The plot against liberal America

In its pursuit of a free-market utopia, the US right tried to crush unions, the legal profession and

The most cherished dream of conservative Washington is that liberalism can somehow be defeated, finally and irreversibly, in the way that armies are beaten and pests are exterminated. Electoral victories by Republicans are just part of the story. The larger vision is of a future in which liberalism is physically barred from the control room - of an "end of history" in which taxes and onerous regulation will never be allowed to threaten the fortunes private individuals make for themselves. This is the longing behind the former White House aide Karl Rove's talk of "permanent majority" and, 20 years previously, disgraced lobbyist Jack Abramoff's declaration to the Republican convention that it's "the job of all revolutions to make permanent their gains".

When I first moved to contemplate this peculiar utopian vision, I was struck by its apparent futility. What I did not understand was that beating liberal ideas was not the goal. The Washington conservatives aim to make liberalism irrelevant not by debating, but by erasing it. Building a majority coalition has always been a part of the programme, and conservatives have enjoyed remarkable success at it for more than 30 years. But winning elections was not a bid for permanence by itself. It was only a means.

The end was capturing the state, and using it to destroy liberalism as a practical alternative. The pattern was set by Margaret Thatcher, who used state power of the heaviest-handed sort to implant permanently the anti-state ideology.

"Economics are the method; the object is to change the soul," she said, echoing Stalin. In the 34 years before she became prime minister, Britain rode a see-saw of nationalisation, privatisation and renationalisation; Thatcher set out to end the game for good. Her plan for privatising council housing was designed not only to enthrone the market, but to encourage an ownership mentality and "change the soul" of an entire class of voters. When she sold off nationally owned industries, she took steps to ensure that workers received shares at below-market rates, leading hopefully to the same soul transformation. Her brutal suppression of the miners' strike in 1984 showed what now awaited those who resisted the new order. As a Business Week reporter summarised it in 1987: "She sees her mission as nothing less than eradicating Labour Party socialism as a political alternative."

In their own pursuit of the free-market utopia, America's right-wingers did not have as far to travel as their British cousins, and they have never needed to use their state power so ruthlessly. But the pattern is the same: scatter the left's constituencies, hack open the liberal state and reward friendly businesses with the loot.

Grover Norquist, one of the most influential conservatives in Washington and the "field marshal of the Bush plan", according to the Nation magazine, has been most blunt about using the power of the state "to crush the structures of the left". He has outlined the plan countless times in countless venues: the liberal movement is supported by a number of "pillars", each of which can be toppled by conservatives when in power. Among Norquist's suggestions has been the undermining of defence lawyers - who in the US give millions of dollars to liberal causes - with measures "potentially costing [them] billions of dollars of lost income". Conservatives could also "crush labour unions as a political entity" by forcing unions to get annual written approval from every member before spending union funds on political activities. His coup de grâce is that the Democratic Party in its entirety would become "a dead man walking" with the privatisation of social security.

Much of this programme has already been accomplished, if not on the precise terms Norquist suggested. The shimmering dream of privatising social security, though, remains the great unreachable right-wing prize, and the right persists in the campaign, regardless of the measure's unpopularity or the number of political careers it costs. President Bush announced privatisation to be his top priority on the day after his re-election in 2004, although he had not emphasised this issue during the campaign. He proceeded to chase it deep into the land of political unpopularity, a region from which he never really returned.

He did this because the potential rewards of privatising social security justify any political cost. At one stroke, it would both de-fund the operations of government and utterly reconfigure the way Americans interact with the state. It would be irreversible, too; the "transition costs" in any scheme to convert social security are so vast that no country can consider incurring them twice. Once the deal has been done and the trillions of dollars that pass through social security have been diverted from the US Treasury to stocks in private companies, the effects would be locked in for good. First, there would be an immediate flood of money into Wall Street; second, there would be an equivalent flow of money out of government accounts, immediately propelling the federal deficit up into the stratosphere and de-funding a huge part of the federal activity.

Business elites

The overall effect for the nation's politics would be to elevate for ever the rationale of the financial markets over such vague liberalisms as "the common good" and "the public interest". The practical results of such a titanic redirection of the state are easy to predict, given the persistent political demands of Wall Street: low wage growth, even weaker labour organisations, a free hand for management in downsizing, in polluting, and so on.

