functions as a monopoly within the US political market as a government supplier of aid. Jewish voters thus form preferences and expected utility functions based upon the differing levels of aid provided by the US government, a monopolistic supplier. To further analyze the impact of US foreign policy toward Israel on Jewish voting patterns, it is necessary to examine the historical political alignment of Jews, from Jeffersonian Republicans to Democrats to Republicans, prior to the establishment of Israel as a Jewish state. While Jewish political equality did not emerge directly out of the American revolution, Jews achieved political equality in the five states they were most numerous in, and the growing movement in revolutionary America for the separation of church and state worked to the Jewish community’s advantage (Fuchs, 1980, p. 24). The first instance of Jewish political alignment began with a Jewish attachment to the Jeffersonian Republicans; in the 1830s, Jackson and the new Democratic party gained the Jewish devotion Jefferson and Madison had maintained (Fuchs, 1980, p. 29). By 1840, a large majority of American Jewry, around 15,000 at the time, joined Martin Van Buren’s coalition, buoyed by Van Buren’s protection of Jews in Egypt (Fuchs, 1980, p. 30). With the immigration of as many as 100,000 German Jews to the United States between 1848 and the beginning of the Civil War, Jewish political alignment shifted, splitting support between Democrats and the Whigs (Fuchs, 1980, p. 33). By 1860, Jews in the North, particularly German-Jews, welcomed the new Republican Party, as many Rabbis and Jews opposed slavery (Fuchs, 1980, p. 35). In the four decades after the Civil War, Jews were widely divided with a slight major party preference for the Republican Party (Fuchs, 1980, p. 50). With the exception of Woodrow Wilson’s Jewish majority in 1916, Jews continued to lean Republican in presidential elections from 1900 to 1928 even with an influx of nearly two million Jewish immigrants fleeing anti-Semitism and poverty in Europe (Fuchs, 1980, p. 51). However, the 1920s showed a growing trend of Jewish support for the Democratic party, more rapid in certain cities but generally solidified by the Jewish commitment to Franklin Roosevelt in 1932 (Fuchs, 1980, p. 71). For example, in Boston’s Ward 14, a heavily Jewish area, 78 percent of enrolled voters were Republican in 1928, while only 14 percent of voters were Republican in 1952 (Fuchs, 1980, p. 72). The proportion of Jews who voted for the Democratic Party peaked at 90 percent for FDR in the 1940s (Rebhun, 2016, p. 141). To maintain Jewish support, the Democratic Party committed itself to fighting fascist anti-Semitism in Europe and to ensuring the military and economic security of the State of Israel (Schnall, 1987, p. 77). In all Presidential elections since 1932, 60 to 90 percent of American Jews voted for the Democratic candidate. (Rebhun, 2016, p. 141). While Jewish-American Democratic support has been in decline since the late 1960s, the Jewish vote has remained solidly within the Democratic camp (Rebhun, 2016, p. 143). Additionally, the Jewish vote declined in Republican support between 1980 and 2000 but has since risen from 2000 to 2016 (Kent, 2016). As evidenced by the above historical charting of Jewish political alignment, the Jewish community has shifted in partisan alignment multiple times in American history. Why then have Jews maintained their allegiance to the Democratic Party since 1932? While many factors are involved in addressing this question, a key factor absent in other eras of American history is the establishment of Israel in 1948 and the consequent United States’ support of Israel. The median voter theorem becomes especially relevant in addressing the Jewish-Democratic alliance. Anthony Downs observed that voters can cut the cost of information by comparing ideologies rather than policies — the lack of information thus engendering a demand for ideologies in the electorate (1957, p. 142). Downs reasons that stable government in a two-party democracy requires a distribution of voters approximating a normal curve in which both parties resemble each other closely (1957, p. 143). In terms of US-Israeli foreign policy, Democrats and Republicans resemble each other closely in that they have both maintained military and economic aid for Israel. According to the Median Voter Theorem, with both parties exhibiting similar ideologies of a pro-Israel consensus, one would expect the distribution to resemble a normal curve, but this has not been the case. Surprisingly, Democratic and Republican Israeli policy has had more in common than not; yet, a normal curve does not represent the Jewish vote. In the election of 1948, both party candidates were committed to Zionism, with both parties adopting pro-Israel positions in their national platforms (Fuchs, 1980, p. 81). Truman’s election allowed the Democratic party to yield pro-Israel results, beginning with Truman’s recognition of Israel, the $100 million loan from the Export-Import Bank in 1949, and the Tripartite Declaration of 1950 (Sharp, 2016, p. 36). Lawrence Fuchs identified 1952 as a key moment in the political market for the Jewish vote, in which despite being as “well paid, fed, and educated as the most successful Republican denomination groups” Jews continued to vote for Democrats (1980, p. 99). Eisenhower’s term, however, allowed for product differentiation in the political market; Jews could now compare the quality of the collective good provided by the United States government, economic and political aid to Israel, under two different political parties. Indeed, while several factors, as Lawrence Fuchs noted, contributed to Jewish loyalty to the Democratic party, the Eisenhower Administration's policy toward Israel hurt Republican chances with Jewish voters; Zionist rallies were held in October of 1954 protesting the Eisenhower Administration’s policy towards Israel (Fuchs, 1980, p. 117). Fuchs indicated that Zionist leaders criticized the Eisenhower Administration's decision to ship arms to “feudal Arab leaders” while holding back on Israeli military aid (Fuchs, 1980, p. 117). The Suez Canal, in which the United States strengthened its bond with Egypt and forced military Israeli withdrawal, provided another demonstration of Eisenhower’s lukewarm position toward Israel (“Suez Crisis, 1956,” n.d.). Weak Republican support for Israel did not shift Jewish political alignment to its benefit; American Jews thus exhibited a lopsided preference for Democratic US-Israeli policy during the 1960 election of John F. Kennedy, with around 80 percent voting for Kennedy and 18 percent voting for Nixon — a major shift from the 1956 election in which 60 percent voted for Stevenson while 40 percent voted for Eisenhower (Weisberg, 2012, p. 217). Post-1948, several Republican administrations have seen fluctuations in their capturing of the Jewish vote. Professor Theodore Wright, writing in 1982, noted that in recent years Republicans had sought to “outbid the Democrats” in their promises to the Zionist state. Indeed, the election of Ronald Reagan demonstrated a partisan shift in the political market in reaction to the Israel policies of the Democratic Carter Administration. Professor Weisberg cited data showing that many Jews felt Carter was too hard on Israel and consequently 39 percent voted for Reagan and 45 percent voted for Carter (Weisberg, 2012, p. 228). This represented a major shift in the partisan distribution of Jewish voters, nearly approaching Downs’s normal distribution curve. However, despite Reagan’s policies being more pro-Israel than Carter’s, the Democratic party regained the Jewish vote in the 1984 presidential election, with 67 percent voting for Walter Mondale and 31 percent voting for Ronald Reagan (Weisberg, 2012, p. 228). Professor Weisberg notes that while Republicans saw a boost in their attainment of the Jewish vote in the 1970s and 1980s, it was followed by subsequent loss of the Jewish vote in the 1990s and 2000s (Weisberg, 2012, 232). However, another interesting data point occurred in 2012. The highly-publicized testiness of Obama’s relationship with Israeli Prime Minister Benjamin Netanyahu and “dissatisfaction with Obama’s Middle East policy” during his first term boosted the Jewish Republican vote by 9 percentage points, from 21 percent for McCain to 30 percent for Romney (Rebhun, 2016, p. 144). The Republican resurgence was squashed in the 2016 election, falling to 24 percent for Trump despite visible strain in the Obama-era US-Israeli diplomatic relations. These various historical examples indicate that shifts in the partisan alignment of the Jewish vote occur in accordance with a greater expected utility of Republican Israeli policy after a strain in Democratic-Israel relations. Nonetheless, while Jewish voters demonstrate small shifts in political alignment, they often return to a high percentage of votes for the Democratic presidential candidate. This is a noteworthy behavior; if Republicans have proven to Jewish voters that they can successfully compete with Democrats with their pro-Israel policies, why have more Jews not shifted to the Republican party? Arye Hillman accounted for such a phenomenon by considering the expressive-voting hypothesis, which posits that certain people vote “to obtain the expressive utility from confirming identity” to themselves or a group rather than to decisively sway an election (2011, p. 250). Because American Jews have historically aligned with the Democratic Party, Hillman assumed that Jews, with exceptions, rationally vote for Democrats, though it is against their self-interest, in order to gain the expressive utility associated with expressing group identity (2011, p. 256). Hillman offered a variety of historical examples from Podhoretz’s book Why Are Jews Liberals?. In the 1960’s election, he noted that Kennedy’s father was openly anti-semitic, yet Kennedy secured 82% of the Jewish vote (Hillman, 2011, p. 254). In 1972, he cited that the Democrat McGovern received two-thirds of the Jewish vote despite McGovern favoring racially-based quotas in education that would have been disadvantageous to Jews and be inimical to the state of Israel (Hillman, 2011, p. 254). Additionally, in 2008, 78 percent of Jews voted for Obama despite Obama having “anti-Israel associations” and a record that showed less concern for Israel than his Republican opponent (Hillman, 2011, p. 255). There are obviously limits to how much Jewish identity impacts voting decision and how much Jewish identity is tied to Israel. However, despite its assumptions about Jewish identity, Hillman’s evidence provides a theoretically relevant public choice explanation of why Jews may rationally vote for Democrats despite competitive pro-Israel policies from the Republican Party. Rather than functioning as a singular issue which ultimately sways the Jewish voter, the Jewish preference for a robust pro-Israel policy represents a unique and influential indicator within the multifaceted preferences of the Jewish voter. By examining historical presidential voting data, specific instances when Jewish voters could have voted according to a pro-Israel preference based upon the partisan performance of the previous administration can be identified. While this analysis has been largely driven by market outcomes – Jews evaluating their voting decisions based off of the Israeli policy of the current administration – it highlights the impact of information on voting patterns. If a Jewish voter is provided with more information, via four years of governance by a certain party, about the perceived ideology of either political party, they will adjust their preferences according to this new information. While Downs notes there are costs to acquiring such information, the marginal return, or the increase in utility from making an improved decision concerning partisan Israeli-relations ideology, would presumably exceed the marginal cost of acquiring such information for Jewish voters who decide to vote. However, while it is important to analyze the behavior of Jews as an ethnic group, there exist differences within the Jewish community which should also be examined. Laurence Kotler-Berkowitz and Lawrence Sternberg researched the influence of the centralized institutions of the American Jewish community on political cohesion and division amongst Jews (2000, p. 23). The researchers amalgamated data proving that the political activists within major Jewish institutions in the United States, such as the Jewish Community Relations Council and the organized Federation system, display differences in measures of ideology, partisanship, political and social attitudes, and policy preferences than most synagogue members and donors and are decisively more liberal (2000, p. 40). Their research demonstrated that the participants in the most centralized set of Jewish institutions display political preferences “within a fairly narrow range, denoting political cohesion” (2000, p. 44). Kotler-Berkowitz and Sternberg’s research also showed that while Jews tend to lean liberal, the degree of cohesion within the American Jewish community should not be assumed to be absolute. For example, political division among American Jews, despite the overall liberalism of Jewish institutions, allows for the opportunity of Republican competition in the markets, specifically in the more traditional Jewish communities. Republicans have particularly thrived among Orthodox Jews, who are the most Republican in their voting (Weisberg, 2012, p. 225). Eytan Gilboa traced the historical arc of Jewish support for Israel and the complicated relationship between Jews and specific Israeli policy preferences. Beginning in 1948, he notes that 90 percent of American Jews supported the establishment of Israel and the decision of President Truman to recognize the State of Israel (Gilboa, 1986, p. 113). According to public surveys from 1957 to 1983, Jews remained highly favorable toward Israel, with all but one of the pro-Israel results ranking above 90 percent (Gilboa, 1986, p. 113). Gilboa’s research also notes that all surveys of American Jews in his research show overwhelming support for US aid to Israel — around 91 to 96 percent from 1971 to 1985 (Gilboa, 1986, p. 117). However, Gilboa also investigated public opinion surveys that show a less unified American Jewish community from 1967 to 1982 concerning positions and policies in the Arab-Israeli conflict (Gilboa, 1986, p. 121). Surveys between 1980 and 1984 further evidence a split Jewish opinion on the question of a Palestinian state (Gilboa, 1986, p. 123). The conclusion of Gilboa’s paper highlights the remarkable stability of Jewish support for economic and military aid for Israel despite diverging foreign policy positions of American Jewry. Gilboa’s data and conclusions highlight an interesting complication of the Jewish political market; American Jews, while supporting aid, may not uniformly support the same policy results. The complex interactions between Zionism, ethno-religious political behavior, and political support for Israel highlights the lack of information politicians acquire about the Jewish community and also provides evidence of why US aid for Israel has been sustained for so long. An additional complication is that the Jewish voting is not the only group incentivizing pro-Israel policy. In fact, since 1989, Israel’s favorability among general Americans has vacillated between 45 percent and 79 percent (Saad, 2016). Republicans have additional political incentives to support Israel that may influence the Jewish vote. Evangelical Christians, who number about 75 million in the United States, have become “increasingly mobilized” in support of Israel (Waxman, 2010, p. 15). Since the Second Intifada, which began in 2000, the Christian Right has become increasingly influential in the Republican political market. According to Professor Murray Friedman, the Christian Right, while showing strong support for Israel, disincentivized Jews from joining the Republican party out of fear that the Christian Right has become “too influential” in the GOP (2003, p. 436). The influence of the Christian Right on Republican foreign policy highlights that while Republicans compete with Democrats for the Jewish vote with pro-Israel policy, they also compete for the vote of the Christian Right through pro-Israel policy. Additionally, the bedrock of evangelical support for Israel has shifted incentives for Jews to vote as single-issue voters; support for Israel remains ensured for by the prominent support for pro-Israel candidates on the Right vying for the support of evangelists, allowing Jewish voters flexibility to vote for Democrats who may not be as pro-Israel as the Republican candidate. In recognizing that pro-Israel policy has not yielded strong Jewish electoral results, Republicans have continued to maintain pro-Israel policy because the Christian Right has incentivized them to do so. Thus, while the political market for the Jewish vote remains influenced by a multitude of factors, the widespread preference among Jewish voters for a pro-Israel collective good shifts incentives in the political market. How Jews collectively vote remains complex, and the historical Jewish alignment with the Democratic Party despite competitive pro-Israel policy from the Republican Party highlights this complexity. It seems likely that two trends will continue based on the political incentive structures described in this paper: Jews will continue to predominantly align with the Democratic Party and both Democrats and Republicans will continue to offer competitive pro-Israel ideologies. The public choice approach to Jewish political behavior thus offers insight into why these trends continue by examining the incentives that shape how Jews vote and how politicians respond in turn. References Aldrich, J. H. Rational choice and turnout. American Journal of political science, 1993: 246-278. Bayme, S. AMERICAN JEWRY AND THE STATE OF ISRAEL: HOW INTENSE THE BONDS OF PEOPLEHOOD? Jewish Political Studies Review, 20(1/2), 2008: 7-21. Retrieved from http://www.jstor.org/stable/25834774 Baker, P. For Obama and Netanyahu, a Final Clash After Years of Conflict. 2016. Retrieved April 02, 2017, from https://www.nytimes.com/2016/12/23/world/middleeast/israel-benjamin-netanyahu-barack-obama.html Cohen, S., & Liebman, C. American Jewish Liberalism: Unraveling the Strands. The Public Opinion Quarterly, 61(3), 1997: 405-430. Retrieved from http://www.jstor.org/stable/2749579 Downs, A. An Economic Theory of Political Action in a Democracy. Journal of Political Economy, 65(2), 1957: 135-150. Retrieved from http://www.jstor.org/stable/1827369 Ferejohn, J. A., & Fiorina, M. P. The paradox of not voting: A decision theoretic analysis. American political science review, 68(02), 1974: 525-536. Fuchs, L. H. The Political Behavior of American Jews. Westport, CT: 1970. Greenwood Press. http://www.jstor.org/stable/4371453 FRIEDMAN, M. The Changing Jewish Political Profile. American Jewish History, 91(3/4), 2003. 423-438. Retrieved from http://www.jstor.org/stable/23887289 Gilboa, E. Attitudes of American Jews Toward Israel: Trends Over Time. The American Jewish Year Book, 86, 1986: 110-125. Retrieved from http://www.jstor.org/stable/23604779 Hillman, A. Expressive voting and identity: Evidence from a case study of a group of U.S. voters. Public Choice,148(1/2), 2011: 249-257. Retrieved from http://www.jstor.org/stable/41483691 Kent, D. Presidential vote by religious affiliation and race. 2016. Retrieved March 28, 2017, from http://www.pewresearch.org/fact-tank/2016/11/09/how-the-faithful-voted-a- preliminary-2016-analysis/ft_16-11-09_relig_exitpoll_religrace/ Kotler-Berkowitz, L., & Sternberg, L. THE POLITICS OF AMERICAN JEWS: COHESION, DIVISION, AND REPRESENTATION AT THE INSTITUTIONAL LEVEL. Jewish Political Studies Review, 12(1/2), 2000: 21-54. Retrieved from http://www.jstor.org/stable/25834469 REBHUN, U. POLITICAL ORIENTATION. In Jews and the American Religious Landscape (pp. 134-164). 2016. New York: Columbia University Press. Retrieved from http://www.jstor.org/stable/10.7312/rebh17826.9 Saad, L. Americans' Views Toward Israel Remain Firmly Positive. 2016. Retrieved April 06, 2017, from http://www.gallup.com/poll/189626/americans-views-toward-israel-remain-firmly-positive.aspx Schnall, D. REPUBLICANS, DEMOCRATS AND AMERICAN JEWS. Tradition: A Journal of Orthodox Jewish Thought, 22(4), 1987: 75-87. Retrieved from http://www.jstor.org/stable/23259491 Sharp, J. M. Federation of American Scientists [Scholarly project]. 2016. Retrieved March 20, 2017, from https://fas.org/sgp/crs/mideast/RL33222.pdF Suez Crisis, 1956. (n.d.). Retrieved March 30, 2017, from https://2001-2009.state.gov/r/pa/ho/time/lw/97179.htm U.S. Recognition of the State of Israel. (n.d.). Retrieved March 20, 2017, from https://www.archives.gov/education/lessons/us-israel Waxman, D. The Israel Lobbies: A Survey of the Pro-Israel Community in the United States. Israel Studies Forum,25(1), 2010: 5-28. Retrieved from http://www.jstor.org/stable/41805051 Weisberg, H. Reconsidering Jewish Presidential Voting Statistics. Contemporary Jewry,32(3), 2012: 215-236. Retrieved from http://www.jstor.org/stable/43549743 Wright, T. Ethnic Group Pressures in Foreign Policy: Indian Muslims and American Jews. Economic and Political Weekly, 17(41), 1983: 1655-1660. Retrieved from http://www.jstor.org/stable/4371453

