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Stephen Harper on Trump, the U.S., and populism

Octavian Report: What prompted you to write Right Here, Right Now?

Stephen Harper: What prompted me was basically the series of events that occurred, I believe, by coincidence almost from the day I left office — a series of big economic surprises in Western democracy. The first was Brexit. Then came the rise and ultimate success of Donald Trump, both in the Republican primaries and the general election. I began to give speeches on that subject: why was this happening? Then in the book I turned my attention more to asking how conservatives should respond to some of these trends.

OR: What do you think the causes of the resurgence of populism and rise of nationalism are?

Harper: We’ve identified four themes. They’re not all the themes of every populist movement, but there’s a lot of commonality: upset about economic policy and economic outcomes, about trade and trade deals and trade outcomes, about globalization and globalism more generally, and about immigration. Canada is unique in that we’ve had changes in government, but we have had no disruptive or unorthodox or, quote, populist political movement in the last several years. So I started to think, “Why is that?”

As I looked at the issues the populists are raising — and I think this will surprise many readers, knowing my background — I actually concluded that they’re largely right in their assessment of the challenges and the issues but not so right in the solutions. In some cases, it’s hard to identify what the solutions being proposed actually are.

I ran a conservative government. I think most would agree, even if they didn’t support the government, that on these policy matters — economic policy, trade, immigration, globalization — Canada has adjusted reasonably well with policies that are all very pro in these areas but haven’t produced populist backlash. To a significant degree I used my own experiences to explain why I think there are better approaches than have been taken in these areas.

OR: What do you think the right approach is on trade?

Harper: The big picture is where the populists are right and where, for instance, the President is right. You can open any number of publications, some by supposed experts, who will tell you all trade is good and all trade deals are good deals.

This is just not true. If every trade deal were a good deal, every time a big commercial company or an investment firm were making a deal, they wouldn’t need hundreds of advisors working out all the details. Having negotiated almost all of Canada’s existing trade agreements, I can tell you it’s absolutely possible to get a bad deal. There is no doubt that in some cases Western countries or the United States have had bad outcomes in trade arrangements. So we have to face the fact that trade deals need to be done better.

Trade is by and large good and by and large beneficial. I would go as far as to say it is by and large essential in the modern and globalizing economy. It really comes down to, and it’s not sexy, rolling up your sleeves and knowing the details of policy. Our trade agreement with the European Union took seven years to negotiate, requiring thousands of consultations and hundreds of negotiators. But the day I announced it, I knew exactly what I was agreeing to. As I say in the book, when I made the announcement in Brussels with José Manuel Barroso, then President of the European Commission, we were going to get a thousand press releases from various Canadian interests on the deal. We knew exactly what every one of them was going to say. We were not guessing. There’s always risk. But we knew who would win. We knew who would lose, and we knew where there’d be struggles and where mitigation was possible. We had this stuff worked out.

You can’t just go on the vague theory that David Ricardo said 150 years ago you can trade wine for cloth and assume that answers every question. It’s just not that simple.

I’m not questioning the fundamentals of what I would call post-Cold War globalization principles. I’m questioning the degree to which those principles have become an excuse for people who really haven’t done their homework on good policy and monitoring impacts.

OR: What’s your view on the right approach to immigration?

Harper: Literally everyone looks at Canada on this question, because there really is no country on Earth that has had as much relatively large-scale immigration with similarly high levels of not just public acceptance but positive adjustment and integration.

When I was Prime Minister, other leaders would come to me and say, “How can we do that here? We’ve got this illegal and irregular immigration. It’s very unpopular. How do we change public opinion?” I used to tell them, “You can’t.” Illegal and irregular immigration will never be accepted by the public. It’s that simple.

Canada is a, quote, open and tolerant country on this. But a big part of the reason that immigration has been so successful there is that our systems are fundamentally legal. Even if you don’t agree with aspects of immigration policy, you accept that this is a decision that the country has made under law. When immigration becomes fundamentally not legal in character, you can’t expect widespread public acceptance. You also, by the way, can’t expect a lot of other things. You can’t expect successful integration. It comes with a whole bunch of other problems.

I ran the largest per capita immigration program in the world. We’re one of the few right-of-center parties not only to get a substantial chunk of the immigrant vote in many communities, but to dominate the immigrant vote with high public acceptance. The way we did that was by having a pro-immigration policy but one that is not blind to immigration abuse. The Left often accuses people on the Right of pandering to anti-immigration sentiment, but often the bigger problem is the Left pandering to immigration abuse. Immigration abuse does have to be curtailed, and it will always exist in some forms. If it gets serious, you have to deal with it. Like on trade: just because trade is good doesn’t mean you can pretend all trade is good. Just as immigration is good, you can’t pretend that all immigration under all circumstances will automatically be good. You have to make sure it’s good.

OR: What role do you see the financial crisis having played in driving the rise of populism?

Harper: I think it’s the fundamental reason. In countries like the United States, you had a massive crisis with widespread negative social and economic impacts on people in tandem with bailouts for what were perceived as big and wealthy institutions (or even individuals). That’s poison to political culture.