The longing for permanent victory over liberalism is not unique to the west. In country after country, business elites have come up with ingenious ways to limit the public's political choices. One of the most effective of these has been massive public debt. Naomi Klein has pointed out, in case after case, that the burden of debt has forced democratic countries to accept a laissez-faire system that they find deeply distasteful. Regardless of who borrowed the money, these debts must be repaid - and repaying them, in turn, means that a nation must agree to restructure its economy the way bankers bid: by deregulating, privatising and cutting spending.

Republicans have ridden to power again and again promising balanced budgets - government debt was "mortgaging our future", Ronald Reagan admonished in his inaugural address - but once in office they proceed, with a combination of tax cuts and spending increases, to inflate the federal deficit to levels far beyond those reached by their supposedly open-handed liberal rivals. The formal justification is one of the all-time great hoaxes. By cutting taxes, it is said, you will unleash such economic growth that federal revenues will actually increase, so all the additional government spending will be paid for.

Even the theory's proponents don't really believe it. David Stockman, the libertarian budget director of the first Reagan administration, did the maths in 1980 and realised it would not rescue the government; it would wreck the government. This is the point where most people would walk away. Instead, Stockman decided it had medicinal value. He realised that with their government brought to the brink of fiscal collapse, the liberals would either have to acquiesce in the reconfiguration of the state or else see the country destroyed. Stockman was candid about this: the left would "have to dismantle [the government's] bloated, wasteful, and unjust spending enterprises - or risk national ruin".

This is government-by-sabotage: deficits were a way to smash a liberal state. The Reagan deficits did precisely this. When Reagan took over in 1981, he inherited an annual deficit of $59bn and a national debt of $914bn; by the time he and his successor George Bush had finished their work, they had quintupled the deficit and pumped the debt up to more than $3trn. Bill Clinton called the deficit "Stockman's Revenge" - and it domin ated all other topics within his administration's economic teams. With the chairman of the Federal Reserve Alan Greenspan himself speaking of "financial catastrophe" unless steps were taken to control Reagan's deficit, Clinton was soon a convert. He got tough with the federal workforce.

So-called virtues

George W Bush proceeded to plunge the budget into deficit again. Indeed, after seeing how the Reagan deficit had forced Clinton's hand, it would have been foolish for a conservative not to spend his way back into the hole as rapidly as possible. "It's perfectly fine for them to waste money," says Robert Reich, a former labour secretary to Bill Clinton, summarising the conservative viewpoint. "If the public thinks government is wasteful, that's fine. That reduces public faith in government, which is precisely what the Republicans want."

In 1964, the political theorist James Burnham diagnosed liberalism as "the ideology of western suicide". What Burnham meant by this was that liberalism's so-called virtues - its openness and its insistence on equal rights for everyone - made it vulnerable to any party that refuses to play by the rules. The "suicide" that all of this was meant to describe was liberalism's inevitable destruction at the hands of communism, a movement in whose ranks Burnham had once marched himself. But his theory seems more accurately to describe the stratagems of its fans on the American right. And the correct term for the disasters that have disabled the liberal state is not suicide, but vandalism. Loot the Treasury, dynamite the dam, take a crowbar to the monument and throw a wrench into the gears. Slam the locomotive into reverse, toss something heavy on the throttle, and jump for it.

Mainstream American political commentary customarily assumes that the two political parties do whatever they do as mirror images of each other; that if one is guilty of some misstep, the other is equally culpable. But there is no symmetry. Liberalism, as we know it, arose out of a compromise between left-wing social movements and business interests. It depends on the efficient functioning of certain organs of the state; it does not call for all-out war on private industry.

Conservatism, on the other hand, speaks not of compromise, but of removing its adversaries from the field altogether. While no one dreams of sawing off those branches of the state that protect conservatism's constituents - the military, the police, legal privileges granted to corporations - conservatives openly fantasise about doing away with the bits of "big government" that serve liberal ends. While de-funding the left is the north star of the conservative project, there is no comparable campaign to "de-fund the right"; indeed, it would be difficult to imagine one.

"Over the past 30 years, American politics has become more money-centred at exactly the same time that American society has grown more unequal," the political scientists Jacob Hacker and Paul Pierson have written. The resources and organisational heft of the well-off and hyper-conservative have exploded. But the org anisational resources of middle-income Amer icans . . . have atrophied. The resulting inequality has greatly benefited the Republican Party while drawing it closer to its most affluent and extreme supporters."

In this sense, conservative Washington is a botch that keeps on working, constructing an imbalance that will tilt our politics rightward for years, a plutocracy that will stand, regardless of who wins the next few elections. And as American inequality widens, the clout of money will only grow more powerful.