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A More Perfect Union Inclusive Norms and the Future of Liberal Unity Benjamin Seymour Brown University Author Ginevra Bulgari Vance Kelley Julia Rock Jakob Wells Editors Spring 2018 This essay analyzes the most dire threats to political unity today b y critiquing historical approaches to this subject. Given the sprawling apparatus of the modern state, it’s easy to wonder how such an entity—one that requires the complex and cumbersome coordination of complete strangers every day—exists and persists at all. Indeed, endless tomes of regulations guide this bureaucratic behemoth’s daily affairs; and yet, these volumes seem inadequate to address the philosophical question of what motivates humanity to come together despite differences and form a project directed toward mutual advantage and a common good. An answer to this question would need to identify a more essential aspect of our constitution as persons, a continuity that underlies the diverse interests and identities that coexist in a state. Generations of political theorists have grappled with the problem of national unity and, through their attempts to theorize this fundamental impulse, realized that unity is the sine qua non condition of possibility for the state; therefore, upholding this unity is of vital importance for national stability and longevity. The German political theorist Carl Schmitt, who was an active member of the Nazi party, virulent anti-Semite, and chief architect of the Third Reich’s justificatory underpinnings, was chiefly concerned with national unity. He uses his principle of national unity as homogeneity and exclusion to challenge the inclusive liberal notion of unity through shared values, by arguing that the liberal approach poses an existential threat to the survival of the state. Despite the clarity and thoroughness of Schmitt’s critique of liberalism, liberal political thinkers such as John Rawls and Jürgen Habermas remain unconvinced by Schmitt’s account and instead defend the liberal conception of unity, which avoids the drastic conclusions and totalitarian implications of Schmitt’s thought. While Rawls’ responses to Schmitt’s normative arguments prove compelling, Habermas, by recognizing the central importance of identity in Schmitt’s critique, lays the groundwork for a new defense of liberal unity that retains a substantive interest in questions of national identity. To reformulate and reaffirm the liberal notion of unity, this paper will: (I) explore Schmitt’s notion of national unity through enmity as a critique of liberal inclusivity; (II) examine Rawls’ account of overlapping consensus as a foundation for social unity that resists Schmitt’s most problematic commitments; (III) clarify how Habermas’ preoccupation with identity further strengthens the Rawlsian notion of liberal unity against Schmittian ethno-nationalism; and finally (IV) realize Habermas’ conception of inclusive unity by, counter-intuitively, embracing the very fragmentation of social identities that appears to be the greatest threat to national unity today. Rooted in radical exclusion and the constant threat of violence, Schmitt’s conception of the political situates unity in a homogenous populace’s allegiance against a common enemy. As an inheritor of German existentialist thought, Schmitt analyzes political life with a systematic approach that emphasizes an ontological and philosophical hierarchy, wherein certain concepts are metaphysically prior to higher-order notions. The absolute foundation of this hierarchy, from which all political entities ultimately derive, is Schmitt’s conception of the political. Indeed, the first sentence of his treatise, The Concept of the Political, confirms this hierarchical approach: “The concept of the state presupposes the concept of the political” (Schmitt, The Concept of the Political, 19). For Schmitt, a concept only derives its meaning by referring to a concrete reality in the world. While the referent of the more intuitive concept of the state is the state’s sprawling apparatus and daily operations, Schmitt believes that his more fundamental notion of the political denotes an equally tangible reality. Schmitt’s famous friend-enemy distinction instantiates the concept of the political within his system. As a theorist whose philosophy is defined by its political principle of radical negation and exclusivity, Schmitt believes that every discourse is defined by an insoluble antithesis or distinction. Like the contrasts between good and evil in ethics, beautiful and ugly in aesthetics, and profitable and unprofitable in economics, Schmitt contends that the political is defined by the antithesis between friend and enemy. Such a reductionist analysis establishes the political as independent from moral questions and postulates the friend-enemy distinction as ontologically irreducible: The political enemy need not be morally evil or aesthetically ugly; he need not appear as an economic competitor, and it may even be advantageous to engage with him in business transactions. But he is, nevertheless, the other, the stranger; and it is sufficient for his nature that he is, in a specially intense way, existentially something different and alien, so that in the extreme case conflicts with him are possible (Schmitt, The Concept of the Political, 27). The dehumanizing and fascistic possibilities of a conception of politics based on a distinction that treats another person as existentially alien marks Schmitt’s philosophy as a clear antipode to liberal notions of equality and intuitive morality. But Schmitt’s existentialist conception of meaning imbues his notion of the political with a dangerous urgency, as the concrete referent of the friend-enemy distinction, and thus the very concept of the political itself, is the constant and real possibility of physical violence with the enemy. By establishing a principle of difference, negation, and enmity as the foundation of his conception of politics, Schmitt makes his principle of unity the ontological epicenter of his philosophical project. Fully aware of the power of the fear and hostility on which his notion of the political is founded, Schmitt contends that only the sheer force of the friend-enemy distinction is sufficient to fuse a collection of individuals into a genuine social unit. Schmitt’s emphasis on collectivity is likewise essential to his understanding of the political. The friend and enemy of Schmitt’s antithesis necessarily refer to collectives, transforming these enemies into public enemies and these friends into the other members of one’s political group. Thus, the concept of the political only becomes efficacious by virtue of the shared quality of the friend-enemy distinction. But when a group of individuals is united, through a common and homogenous sense of who the friends and the enemies are, it partakes in the sublime force of the political, which transfigures this collective into an entirely new kind of entity—a people. In Schmitt’s ontological hierarchy of politics, a people are second only to the political antithesis that defines and unites them. Yet a new property emerges at the higher metaphysical order of a people that both allows for the possibility of an organized state and proves significant to another dimension of Schmitt’s critique of liberalism: “If such an entity [of a people] exists at all, it is always the decisive entity, and it is sovereign in the sense that the decision about the critical situation, even if it is the exception, must always necessarily reside there” (Schmitt, The Concept of the Political, 38). By virtue of its sovereignty, which Schmitt equates with an ability to make certain decisions, a homogenous people becomes capable of forming the institutions and norms of a state. Like his conception of political unity through radical exclusion, Schmitt’s formulation of sovereignty similarly challenges another fundamental liberal tenet: the commitment to norms exemplified by the rule of law. As set forth in his collection of essays, Political Theology, Schmitt’s notion of sovereignty receives a succinct expression in the book’s famous first sentence: “Sovereign is he who decides on the exception” (Carl Schmitt, Political Theology: Four Chapters on the Concept of Sovereignty, 5). Related to the idea of a state of emergency, the exception refers to an abnormal situation in which the Schmittian sovereign decides that the general rules do not apply. In this exceptional situation, the sovereign then suspends the general norms and acts by virtue of its own authority. Thus, for Schmitt, a law or norm is only legitimate when it is recognized by the ontologically prior sovereign power, yet this recognition consists precisely in the sovereign acknowledging its own authority to suspend or violate this rule in exceptional cases. By arguing that norms are only defined by their exceptions and limits, Schmitt undermines the liberal commitment to the rule of law, which insists that sovereign powers are not exempt from their own laws and norms. Schmitt’s critique of liberalism thereby rejects a normative approach to politics that extends back to the Magna Carta and inscribes authority within definite bounds. An even more disturbing feature of Schmitt’s notion of sovereignty, however, is that the ambiguous phrase “on the exception,” means not only that the sovereign decides in exceptional cases, but also that the sovereign decides which cases are to be treated as exceptional. As Schmitt writes: “He [the sovereign] decides whether there is an extreme emergency as well as what must be done to eliminate it. Although he stands outside the normally valid legal system, he nevertheless belongs to it, for it is he who must decide whether the constitution needs to be suspended in its entirety” (Carl Schmitt, Political Theology: Four Chapters on the Concept of Sovereignty, 7). The sublime and even transcendent authority that Schmitt attributes to the sovereign is problematic beyond merely challenging the rule of law, which forms the very foundation of the liberal constitutional state—since sovereign authority ontologically derives from the political, Schmitt argues that the unchecked power of the sovereign must therefore serve to maintain and strengthen this antagonistic principle of unity. Thus, according to Schmitt, the state must act in such a way that most promotes the homogenous unity of the political, upon which the very possibility of a state depends. Schmitt’s ontological hierarchy, by exalting his notion of the political as the unity of a sovereign people, imbues political entities with a telos. The political, as the foundation of all public associations and institutions, also becomes their vital principle and their ultimate purpose. In Constitutional Theory, Schmitt’s most influential legal text, the sinister principle of national unity assumes a more concrete and recognizable form. Fundamental liberties, as established in this text, are usually non-political in the sense that they attach to individuals in their private lives or in a non-social manner. For example, freedom of worship is a basic liberty that, according to Schmitt, should be respected by the state as long as one’s religious views or practices merely affect one’s private behavior. This right could be suspended if members of a certain religion used their faith as a vehicle for political change, as in the case of the Civil Rights Movement or the Indian Independence Movement. While Schmitt recognizes that there are often de facto limits to the political in a state, there is no limiting principle to stop the intrusive expansion of the political. Thus, the reach of the political can and even should expand if it serves to strengthen national unity. To pursue our example, the sovereign could decide to suspend even the right to privately believe in a certain religious doctrine if the sovereign decides that this doctrine is affiliated with its Schmittian enemy. This expansion of the realm of the political, if continued, culminates in what Schmitt celebrates as the ideal of the “total state,” in which all aspects of life are re-politicized and thereby subsumed into an all encompassing friend-enemy distinction: “Every religious, moral, economic, ethical, or other antithesis transforms into a political one if it is sufficiently strong to group human beings effectively according to friend and enemy” Schmitt, The Concept of the Political, 37). The total state in which everything reflects and strengthens the friend-enemy distinction would, for Schmitt, possess the highest possible degree of political unity, as its people would have a completely homogeneous sense of friend and enemy. It requires no small leap of the imagination to see how Schmitt’s ideal of the total state coincided with Nazism, which attempted to build an empire based on an ethnic friend-enemy distinction that indeed encompassed all aspects of life. Yet despite this repulsive extremism, Schmitt’s model is a considerable challenge to liberalism—one that requires a liberal response that can defend an inclusive account of national unity and a norm-based approach to politics that leaves the rule of law intact. Rawls provides a liberal antidote to Schmitt by formulating an inclusive conception of national unity based on shared norms. John Rawls proved to be a preeminent liberal philosopher by offering analyses of the principles underlying modern constitutional democracies, distinguished by Rawls’ interest in promoting the just and fair treatment of all members of these societies. Indeed, Rawls’ background in Kantian moral philosophy is evident in his persistent belief in the equal dignity of persons—a liberal tenet that Schmitt rejects through the ontological inequality imbedded in his friend-enemy distinction. In place of the exclusion and homogeneity that suffuse Schmitt’s conception of the political, Rawls affirms an inclusive principle of unity that is woven into the very fabric of his philosophical system as a crucial background assumption. In Political Liberalism, Rawls describes how he assumes a plurality of different worldviews to be a fundamental feature of liberal democracies: “the diversity of reasonable comprehensive religious, philosophical, and moral doctrines found in modern democratic societies is not a mere historical condition that may soon pass away; it is a permanent feature of the public culture of democracy” John Rawls, Political Liberalism, 36). Rawls defines comprehensive doctrines as complete and fully realized normative worldviews. In his assumption, Rawls flatly rejects the homogeneity that Schmitt argues is the essence of political unity. Though this assumption appears to be a factual claim about the nature of liberal democratic societies, Rawls gives this claim normative weight by distinguishing between the notion of mere pluralism—wherein members of a society subscribe to different comprehensive doctrines—and that of reasonable pluralism. For Rawls, reasonable pluralism refers to the idea that free institutions actually promote a diversity of comprehensive doctrines that a reasonable person could subscribe to. As a radically pluralistic and inclusive notion, reasonable pluralism, as a fundamental feature of liberal democracies, creates the space in which democratic deliberation and debate can occur. As a vital condition for the proper functioning of a democratic and liberal society, reasonable pluralism ensures that inclusivity and diversity occupy a fundamental position in Rawlsian liberal society. But this rebuke of Schmitt’s notion of the political, as defined by the friend-enemy distinction, does not yet provide an alternative account of national unity. Through his notion of overlapping consensus, Rawls proposes a theory of national unity grounded in shared norms and similarity across difference. Given the profound diversity of individuals’ values within a liberal society that reasonable pluralism implies, national unity, at least from the perspective of Schmitt’s critique, appears precarious. Yet Rawls denies that national unity is unattainable in liberal democracies, by exploring the distinction between an individual’s comprehensive doctrine and their non-comprehensive political views. Along these lines, two individuals—for example a Christian fundamentalist and a socialist atheist—could deeply disagree over many issues by virtue of their conflicting comprehensive doctrines; however, they might also hold some political views in common, like a commitment to the right to free speech. Thus, despite the radical heterogeneity and diversity of worldviews in a multicultural liberal society, there are certain principles that Rawls argues would be shared amongst opposing but reasonable comprehensive doctrines. These shared principles, to which any reasonable person would assent, constitute Rawls’ notion of the overlapping consensus, which unites individuals whose comprehensive doctrines may nonetheless be extraordinarily different. As establishing a common national commitment to certain principles, the overlapping consensus serves to unite a reasonably pluralistic society around inclusive norms. Rawls also frames his discussion of the overlapping consensus in explicitly normative terms, beyond the mere fact that the overlapping consensus is a collection of normative principles, by relating the overlapping consensus to liberal notions of legitimacy and autonomy: Since political power is the coercive power of free and equal citizens as a corporate body, this power should be exercised, when constitutional essentials and basic questions of justice are at stake, only in ways that all citizens can reasonably be expected to endorse in the light of their common human reason (Rawls, Political Liberalism, 139-140). Rawls’ insistence on certain limiting conditions under which coercive political power should be employed reveals a striking divergence from Schmitt’s unlimited notion of sovereign authority. Only authority exercised within these limits is legitimate in the Rawlsian sense. Furthermore, Rawls’ particular formulation of legitimacy is intimately related to the notion of autonomy, which literally means self-lawgiving. Since political coercion is only legitimate when any reasonable individual would assent to it, the state’s sovereign authority is strictly limited by the overlapping consensus, i.e. what reasonable citizens would mutually agree to. In stark contrast to Schmitt’s unlimited notion of sovereignty as rooted in a unifying principle of profound exclusion and homogeneity, Rawls outlines a liberal notion of unity through an overlapping consensus that emphasizes shared norms across reasonable differences and inscribes the state’s coercive authority within determinate limits. Rawls’ insistence on the rule of law and an inclusive notion of national unity becomes even more apparent through the concrete and realized form it assumes in Rawls’ reflections on the importance of constitutions for liberal societies. For Rawls, constitutions perform the essential function of codifying certain shared and fundamental values—aspects of the overlapping consensus—to ensure that they are consistently respected. In contrast to Schmitt, Rawls is an adamant supporter of the rule of law, who affirms the importance of consistently and impartially upholding rules. In A Theory of Justice, Rawls devotes a section to the rule of law, wherein he provides a simple and intuitive counter-argument to Schmitt’s contention that a rule is essentially defined by its ability to be suspended in exceptional cases: “The rule of law also implies the precept that similar cases be treated similarly. Men could not regulate their actions by means of rules if this precept were not followed” (Rawls, A Theory of Justice, 237). Indeed, under a regime whose laws are frequently suspended or changed by the sacrosanct power of the sovereign, it would be prohibitively difficult to follow laws at all, given their constant mutability. Like Schmitt, however, Rawls argues that constitutions should and do reinforce his notion of national unity in important ways. First, the constitution provides specific procedures for conflict resolution that diffuse intra-societal tensions, instead of merely redirecting these antagonistic energies toward a common enemy. Second, Rawls claims that a state’s constitution, when successful, can reinforce reasonable pluralism and foster a positive feedback loop that stabilizes and unites the diverse members of a liberal society under their shared values and institutions: The basic political institutions incorporating these principles and the form of public reason shown in applying them when working effectively and successfully for a sustained period of time (as I am here assuming)—tend to encourage the cooperative virtues of political life: the virtue of reasonableness and a sense of fairness, a spirit of compromise, and a readiness to meet others halfway, all of which are connected with the willingness to cooperate with others on political terms that everyone can politically accept (Rawls, Political Liberalism, 163). In a gesture similar to Schmitt’s claim that the constitution must serve the telos of his exclusive conception of national unity, Rawls maintains that the constitution can be an important component in securing unity in a pluralistic liberal society by strengthening certain common virtues that promote inclusivity. Rawls therefore formulates a liberal conception of national unity that offers an attractive alternative to Schmitt’s vision of unity through a mutual enemy. Indeed, Rawls’ response to Schmitt also seems far better equipped to handle the multicultural realities of an increasingly globalized world, whose largest and most prominent states are and continue to become ever more pluralistic. While Rawls’ responses to Schmitt fail to explicitly address the problematic role of identity in Schmitt’s critique of liberal unity, Habermas addresses this issue from a liberal perspective similar to Rawls’. Although educated in different philosophical traditions, Rawls and Habermas share commitments to many fundamental liberal values. Like Rawls, Habermas begins with the factual assumption that contemporary liberal democracies are defined by their multiculturalism and plurality of worldviews. Given this diversity, Habermas likewise claims that these disparate groups can be brought together through shared norms and an inclusive attitude that rejects the radical homogeneity of the Schmittian political. Despite these shared preoccupations between Rawls and Habermas, their divergent emphases reveal crucial aspects of their philosophical vantage points. For example, Habermas imbues the question of national unity with an urgency and importance comparable to Schmitt. Although Rawls undeniably thought about and wrote on the question of national unity with acuity and insight, Schmitt and Habermas examine the threat of political fragmentation as fundamental because of their shared German inheritance of a national history marked by perennial partition and disunity. In contrast to both Schmitt and Rawls, however, Habermas turns to a nation’s constitution to provide—not merely a supportive element in fostering a unified national community—but a veritable foundation for a unified and inclusive liberal state. Referring to this political model as “constitutional patriotism,” Habermas proposes an alternative liberal principle of unity, one highly related to and coherent with Rawls’ liberal project, that Habermas argues can challenge Schmitt’s claim that liberal inclusivity cannot provide a substantive identity to the members of a society. Habermas’ groundbreaking essay, “The Postnational Constellation and the Future of Democracy,” explores how globalizing forces have fundamentally altered identity-forming processes in a way that renders unity through nationalist identities no longer viable. By reflecting on the contemporary prevalence of immigration, the complex ways in which localities interact with globalized mass media, and the ease of communication across national and cultural lines, Habermas arrives at the conclusion that people have adapted a new sense of identity in response to these multifarious forces. Because ‘traditional’ modes of identity, in the nineteenth century for example, were more stable and consistent across localities, identifying with a particular town, religion, nation, and worldview was a more socially unifying and coherent process. Habermas contends that today, however, a single individual might identify with multiple hometowns, two or more national heritages, and a familial as well as a personal religious identity. Habermas vividly describes: [T]he dynamic image of an ongoing construction of new modes of belonging; new subcultures and lifestyles, a process kept in motion through intercultural contact and multiethnic connections. This strengthens a trend toward individualization and the emergence of ‘cosmopolitan identities,’ already evident in postindustrial societies Habermas, "The Postnational Constellation and the Future of Democracy," 76). This process, whereby interaction with global forces leads individuals to adopt layered identities, simultaneously threatens traditional models of national unity and underscores the need for a more inclusive and norm-based model of political unity. Undoubtedly, Schmitt’s conception of political unity would qualify as a ‘traditional,’ model of national belonging, whose unqualified insistence on the importance of national homogeneity does not seem capable of prevailing under these new conditions. Indeed, Habermas writes that Schmitt’s friend-enemy distinction most often appears along ethnic lines, as in the case of National Socialism, although for Habermas this is a historically contingent fact. Regardless, Habermas considers Schmitt’s notion of the political a reflection of the ethnonationalist conception of national identity whose unity is predicated on a sense of belonging to a shared heritage: “‘ethnonationalism’ blurs the traditional distinction between ‘ethnos’ and ‘demos.’ This expression emphasizes the proximity between an ‘ethnos,’ a pre-political community of shared descent organized around kinship ties, on the one hand, and a nation constituted as a state that at least aspires to political independence on the other” (Habermas, "On the Relation between the Nation, the Rule of Law and Democracy," 130). The absolute nature of Schmittian homogeneity, especially when considered along ethnic lines, appears all the more reactionary and unviable in light of Habermas’ account of contemporary, complex identity formation. Thus, Habermas proposes constitutional patriotism as an inclusive way of identifying with the national community that opposes Schmittian ethnonationalism. Like the liberal commitment to shared norms and inclusive pluralism outlined by Rawls, Habermas’ constitutional patriotism entails a national culture that identifies with the values embodied by that nation’s constitution. Since liberal democratic constitutions use highly generalized language in order to encompass as many situations as possible, constitutional norms embrace the tolerance and equality that Habermas sees as vital to ensuring national unity in the contemporary, globalized world. In contrast to constitutional patriotism, Habermas characterizes ethnonationalism as entailing a pathological and exclusive fusing of the national culture with mere majority culture. Consider the case of Germany, wherein a conception of German identity that relies on a certain ethnic, religious, or even linguistic affiliation would exclude significant portions of the populace. For Habermas, the immediate gains of the Schmittian exclusionary approach will in fact undermine national unity on the long run, due to the unstoppable process of global connections forging complex identities within societies whose homogenous histories are quickly becoming relics of the past. Habermas therefore arrives at a normative claim intended to provide a solution to the problem of achieving unity through identity in a contemporary liberal state: “the majority culture must detach itself from its fusion with the general political culture in which all citizens share equally; otherwise it dictates the parameters of political discourses from the outset” (Habermas, "The Postnational Constellation and the Future of Democracy," 146). Constitutional patriotism is realized in this very act of uncoupling majority culture from national culture, wherein the national culture transforms into the identification with the shared norms and inclusive equality of constitutional values. Only then can national unity be achieved without resorting to Schmittian ethnonationalism, which Habermas argues excludes vast communities within contemporary liberal democracies. Although Habermas himself acknowledges that constitutional patriotism is more abstract than the primitive power of Schmitt’s friend-enemy distinction, he embraces it as a normative necessity that citizens of liberal democracies should undertake, to ensure the stability and longevity of their nation’s political culture. By arriving at a moral injunction, Habermas fails to provide an adequate incentive for the majority to adopt constitutional patriotism; however, a Habermasian approach that more fully embraces the aforementioned fragmentary identity-forming processes solves this issue by pointing the way towards the dissolution of majority culture itself. The prospect of uncoupling national from majority culture is undeniably daunting, as the widespread introduction of constitutional patriotism as a national identity would involve the loss of significant privilege, status, and power for those who are current members of this majority culture. The roots of ethnonationalism continue to grip the political foundations of ostensibly liberal democratic societies, less because the public is convinced by the ideas of thinkers like Schmitt—although segments of these populations undoubtedly are, as the so called “alt-right” has recently demonstrated in the US—but rather because the majority gains an elevated status through exclusionary forms of national unity. The ethical cost of this exaltation of the majority culture on a national scale is the demeaning alienation of minority communities and, while Habermas is right to advocate for a more inclusive national identity that would remain faithful to liberal values, it seems unlikely that the majority would freely give up its status by adopting constitutional patriotism only to benefit the greater good. If one believes that people tend to act out of self-interest instead of morality, then the incentive to preserve the connection between majority and national culture itself must be nullified before constitutional patriotism can prevail. The tools for solving this problem are present in Habermas. To take Habermasian thought a step beyond Habermas himself, one can imagine what the process of complex identity fragmentation and formation would look like in the long term. In this scenario, the majority of people would no longer subscribe to a singular or even predominant identity. On the contrary, the very fragmentation that Habermas argues unsettles national unity would transform the populace of a liberal democracy into a vast network of many small communities, whose individual members would each belong to a great multitude of them. Such a nation would be so deeply fragmented that any given aspect of one’s identity would not provide a sufficiently large community to establish a majority. Instead, majority decisions would be made entirely by heterogeneous coalitions whose interest overlap for the time being, but who remain fragmentary constellations of various communities without a single or cohesive identity. Under such conditions of extreme fragmentation and individualization, Schmitt would argue that the nation itself has ceased to exist, even if its political institutions persist. From a Habermasian perspective, however, everyone would finally have an incentive to adopt constitutional patriotism, as the majority culture itself has dissolved. To some, this thought experiment may appear extreme, unfounded, or idealistic; but, by revealing a path to constitutional patriotism that does not rely on the mere moral goodness of an entire population, it offers a compelling reason to embrace the fragmentation that Habermas himself ambivalently describes. In doing so, the positive potential of fragmentation provides the possibility of a more hopeful future, in which liberal unity can be fully realized through the widespread adoption of identities as malleable, personal, and idiosyncratic as their individual subscribers. Thus, the future of liberal unity can only be attained through a confrontation and embrace of the very fragmentation that political theorists have feared for far too long. A Habermasian solution to the problem of national identity’s role in fostering political unity thereby completes the liberal project, developed by Rawls and Habermas, of formulating an adequate response and alternative to Schmitt’s critique of liberalism. As the nation-state continues to assert its relevance in the global consciousness of the 21st century, the naïve question to ask would be when the nation-state will fall into obsoleteness and thereby cease to exist. On the contrary, the deep political impulse in humanity and the social need for some form of unifying structure mean that the future of the liberal state will entail a transformation instead of an extinction. But the new political arrangement awaiting humanity at the end of this metamorphosis is yet undecided—making the path to be pursued all the more crucial. By recognizing that national unity as we know it will need to be radically reshaped and may even appear in the guise of what we now perceive as fragmentation, a new path toward this future emerges that rejects neither globalizing fragmentation nor the national community. Only through such affirmation can the enduring negativity of exclusion and perpetual violence someday be overcome. Endnotes 1 Readers may question the philosophical value of engaging with a theorist as reprehensible and repulsive as Carl Schmitt; however, I remain convinced that vigilant opponents of fascism must constantly challenge its foundations, not only to demonstrate the intellectual illegitimacy of totalitarianism, but also to better discern the fascistic modes of thought insidiously purveyed by alleged proponents of liberalis 2 This empirical claim is disputable, but simply assumed in this paper. I ask that skeptical readers grant it arguendo. References Böckenförde, Ernst-Wolfgang. “The Concept of the Political: A Key to Understanding Carl Schmitt's Constitutional Theory.” Law as Politics: Carl Schmitt's Critique of Liberalism. Ed. David Dyzenhaus. Durham: Duke UP, 1998. Print. Habermas, Jürgen. “On the Relation between the Nation, the Rule of Law and Democracy.” The Inclusion of the Other: Studies in Political Theory. Ed. Ciaran Cronin and Pablo De Greiff. Cambridge, MA: MIT, 1998. Print. Habermas, Jürgen. “The Postnational Constellation and the Future of Democracy.” The Postnational Constellation: Political Essays. Trans. Max Pensky. Cambridge, MA: MIT, 2001. Print. Müller, Jan-Werner. Constitutional Patriotism. Princeton, NJ: Princeton UP, 2007. Print. Rawls, John. Political Liberalism. New York: Columbia UP, 2005. Print. Rawls, John. A Theory of Justice. Cambridge, MA: Belknap of Harvard UP, 1971. Print. Schmitt, Carl. The Concept of the Political. Trans. George Schwab. Chicago: U of Chicago, 2007. Print. Schmitt, Carl. Constitutional Theory. Trans. Jeffrey Seitzer. Durham: Duke UP, 2008. Print. Schmitt, Carl. Political Theology: Four Chapters on the Concept of Sovereignty. Trans. George Schwab. Chicago: U of Chicago, 2005. Print.

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Oedipus and Ion as Outsiders: The Implications and Limitations of Genealogical Citizenship Oedipus and Ion: The Implications and Limitations of Genealogical Citizenship An Analysis of Oedipus at Colonus by Sophocles and Ion by Euripides Claire Holland University of Chicago Author Marysol Fernandez Harvey Tathyana Mello Amaral Antonio Almazan Editors Spring 2019 Download full text PDF (12 pages) Introduction In ancient Athenian society, the collective myth of autochthony[1] provided the basis for social order, determining who got the benefits of citizenship and who was excluded from the polis [2]. According to their autochthonous myth, the citizenry of Athens did not emigrate from elsewhere, but instead arose from the earth upon which ancient Athens stood. Theirs was not a city of immigrants; from their very origins, the people of Athens believed themselves to be the only population that had always belonged to Athenian soil. Thus, each true-born Athenian carried within them the essential spirit of the Athenian people, passed down from generation to generation. To determine and confirm their citizenship on an individual level, each Athenian had to demonstrate their autochthonous familial descent when they came of age in a dokimasia, an examination wherein citizen tribunals collected testimony from friends and family members in support of one’s claims to citizenship[3]. In this way, one’s lineage became the sole factor determining one’s inclusion in the polis . Once blood became the basis for citizenship, citizens who were established as autochthonous could not be excluded from the polis on the basis of class. The poorest citizens had the same right to participate in Athenian government as the elite, although in practice the higher classes enjoyed special privileges, such as training in rhetoric, which poorer citizens did not. For ancient Greek city-states, this level of inclusivity was groundbreaking; most city-states did not consider their lower- or even middle-class members to be citizens, even in democratic systems of governance. However, this is not to say that Athens was entirely without social divisions, for more than just fully-privileged citizens lived within the city walls. Overall, inhabitants were sorted into three groups: citizens, metics, and slaves. While citizens enjoyed all the rights and benefits of the polis , including the right to vote and to participate in public forums, metics were an in-between, catch-all group, not subjugated like slaves but not as privileged as citizens. They could not participate in government or vote, for example, but were still able to participate economically in Athenian society. Metics were what we today might call a migrant class, as they did not meet the full requirements for blood-based citizenship but were still free. Metics were not confined to only the lower classes; like citizens, metics existed in every economic stratum, from the poorest to the richest. However, regardless of economic class, citizens, being true-born Athenians, were more socially vaunted. While lauded by political theorists for its groundbreaking inclusivity, the Athenian genealogical grounds for inclusion, like any other such system, necessitated that some be excluded so that the polis might be defined and unified rather than indistinct and anarchic. This exclusion, at least theoretically, was to be on the grounds of blood-based requirements for citizenship[4]. However, as Oedipus at Colonus by Sophocles, the second in his trilogy about the eponymous protagonist, and Ion by Euripides make abundantly clear, this distinction did not always play out as it ought. In fact, the existence of exceptions to the rule of blood-based citizenship reveals that its apparent legitimacy was, at its core, fallacious. The tragedy of Oedipus and Ion is in that the knowledge of their parentage, which should have moved them out of their marginal social positions and into the sociopolitical centers of their respective poleis , actually prevented them from claiming their rightful places within society. This is due to the fact that in practice, blood did not stand alone in determining membership to the polis . Athenian society instead relied upon adherence to socially-codified, secondary behavioral implications of blood-based membership, as shown through a further examination of the Athenian city-state and the plays Oedipus at Colonus and Ion. What’s more, the rule of descent necessarily meant that any violations of these secondary behaviors were inheritable and thus contaminated an individual’s entire genetic line from their transgression onward. In examining the social structures as they are presented in these two works, in light of the historical context of ancient Athens, it is clear that the lineage-based autochthony myth was only the beginning of the implied social order. Literary Background Before diving into the social structure of Athens, a short summary of each play is in order, which will highlight the most relevant plot points. Thanks to Freud, most are familiar with Oedipus, or at least with his infamous acts: killing his father, marrying his mother, and fathering her children. Once he discovers all that he has unknowingly done, Oedipus blinds himself and is outcast from Thebes, his home and onetime kingdom. All of this takes place in Oedipus Rex , the first in Sophocles’ trilogy of plays about Oedipus and his family. Following these events is Oedipus at Colonus , which shows Oedipus in exile from Thebes as he approaches the Athenian acropolis. During the course of the play, Oedipus encounters a pair of Athenian citizens, who fetch Theseus, the Athenian king, to determine if Oedipus will be allowed to stay in Athens. After a lengthy debate, Theseus decides to accept him, thanks in part to the pleading of Oedipus’s daughters, who have been helping him in his blindness. At the conclusion of the play, Oedipus is led away into the forest of Athens where he dies without leaving a trace, with Theseus as his sole witness swearing not to say a word about what happened to him. The themes of Oedipus at Colonus reach their pinnacle in Antigone , the final play in Sophocles’ trilogy, wherein Oedipus’s children are all killed, save Ismene, whether it be by their own hands or those of their political rivals. Ion by Euripides centers around another family drama, although perhaps not as well known as that of Oedipus. In the play, Ion is an orphan like Oedipus, raised in the Temple of Apollo at Delphi. The play starts when Creusa, forebear and Queen of Athens, and her husband Xuthus, a war hero and metic, visit the Temple to ask for a prophecy concerning Xuthus’s prospects of having any children. There, the couple meets Ion, and the prophecy leads Xuthus to assume that the now-grown orphan is his true-born son. By the end of the play, however, Creusa and Ion discover his true parentage: that it is she who is really his mother, and that his father is actually the god Apollo, who raped her before she married Xuthus. Following council from the goddess Athena, they choose to keep this knowledge secret from Xuthus for reasons that will later be discussed, and Ion goes on to eventually found the Ionian race. The Athenian City-State With the above summaries in mind, we will begin our analysis of the Athenian city-state. Athenian democracy, while more inclusive of lower classes than any prior sociopolitical structure, necessarily imposed limits on those allowed into the privileged citizenry. Voting could only be meaningful if it were limited; absolute freedom to participate in the polis would be, as Jacques Derrida says of unconditional hospitality, “a law without imperative, without order and without duty. A law without law, for short.”[5] For order and social duty to exist, there must be a specific group to whom these imperatives apply, or else all is unordered chaos. The necessary trade-off in this collective unification is the creation of an out-group against which the citizenry can be defined and assert its exceptionalism. In this way, the social order itself creates the outlaw, the metic, the orphan, and the bastard: broad, inferior social categories designed to include those who do not adhere to the implied social code. Those considered “outside of the law” are not actually so, for they fall into categories created by the social order. The only individuals truly outside of the law are those who cannot be defined by it, which we shall see is the case for Ion and Oedipus. The social rule creates the social rulebreakers, and at the same time the rule-breakers throw the rule itself into relief. Each is the inverse of the other’s positive assertion, becoming a co-constitutive axis. They provide legitimacy by means of a relation of difference through which to define themselves, while in reality neither category exists outside of the artificial, dyadic social construction. In order for a society to function, however, it must be able to overlook the arbitrariness of social delineation and instead see it as legitimate, even inherent to its subjects. To that end, Athens turned to a system of social order that on its face seemed absolute, inherent, and infallible: blood-based citizenship dependent upon genealogical descent from an autochthonous original populace. In the way of legitimacy, autochthony appeared acceptable to its citizens because it could not be disproven, even though it was just as much of a social construct as any other conception of citizenship and justification of exceptionalism. Because the mythical original autochthonous population from which Athenians claimed citizenship was ancestral, its supposed existence could not be called into question based on facts, since there were none to confirm or deny its existence. Like the founding myth of any society, the lie at the core of Athenian structure not only persisted but, interestingly, added legitimacy to the regime. Autochthony also provides a reason to see status as inherent to the citizen, since it “grounds difference in claims of nature—specifically, in earth and blood—[which gives] these categories the appearance of an ontological status.”[6] That is, Athenian exceptionalism appeared justified since it was traceable back to inherent natural differences between people. The lie of one’s social status being inherent, especially in a system based on blood, means that both adhering to its standards and violating them are not seen as merely shifting status, but are actions sublimated into the person themself. Oedipus, answering the question the Chorus poses as to his identity, does not say, “I am in exile”—that is, inhabiting an external, imposed state—but “I am an exile” (italics added).[7] His status has become his being, since blood determines both. Just as Thomas Kuhn conceives of paradigm shifts in science as not only incorporating past scientific information, but also as proclaiming past paradigms unscientific, so too do new information and actions that cause a change in status retroactively re-write one’s entire self. Everything that previously signaled one’s status becomes a lie, and, in a world where statuses can change, passing becomes both possible and inevitable.[8] This is the unavoidable fallout of the idea of social status as inherent and blood based. While autochthony’s claims of being inherent certainly rested on shaky ground, these were not the only fallacious premises upon which Athenian self-conception depended. Because autochthony was meant to order, it centrally imposed its structure down to even the level of individual family, and in doing so, manifested itself as a myth of unity. Above all, genealogical claims were meant to be objective and clear, “largely to guard against the kind of mingling and confusion of identities that blurs discrete lines of demarcation in the social order.”[9] The ideological primacy of a clearly-ordered and unified family structure was designed to make orderly life possible, with a cohesive overall clan structure which mirrored the internal structure of the family. In this way, the polis functioned ideologically as a single entity, its uniform organization all the way down to the individual level supplementing its unifying claim to one collective heritage. This ideology is far from abstract, and is in fact visible in much of the literature Athenian citizens produced. In Pericles’ Funeral Oration, for example, “the ‘populus,’ in the general sense of the term, is not politically divided,” and, indeed, “is never divided in the works of the tragic poets.”[10] This broad claim of unity is seen in Oedipus at Colonus as well, when Theseus, reacting to Creon’s abduction of Oedipus’s daughters, proclaims, “Your [Creon’s] behavior is an affront to me, / A shame to your own people and your nation,” and that “the whole city [Athens] / Must not seem overpowered by one man.”[11] In a unified citizenry, any citizen exemplifies that citizenry, and thus the actions of one man can impact the reputation of the entire polis . In this way, the citizen is metonymic of the polis , and conflating one with the other is both an easy and powerful move in a mythically-unified city like Athens, especially by its figurehead Theseus. What this means, however, is that the broad-reaching social order determines not only social status, but behavior. One must act in accordance to its social prescriptions, or else one endangers the social ideal of collective unity. Thus, those who violate the social norms, especially those important enough to be codified into law, must either be expelled from the polis by being placed into one of the excluded classes—in extreme cases, such as with Oedipus, this meant being expelled from the city itself and branded an exile—or eliminated entirely. In a society founded on absolute, broad-reaching, inherent order, any person whose very presence defies that system of order threatens the entire conception of the polis, a conception that must be kept in place so that democracy and the state as a whole can function. In order to see why Oedipus and Ion are not able to take their rightful places, then, it is necessary to examine exactly which secondary social prescriptions they violate that threaten the order and unity of the polis .[12] The Social Implications Of Blood While the primary concern of a genealogical social organization is creating a clear order, it must also be a self-sustainable system. What this means is that in order to reproduce viable citizens, and thereby the entire social order, secondary behavioral prescriptions become necessary. A system meant merely to determine whether or not one was citizen (i.e., pure lineage) became instead a guiding social principle, dictating not only social standing but also desired social behavior. To borrow a term coined by James C. Scott, the requirement of pure lineage in a genealogical society set into motion “a process by which ‘a measure colonizes behavior’”—that is, what is meant to be descriptive becomes prescriptive.[13] In the quest to create social order and obtain clarity through kinship organization, a blood-based society generated secondary regulations that helped further its own existence. No longer did it merely order society, but the desire to adhere to the blood standard now shaped the ways Athenians lived their lives. For example, the stringency of claims to autochthony biased societal perceptions of preferable marriages. Athenian-Athenian matches, or, more generally, marriages between members of the polis with clearly-defined statuses were considered more appropriate in ancient Athenian society. These biases played into the need for social order: if one was certain who one’s parents were, one’s own status was clearly defined. Conversely, if one was uncertain about their parentage, their social status was diminished due to the social order. We see this bias throughout history, with orphans and bastards historically being treated as lower-class citizens, inferior to those of straightforward lineage. With unclear parentage, one is not immediately stateless, per say, but one experiences a sort of social statelessness. As Creusa says of Ion, “It was for your good that Loxias settles into a noble house. If you were called the god’s son, you would not have had a house as your inheritance or a father’s name.”