If you look truthfully at it, we could see all kinds of signs: the Tea Party, Occupy Wall Street. There are all kinds of signs that there was a lot of angst around this. I think as the recovery just continued to be slow and people could see, frankly, banks and the wealthier sides of society resuming their upward track and that things actually weren’t improving for them, that just started to come to the fore.

As in the Republican primaries, I think the reality is you had a bunch of conventional Republican candidates who were announcing policies that didn’t address the issues that actually concerned people anymore. The average working-class Republican voter who wasn’t moving ahead wasn’t really concerned about dropping high marginal rates in capital gains and corporate taxes. It just wasn’t what was in their life. I think it was delayed but inevitable, in retrospect.

There are some pollsters who will dispute my analysis and say, “Well, in the data, economics looks secondary; it’s really immigration and cultural issues that are driving it.” I don’t believe that. I think that’s the limitation, frankly, of polling.

I’m an economist and a politician. We know that when things are not good for people economically, suddenly a whole lot of other things make them mad that when things are good for them they really don’t care about. I think to suggest that there is a widespread public angst or anger disconnected from people’s economic circumstances is not consistent with what we know about human behavior in either economics or politics.

OR: How do you assess the major recession in leadership we seem to be facing?

Harper: I’m not trying to evaluate the President’s personality or his policies. I’m certainly not trying to make predictions about the success of Donald Trump as President. I’m trying to draw attention to the fact that when we see things that have surprised people on the Left and the Right we should disabuse ourselves of the notion that this was all some fluke. As I say, the more I look at the themes and the more I look at governmental response, I see the public concerns as justified. The right thing for conservatives to do is to figure out how to adapt ourselves to this real public angst and these real public concerns with policies that will lead us in a positive direction.

For those conservatives who continue to have grave reservations about the Donald Trumps and the Nigel Farages, I say that the Donald Trumps and the Nigel Farages of the world are, for better or worse, attempting to fix what is wrong with democratic capitalist societies. If ultimately there is not some success through this, this task will eventually end up in the hands of the Bernie Sanderses and Jeremy Corbyns of the world — whose goal is to destroy democratic capitalist societies. It is a much bigger danger, a much bigger threat, and we are headed in that direction unless we adapt appropriately.

OR: How do you see the future of the postwar order in geopolitics and institutions like NATO?

Harper: I think the bigger threat to the West, long-term, would be something that would cause this current angst about market-based economic policy and trade policy, actually common to the left and the right wings of populism, to become ideological protectionism or, even worse, ideological socialism. That would destroy the West as an economic player, and would undermine our societies far more than geopolitical mistakes.

As regards NATO: this has been coming for a long time, far longer than the financial crisis. The reality of the Western alliance is that it has been increasingly based overwhelmingly on American contribution and moralizing from its partners, and that is not viable. I think the American public’s sick of it. Why are we defending wealthy Europe when it doesn’t appear interested in its own defense?

The American public — and I witnessed this up close — has been told two things that I think are contradictory. I saw it in my term in office; I continue to see it. It is told that America has a unique responsibility for global leadership and told, at the same time, that we’re now in a multi-polar world where America can’t really expect to lead.

So which is it?

Independent of what President Trump may or may not think, it’s not realistic for the world to expect the United States to act as a purely systemic player when it no longer has purely systemic power. It is logical that you would expect it to act more narrowly in its own national interests.

I expect to see an American policy that will become more focused towards its national interest. I expect it will recognize that for its own sake it has to engage in productive alliances, but that its partners will also realize that to expect situations where America contributes all of the resources and shares decision making is unrealistic. The Israelis have figured this out. If you want America to be a partner, you show how you can bring resources to the table, too. I think that can be adjusted. But we’re at an impasse right now where it appears America is saying, “We’re sick of supporting you guys. Just go away,” and Europeans are saying, fingers wagging, “You’re wrong; come back and serve us.” That’s not viable. 

OR: Are you concerned about U.S. debt levels?

Harper: This is where as a more traditional conservative, especially in economics, I find myself out of step with American public opinion. It generally doesn’t consider the debt a problem or the deficit a problem. That seems to be true on the Left and Right and in the center. At best, lip service is paid but hardly even that. I’m increasingly assured by Americans that because the dollar is a reserve currency there’s no limit on the amount the government can borrow, and frankly the world seems to be willing at the moment to lend unlimited trillions of dollars to the United States at virtually zero percent. I think this is an unwise policy. I’m not sure it’s having any impact yet, but it’s bound to have an impact.

It’s important to note here that one of the misreadings of the economy in the last few years has been the notion that America has had multiple rounds of quantitative easing with no inflation. America’s had multiple rounds of quantitative easing with no consumer inflation, but quantitative easing done through bond transactions and interest rates has caused massive asset price inflation. If you start printing money, you will get asset inflation as well. I’m stunned by the number of people who can see these things but can’t connect the dots. Current monetary and fiscal policy — so-called expansionary monetary and fiscal policy — used wrongly contributes to income inequity.

OR: There is concern in some quarters that the U.S. has had now four consecutive administrations with inconsistent foreign policy — how serious an issue do you think that is?