As I write this, the lobbyist-fuelled conservative boom of the past ten years is being supplanted by a distinct conservative bust: like the real-estate speculators who are dumping properties all over the country, conservative senators and representatives are heading for the revolving door in record numbers.

Plutocracy

The Democrats who have taken their place are an improvement, certainly, but for the party's more entrepreneurial leaders electoral success in 2006 was merely an opportunity to accelerate their own courtship of Washington's lobbyists, think-tanks and pressure groups staked out on K Street. Democratic leaders have proved themselves the Republicans' equals in circumvention of campaign finance laws.

Throwing the rascals out is no longer enough. The problem is structural; it is inscribed on the map; it glows from the illuminated logos on the contractors' office buildings; it is built into the systems of governance themselves. A friend of mine summarised this concisely as we were lunching in one of those restaurants where the suits and the soldiers get together. Sweeping his hand so as to take in our fellow diners and all the contractors' offices beyond, he said, "So you think all of this is just going to go away if Obama gets in?" This whole economy, all these profits?

He's right, of course; maybe even righter than he realised. It would be nice if electing Democrats was all that was required to resuscitate the America that the right flattened, but it will take far more than that. A century ago, an epidemic of public theft persisted, despite a long string of reformers in the White House, Republicans and Democrats, each promising to clean the place up. Nothing worked, and for this simple reason: democracy cannot work when wealth is distributed as lopsidedly as theirs was-and as ours is. The inevitable consequence of plutocracy, then and now, is bought government.

This is an edited extract from Thomas Frank's "The Wrecking Crew", published this month by Harvill Secker (£14.99)

© Thomas Frank, 2008

This article first appeared in the 18 August 2008 issue of the New Statesman, Superpower swoop

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Why the elites always rule

Since an Italian sociologist coined the word “elite” in 1902, it has become a term of abuse. But history is the story of one elite replacing another – as the votes for Trump and Brexit have shown.

Donald Trump’s successful presidential campaign was based on the rejection of the “establishment”. Theresa May condemned the rootless “international elites” in her leader’s speech at last October’s Conservative party conference. On the European continent, increasingly popular right-wing parties such as Marine Le Pen’s Front National and the German Alternative für Deutschland, as well as Poland’s ruling Law and Justice party, delight in denouncing the “Eurocratic” elites. But where does the term “elite” come from, and what does it mean?

It was Vilfredo Pareto who, in 1902, gave the term the meaning that it has today. We mostly think of Pareto as the economist who came up with ideas such as “Pareto efficiency” and the “Pareto principle”. The latter – sometimes known as the “power law”, or the “80/20 rule” – stipulates that 80 per cent of the land always ends up belonging to 20 per cent of the population. Pareto deduced this by studying land distribution in Italy at the turn of the 20th century. He also found that 20 per cent of the pea pods in his garden produced 80 per cent of the peas. Pareto, however, was not only an economist. In later life, he turned his hand to sociology, and it was in this field that he developed his theory of the “circulation of elites”.

The term élite, used in its current socio­logical sense, first appeared in his 1902 book Les systèmes socialistes (“socialist systems”). Its aim was to analyse Marxism as a new form of “secular” religion. And it was the French word élite that he used: naturally, one might say, for a book written in French. Pareto, who was bilingual, wrote in French and Italian. He was born in Paris in 1848 to a French mother and an Italian father; his father was a Genoese marquis who had accompanied the political activist Giuseppe Mazzini into exile. In honour of the revolution that was taking place in Germany at the time, Pareto was at first named Fritz Wilfried. This was latinised into Vilfredo Federico on the family’s return to Italy in 1858.

When Pareto wrote his masterpiece – the 3,000-page Trattato di sociologia ­generale (“treatise on general sociology”) – in 1916, he retained the French word élite even though the work was in Italian. Previously, he had used “aristocracy”, but that didn’t seem to fit the democratic regime that had come into existence after Italian unification. Nor did he want to use his rival Gaetano Mosca’s term “ruling class”; the two had bitter arguments about who first came up with the idea of a ruling minority.

Pareto wanted to capture the idea that a minority will always rule without recourse to outdated notions of heredity or Marxist concepts of class. So he settled on élite, an old French word that has its origins in the Latin eligere, meaning “to select” (the best).

In the Trattato, he offered his definition of an elite. His idea was to rank everyone on a scale of one to ten and that those with the highest marks in their field would be considered the elite. Pareto was willing to judge lawyers, politicians, swindlers, courtesans or chess players. This ranking was to be morally neutral: beyond “good and evil”, to use the language of the time. So one could identify the best thief, whether that was considered a worthy profession or not.