[14] Because Athenian women could not hold property, Ion must pass as the son of a metic in order to inherit a name of any meaning. Indeed, we see at the beginning of the play that Ion has no name at all until Xuthus gives it to him.[15] Naming is a familial claim, but as a bastard of Apollo, Ion has no name to claim whatsoever. While his Athenian mother ought to make him Athenian as well, revealing his true parentage would render Ion not only destitute, but without any form of social identification. To have a subordinate place in the social order is better—at least as Ion is coerced to believe by Xuthus and Athena—than to have no place at all. While his parentage is clear, Ion’s social status is not, revealing one of the major failures of a blood-based system. Inheritance can only deal with facts that it was built to incorporate for it is based on the grounds that it stems from absolute fact. While being the son of a god ought to have positive effects on his social standing, the fact that Apollo has entered the social order from a place completely external to it means that Ion and all of his progeny are also unable to fit into the social system at all. Ion cannot even be defined by one of the catch-all categories such as “orphan” that have been built into society for extreme, non-standard cases. A social order based on genetic lineage “expresses a demand to repeat (over generations) what can only happen once (the original birth).”[16] Genealogical in-grouping made both citizenship and violations of its reproductive practices iterative: if one’s ancestors made a mistake in marriage or reproduction, it would be reproduced throughout the entire genealogical line with no chance of correction, save through covering it up. Once revealed, Apollo’s original sin of impregnating Creusa—or, as it was more likely to be seen in this society, Creusa’s original sin of giving birth to Ion—would haunt Ion’s family line forever. Ion therefore must follow Athena’s advice and pass as a metic until the end of his days, his knowledge of his true parentage keeping him from fully joining the polis lest he become disenfranchised and lose his social classification of orphan, along with the protection that classification affords. While Ion’s crime against the social order is his very birth, Oedipus’s crime is more nuanced, hinging on his transition from ignorance to knowledge of his own parentage. Oedipus at Colonus thus explores what happens when that which goes against the social order is revealed, instead of staying safely hidden. While Ion confounds orderly overall social classification, Oedipus hopelessly confuses the internal family ordering upon which the whole of Athenian society was based. Oedipus not only confuses this order by killing his father, upending the proper power dynamic and sinning against the polis ’s conception of the ideal family, but also by marrying his mother and having children by her. This creates social positions untenable within Athenian society: sister-daughters, son-brothers, father-siblings, grandmother-mothers, etc. In his ignorance, Oedipus commits crimes that, upon coming to light, make both himself and his entire family socially unclassifiable, for the social order has no way of coping with the complications of incest. Just as Ion’s potential outing could contaminate the legitimacy of his entire line, Oedipus’s revelation does contaminate his entire family structure because of the supposedly inherent and unifying qualities of blood. This inherited contamination is evident in the ill fate of Oedipus’s daughters in the following play, Antigone . What brings people together in the social order can just as quickly spread social contamination. Oedipus and his family, especially his offspring, each inhabit multiple social categories, which contradict each other in their implications of exclusion and inclusion. Despite Oedipus and by extent his children being at least doubly Theban, the revelation of Oedipus’s parentage means they cannot be allowed to remain in the polis . Society has no outcast category in which to put the members of this family, so they must be expelled. They have violated the social order and thus cannot stay in the city since their continued presence threatens the myth of broader social unity. While the concept of unity was not as important in Thebes as in Athens, at least from an Athenian perspective, incest was still taboo. To some extent, Oedipus’s family had to be Theban since Thebes served as Athens’ dramatic foil, a place where scenes were allowed that couldn’t play out in Athens, even mythically.[17] Thebes was a place to explore social possibilities. If Oedipus’s stories took place within Athens’ idealized system, even in fiction, they risked exposing too directly its fragility. The slight distance between the two cities, both physically and ideologically, was what made such socially-shattering myths as Oedipus palatable. They were allowed to explore the potential effects that taboo events such as incest could have within Athens without threatening the social order with its intense emotional baggage. Conclusion The Athenian social order tolerates certain types of aberrations as long as they fall within the outcast categories it has created so that its myth of unity can persist despite inevitable anomalies. If an individual falls outside of these catch-all categories then they must be eliminated. Indeed, we see this occur through the plays as Oedipus’s children—who break no laws but whose very existence as daughter-sisters and brother-sons exposes the fragility of blood-based social order—eventually kill themselves and each other. The sin must be cut off at the source or else it will grow exponentially with every following generation. All of Oedipus’s family must end to cleanse the blood and the city. Unlike with Ion, Oedipus’s familial social transgressions are known, precluding him from the approved social order. Therefore, Oedipus faces no other socially-viable option but to be expelled from the polis . He threatens the polis ’s behavioral unity, the myth of unity that the entire polis is founded upon, and therefore, the polis itself. The mythically-unified polis, for whom all included individuals are metonymic representatives, cannot include an individual who has violated its secondary socio-familial prescriptions even if those transgressions are not intentional. Interestingly, Oedipus is asked to conditionally rejoin Thebes after his expulsion because the metonymic power the polis has over its citizens supersedes all other considerations. The claim which Athens newly asserts over Oedipus infringes upon that primary consideration, and so his secondary sins can be overlooked in favor of his primary birthright. Oedipus’s parentage is revealed, while Ion’s is not, and these revelations are what shaped their tragic fates. However, in a genealogical system that gains legitimacy based on the claim that blood is objective, inherent, and unfakeable, how is it possible that either of their lineages, at any point, not be revealed? The answer, in short, is that despite its apparent objectivity, blood does not speak for itself. One cannot look at someone and tell who their parents are, and, like Ion, individuals might be mistaken about their true parentage. This opens up the possibility of acting and passing as a citizen, even unintentionally, when one is not. This possibility threatens the autochthonous myth of blood being self-evident and inherent—thereby threatening the entire Athenian social order. As the bastard child of a god and an Athenian, Ion, while objectively an Athenian, does not fit neatly into the social narrative. Revealing his parentage may lead to questions about his autochthony. To secure his high position of power, a palatable lie must be constructed to ensure the propagation of his own line and the social order as a whole. Blood in this case is a performance, willing or not, for the sake of the social order to which his own exceptional circumstances must be subsumed. Because the autochthonous genealogical citizen myth is founded on the basis that it has no exceptions, having a questionable figurehead at one of the most important family lines might incite social crumbling from the top down. As an inevitable consequence of the need to preserve the mythical unity that this society was founded on, Ion, whose familial transgressions can be subsumed into pre-existing social categories, is able to be a metic as long as he hides his familial transgressions under a socially-acceptable genealogical narrative. Oedipus, on the other hand, who reveals his familial transgressions under extreme emotional duress[18], must necessarily be evicted from his polis for his violation of its secondary prescriptions since the assertion of his status along family lines implicates his other behavior. The tragedy of Oedipus and Ion is that the knowledge they gain of their parentage, which should shift them from their marginal social positions into the sociopolitical centers of their respective poleis , actually means that they cannot claim their rightful places in society. The knowledge of their parentage is inextricable from the knowledge that either they or their parents violated the secondary prescriptive norms of their genealogically-based society. Despite its claims to being inherent, providing clear order, and unifying the polis , (blood) autochthony failed in almost every one of these respects, as does any other basis for social organization and delineation of citizenship. In order to preserve and reproduce this order, the reproduction of individuals needed to adhere to secondary behavioral prescriptions that blood-based membership entails, lest their entire family lines be contaminated. Due to the different natures of Ion’s and Oedipus’s social crimes, as well as the secrecy of sensitive information or lack thereof, Ion is able to pass within the polis while Oedipus must be expelled in order to preserve the social myth. However, neither is able to claim what is rightfully theirs: the title of citizen. Endnotes [1] Autochthony: n., The quality, state, or condition of being autochthonous; an instance of this. Autochthonous: (of an inhabitant of a place) indigenous rather than descended from migrants or colonists. Oxford English Dictionary, “autochthony” and “autochthonous,” OED Online, December 2018. [2] Polis refers to a Greek city-state. Here, more specifically, it refers to the people allowed within government in Athens, the people who constituted the voter base and who were included in all aspects of civic life. [3] Dokimasia : n, The term δοκιμασία and the related verb dokimazein were used in various Greek contexts to denote a procedure of examining or testing, and approving or validating as a result of the test. Oxford Classical Dictionary , 2016, "dokimasia." [4] At the time in which Ion is set, the requirement for citizenship was having one Athenian parent, not two, as it was after Pericles’ citizenship law. For Oedipus, the distinction is irrelevant because both of his parents are Thebans—or, in his father’s case, a naturalized Theban ruler. [5] Jacques Derrida, Of Hospitality: Anne Dufourmantelle Invites Jacques Derrida to Respond , Trans. Rachel Bowlby, (Stanford: Stanford University Press, 2000), 83. [6] Demetra Kasimis, “The Tragedy of Blood-Based Membership: Secrecy and the Politics of Immigration in Euripides’s Ion,” Political Theory 41(2):231-256 (2013), 15. [7] Sophocles, Oedipus at Colonus , trans. Robert Fitzgerald (New York: Harcourt, Brace, 1941), 92, line 9. The exact blood-based social conventions Oedipus violates that lead to his expulsion from Thebes will be explored later. [8] Passing, or being perceived and accepted as something other than what one actually is, is certainly an important part of any strictly-delineated social order. For example, in the post-Jim Crow era, certain people who would legally have been considered African American could “pass” in their daily lives as white. Passing is especially important in relation to Euripides’ Ion, but further discussion is not within the scope of this paper. [9] Kasimis, “The Tragedy of Blood-Based Membership,” 15. [10] Pierre Vidal-Naquet, “Oedipus Between Two Cities: An Essay on Oedipus at Colonus,” in Myth and Tragedy in Ancient Greece, eds. Jean-Pierre Vernant and Pierre Vidal-Naquet, trans. Janet Lloyd (New York: Zone Books, 1988), 331; 334. [11] Sophocles, 132, lines 8-9; 136, lines 14-15. [12] Ion is the son of the sun god Apollo and the Athenian princess Creusa; Oedipus is the son of two Theban monarchs. Thus, both theoretically should be included in their respective poleis on the basis of blood, especially since it is the blood of the elite. [13] James C. Scott, Two Cheers for Anarchism: Six Easy Pieces on Autonomy, Dignity, and Meaningful Work and Play (Princeton: Princeton University Press, 2014), 114. [14] Euripides, Ion , trans. H.K. Lee (Warminster, England: Aris & Phillips, 1997), 503. [15] Euripides, Ion , 403. [16] Kasimis, “The Tragedy of Blood-Based Membership,” 13. [17] Vidal-Naquet, “Oedipus Between Two Cities,” 334: “There is one place where stasis [social division] finds a special home: It is Thebes,…an anti-city.” [18] Euripides, Ion , 104, lines 17-18: “Nothing so sweet / As death, death by stoning, could have been given me.” Oedipus’s distress comes from his internalization of the prescribed external social standards, which hold so much weight as taboo that he, as a metonymic citizen, feels anguish from actively breaking these rules, even if unaware he was doing so. References Derrida, Jacques. Of Hospitality: Anne Dufourmantelle Invites Jacques Derrida to Respond. Trans. Rachel Bowlby. Stanford: Stanford University Press, 2000. Euripides. Ion . Translated by H.K. Lee. Warminster, England: Aris & Phillips, 1997. Kasimis, Demetra. “The Tragedy of Blood-Based Membership: Secrecy and the Politics of Immigration in Euripides’s Ion.” Political Theory 41(2):231-256 (2013). Scott, James C. Two Cheers for Anarchism: Six Easy Pieces on Autonomy, Dignity, and Meaningful Work and Play. Princeton University Press, 2014. Sophocles. Oedipus at Colonus . Translated by Robert Fitzgerald. New York: Harcourt, Brace, 1941. Vidal-Naquet, Pierre. “Oedipus Between Two Cities: An Essay on Oedipus at Colonus.” In Myth and Tragedy in Ancient Greece. Edited by Vernant, Jean-Pierre, and Pierre Vidal-Naquet. Translated by Janet Lloyd. New York: Zone Books, 1988. Vernant, Jean-Pierre, and Pierre Vidal-Naquet. Myth and Tragedy in Ancient Greece. Translated by Janet Lloyd. New York: Zone Books, 1988.

The Brown University Journal of Philosophy, Politics, and Economics (JPPE) is a peer reviewed academic journal for undergraduate and graduate students that is sponsored by the Political Theory Project and the Philosophy, Politics, and Economics Society Program at Brown University. The Brown Journal of Philosophy, Politics & Economics Volume VII, Issue I scroll to view articles Featured Articles Philosophy Body Ethics: Moving Beyond Valid Consent Christine Chen Non-Self Through Time Anita Kukeli Divisive Identities Exploring the Interplay of Personal and Social Identities Ella Neeka Sawhney The Captain and the Doctor George LeMieux Read More PoLitics The European Union Trust Fund for Africa: Understanding the EU’s Securitization of Development Aid and its Implications Migena Satyal A Death Sentence Beyond Death Row: Helling v. McKinney and the Constitutionality of Solitary Confinement Hallie Sternblitz Rewriting the Antitrust Setlist: Examining the Live Nation-Ticketmaster Lawsuit and its Implications for Modern Antitrust Law Katya Tolunsky Read More Economics Read More Not Paying income tax timely leads to significant financial losses for the governments. What design changes could be made to tax collection policy to minimize these delays? Aryan Midha One Planet, One Oklahoma: Exploring a Framework for Assessing the Feasibility of Localized Energy Transitions in the United States Anna Hyslop Applications for JPPE will resume in the fall! See Available Positions

The Brown University Journal of Philosophy, Politics, and Economics (JPPE) is a peer reviewed academic journal for undergraduate and graduate students that is sponsored by the Political Theory Project and the Philosophy, Politics, and Economics Society Program at Brown University. The Brown University Journal of Philosophy, Politics & Economics *FEATURES * FROM GREG FISCHER Mayor of Louisville, KY Jorge O. Elorza Mayor of Providence, RI Economics Cannabis By Kaid Ray-Tipton Latent Effects of Cannabis Legalization: Racial Disproportionality and Disparity in Washington State Drug Convictions, 2000-2015 Click to flip through the journal Philosophy A More Perfect Union Economics Energy By Benjamin Seymour Inclusive Norms and the Future of Liberal Unity By Jingpeng Shao Embracing Renewable Energy for Sustainable Job Growth in West Virginia economics Politics A.S.E.A.N Philosophy Transcendental Self By Hisyam Takiudin The Long Game: ASEAN, China's Charm Offensive and the South China Sea Dispute By Jennifer Kim Reconceptualizing the Idea of the Self Within Western Philosophy: The Existence-Reason Binary and the Nonrational Transcendental Self Politics Racial Capitalism Politics American Jews By Olerato Mogomotsi Racial Capitalism in Post-Apartheid South Africa: Challenging the Fallacy of Black Entitlement under Service Delivery Protests. By Jake Goodman The Political Behavior of American Jews A Public Choice Approach to Israel-influenced Voting

Two Forms of Environmental-Political Imagination: Germany, the United States, and the Clean Energy Transition Two Forms of Environmental-Political Imagination Germany, the United States, and the Clean Energy Transition Nathan S. Chael Stanford University Author Fabienne Tarrant Lori Kohen Huayu Wang Connor Riley Editors Spring 2019 Download full text PDF (52 pages) Abstract The United States and Germany have followed markedly different paths thus far in the 21st century in their efforts to reduce emissions from energy production and thereby combat climate change through national policy. I extend Professor Jedediah Purdy’s notion of the “environmental imagination” to discuss the “environmental-political imagination,” or implicit vision of the environment, politics, and how they ought to be approached and structured, latent in each country’s central 21st-century climate policy initiative. I find that a general spirit of individuation and conflict marks the United States’ modern environmental-political imagination, while a general spirit of collective enterprise and continuity marks Germany’s. A parallel series of examples is used in each country to illustrate this, including understandings of economy and environment, particular forms of energy and landscape, and ideas of leadership and agency, and finally some objections are considered. I. Introduction “‘We’re the first generation to feel the impact of climate change and the last generation that can do something about it.’ And that’s why I committed the United States to leading the world on this challenge.” [1] – President Barack Obama “Dealing with climate change means facilitating and promoting social and economic change in the best possible way. Germanyʼs Energiewende, or energy transition, is an encouraging example of how that can be done, despite all the challenges its details pose. We intend to continue down this route—with everyone on board, including each individual sector of the economy.” [2] – Dr. Barbara Hendricks, former German Minister for Environment, Nature Conservation, and Nuclear Safety “In a world we can’t help shaping, the question is what we will shape.” [3] – Jedediah Purdy These are, to say the least and state the obvious, complicated political times in both the United States and Germany. From the midst of the complexity and chaos, though, at least one emergent trend stands out: there is a widespread sense that Germany is overtaking at least part of the mantle of global leadership that has characterized the United States’ posture towards the world since the fall of the Soviet Union and before. This phenomenon has been particularly pronounced since the election of President Donald Trump in the US—German Chancellor Angela Merkel has since been pointedly labeled the new “leader of the free world” in numerous news outlets[4]—but is surely reflective of deeper and longer-standing political and ideological currents in both nations. In this essay I wish to trace the legal and philosophical contours of this trend in one particular arena: that of environmental policy, and in particular energy policy. German and American environmental attitudes have, and have long had, marked differences, and these attitudinal differences manifest in a correspondingly deep divergence between the two countries’ environmental laws. A particularly rich and currently relevant pair of examples of this historical disparity can be found in the Clean Power Plan in the United States and the Energiewende, Germany’s 21st-century suite of goals and policies aimed at a transition to a low-carbon economy. These recent federal policy efforts to spur a transition to lower-emission energy sources in each country reveal a distinctive set of underlying contemporary notions about what Americans and Germans take the environment and its value to be—what the legal scholar and historian Jedediah Purdy has called “the environmental imagination”[5]—and, relatedly, what they take the role of law to be relative to the environment. That is, what an appropriate set of energy and environmental policies looks like, what the nation is responsible for in combating environmental problems that affect both its own people and other nations, and what roles its different individual and institutional actors ought to have in creating and advancing those policies. Taken together, following Purdy, I label this set of underlying philosophical views connecting the environment, law, state, and society the “environmental-political imagination” of each nation, and later in the paper will have much more to say about this concept. The structure of the essay is as follows. First, I describe the contents of, and, in a pre-philosophical way, tell the stories of a pair of recent environmental laws/policy initiatives, the Clean Power Plan (CPP) in the United States and the so-called Energiewende, or “energy transition,” in Germany. While this pair merely scratches the surface of German and American environmental law, I show that they constitute a particularly significant set of policies, and comprise a particularly rich contrast for the exploration of the two nations’ dominant ways of understanding the intersection of environment and politics. In the paper’s second section I elaborate upon the concept of the environmental-political imagination and its specific utility here, then argue for a particular characterization of the environmental-political imagination that underpins each country’s contemporary energy policy initiative. The claim at which I arrive comprises the central philosophical contention of the essay: a spirit emphasizing the individuation and conflict of different spheres of activity, landscapes, interests, and agents pervades the 21st-century American environmental-political imagination, while across the same set of diverse aspects, the contemporary German environmental-political imagination is marked by a sharply contrasting and equally pervasive spirit of collectivism and continuity. After arguing for this view, in the essay’s third section I articulate and provide short responses to some potential objections to my argument, attempting to clarify and trace some of its ramifications. Before beginning in earnest, a few notes on the paper’s methodology. First, while German and American environmental law and their underlying imaginative ideologies have rich and compelling histories, rather than sustaining a full historical argument here I confine myself mainly to this century’s developments, using the CPP and recent developments in the Energiewende as contemporary lenses onto deeply historical phenomena for the sake of scope and analytical clarity. Where necessary, however, events deeper in history are discussed; it should simply be kept in mind that in a larger sense all current laws and ideologies are inextricably rooted in historical factors. I shall have more to say later about how we might understand this temporal issue. Second, it will doubtless be noted that establishing unquestionable causal linkages between such concrete phenomena as environmental laws and such slippery, implicit ones as “environmental-political imaginations” is a difficult, nigh impossible, exercise, particularly without the benefit of a full historical account. To do so is not my aim. Instead, this essay is meant to provide a form of rational reconstruction: given the issues and policies in question, how they came into being, and the way Germans and Americans both in and outside government think and talk about them, I aim to give the most plausible and revealing characterization of the underlying logics that root them. Some measure of causality running from these imaginative attitudes to the production of the policies at issue is, I believe, necessarily present (as is some causal connection is from earlier law and policy to these recent attitudes), but the paper makes no attempt to account for all the specific social and institutional factors by which such attitudes are mediated before becoming legally manifest. II. The Clean Power Plan and the Energiewende The issue of climate change driven by anthropogenic greenhouse gas (GHG) emissions into the global atmosphere is fundamentally both an economic and environmental one. Carbon dioxide (CO2), the GHG primarily responsible for increasing global temperatures[6], is emitted in fossil fuel combustion that produces electricity and powers industrial equipment, vehicles, and the many other machines of modern economic activity. The historical causal link between CO2 emissions and economic growth is strong and well-documented[7]. In short, emissions-intensive fuels are the lifeblood of today’s global economy; CO2 emissions, economic production, and climate change thus constitute a tightly linked trio of phenomena, and the United States and Germany are quite similar nations in a host of ways closely related to it. Both are highly industrialized nations with immense economic and emissions output: the US economy is the world’s largest, and Germany’s is fourth largest globally and by far the largest in the European Union (EU)[8]. The US and Germany ranked 13th and 19th in the world, respectively, in per capita GDP in 2015,[9] and 3rd and 8th respectively in per capita CO2 emissions in the same year.