Harper: There will be foreign-policy people who will argue that any kind of change is destabilizing and shouldn’t be done. You get this among some businesspeople as well. Businesspeople tend to like even a bad investment environment as long as it’s known and doesn’t change. As soon as it’s changed, they’re upset.

I’m not in that camp. What I worry about is if change becomes unpredictable or even irrational. That’s a scary thing. The abandonment of allies on a whim, for example, is something that would naturally worry people.

But we know that the democratic model is subject to change. That’s the whole concept: that people can change direction. They can vote for people who will change direction. Those changes might be wrong, but the strength of democratic societies is that they are resilient and can adjust to errors. When undemocratic systems get on a wrong tangent, they can go there indefinitely. Look at Venezuela: every negative change just leads to new negative change to further entrench all the problems (almost as a deliberate policy).

There’s many things in the past four presidencies that I would disagree with individually and certainly some individual actions I would vehemently disagree with, but I would not suggest that change in itself is a bad thing. In fact, I argue in the book that the orientation of the Trump Administration really can be traced very directly to the previous two administrations. You had the Bush Administration which was bold and assertive in its foreign policy but proved on some major things like the Iraq War to be wrong and at great cost. That was followed by the Obama Administration: much more collaborative and cautious but often seen as weak, ineffectual, or not believing in America.

When you put those two things together — a public mad that a whole bunch of ventures cost us money and then a direction in foreign policy not assertive about America — it’s very obvious how you then get a presidency that’s about much more selective engagement but in a much more unilateralist way. That follows almost as night follows day.

Will it work? If you look around the world now you can see areas where it’s actually working, and you can see lots of area where it’s clearly not working.

OR: What’s the solution to all of this?

Harper: I believe that our policy should be fundamentally pro-market, pro-trade, pro-globalization, and pro-immigration. I think the overwhelming evidence and experience is that if we were to go in completely opposite philosophical directions, that would be disastrous over time. But I think we have to recognize that these policies have not been pursued well and need to be pursued better, and we need to recognize the problems. We can’t sustain market-oriented policies if they have non-inclusive growth. If all the benefits are going to the top segments of society, that is not a sustainable model. We can’t pursue trade policies that are leading to massive global imbalances and, in the case of the U.S., massive outflows of funds from the United States to its main geopolitical rival.

I believe in globalization and internationalism but we cannot allow our leaders to denigrate our own nation-states and believe that they don’t have responsibility to them or to condemn our own nationalism in principle. The United States, like Canada, is right to be a patriotic country that believes in itself. There’s a big difference between that and aggressive xenophobia. Likewise, I’m very pro-immigration. I think the United States and Canada are stellar examples of how over long periods of time immigration has been a really positive thing, but that doesn’t mean that large-scale illegal and irregular immigration with rampant abuse is a good policy or one that we can expect the public to support. The principles are right, but we have to do a much better job on the specific polices and their application.

OR: Are you optimistic about that happening?

Harper: The beauty of no longer being in government is I don’t have to actually worry about whether the solutions will be adopted. I just have to diagnose the problem and solve it all in a few pages. I’m optimistic in two senses. First, I’m optimistic that in spite of all the current challenges that exist in democratic societies and in the world generally, and notwithstanding the disruption a lot of people have felt, we are for the most part wealthier than ever before, healthier, living longer lives, and having more economic opportunities. So I think we have every reason to be optimistic.

I also believe that democratic capitalistic societies, and I stress both, have proven over time to be highly resilient and adaptable including in the face of very disruptive political change or economic events.

I think China has probably made a serious error in what they’ve done in the last year. I understand the frustration of the Chinese people with corruption and with the unresponsiveness of the system, but the collective leadership system of Deng Xiaoping is what allowed China to grow and emerge from the Mao Zedong era. Creating a one-man rule for life for Xi Jinping — and I know him, he’s a dynamic leader — rarely works out very well a generation or so from now. Those types of societies don’t adapt. Their economies don’t adapt. Often, if they respond to crisis, they respond in ways that are extremely negative. So I’d over time put more of my bets on societies that maintain this economic and political dynamism and messiness. That messiness is usually better at finding solutions than dictates.

OR: Do you see technology as a driver of the political disruption the world is facing?

Harper: I believe there are fundamentally two reasons for the political upheaval we’re having. One is the technological developments obviously independent of the global recession. We now have a situation where political dissent can be organized in new and rapid ways outside of established channels of information, outside of established institutions. This is why establishment opinion matters less and less and why polling is more and more inaccurate and why we’re getting bigger surprises.

But that wouldn’t be happening unless there were underlying deep dissatisfactions. If people were happy with their lives, I don’t believe new technology would be producing these new disruptive movements. I think it’s the combination. Once again, I’m in a different camp than some. Some pine for the good old days of three networks and limited opinion and information kept us all civil and blah, blah, blah. I’m a believer that more voices over time is actually far better for democracy and far healthier. I don’t want to blame disruption on bad public opinion. I want to blame disruption on political leaders and systems who have been unsuccessful in marrying good policy choices with public opinion.