Napoleon was his prime example: whether he was a good or a bad man was irrelevant, as were the policies he might have pursued. Napoleon had undeniable political qualities that, according to Pareto, marked him out as one of the elite. Napoleon is important
because Pareto made a distinction within the elite – everyone with the highest indices within their branch of activity was a member of an elite – separating out the governing from the non-governing elite. The former was what interested him most.

This is not to suggest that the non-governing elite and the non-elite were of no interest to him, but they had a specific and limited role to play, which was the replenishment of the governing elite. For Pareto, this group was the key to understanding society as a whole – for whatever values this elite incarnated would be reflected in society. But he believed that there was an inevitable “physiological” law that stipulated the continuous decline of the elite, thereby making way for a new elite. As he put it in one of his most memorable phrases, “History is the graveyard of elites.”

***

Pareto’s thesis was that elites always rule. There is always the domination of the minority over the majority. And history is just the story of one elite replacing another. This is what he called the “circulation of elites”. When the current elite starts to decline, it is challenged and makes way for another. Pareto thought that this came about in two ways: either through assimilation, the new elite merging with elements of the old, or through revolution, the new elite wiping out the old. He used the metaphor of a river to make his point. Most of the time, the river flows continuously, smoothly incorporating its tributaries, but sometimes, after a storm, it floods and breaks its banks.

Drawing on his Italian predecessor Machiavelli, Pareto identified two types of elite rulers. The first, whom he called the “foxes”, are those who dominate mainly through combinazioni (“combination”): deceit, cunning, manipulation and co-optation. Their rule is characterised by decentralisation, plurality and scepticism, and they are uneasy with the use of force. “Lions”, on the other hand, are more conservative. They emphasise unity, homogeneity, established ways, the established faith, and rule through small, centralised and hierarchical bureaucracies, and they are far more at ease with the use of force than the devious foxes. History is the slow swing of the pendulum from one type of elite to the other, from foxes to lions and back again.

The relevance of Pareto’s theories to the world today is clear. After a period of foxes in power, the lions are back with renewed vigour. Donald Trump, as his behaviour during the US presidential campaign confirmed, is perfectly at ease with the use of intimidation and violence. He claimed that he wants to have a wall built between the United States and Mexico. His mooted economic policies are largely based on protectionism and tariffs. Regardless of his dubious personal ethics – a classic separation between the elite and the people – he stands for the traditional (white) American way of life and religion.

This is in stark contrast to the Obama administration and the Cameron government, both of which, compared to what has come since the votes for Trump and Brexit, were relatively open and liberal. Pareto’s schema goes beyond the left/right divide; the whole point of his Systèmes socialistes was to demonstrate that Marxism, as a secular religion, signalled a return to faith, and thus the return of the lions in politics.

In today’s context, the foxes are the forces of globalisation and liberalism – in the positive sense of developing an open, inter­connected and tolerant world; and in the negative sense of neoliberalism and the dehumanising extension of an economic calculus to all aspects of human life. The lions represent the reaction, centring themselves in the community, to which they may be more attentive, but bringing increased xenophobia, intolerance and conservatism. For Pareto, the lions and foxes are two different types of rule, both with strengths and weaknesses. Yet the elite is always composed of the two elements. The question is: which one dominates at any given time?

What we know of Theresa May’s government suggests that she runs a tight ship. She has a close – and closed – group of confidants, and she keeps a firm grip on the people under her. She is willing to dispense with parliament in her negotiation of Brexit, deeming it within the royal prerogative. Nobody yet knows her plan.

The European Union is a quintessentially foxlike project, based on negotiation, compromise and combination. Its rejection is a victory of the lions over the foxes. The lions are gaining prominence across the Western world, not just in Trumpland and Brexit Britain. Far-right movements have risen by rejecting the EU. It should come as no surprise that many of these movements (including Trump in the US) admire Vladimir Putin, at least for his strongman style.

Asia hasn’t been spared this movement, either. After years of tentative openness in China, at least with the economy, Xi Jinping has declared himself the “core” leader, in the mould of the previous strongmen Mao Zedong and Deng Xiaoping. Japan’s prime minister, Shinzo Abe, has also hardened his stance, and he was the first world leader to meet with President-Elect Donald Trump. Narendra Modi in India and Rodrigo Duterte in the Philippines are in the same mould, the latter coming to power on the back of promising to kill criminals and drug dealers. After the failed coup against him in July, Recep Tayyip Erdogan has also been cracking down on Turkey.