[10] The structures of the two economies are strikingly similar: while Germany’s economy is somewhat more reliant on industrial production, both derive about 1% of national GDP from agriculture, between 20 and 30% from industry, and the remaining large majority from the service sector.[11] Beyond these basic economic likenesses, the two federal republics maintain immense bureaucratic apparatuses for research, monitoring, regulation and enforcement related to the environment. Both countries founded federal environmental agencies, the Environmental Protection Agency (EPA) in the US and the German Federal Environment Agency (UBA, for its initials in German), in the early 1970s. Both federal-level agencies help set and enforce national-level policy floors that state-level agencies enforce and can augment in their jurisdictions (though, as will be discussed in greater detail, Germany’s federal environment apparatus has expanded significantly since the founding of the UBA).[12] From a distance, then, the two nations appear to share a basic economic and governmental structure relative to environmental issues, with some history in common to boot. Despite social and cultural differences, this might suggest that the United States and Germany would pursue the transition to low-carbon economies based on clean energy along similar pathways. Yet the two nations have in recent years diverged drastically in their federal policy efforts to facilitate this transition. The CPP and Energiewende constitute the central components of this divergence. Though they cannot capture all there is to say on the issue, they provide a striking contrast that will allow for interrogation to its heart. For a brief examination of the facts of each, I turn first to the US and then to Germany. A. The Clean Power Plan The CPP emerged from a context of hesitation and failure on the part of the US government to regulate GHG emissions. In 2007, the Supreme Court in Massachusetts v. EPA ruled that the EPA had the authority and duty, if it found CO2 to be a driver of climate change, to regulate CO2 emissions and thereby combat climate change under the Clean Air Act.[13] The decision, while empowering the EPA to promulgate the rule codifying the CPP eight years later, was actually a defeat for it at the time: the Bush-era EPA did not wish to regulate CO2 emissions, and argued in the case that the Clean Air Act did not cover them. Two years later, legislative efforts to regulate emissions through a “cap-and-trade” scheme similar to the EU’s, wherein a legal limit of GHG emissions is set and emitters can buy and sell permits to emit beneath that cap,[14] failed when the American Clean Energy and Security Act (also known as the Waxman-Markey Bill) passed the House but was never brought to a vote in the Senate. The deadening impact this had on federal climate action, early in Obama’s first term with Democratic majorities in both legislative chambers, was palpable: in Purdy’s view, “when Waxman-Markey failed, a whole generation of reformist thinking went with it.”[15] Frustrated by legislative stagnation, President Obama later directed the EPA to formulate a rule regulating GHG emissions in the power sector.[16] This rule ultimately became the Clean Power Plan, an EPA regulation designed to decrease power-sector CO2 emissions by 32% by 2030, relative to 2005 levels, by instituting emissions guidelines for fossil fuel-fired power plants and directing states to create and implement their own such standards.[17] About 40% of US CO2 emissions came from the power sector in 2005,[18] so other things equal the CPP alone would cut total US emissions over 12% between 2005 and 2030. This would be the largest legally-mandated emissions reduction in US history, and, accordingly, upon its announcement President Obama labeled the CPP “the single most important step America has ever taken in the fight against climate change.”[19] However, backlash to the CPP from industry and political groups was immediate and intense. Also, before the rule could take effect, the Supreme Court issued an order blocking its entry into force until all litigation challenging it was complete.[20] Then, after President Trump took office, he ordered the EPA to review it, and an EPA proposal to repeal it was soon unveiled.[21] While the CPP remains technically alive as of this writing in August 2018, its repeal is expected to be officially complete soon. When that happens, the rule that the Harvard Environmental Law Program has called “the crown jewel of America’s international climate commitments”[22] will be dead before it ever came alive. The CPP was designed to reduce CO2 emissions predominantly by decreasing the use of coal-fired power plants, which have high emissions intensity relative to other energy sources.[23] Market forces, coincidentally, have recently made a major impact in the direction intended by the CPP, as a dramatic shift in energy prices caused by cheap natural gas usage from shale sources has taken place. US CO2 emissions rose steeply from 1990 to 2005, when shale-sourced natural gas hit the market,[24] and have dropped 12% since then.[25] Still, bracketing this fortunate trend, the overall picture of US climate progress is less rosy: annual US GHG emissions remain about 2% greater than they were in 1990.[26] In the absence of any prospect of federal action to aggressively cut emissions, and in light of President Trump’s 2017 decision to withdraw from the Paris Agreement, many cities, states, and private enterprises have taken matters into their own hands and pledged to enforce their own emissions cuts.[27] B. The Energiewende The idea of Energiewende , or “energy transition,” in Germany goes back to the late 1970s and early 1980s, when environmentalist groups opposed to nuclear energy and fossil fuels called for a transformation of Germany’s energy sources in the wake of nuclear plant construction and the 1973 and 1979 oil crises.[28] However, the term did not describe a substantive policy initiative until the turn of the millennium, when Germany’s governing coalition of the Green Party and the center-left Social Democrats began to take widespread action to promote a transition to new forms of energy production. Since the passage of the first Renewable Energy Sources Act in 2000, Energiewende has become shorthand for a vast array of goals and timetables for renewable energy production and emissions cuts, research reports supporting these goals and timetables, and legal requirements enforcing them.[29] The action of the Energiewende is not localized to one federal ministry or even branch of government. Instead, its regulations spring from multiple sources: administratively, the Federal Environment Agency (UBA), the Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety (BMU), and the Federal Ministry for Energy and Economic Affairs (BMWi) all play a part in setting and realizing its goals. The chancellor and legislative branch are heavily involved in Energiewende policy creation as well. The key reports and policy components of the Energiewende are as follows. 2000’s Renewable Energy Sources Act (EEG) guaranteed a twenty-year period of high prices for electricity from renewable sources sold into the grid,[30] and was updated in 2004, 2009, 2012, 2014, and 2017 to increase the law’s renewables targets and adjust its pricing mechanisms.[31] 2007’s Integrated Energy and Climate Programme, also known as the Meseberg decision, approved a package of fourteen new laws and amendments to provide a policy basis for the doubling of Germany’s emissions reductions targets for 2020 from 20 to 40%, compared to 1990 levels.[32] A long-term plan for Germany’s use of various sources of energy in different sectors was approved in 2010 as a cornerstone of the Energiewende ,[33] and in 2014 and 2016 the federal cabinet approved long-term climate action plans for 2020 and 2050, respectively.[34] In addition to CO2 reductions and renewables increases, a central and heavily publicized component of the Energiewende is its move to abolish nuclear energy production in Germany. After the Fukushima nuclear disaster in 2011, in which a magnitude 9.0 earthquake off the coast of Japan triggered a tsunami which caused a meltdown at the Fukushima Daiichi nuclear plant, the German government under intense public pressure announced plans to immediately cease operations of eight of its oldest nuclear power plants, with all remaining nuclear plants to be closed by 2022.[35] The Energiewende , for all its progress, has been enormously expensive. Much of the cost of the heavy renewables subsidies has been passed onto consumers: a renewables surcharge on utilities bills has raised the average household’s monthly fee by 50% since 2007.[36] Moreover, the decade-long sprint to close the nation’s nuclear plants necessitates a costly rapid increase in the use of other sources, since Germany has long sourced a large portion of its power supply from nuclear energy.[37] Even beyond costs caused by solar subsidies and cuts to nuclear energy, the Energiewende today faces other challenges: for instance, due to recent rapid economic and population growth, German CO2 emissions reductions have stagnated since 2014 and the country will therefore likely miss its 2020 target.[38] The fact remains, though, that through a concerted policy effort Germany has cut its total CO2 emissions over 26% from its levels in 1990 (the key baseline year for emissions reductions in international climate policy). In absolute terms, it has cut emissions more than any other EU nation since then,[39] and since the passage of the EEG in 2000 it has sextupled its electric power production from renewables, mainly wind and solar, to a full 36% of national supply in 2017.[40] This is an enormous figure by global standards. The Energiewende , though costly and facing obstacles, has made impressive strides. Thus we have two modern, industrialized, immensely productive nations, expected to be regional and global leaders on a variety of issues, with markedly different policy responses to the climate and energy problem: one with a climate policy crafted, immediately challenged, and quickly repealed upon a change of government, and the other making imperfect but steady progress. Furthermore, despite the two countries’ basic similarities, few today would be surprised by this stark contrast. It is generally understood that Germany, to use the jargon of energy policy circles, is “ambitious on climate,” while the United States is not. For the remainder of this paper, I aim to use the facts of these two policy initiatives and their development in order to interrogate this general understanding rather than take it for granted, and thereby go a level or two deeper into the human reasons that might explain why it, and certain facts adjacent to it, hold. Such major differences in the two nations’ contemporary laws on energy and climate provide important loci for insights into the imaginative and ideological characteristics of these nations with respect to politics, law, and the environment. Since these policies mandate (or, in the case of the CPP, attempted to mandate) how they, as states and societies, must respond to climate change, such differences provide comparative lenses onto how Germany and the United States view their relationships to their own populations and other nations that climate change will harm, and to the natural world which provides the resource basis for their economic production and which they in turn affect through greenhouse gas emissions. As Purdy puts it, “Law is a circuit between imagination and the material world”[41]; the laws that exist came about through processes expressing an underlying imagination, and can be expected through the realization of what they require to influence the imagination of the future. Examining this pair of policy initiatives, then, what imaginative structures underlying German and American environmental and political life could help account for this vast difference? III. The Contemporary German and American Environmental-Political Imaginations via the CPP and the Energiewende Before laying out dominant features of the two nations’ environmental-political imaginations, I must briefly elaborate upon the concept of the environmental-political imagination itself, and clarify how it relates to Purdy’s concept of the environmental imagination. Neither concept refers directly to the explicit ideological statements parties make in their environmental platforms, nor theories of the true, the good, or the just in tracts on environmental or political philosophy; as Purdy says, “Imagination is less precise, less worked out, more inclusive than ideas, and it belongs to people in their lives, not philosophers working out doctrines. Imagination is a way of seeing, a pattern of how things must be.”[42] It might be thought of as taking place on the mental level prior to ideology, or as ideology’s raw material. It has to do with the way people, individually and in institutions, think and make assumptions about what exists in nature and the human world, how those things are organized, what is valuable about them, and what ought to be done with them, here in particular with respect to climate and energy, and the collective decision-making proper to the political sphere. It is an implicit, blurry set of notions, perhaps internally contradictory, largely submerged or subconscious, that acts as inputs in the formation of laws and policies that then make explicit what may and may not be done. I borrow this framing of “imagination” from Purdy, but employ it in the discussion of somewhat different material from what is referred to by his concept of the “environmental imagination.” As Purdy uses it, the environmental imagination refers primarily, though not exclusively, to how people understand and act upon the environment at the level of landscape, rather than atmosphere and climate.[43] While Purdy acknowledges that, in the future, different nations or regions might develop their own “ethics and politics of climate change,”[44] he does not examine in a descriptive sense how such different environmental-political imaginations are already at work in different places. My analysis here is meant to fill this gap, to focus on the particular environmental, economic, and political issue of climate change and explore how the US and Germany are in fact seeing and acting upon it by using Purdy’s framing of the environmental imagination as a conceptual starting point. Purdy’s political focus is mainly on how people’s imaginative notions of the environment work their way into political life, since decisions about how to approach and use the environment are made in the political sphere. I wish to inquire further about Americans’ and Germans’ imaginative notions of politics itself: their notions and assumptions about what politics is like, how government ought to be organized and decisions made, and what we owe to others inside and outside the polity. Thus the imagination discussed here is itself both environmental and political. Also, since I shall discuss not only how people imagine the climate or the atmosphere but also how their imaginative notions of the environment—generally, of nature overall—affect their nations’ action on climate specifically, “environmental-political” is more appropriate than “climate-political.” The term thus seemed to be the best fit for a capacious idea that extends Purdy’s notion in a logical way. A. The 21st-Century American Environmental Imagination The contemporary American environmental-political imagination, as seen through the story of the Clean Power Plan, can best be characterized by a sensibility of individuation and conflict. By a sensibility of “individuation,” I mean that there exists a pervasive imaginative stress on the sharp divisions among different problems, parties, and conceptual categories of environment and politics, rather than on their continuities; particularly emphasized is the split between the environmental and the economic spheres. Normatively, there is a corresponding imaginative insistence that starkly individualized approaches to such disjoint issues must be appropriate. By a spirit of “conflict,” I mean that these individuated issues, categories, and parties are often imagined as necessarily at odds with one another: there is a powerful sense that trade-off and adversarial relations are inherent to them and to climate change in particular, and that such conflict cannot be overcome by any sense of reconciliation or unification. Individuation is the more fundamental of the two descriptors here, frequently accompanied with an adversarial tone, since two ideas, issues, outcomes, actors, and so on can only be viewed as conflicting if they are first given sharp individuating boundaries. To illustrate this, I marshal a range of evidence from the CPP and beyond to investigate three aspects of the United States’ environmental-political landscape: its view of the relationship between the categories of the “economic” and the “environmental”; its understanding of particular American landscapes and coal, a particularly significant form of energy; and its latent conception of leadership and agency on climate action. A1. Environment and Economy The American environmental-political imagination contains, first and foremost, an insistence upon a sharp distinction between the economic and environmental spheres. “Economic” and “environmental” are not understood as merely two ways in which to view a larger human-natural system, two modes of its measurement that can be usefully distinguished, but instead as two ontologically distinct categories which in practice ought, so far as possible, to be governed by different procedures and norms. In the context of the CPP, this can be initially seen from the law’s institutional backdrop, the structure of which reflects a sharp conceptual disconnect between economy and environment. President Obama instructed the EPA, and the EPA alone, to prepare what became the CPP.[45] It is true that the EPA was created during a time in American history when recognition of human-environmental interconnection was ascendant,[46] and aids human safety through its insurance of clean air and water, but the EPA is explicitly dedicated to environmental protection alone rather than some larger joint goal of environmental-economic harmony. The implicit assumption in much of its work is that the environment is distinct from the economy and other human spheres and will need to be guarded against them. Some EPA officials have even suggested that the EPA has done its job of ensuring clean air and water too well, such that many Americans lose sight of ways in which economic production impacts the environment.[47] Conversely, the US Department of Commerce, the cabinet ministry that proclaims to be tasked with just “one overarching goal: Helping the American Economy Grow”[48] (emphasis in the original), mentions no environmental, ecological, or sustainability concerns in any of its five strategic pillars that support its central aim. Thus in the executive branch’s structure, the concepts of environment and economy are thoroughly and formally separated. The Department of Energy (DOE) might be expected to mediate the two, but it has a strong defense and pure research bent: at once handling nuclear weapons research, nuclear energy research and operations, and clean and fossil energy research. These specifics of bureaucratic organization may seem somewhat arbitrary, but they dictate both how federal agencies’ fields of action are defined and approached and how official discourse regarding those fields is expressed in public. I submit that both of these have significant consequences for how Americans perceive environmental, economic, and energy issues and their nation’s ways of handling those issues. In the context of this division of labor, President Obama’s executive assignment of the CPP’s preparation to the EPA alone appears symbolic of where climate change fits into the American environmental-political imagination, representing the official assignment of US action on climate change to the environmental sphere alone rather than the economic one. The huge backlash against the CPP illustrates the conflictual, not merely individuating, nature of this aspect of the environmental-political imagination:[49] many perceived the CPP as a conferral of environmental benefits and therefore also a sentence of concomitant economic sacrifice and degradation. A host of challenges were immediately raised against the proposed law, and the ensuing political warfare was intense.[50] This is deeply ironic in light of the fact that the government’s own study of the Clean Power Plan indicated that, in fact, due to long-term increases in energy efficiency, savings on climate adaptation costs, and savings on health expenditures due to reducing vast quantities of harmful fumes like sulfur dioxide in the air, it would likely have saved the US billions per year by 2030 relative to the status quo.[51] Much has been made of the idea that organizations like fossil fuel companies, many of which stand directly to lose from a transition to low-emission energy sources and lobbied hard against the CPP,[52] are the real villains preventing America’s energy transition. Coal and oil companies certainly lobbied hard against the CPP and may have played a large role in spreading the notion that emissions reductions, like environmentally beneficial policies generally, necessarily conflict with economic benefits. However, it was not merely these companies that voiced their concerns: amid both an outpouring of support for and backlash against the proposed rule, the EPA received over 4.3 million comments on it in six months.[53] Much has also been made of the deep partisan divide on belief in and concern about climate change itself,[54] which tracks the two parties’ divergent emphasis on action to protect the environment and action to aid the economy. This divide was clearly visible in the battle over the CPP, for instance, when the 11 Senate Republicans of the Environment and Public Works Committee issued a letter in support of repealing the CPP in 2017 that made no mention of the environment or climate change. That letter mentioned only “the pervasive, negative effects [the CPP] would have had on Americans across the country. The CPP would have driven up energy prices, eliminated American jobs, and hurt local communities that depend on coal.”[55] Importantly, though, the imagined conflict between economic and environmental benefits on climate change policy cannot be merely a result of American partisanship: that Democrats and Republicans predictably gravitated to their sides of that conflict on the Clean Power Plan means that the idea of the environmental-economic conflict itself was already generally accepted, and action to counteract climate change has simply been imaginatively sorted mainly into the pro-environment rather than pro-economy category (this is not to say, however, that both parties are exactly equally narrow-minded in their understanding of climate change). The imagined disconnection and conflict between the two spheres is thus fertile ground for, rather than a simple output of, increased partisan division. Also, while I will not examine the American imagination of markets in depth here, there seems to be a notable similarity between the way Americans notionally separate the economy and the environment and the well-recognized way they notionally separate markets and government intervention in the economy. It seems that in America, pro-environment action is imagined as government interference into the workings of the market, and for that reason is anti-economic. This is despite the fact that in practice governments always set the rules of the market in the first place, and that in many cases, like the CPP, government action would increase overall economic welfare in the context of the market’s failure to internalize all costs. That the CPP’s emissions reductions would actually save America money and relieve it of immense human suffering in the long term might have saved it in another time or place, but could not in the contemporary United States. A2. Coal and Landscape Beyond the pronounced economic-environmental distinction, another form of individuation prominent in the American environmental-political imagination and visible in the narrative of the CPP is the uniqueness assigned to the landscape of America’s coal mining country, along with an associated imaginative privileging of coal miners themselves and their imagined conflict with nature to extract its energy. This reflects a more general American notion that a sharp definitional line ought to be drawn between particular landscapes, and between them and humankind, a notion easily recognizable in American lore and law historically; one example of this is the Wilderness Act of 1964, which provided for protected, isolated areas that would remain “untrammeled by man” and would each keep their “primeval character” in spite of an expanding, modernizing population.[56] However, in the realm of energy production, a somewhat different individuating mood is at work than in wilderness protection, one that associates specific energy resources with specific landscapes and imagines a zero-sum conflict for primacy between them. The CPP would have achieved its emissions reductions mainly through cuts in the use of coal-fired power plants.[57] As the letter from the Republicans of the Senate Committee for Environment and Public Works illustrates, a key source of opposition to the CPP was a sentiment that the nation’s jobs in coal production must be politically protected. As with the CPP cost-benefit analysis indicating that in the long term the plan would actually have been economically profitable, here too there is a deep and ironic seed of irrationality; just over 160,000 Americans work in coal production, less than half of the number involved in the fledgling solar industry, which the CPP would have benefited,[58] and coal production has already steeply declined because of market forces alone, with cheap natural gas largely supplanting it since 2005.[59] Simple interest-group politics are always, of course, a factor, and support for coal jobs as a public position is due in large part to the rhetoric of President Trump, who has thrust coal production incessantly into the political arena, making it a more partisan issue and implicitly highlighting its racial associations (and, though not discussed extensively here, race is yet another sphere of deep divisions in the American environmental-political imagination, as, for instance, the work of the environmental justice movement has sought to show).[60] However, as Republicans and Democrats seized upon rather than created an imagined fundamental conflict between the economic and environmental spheres, President Trump seized upon rather than created the American glorification of the coal industry and its imagined battle with forms of energy hostile to it. Many Americans view coal miners as an interest group with a special claim to reverence, in some sense especially American, their connection to coal country’s lifeways and landscape that is morally and aesthetically unimpeachable even as they level its mountains and plumb its depths for the dirtiest fossil fuel available. Our version of fascination with and elevation of coal is uniquely American. Millions of Americans outside of coal country are able to glorify coal production imaginatively, thanks in part to the very fact that they have never been to coal country, because coal is closely associated with one of America’s many distinct, individuated landscapes, cultures, and forms of productive connection to the environment. Oil is certainly imaginatively American, in the sense that it can make one rich quickly. But no other source of energy evokes the sort of hardscrabble, manful battle with nature that coal does, up in the mountains and away from the friendly confines of civilization. Actual coal production, of course, is much less attractive than it is imagined to be in its symbolic overcoming of an unfriendly nature: as Purdy notes, “mountaintop-removal mining dynamites hills and hollows into a flat, treeless terrain and buries many hundreds of miles of Appalachian streams.”[61] But politically, huge swaths of the country lionize it for its imaginative associations, and even those who resist this celebration must engage with and seek to erode that picture of it. The point is not that no Americans recognize that burning coal pollutes the atmosphere intensely and that relatively few Americans actually make their living in its industry; it is that the fact that the US has been collectively unable to privilege other goals, such as combating climate change through the CPP, over its glorification of the unique landscape and culture of coal bespeaks a deep temperamental inclination toward the particular and the adversarial in the way the nation imagines what ways of relating to the environment ought to be honored and preserved. Coal also plays a role in the notion of the US as particular and individuated itself because of the role it plays in contributing to US energy independence. The US, despite what political advertisements advocating drilling in yet another remote wilderness might have you believe, is highly energy-independent—on net importing just 7% of its total energy use.[62] This fact provides one strut undergirding the spirit of individuation latent in how the nation views itself globally on climate change. In keeping with its degree of energy independence, there is little sense that the country is truly indebted to other nations in the energy arena. A logic therefore prevails that, politically, it is the United States’ right to individuate itself in the international discourse on climate change. This is true even prior to Donald Trump’s explicit protectionism and withdrawal from the Paris Agreement, an ultimate act of individuation; the resonance of his “America First” message, despite its multiple valences, can at least partially be attributed to a widespread sentiment that America is not necessarily dependent on the rest of the globe and can therefore act on its own terms in international affairs. Accordingly, when it is not refusing to participate on a particular issue, it is seen by much of its own population and government as the proper global leader on that issue. This is true of America’s action on climate change through the Clean Power Plan, and I therefore turn now to sketching the particular ideal of American leadership on climate change manifest in the law’s progression. This ideal is glory-seeking and exceptionalist, placing the US on an imagined pedestal above the other nations attempting to reduce emissions. A3. Leadership and Agency While setting about repealing the CPP, the Trump administration has made an extravagant claim about American leadership on climate change: that, because it cut emissions more than any other nation in 2017, it is therefore “leading the world” on addressing climate change overall.[63] These claims are transparently based on bad-faith: the US is the world’s second-largest emitter, far ahead of third place and only behind China that has coal-fired its way to yearly emissions increases since 2000,[64] so any proportionally nontrivial American emissions cut in 2017 was likely to be the world’s largest in absolute terms that year. Moreover, this “world’s largest” title is just one year old, and is due basically entirely to market forces making it increasingly uneconomical to use coal[65] even as the Trump administration attempts to prop it up through the repeal of the CPP. Nonetheless, Trump’s administration is not the only one in the CPP era to loudly proclaim American climate and energy leadership when the full facts of the situation did not support it. As noted in the paper’s epigraph, Obama claimed upon announcement of the CPP that he was “[committing] the United States to lead the world on this issue.”[66] In hindsight, given Trump’s cancellation of the CPP and withdrawal of the US from the Paris Agreement, Obama’s idealistic portrayal of the CPP as a legal and political commitment to US climate leadership may look like little more than a cruel joke of history, a genuine and dignified gesture of America’s desire to lead for the greater good twisted into a dark irony by a shift in the political winds. Even at the time, it made little sense in light of how much had been accomplished in other portions of the developed world: by 2015, Germany had 15 years of experience with renewable energy tariffs, had set 2020 climate targets, and the whole EU had agreed on 2030 targets with a decade of emissions trading experience behind it.[67] Obama’s insistence on American leadership despite this mountain of evidence indicating that the US was far from a position to lead on emissions reductions is therefore revealing. He was certainly aware of how truly far behind America was in 2015 on climate action, but singular American leadership was nonetheless a central thrust of his pitch of the CPP to the American people. Obama’s rhetoric reflects an American sensibility that, on environmental issues like all others, the US must be unique, particular, special, glorious. This sense of entitlement to climate leadership on the global stage manifests today not in widespread federal government action, but in the individual person of the president. The unilateral actions of Presidents Obama and Trump on the CPP—Obama singly directing the EPA to create it, Trump singly directing the EPA to review and replace it—express, despite their different circumstances, a sense of deserved presidential individuality: that is, a right to define America’s international climate leadership in one’s own way regardless of its previous instantiations. Beyond making for less stable policy, this feature of contemporary American climate politics has the effect of being, if not anti-democratic, only minimally democratic: whichever section of the population elected the last president gets to determine policy on climate and energy, regardless of later public opinion[68] and congressional intervention aside. Any major climate action requires governmental leadership, but the current American version, with its current structure of top-down leadership, leaves little room for individual Americans to play a major role in a clean energy transition. They are simply not viewed as important actors in this context. Their support is not needed, and political leaders do not think to call upon them to help in direct action on climate and energy. Even when Obama did connect environmental concerns, economic ones, and ordinary Americans in his rhetoric on the CPP, he argued merely that it would help keep energy “reliable and affordable for American businesses and families,”[69] which is not exactly a moving call to purposeful collective action on an issue of immense national and global importance. Meanwhile, while millions of Americans, mainly along partisan lines, recognize climate change as a serious problem and some individuals among them have achieved success in discussing it an environmental, economic, and political issue,[70] there has been no grassroots climate movement that has been successful in shifting the national conversation overall or forcing government action. Obama’s unilateral move to force action in a government gridlocked along party lines is ample evidence of this point. A true change in the American popular consciousness analogous to, say, what followed Rachel Carson’s Silent Spring seems out of reach on climate in this moment. Ironically, then, the general pattern of individuation of, and emphasis upon the political import of, distinct institutional actors, relevant landscapes, and concepts of different human and environmental spheres in the American environmental-political imagination fails to elevate the individual himself or herself. Thus a particularly executive-focused version of what is often labeled “American exceptionalism” plays a prominent role in the American environmental-political imagination of climate, as seen through the story of the CPP. But an idea of American exceptionalism is not the fundamental category in that imagination; instead, it fits into its larger spirit of partitioning and antagonism among different notional elements, a sense that—despite the idea that climate change ought to be siloed in the environmental sphere and ought to have no claim on activities outside it—the United States must stand alone at the head of the world’s climate change-battling ranks. This imagination is thus both particular to the environmental-political realm and simultaneously reflective of well-recognized aspects and assumptions of American cultural life. Perhaps nothing captures this better than that the US’s spirit of partition and individuation is not an admission of limitation in each partitioned sphere, whether it be the realm of international affairs, executive leadership, the economic sphere, the environmental, or one of the many landscapes Americans insist upon as particularly special. Instead, this partition bespeaks the idea that by conceptually and legally separating each from the other, the US can grasp the infinite in each; it needs not face limitation; it can have its cake and eat it too. This truth of the environmental-political imagination holds now but is profoundly historically rooted: as Purdy notes, “American democracy had taken shape in historically unique exemption from the basic problem of modern and democratic politics: the problem of managing conflicting interests and values in a world of relative scarcity.”[71] That foundational thread is still clearly visible today. B. The German 21st-Century Environmental Imagination In a deep contrast to its American counterpart, the essential spirit of the contemporary German environmental-political imagination, as viewed through the lens of the Energiewende , can be described by a spirit of continuity and collectivism. The German environmental-political imagination is marked by a sensibility that highlights the ways that humans and the environment are interconnected, believes that all sectors of the human population can (indeed, can only) progress by stewarding nature responsibly, and responds with a persistent, determined concentration upon collectively undertaken gradual reforms designed to benefit domestic society, provide leadership to global society, and preserve nature all at once. In some sense, this notion is similar to the ecological form of the American environmental imagination that Purdy describes, dominant in the latter part of the 20th century,[72] but it is more expansive: it does not merely attempt to capture a fact about how the natural world and humankind are necessarily continuous with each other, but extends also to how different sectors of the human population are interdependent, both inside and outside Germany, and is charged with a forward-looking normative temperament that emphasizes social solidarity in collective action both across society and across time. In order to parallel the American case, I again explore how the economic and environmental spheres are imagined to relate to one another, how culturally important forms of energy and landscape play into prevailing beliefs about how the Energiewende ought to be managed politically, and how leadership on reducing emissions is viewed. As in the American case, critical interpretation of the discourse and structure of government provides the primary evidence base, but a range of other sources, like political party platforms to public opinion polling, supports this characterization as well. B1. Environment and Economy The way the Energiewende is discussed by its prominent advocates, policy leaders, and involved government ministries generally integrates humanity and nature, conceptually fusing notions of what benefits the German economy and what benefits the climate and environment. It evinces a recognition of the interconnectedness of human and environmental systems and an ethic of responsible stewardship of both simultaneously, with neither given fundamental priority, even as it eschews the tone of more traditionally environmentalist rhetoric emphasizing a profound spiritual interconnectedness of man and nature. For example, the very name of 2007’s Integrated Climate and Energy Action Programme, even as it heads a highly technical package of legislation that lays out specific binding mechanisms for Germany’s transition to clean energy, suggests continuity between the natural climate system and humanity’s economic system. The government’s announcement of this package of legislation makes explicit the perspective of unified economic and environmental goals that the name suggests: “The German government's guiding principles for energy policy remain the three objectives of security of supply, economic efficiency and environmental protection.”[73] In the government’s view, these objectives, while they can be usefully distinguished, are not in a deeper sense truly distinct and competitive, with ever-unavoidable trade-offs that must be weighed and decided. If in some cases trade-offs are present, they are not allowed to distract from the larger continuity of the economic and environmental spheres; individuation and competition do not constitute an imaginative focus. Instead, economic ends and climate action are understood as mutually reinforcing: “Efficient climate protection modernises the economy and society.”[74] This language of modernization is telling: in the German environmental-political imagination, human and environmental interconnectedness does not demand the abandonment of current technology or a return, even temporarily, to a pre-industrial way of being, as the American romantic imagination might have it.[75] Instead, humanity can become more modern even as it effectively stewards nature, and along with economic-environmental interconnectedness there is a continuity between today’s Germans and future generations, to whom Germans owe fair treatment. [76] The name of 2010’s Energy Concept for an Environmentally Sound, Reliable, and Affordable Energy Supply (henceforth simply Energy Concept) similarly weaves together economic and environmental goals. The Energy Concept describes a plan to attempt to achieve both, arguing that emissions reductions are not just helpful but fundamental for German economic success, and proclaiming that “a high level of energy security, effective environmental and climate protection and the provision of an economically viable energy supply are necessary for Germany to remain a competitive industrial base in the long term”[77] (emphasis mine). The government’s Climate Action Programme 2020 claims that “Germany benefits from its pioneering role in climate change mitigation. The technical, cultural and social innovations it entails create added value especially for small and medium-sized companies.”[78] Such examples of federal agencies proclaiming the economic benefits of climate change-combating emissions reductions are, in short, abound. However, notably, despite the extensive discussions of the Energiewende ’s potential benefits for the German economy in government publications, none appear to assert economic health as the fundamental reason for why the Energiewende is worthwhile. The vision is instead one of a healthy, collective balance of economic and environmental goals that are irreducibly worthy and in some ways inextricable. Parallel to how American federal agencies institutionally embed the imaginative view of economy and environment as sharply individuated seen in the narrative of the CPP, the German institutional setup reflects a perception of them as integrated, with neither given explicit priority over the other. For example, rather than having a single agency for environmental protection to which CO2 emissions regulations are assigned, in Germany three agencies split the bulk of the Energiewende : the Federal Environment Agency (UBA), the Federal Ministry for Environment, Nature Conservation, and Nuclear Safety (BMU), and the Federal Ministry for Energy and Economic Affairs (BMWi). Although divisions between these bureaucracies are helpful for defining which organization focuses on which aspect of the Energiewende, there is clear continuity in the categories and the goals relative to which emissions, sustainable development, and climate are discussed across agencies, as the quotations from multiple agencies in the reports cited above illustrate. The Energy Concept, for instance, was prepared jointly by the BMU and BMWi. The economy is not entirely treated as linked to the environment—there is also a ministry for economic cooperation and development, and of course one for finance[79]—but the BMWi’s deep involvement in the Energiewende shows that on energy issues the economy is not seen as a removed and independent entity to be managed apart from its inescapable linkage points with the natural world, nor is the environment to be managed without due consultation of economic experts. The institutional realization of these viewpoints came early in the Energiewende era, with departmental reorganization in 2005. Also, constitutionally, the German system is conceptually friendlier to the objective of environmental protection than the American one, and has become even more so in recent history. For example, since 1949 the Grundgesetz (GG), Germany’s Constitution, has provided for the “protection of the natural foundations of life and animals” by executive, legislative, and judicial action, with explicit reference to the nation’s responsibility to future generations.[80] A round of GG reform was completed in 2006, granting the federal government more powers in environmental policymaking.[81] German constitutional tradition also allows for the subordination of private property to environmentally protective uses on the basis of social welfare and human interconnectedness: “The potential obligation to ‘sacrifice’ [one’s] property rights to public needs derives from the concept of a ‘situational commitment of the property’ that follows from the view of man as an individual who is dependent on society.”[82] Thus it appears that a German perspective of environmental and economic solidarity is deeply built into the German legal and political consciousness,[83] with neither sphere deserving of absolute priority, and the legal foundations of this view have evolved alongside the Energiewende overall. By contrast, in the absence of explicit constitutional discussion of how nature is to be safeguarded, in the US environmental protection has been defined primarily with reference to and in implicit subordination to the economy: the major US environmental laws derive their constitutional power from the Commerce Clause’s permission for the regulation of interstate commerce.[84] In addition to the foundational structure of the German government that evinces a prevailing integrative imagination of the environment, society, and how they should be legally approached in the Energiewende , several other popular sources suggest a similar conceptualization. One is the ways political parties express themselves in their bids for citizen support. That the Green Party has been influential since the beginning of the Energiewende , and governed in a coalition with the Social Democrats, is a powerful statement of a popular German belief that environmental considerations should be built into political decision-making. Even more revealing, though, is the stance of the Christian Democratic Union (CDU),[85] Angela Merkel’s pro-business, center-right party. While the Republicans in the US have understood 21st-century pro-business conservatism to require general opposition to new environmental protections, the CDU has since 1978 included an environmental pillar alongside its three core party pillars focusing on economic growth. The phrase they used when adding this pillar was “quality-oriented growth,”[86] conveying the notion that proper economic progress and proper environmental stewardship are intertwined. That year’s platform included the following statement articulating how the party viewed the connection between freedom and responsibility, and the social interconnectedness between generations: “The conservation of our life support system is part of the responsible liberty. He who now irresponsibly exploits this system and alters the environmental relationship damages the solidarity between generations.”[87] In 1989, the CDU advocated a tax on CO2 emissions in keeping with an explicitly religious desire to properly care for Creation.[88] All this—which would sound confidently liberal, if not outright radical in the United States—stemmed from Germany’s main conservative party, which has been the one constant in a series of coalitions overseeing the Energiewende from the German Parliament since 2005. Thus, while highly visible in the policy prescriptions of the Energiewende since the turn of the century, the interconnected German imagination I describe has its roots in long-held popular understandings of what nature is and is for, how economic growth ought to be understood, and how citizens of different social stations and ages bear responsibilities to one another. B2. Nuclear, Coal, and Landscape Like as with the passage of and response to the CPP, particular sources of energy and their associations with culture and landscape have figured prominently in the story of the Energiewende . In Germany, both nuclear energy and coal have been hotly debated. Nuclear energy has been at the center of discussion because of a tension between its convenient lack of emissions and popular sentiment against it, and coal for the exact opposite reasons: its high emissions and historical association with German identity. Unlike the executive-led course reversal in the American case constituted by the CPP repeal, however, the German response to these difficulties has been to alter its path to the Energiewende ’s original goal of emissions reductions by phasing out nuclear energy and reducing the use of coal.[89] In doing so, Germany has collectively displayed a persistence and willingness to sacrifice for the sake of the demands it believes follow from its interconnectedness with nature and with other nations. The abolition of nuclear energy in particular illustrates the political strength of German emphasis on interconnectedness, in multiple senses beyond the previously discussed environmental-economic linkage. Strong anti-nuclear sentiment in Germany dates back decades. In the 1970s and early 1980s, local activist movements sprang up to oppose the construction of nuclear power plants on the basis of concerns about pollution of beloved local landscapes like the Saxony wine country. These movements occurred alongside a spirit of grassroots opposition to a view of the military, the nuclear industry, and a too-powerful state as noxious bedfellows.[90] In fact, the original use of the term“Energie-Wende” came in the title of a pamphlet imagining “Growth and Prosperity without Oil and Uranium.”[91] In 1986, the Chernobyl disaster occurred in nearby Ukraine, increasing fears of nuclear energy and support for the anti-nuclear Green Party.[92] More recently, in 2000 the parliamentary coalition of the Greens and Social Democrats passed a law planning the gradual phase-out of nuclear energy.[93]However, Angela Merkel’s CDU reversed this decision when it swept into power in 2009, arguing that, as a zero-emissions energy source, nuclear power would be valuable for achieving the Energiewende’s emissions reductions targets as a “bridging technology” that would “[pave] the way for the age of renewable energy” by acting as a buffer against both high fossil fuel emissions and high renewables costs.[94] Thus there were two schools of thought: one Green, activist, and anti-nuclear, in favor of nuclear phase-out for the purposes of environmental friendliness and more localized energy production, the other in favor of nuclear energy with the an established and pragmatic consideration of the costs of the Energiewende , and pro-nuclear, at least for the near future. Then, in 2011, the Fukushima Daiichi nuclear disaster hit Japan. Days afterward, Angela Merkel gave a speech announcing that Germany would be immediately closing eight nuclear plants and would shutter the rest by 2022. Given that roughly 30% of German electricity was nuclear-powered at the start of the millennium,[95] and that nuclear energy had been reinvigorated by Merkel’s initial rise, such rapid closure represented a sudden and radical shift. On its face, such a strong German reaction to a Japanese disaster thousands of miles away seems surprising. Fundamentally, however, this German response to Fukushima was about an imagination of international interconnectedness, the reawakened ability of the population and government to imagine a similar disaster happening in Germany. As Merkel put it, “In Fukushima we have to take note that even in a high-tech country like Japan”—and thus a country like Germany—“the risks of nuclear energy cannot be controlled safely.”[96] Ironically, the factors to blame for Fukushima, which were a magnitude 9.0 earthquake at sea and a resultant tsunami crashing into nuclear plants on the shore of the open ocean, are not comparable risk factors for Germany, something Merkel even acknowledged.[97] But that was not the point, nor was it the point that Germany produced far less nuclear energy than some other advanced high-tech nations, like France and the US, which did not move to shutter their plants after Fukushima. The point was that Germans viewed their own destiny as remarkably bound up with the rest of the world’s, to the extent that a nuclear catastrophe in east Asia meant a whole nation’s nuclear supply in west-central Europe must be shut off. This rapid phase-out of a well-established, zero-emissions fuel source makes achieving the near-term emissions cuts targets of the Energiewende difficult, and doing so cost-effectively even more so.[98] But, at least as of 2015, opposition to nuclear energy remained high, with one poll showing 81% of Germans still in outright opposition to it.[99] Germany’s environmental-political imagination thus has its headstrong elements. That the nuclear phase-out is discussed as central to the Energiewende even though the phase-out makes the central Energiewende goal of fast, hefty emissions cuts much more difficult indicates that a larger integrative vision of how Germany should relate to its neighbors and to the environment drives both denuclearization and decarbonization. Coal, another energy source with a potent imaginative valence of landscape and environment in Germany, was also discussed at the coining of the term Energiewende in the early 1980s. However, unlike nuclear energy, the use of coal was celebrated rather than attacked. Since coal is a particularly “dirty” fuel, in that it emits more CO2 per unit of heat energy produced than other common fossil fuels,[100] such celebration may seem puzzling now, in the context of an Energiewende focused on reducing emissions. However, at the time, the goal of reduced emissions was less clarified, and instead coal was promoted because of its particularly German flavor. The use of heimische Kohle, or “domestic coal,” in place of oil was promoted, where heimische is a version of “domestic” that carries particular warm connotations of the German homeland. Germany has long gotten, and still gets, a huge proportion of its electric power from its vast coal reserves. It remains the world’s largest producer of lignite, a particularly inefficient and dirty form of coal.[101] But, unlike in the US, where the current government has dubiously pitched its replacement for the CPP as a savior for the coal industry, despite American coal’s uneconomically high cost relative to natural gas,[102] Germany has shown itself to be willing to move away from coal despite its historic connotations, its current potential utility in an energy transition complicated by the nuclear phase-out, and its home sourcing in a nation largely dependent on Russia for other fossil fuels. But the emissions reductions logic is clear: as the country’s 2050 Climate Action Plan states, “It will only be possible to meet the climate targets if coal-fired electricity production is gradually reduced.”[103] Accordingly, the country has formed an executive commission to oversee the phase-out of coal, and to ensure it is done in an inclusive way that will allow for a transition for its former workers and regions.[104] What explains this willingness to leave coal behind? I contend that, imaginatively, this readiness stems from an inward-facing sense of continuity and collectivism that complements the outward-facing form that motivated the nuclear phase-out decision after Fukushima. Unlike in the US, where coal is associated with one specific, romanticized landscape and culture over any other, in Germany heimische Kohle is not romanticized to the same extent. This is not to say the German coal industry has not battled the Energiewende, but it lacks the comparative political support of the US industry, and the resulting political mood is far different. Today, amid the effort to forge a new, more modern national energy identity, the old ideal of self-reliance from national coal production has lost its sway as Germans generally prefer to see a modern country unified in the face of climate change, a collective pursuing a responsible Energiewende. They celebrate the connections between landscape and society other ways, like in the country’s fifteen recently established UNESCO biosphere reserves which celebrate a balanced relationship of nature and humankind, and its many nature parks that preserve cultural, historical, and environmental sites together.[105] Germans have become quite confident on this issue: as Rainer Baake, a deputy minister of the BMWi, said bluntly in an interview with The New York Times when asked about high energy costs, “The energy transformation in Germany will be carried out by two main sources—those are wind and solar.”[106] B3. Leadership and Agency Leadership on the energy transition in Germany has long had a public face with deep experience on environmental issues: As Germany’s minister for the environment, Angela Merkel (sometimes called the “Climate Chancellor”)[107] presided over the first-ever UN conference on climate change, held in Berlin in 1994.[108] However, that Germany happened to elect an experienced former environmental minister as chancellor for the best part of the century’s first two decades is far from the whole story of the idea of leadership in the Energiewende. This section more deeply examine the components of leadership and agency in Germany’s environmental-political imagination: who it sees as responsible for taking action, what latitude leading agents have to change the course of existing initiatives, the nature of Germany’s participation on environmental issues in the international sphere, and the values that implicitly drive these understandings. It argues that a collectivist view of leadership focused on reciprocity and persistence prevails, in which each sector of German society (particularly individual citizens) is both empowered and expected to take action that furthers the Energiewende. The federal government is respected in its role as overseer of the Energiewende, but is expected to provide a fair deal from which all will benefit as a result. Internationally, Germany imagines itself as an environmental first mover that leads by example, its internal collective action a display of good-faith responsibility that ought to spur trust and reciprocity in the larger collective of nations. As in the United States, an important portion of Germany’s direction on climate and energy policy comes from the top. Chancellor Merkel has acquired a reputation as a forceful climate hawk, and, as much of this essay’s sourcing thus far has shown, hierarchical federal ministries set a great deal of Energiewende policy. But the way figures at the top discuss the action of the Energiewende makes clear that they conceive of it as necessarily a collective endeavor. Merkel, when announcing Germany’s retreat from nuclear energy, put it this way: “All of us, government and opposition, federal, state and local governments, society as a whole, every single one of us, all of us, if we do it properly, can combine ethical responsibility with economic success in this future project. This is our shared responsibility.”[109] Dr. Barbara Hendricks, then head of the BMU, wrote in her foreword to the 2020 Climate Action Programme that “All of us—all areas of industry and all individuals—have to step up to the plate.”[110] One way this collective spirit manifests is in the federalist relationship between the central government and the Länder, the German states. Whereas the CPP’s direction of each state to develop its own scheme for CO2 emissions reductions set off near-immediate battles in court about whether this fragmented approach constituted “bread-and-butter federalism” or gross federal overreach, the German chancellor and minister for energy and economic affairs meet twice yearly with the heads of all of the sixteen Länder to discuss Energiewende policy implementation and enjoy a close and generally functional, if not frictionless, relationship.[112] A rhetorical approach framing reciprocal collective participation as necessary for a successful Energiewende prevails especially strongly with respect to individual Germans. As one BMU report puts it, “Particularly here [in the Energiewende ] it is therefore important to create opportunities for the public to get involved and to support people in becoming aware of their scope for action...Climate action depends far more than any other policy area on the active involvement of as many people as possible.”[113] The government says that rather than asking individuals to sacrifice their own time and resources to reduce emissions, it will provide opportunities for citizen participation such that they themselves benefit.[114] Furthermore, the government has pledged to cut its own emissions to demonstrate its own responsibility and commitment to the cause.[115] Its statements of support for a ground-up Energiewende have, so far, been more than just so much grassroots talk: a cornerstone incentive of the push for emissions cuts has been the Renewable Energy Sources Act’s high federally subsidized prices, guaranteed for renewable energy sold to the grid by small-scale producers like individuals, households, and local co-ops.[116] Early in the century, the government promoted the adoption of small-scale photovoltaic (PV) solar installations with the so-called “100,000 Roofs” initiative, which provided government loans for people to buy rooftop solar systems. Germans have responded by engaging: by 2003, the program was successfully completed,[117] and by the end of 2017 there were 1.6 million PV installations nationwide,[118] with over 40% of total renewable capacity owned by citizens.[119] Much of this subsidizing has aided rural areas in particular, with farmers coming to own a greatly disproportionate percentage of PV installations and the generally conservative farmers’ association pushing the CDU to greater support of the Energiewende .[120] The mere thought of today’s rural, conservative Americans strongly supporting federal climate change policy illustrates both how vast the gulf is between Germany and the US on this issue and how powerful subsidies can be. For the most part, then, the German population does not aid its country’s climate policy as a sacrifice: it does so while gaining generous federally-designed benefits. But this profitability is part of the nation’s imagination of climate change as an integrated social-environmental problem that offers the opportunity to progress and modernize. The Energiewende is not fully democratic, per se, since the executive branch of the federal government from the beginning has played a strong role in setting its policies, but it has become truly collective in its implementation and its expansion of renewable energy enjoys 95% popular support.[121] Thus, in its rhetoric and action, Germany has to a significant extent successfully cast climate change not merely as an international political issue but as a collective German one, and as an opportunity to be addressed by the fulfillment of a social contract. Everyone must do their part, and accordingly, the benefits will be reaped by all. Unlike the autocratic “picking [of] winners and losers”[122] which the CPP was imagined to be by many in the US, the Energiewende is an “an investment in our own future.”[123] The understanding of this investment transcends the merely financial. For instance, the environment ministry stresses the need not just for technical research and development, but social and cultural research to increase understanding of “how people perceive climate change, what consequences it has for their lives, and...how all sections of the population can be included and social acceptance fostered.”[124] This sort of holistic environmental-political idea—linking often-separated human categories like “social,” “cultural,” and “economic” into a continuous whole addressing the state of the public under the banner of the issue of climate change—is, as we have seen, quintessentially modern German. If the Energiewende is supposed to be an endeavor which involves all sectors of society and is positively viewed by both the government and the public—the first and third of Hegel’s three spheres of consciousness in ethical life[125]—where does that leave German businesses, the key element in Hegel’s second sphere of civil society? How do economic actors understand this initiative that has cost so much? For one, the high level of popular support, combined with consistent governmental action, guarantees that German businesses—though they might not be automatically inclined to accommodate the demands of the Energiewende—have little choice but to make the best of it and adapt, as they are squeezed from above and below. This is particularly true of energy companies: as one former utilities executive put it, the Energiewende is “an irreversible process now.”[126] The country’s two largest power companies have both in recent years split in two, with one company emerging dedicated to traditional fuels and one to renewables.[127] Germany’s environmental-political imagination as realized in the Energiewende is thus not a utopian one, where achievement of the large social transition demanded by sharp emissions reductions arises from simple good will and is painless for all. However, given the demanding goal, what is required is clear: as the 2020 climate plan put it, “The energy industry is the sector with the highest greenhouse gas emissions and the greatest technical and economic potential for reduction.”[128] But while certain big businesses may not be happy, others are, as smaller companies dedicated to the production, installation, equipment, and maintenance of renewable energy technology have sprung up and the Energiewende has gained the support of industry groups like the German Confederation of Small and Medium-Sized Enterprises.[129] Plus, the collectivist temperament of the Energiewende extends to the hurt businesses: The government has pledged to work, including at EU level, to create job opportunities in regions most affected by the switch to renewables.[130] The dominant German conception of political leadership on environment outside its own borders is close to the imagination just described inside them. The federal government claims and demonstrates responsible leadership by example, acknowledging its interdependence with other nations without which a major dent cannot be made in international environmental issues like climate change, then expects them to follow suit just as it expects its own citizens and private enterprises to contribute to the Energiewende . This ideal of leadership, as read through Germany’s public statements and actions, is recognizable on both the European stage and the global stage. At the European level, Germany casts itself as a proudly trustworthy friend acting in solidarity for the larger collective European cause of which it is a part, willing to take on heavy burdens to encourage action by others. In the BMU’s words, “Germany’s climate policy is embedded in European and international agreements and legal obligations. Germany has always been a reliable partner in international and European climate policy.”[131] Since the early 2000s, it has shown leadership multiple significant times in the EU. First, following the publication of the Stern Report on the Economics of Climate Change in 2006, which argued that the worst effects of climate change could still be prevented with rapid and concerted action,[132] Germany led the EU during its Presidency of the Council of the European Union to its landmark 20-20-20 targets, which committed the EU as a whole to 20% reductions in CO2 emissions, 20% of power from renewable energy, and 20% increased energy efficiency levels by 2020.[133] Shortly after, in 2007, it passed major Energiewende legislation doubling these EU baseline commitments, pledging to cut its own CO2 emissions 40% by 2020.[134] For the most part, the EU has followed suit. As of August 2018, it is on track to meet its 20-20-20 commitment,[135] and several EU countries have now caught up to Germany in terms of emissions cuts and renewables production.[136] To exactly what extent these positive changes would have occurred without Germany taking leadership on the issue through the Energiewende is impossible to say, but its leadership has been immensely publicized and other nations have both followed in its footsteps and learned from its mistakes. Germany’s actions on the global stage in the 21st century have also evinced an imagination of itself as a responsible actor seeking to initiate a reciprocal exchange of actions rather than to gain credit for its own glory. The aforementioned 2007 decision to cut CO2 emissions 40% by 2020, the “Meseberg decision,” also immediately preceded the 2007 UN Climate Change Conference (COP13) in Bali. The government’s statement on the legislation proclaimed, By implementing the key elements adopted in Meseberg, Germany is demonstrating that climate protection can be implemented in all sectors in an economically viable way. With Meseberg we are moving away from the attitude in international climate policy of “you first” towards “this is what I’m doing, what about you?” This is the only way to break the deadlock in international negotiations.[137] The negotiations at COP13 in Bali ultimately achieved somewhat underwhelming results,[138] in part due to strong US objections to a proposal by developing countries. However, Germany’s 21st-century form of climate leadership by example has been durable and persistent despite international mediocrity: seven years after Bali, it put forth a new and more ambitious emissions reductions plan ahead of the 2015 UN Climate Change Conference (COP21) in Paris, which finally produced a (limited) international breakthrough in the form of the landmark Paris Agreement. Recycling their argument from the domestic context that emissions reductions and renewable power are crucial for economic modernization, ahead of Paris, Germany wrote that “Germany can, and must, play a key role internationally and must demonstrate that taking climate action in an industrialised country does work and, in fact, is crucial for any economy that wants to be competitive in the 21st century.”[139] While climate change is today’s signal international environmental issue, it is not the case that Germany’s sharp international environmental-political desire for responsible, reciprocal action is limited to climate and energy. There is a broader environmental conceptual connectivity, a common language for understanding environmental issues that must be politically approached, at work. For instance, in the context of biodiversity preservation, one of the UN Sustainable Development Goals,[140] a prominent German environmental NGO argued, “only if we in Germany take the lead and preserve...habitats from destruction, will we also be able to expect such conservation ideas to take root in poorer countries.”[141] A likely important factor contributing to this keen perception of international interdependence and leadership on environmental issues in Germany is its position in the center of Europe, caught as the most important nation in a terrestrial geographic web of dense population, commerce, borders, and laws. This position plays a part in both cross-border environmental issues that Germany must aid in solving, and issues of energy dependence: Germany depends on nearby, oil-rich, unfriendly Russia for 40% of its oil imports[142] and a significant quantity of natural gas to boot, a position that increasing its supply of renewables through the Energiewende aims to help it escape. The last feature of leadership and agency as understood in the modern continuous, collectivist German environmental-political imagination that I shall discuss here is its leaders’ respect for the temporal continuity of policy. This is well exemplified in the logical coherence of Energiewende policy since the turn of the millennium. Successive German central governments, for the most part, do not feel empowered or motivated to craft a climate and energy policy that is entirely their own. Instead, they adjust old policies and craft innovative ones atop an established structure that keeps the original fundamental goals intact, bespeaking a respect for prior action and an effective norm that holds it unacceptable to simply throw out the work of previous governments and attempt to start over. This pattern is a temporal corollary to the emphasis on social solidarity and collective action discussed so far that characterizes German environmental leadership. This persistent, collective gradualism is visible in the official discourse of the Energiewende : most laws, policy announcements, and statements by political leaders include provisions for frequent recalibration of the policies designed to cut emissions and increase renewables use.[143] For instance, the government in 2007 assured people at the outset of its doubling of emissions cuts targets that, in the event of ineffectiveness or cost-inefficiency in the design of the policy, its mechanisms would be redesigned.[144] Such assurances are often accompanied by exhortatory language about the value of determination and staying the course. For instance, from the minister of the BMU’s foreword to the 2020 Climate Action Programme: “Germanyʼs Energiewende , or energy transition, is an encouraging example...despite all the challenges its details pose. We intend to continue down this route—with everyone on board, including each individual sector of the economy.”[145] As in the case of its domestic inclusion and international leadership, this ambitious talk has generally in the Energiewende been convincingly backed by action. The sheer volume of legislation passed each year to update and fine-tune the Energiewende , usually in the direction of greater policy ambition, is a testament to a deep-seated incrementalist perseverance. The repeated revisiting of the 2000 Renewable Energy Sources Act is a good example of this. New versions of the act have been passed five times since its original passage, in order to update its pricing mechanisms and the rates of its energy subsidies in light of new evidence and emissions reductions progress, but the core structure has remained in place.[146] This is undoubtedly thanks in part to the way it and other Energiewende policies have intentionally involved and benefited individual citizens, such that reversing it would be fatally unpopular, but updating it remains popularly accepted. This patience of the German environmental-imagination when it comes to leadership and effective action also guarantees that beneficial policy experiments are encouraged, and the government can learn from its mistakes. For instance, after a successful experimental cross-border wind energy auction with Denmark, Germany laid plans to expand its cross-border renewables connectivity within Europe.[147] Such experimentation and improvement within a broader continuity rarely occurs in a modern US environmental-political context defined largely by the desire of each administration to craft its own signature policies on key issues like energy. In the US, more typical than a rhetoric of adjustment, gradual improvement, and persistence are words like “repeal,” “rule unconstitutional,” and “replace.”[148] This pendulum effect on climate and energy policy in the US reflects an environment of partisan hostility, certainly, but also a vision of environmental politics as a zero-sum game played between individuated competing parties. Moreover, the German imagination of temporal continuity and gradual adjustment of laws dovetails with a conceptual continuity of environmental outcomes, which is the opposite of the American case. In contemporary Germany, the climate problem, along with environmental problems generally, tends not to be framed as a binary with either an outcome of glorious victory or devastating failure depending on which of competing policies is selected. Instead, a more realist, incremental perspective prevails: better environmental outcomes can be achieved on a spectrum of possible outcomes by improving the design and implementation of laws. As a BMU dossier explaining Germany’s climate policies put it, “Climate change cannot be reversed...Nevertheless, it is still possible to slow down climate change and limit its impacts on humans and the environment.”[149] Words like “fighting” climate change, rather than “solving” it or “defeating” it, are common.[150] Accordingly, Germany has not just emissions reductions plans, but an official strategy for adaptation to climate change.[151] The US, where action on climate change tends to be framed as either part of a once-and-for-all climate solution or a total failure, has no such plan. There is no place in American environmental-political rhetoric for a reasoned gradualism, even an urgent one: as Obama put it, ours is “the last generation”[152] that can do something about climate change, and that “doing something” is cast usually as “solving” climate change, or failing to do so.[153] Rather than climate change becoming progressively worse the less each generation acts to prevent it, in this imagination the generation of today becomes “the last generation” that can act, the glorious individual agent who either succeeds or fails. The desire in the US political imagination for glorious leadership by a particular individual or group is not limited to competing parties or economic interests, then, but extends over time: America particularizes the present. In Germany, by contrast, persistence, gradualism, and the principle of “fairness between generations”[154] deeply influences the German moral and political compass and produces an approach to policy better suited to the problem of CO2 emissions itself: needful of sustained cuts over time and productive of a problem that can get a bit worse when policy is a bit less effective. To conclude this section: in the German environmental-political imagination, climate change is an issue of collective responsibility on which Germany ought to lead in a persistent, patient, and reciprocal way, both domestically and internationally, with participation from the top to the bottom of society and benefit for all involved. Endnotes [1] Barack Obama, “Remarks Announcing the Environmental Protection Agency’s Clean Power Plan - DCPD-201500546” (Office of the Federal Register, National Archives and Records Administration, August 3, 2015), https://www.govinfo.gov/app/details/DCPD-201500546. https://www.govinfo.gov/app/details/DCPD-201500546 Obama. [2] Barbara Hendricks, Foreword, in “The German Government’s Climate Action Programme 2020 - Cabinet Decision of 3 December 2014” (Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB), December 3, 2014). [3] Jedediah Purdy, After Nature: A Politics for the Anthropocene (Cambridge, Massachusetts: Harvard University Press, 2015), 3. [4] See, e.g., Suzanne Moore, “Angela Merkel Shows How the Leader of the Free World Should Act | Suzanne Moore,” The Guardian , May 29, 2017, sec. Opinion, https://www.theguardian.com/commentisfree/2017/may/29/angela-merkel-leader-free-world-donald-trump . [5] Purdy, After Nature , 6. [7] For a general global analysis, see Douglas Holtz-Eakin & Thomas M. Selden, Douglas Holtz-Eakin and Thomas M. Selden, “Stoking the Fires? CO2 Emissions and Economic Growth,” Journal of Public Economics 57 , no. 1 (May 1995): 85-101. For an early economic analysis linking CO2, growth, and climate, see William D. Nordhaus, William D. Nordhaus, “Economic Growth and Climate: The Carbon Dioxide Problem,” The American Economic Review , no. 1 (1977): 341. For an examination of several industrialized nations, including the US and Germany, that provides empirical evidence against the theoretical notion in environmental economics that beyond a certain level of development, emissions and growth vary inversely, see S.M. de Bruyn et al, Economic Growth and Emissions: Reconsidering the Empirical Basis of Environmental Kuznets Curves , 25 Ecological Econ. 161-175 (1998). For an analysis focused on China, see S.S. Wang et al., “CO2 Emissions, Energy Consumption and Economic Growth in China: A Panel Data Analysis,” Energy Policy 39 (September 1, 2011): 4870–75, https://doi.org/10.1016/j.enpol.2011.06.032 . [8] “GDP (Current US$) | Data” (World Bank, 2018), https://data.worldbank.org/indicator/NY.GDP.MKTP. CD?year_high_desc=true. [9] “GDP per Capita, PPP (Current International $) | Data” (World Bank, 2018), https://data.worldbank.org/ indicator/NY.GDP.PCAP.PP.CD?end=2015&start=1960&year_high_desc=true. [10] “Each Country’s Share of CO2 Emissions,” Union of Concerned Scientists, October 11, 2018, https://www . ucsusa.org/global-warming/science-and-impacts/science/each-countrys-share-of-co2.html. [11] “The World Factbook,” Central Intelligence Agency, 2016, https://www.cia.gov/library/publications/theworld-factbook/. [12] United States Environmental Protection Agency, “Our Mission and What We Do,” Overviews and Factsheets, US EPA, January 29, 2013, https://www.epa.gov/aboutepa/our-mission-and-what-we-do; “About Us,” Umweltbundesamt, September 6, 2013, http://www.umweltbundesamt.de/en/the-uba/about-us. For a lay overview of the EPA’s history and functions, see Robinson Meyer, “How the U.S. Protects the Environment, From Nixon to Trump,” The Atlantic, March 29, 2017, https://www.theatlantic.com/science/archive/2017/03/how-the-epa-andus-environmental-law-works-a-civics-guide-pruitt-trump/521001/. [13] Massachusetts v. Environmental Protection Agency, No. 05–1120 (Roberts Court April 2, 2007). [14] “EU Emissions Trading System (EU ETS),” Climate Action - European Commission, accessed January 2, 2019, https://ec.europa.eu/clima/policies/ets_en. [15] Meyer, “How the U.S. Protects the Environment.” [16] “The Clean Power Plan: EPA Interprets the Clean Air Act to Allow Regulation of Carbon Dioxide Emissions from Existing Power Plants.,” Harvard Law Review 1152 129, no. 4 (February 2016), https://harvardlawreview. org/2016/02/the-clean-power-plan/. [17] Environmental Protection Agency, “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units | 80 FR 64661” (Federal Register, December 22, 2015), https://www. federalregister.gov/documents/2015/10/23/2015-22842/carbon-pollution-emission-guidelines-for-existingstationary-sources-electric-utility-generating. [18] United States Environmental Protection Agency, “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016,” Reports and Assessments, US EPA, January 30, 2018, https://www.epa.gov/ghgemissions/inventoryus-greenhouse-gas-emissions-and-sinks-1990-2016. [19] Barack Obama, “Remarks Announcing the Environmental Protection Agency’s Clean Power Plan.” [20] Robinson Meyer and Matt Ford, “A Major Blow to Obama’s Climate-Change Plan,” The Atlantic, February 9, 2016, https://www.theatlantic.com/politics/archive/2016/02/supreme-court-clean-power/462093/. [21] 40 C.F.R. §60. [22] “Clean Power Plan / Carbon Pollution Emission Guidelines - Environmental & Energy Law Program,” Harvard Law School, September 27, 2017, https://eelp.law.harvard.edu/2017/09/clean-power-plan-carbonpollution-emission-guidelines/. [23] United States Environmental Protection Agency, “FACT SHEET: Clean Power Plan Overview,” Overviews and Factsheets, accessed January 3, 2019, fact-sheet-clean-power-plan-overview.html. [24] Robert Rapier, “Yes, The U.S. Leads All Countries In Reducing Carbon Emissions,” Forbes, accessed January 3, 2019, [25] US EPA, “Carbon Pollution Emission Guidelines,” ES-6. [26] United States Environmental Protection Agency, “Sources of Greenhouse Gas Emissions,” Overviews and Factsheets, US EPA, December 29, 2015, https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions. [27] See, e.g., Hiroko Tabuchi and Henry Fountain, “Bucking Trump, These Cities, States and Companies Commit to Paris Accord,” The New York Times, January 20, 2018, sec. Climate, https://www.nytimes.com/2017/06/01/climate/american-cities-climate-standards.html. [28] Hardy Graupner, “What Exactly Is Germany’s ‘Energiewende’?” DW.COM, January 22, 2013, https://www.dw.com/en/what-exactly-is-germanys-energiewende/a-16540762. [29] “Sunny, Windy, Costly and Dirty,” The Economist, January 18, 2014, https://www.economist.com/europe/2014/01/18/sunny-windy-costly-and-dirty. [30] “Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz EEG),” International Energy Agency, 2000, https://www.iea.org/policiesandmeasures/pams/germany/name-21702-en.php. [31] BMWi - Federal Ministry for Economics Affairs and Energy, “Renewable Energy,” 2018, https://www.bmwi.de/Redaktion/EN/Dossier/renewable-energy.html. [32] See generally Federal Ministry for Environment, Nature Conservation, and Nuclear Safety (BMU), “The Integrated Energy and Climate Programme of the German Government,” 2007. [33] See generally Federal Ministry of Economics and Technology and Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, “Energy Concept for an Environmentally Sound, Reliable and Affordable Energy Supply,” September 28, 2010. [34] See generally “The German Government’s Climate Action Programme 2020 - Cabinet Decision of 3 December 2014” BMU, December 3, 2014; BMU, “Climate Action Plan 2050 – Germany’s Long-Term Emission Development Strategy,” 2016, https://www.bmu.de/en/topics/climate-energy/climate/national-climate-policy/greenhouse-gas-neutral-germany-2050/. [35] Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, “The Federal Government’s Energy Concept of 2010 and the Transformation of the Energy System of 2011,” 2011. [36] Jeffrey Ball, “Germany’s High-Priced Energy Revolution,” Fortune, March 14, 2017, http://fortune.com/2017/03/14/germany-renewable-clean-energy-solar/. [37] Kerstine Appunn, “The History behind Germany’s Nuclear Phase-Out,” Clean Energy Wire, January 2, 2018, https://www.cleanenergywire.org/factsheets/history-behind-germanys-nuclear-phase-out. [38] See e.g., Sören Amelang, “Germany on Track to Widely Miss 2020 Climate Target – Government,” Clean Energy Wire, June 13, 2018, https://www.cleanenergywire.org/news/germany-track-widely-miss-2020-climatetarget-government. [39] Eurostat, “Greenhouse Gas Emission Statistics - Emission Inventories,” June 2018, https://ec.europa.eu/eurostat/statistics-explained/index.php/Greenhouse_gas_emission_statistics_-_emission_inventories. [40] BMWi, “Renewable Energy,” 2018. [50] See, e.g., Environmental Protection Agency, “Electric Utility Generating Units: Repealing the Clean Power Plan: Proposal,” Policies and Guidance, US EPA, October 4, 2017, https://www.epa.gov/stationary-sourcesair-pollution/electric-utility-generating-units-repealing-clean-power-plan-0; Robinson Meyer, “How Obama Could Lose His Big Climate Case,” The Atlantic, September 29, 2016, https://www.theatlantic.com/science/archive/2016/09/obama-clean-power-plan-dc-circuit-legal/502115/. [51] OAR US EPA, “Clean Power Plan Final Rule – Regulatory Impact Analysis,” Reports and Assessments, October 23, 2015, /cleanpowerplan/clean-power-plan-final-rule-regulatory-impact-analysis, 3-23. [52] See, e.g., sections on ExxonMobil, Peabody Energy, and Southern Company in “Who’s Fighting the Clean Power Plan and EPA Action on Climate Change?” Union of Concerned Scientists, https://www.ucsusa.org/globalwarming/fightmisinformation/whos-fighting-clean-power-plan-and-epa-action-climate. [53] OAR US EPA, “FACT SHEET: Clean Power Plan By The Numbers,” Overviews and Factsheets, accessed January 3, 2019, fact-sheet-clean-power-plan-numbers.html. [54] See, e.g., Megan Brenan and Lydia Saad, “Global Warming Concern Steady Despite Some Partisan Shifts,” Gallup.com, March 28, 2018, https://news.gallup.com/poll/231530/global-warming-concern-steady-despitepartisan-shifts.aspx. [55] “EPW Republicans Send Letter to EPA in Support of Clean Power Plan Repeal,” U.S. Senate Committee on Environment and Public Works, January 12, 2018, https://www.epw.senate.gov/public/index.cfm/2018/1/epwrepublicans-send-letter-to-epa-in. [56] Purdy, After Nature, 190. [57] US EPA, supra note 21. [58] Department of Energy, “2017 U.S. Energy and Employment Report,” January 2017, 29. [59] DOE, “U.S. Energy and Employment Report,” 21. [60] For a theoretical overview of environmental justice and its critical discussion of race, see David Schlosberg, “Theorising Environmental Justice: The Expanding Sphere of a Discourse,” Environmental Politics 22, no. 1 (February 1, 2013): 37–55, https://doi.org/10.1080/09644016.2013.755387); For information about the high proportion of black Americans living near a coal-fired power plant, see “Environmental Racism in America: An Overview of the Environmental Justice Movement and the Role of Race in Environmental Policies,” Goldman Environmental Foundation, June 24, 2015, https://www.goldmanprize.org/blog/environmental-racism-inamerica-an-overview-of-the-environmental-justice-movement-and-the-role-of-race-in-environmental-policies/; By contrast, for statistics showing employment in the coal industry to be disproportionately white, see United States Department of Labor Bureau of Labor Statistics, “Employed Persons by Detailed Industry, Sex, Race, and Hispanic or Latino Ethnicity,” 2018, https://www.bls.gov/cps/cpsaat18.htm. [61] Purdy, After Nature, 30. [62] International Energy Agency, “Energy Imports, Net (% of Energy Use) | Data” (The World Bank, 2015), https://data.worldbank.org/indicator/EG.IMP.CONS.ZS?locations=US&year_high_desc=false. [63] Nicole Lewis, “Fact Checker: EPA Administrator Scott Pruitt’s Claim That the U.S. Is ‘Leading the World’ in ‘C02 Footprint’ Reductions,” The Washington Post, October 23, 2017, https://www.washingtonpost.com/news/fact-checker/wp/2017/10/23/epa-administrator-scott-pruitts-claim-the-u-s-is-leading-the-world-in-c02-footprintreductions/?utm_term=.57dfb8ccf34b. [64] Jan Ivar Korsbakken, Robbie Andrew, and Glen Peters, “Guest Post: China’s CO2 Emissions Grew Less than Expected in 2017,” Carbon Brief, March 8, 2018, https://www.carbonbrief.org/guest-post-chinas-co2-emissionsgrew-less-expected-2017. [65] Benjamin Storrow, “Trump’s ‘Affordable Clean Energy’ Plan Won’t Save Coal,” Scientific American, August 21, 2018, https://www.scientificamerican.com/article/trumps-affordable-clean-energy-plan-wont-save-coal/. [66] Obama, “Remarks Announcing the Environmental Protection Agency’s Clean Power Plan." [67] The European Commission, “EU Emissions Trading System (EU ETS).” [68] It seems notable here that for the entire period between Obama’s direction of the EPA to craft the CPP in 2013 and his announcement of the final rule in 2015, his approval rating stayed beneath 50%; see Gallup, “Presidential Approval Ratings -- Barack Obama,” Gallup.com, accessed January 4, 2019, https://news.gallup.com/poll/116479/Barack-Obama-Presidential-Job-Approval.aspx. [69] The White House Office of the Press Secretary, “Presidential Memorandum -- Power Sector Carbon Pollution Standards,” whitehouse.gov, June 25, 2013, https://obamawhitehouse.archives.gov/the-press-office/2013/06/25/presidential-memorandum-power-sector-carbon-pollution-standards. [70] See e.g., Naomi Klein, This Changes Everything: Capitalism vs. the Climate (New York: Simon & Schuster, 2014). [71] Purdy, After Nature, 34. [73] BMU, supra note 15, at 2. [74] Id., at 1. [75] See, e.g., Purdy, After Nature, 24. [76] BMU and BMWi, “Energy Concept for an Environmentally Sound, Reliable and Affordable Energy Supply,” 4. [77] BMU and BMWi, “Energy Concept for an Environmentally Sound, Reliable and Affordable Energy Supply,” 5. [78] BMU, “The German Government’s Climate Action Programme 2020 - 2014” 18. [79] “The German Federal Government,” deutschland.de, January 23, 2018, https://www.deutschland.de/en/ topic/politics/the-german-federal-government. [80] “Basic Law for the Federal Republic of Germany - Article 20a [Protection of Natural Foundations of Life and Animals]” (Federal Ministry of Justice and Consumer Protection and Federal Office of Justice), accessed January 4, 2019, https://www.gesetze-im-internet.de/englisch_gg/englisch_gg.html#p0119. [81] “The German Environmental Constitutional Law,” Umweltbundesamt, January 29, 2016, http://www.umweltbundesamt.de/en/the-german-environmental-constitutional-law. [82] Monika Neumann, “The Environmental Law System of the Federal Republic of Germany,” Annual Survey of International & Comparative Law 3, no. 1 (1996): 69–110. [83] Jonathan Cannon, Environment in the Balance (Harvard University Press, 2015), http://www.hup.harvard.edu/catalog.php?isbn=9780674736788. [84] Arlan Gerald Wine, “Enforcement Controversy Under the Clean Air Act: State Sovereignty and the Commerce Clause,” Transportation Law Journal 8 (1976): 383–400. [85] See, e.g., Massachusetts v. 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