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In Les systèmes socialistes, Pareto elaborated on how a new elite replaces the old. A, the old elite, would be challenged by B, the new, in alliance with C, the people. B would win the support of C by making promises that, once in power, it wouldn’t keep. If that sounds like the behaviour of most politicians, that is because it probably is. But what Pareto was pointing out was how, in its struggle for power, the new elite politicised groups that were not political before.

What we know of Trump supporters and Brexiteers is that many feel disenfranchised: the turnout in the EU referendum could not have been greater than in the 2015 general election otherwise, and significant numbers of those who voted for Trump had never voted before. There is no reason to think that they, too, won’t be betrayed by the new leaders they helped to bring to power.

In the last years of his life, Pareto offered a commentary on Italy in the 1920s. He denounced the state’s inability to enforce its decisions and the way that Italians spent their time flaunting their ability to break the law and get away with it. He coined the phrase “demagogic plutocracy” to characterise the period, in which the rich ruled behind a façade of democratic politics. He thought this particularly insidious for two reasons: those in power were more interested in siphoning off wealth for their personal ends than encouraging the production of new wealth, and consequently undermined national prosperity (remember Pareto’s training as an economist); and, as the demagogic elites govern through deceit and cunning, they are able to mask their rule for longer periods.

Much has been made of Trump’s “populism”, but the term “demagogic plutocrat” seems particularly apt for him, too: he is a wealthy man who will advance the interests of his small clique to the detriment of the well-being of the nation, all behind the smokescreen of democratic politics.

There are other ways in which Pareto can help us understand our predicament. After all, he coined the 80/20 rule, of which we hear an intensified echo in the idea of “the One Per Cent”. Trump is a fully paid-up member of the One Per Cent, a group that he claims to be defending the 99 Per Cent from (or, perhaps, he is an unpaid-up member, given that what unites the One Per Cent is its reluctance to pay taxes). When we perceive the natural inequality of the distribution of resources as expressed through Pareto’s “power law”, we are intellectually empowered to try to do something about it.

Those writings on 1920s Italy landed Pareto in trouble, as his theory of the circulation of elites predicted that a “demagogic plutocracy”, dominated by foxes, would necessarily make way for a “military plutocracy”, this time led by lions willing to restore the power of the state. In this, he was often considered a defender of Mussolini, and Il Duce certainly tried to make the best of that possibility by making Pareto a senator. Yet there is a difference between prediction and endorsement, and Pareto, who died in 1923, had already been living as a recluse in Céligny in Switzerland for some time – earning him the nickname “the hermit of Céligny” – with only his cats for company, far removed from day-to-day Italian politics. He remained a liberal to his death, content to stay above the fray.

Like all good liberals, Pareto admired Britain above all. As an economist, he had vehemently defended its system of free trade in the face of outraged opposition in Italy. He also advocated British pluralism and tolerance. Liberalism is important here: in proposing to set up new trade barriers and restrict freedom of movement, exacerbated by their more or less blatant xenophobia, Trump and Brexit challenge the values at the heart of the liberal world.

***


What was crucial for Pareto was that new elites would rise and challenge the old. It was through the “circulation of elites” that history moved. Yet the fear today is that history has come to a standstill, that elites have ­become fossilised. Electors are fed up with choosing between the same old candidates, who seem to be proposing the same old thing. No wonder people are willing to try something new.

This fear of the immobility of elites has been expressed before. In 1956, the American sociologist C Wright Mills published The Power Elite. The book has not been out of print since. It is thanks to him that the term was anglicised and took on the pejorative sense it has today. For Mills, Cold War America had come to be dominated by a unified political, commercial and military elite. With the 20th century came the growth of nationwide US corporations, replacing the older, more self-sufficient farmers of the 19th century.

This made it increasingly difficult to ­distinguish between the interests of large US companies and those of the nation as a whole. “What’s good for General Motors,” as the phrase went, “is good for America.” As a result, political and commercial interests were becoming ever more intertwined. One had only to add the Cold War to the mix to see how the military would join such a nexus.

Mills theorised what President Dwight D Eisenhower denounced in his January 1961 farewell speech as the “military-industrial complex” (Eisenhower had wanted to add the word “congressional”, but that was thought to be too risky and was struck out of the speech). For Mills, the circulation of elites – a new elite rising to challenge the old – had come to an end. If there was any circulation at all, it was the ease with which this new power elite moved from one part of the elite to the other: the “revolving door”.

The Cold War is over but there is a similar sense of immobility at present concerning the political elite. Must one be the child or wife of a past US president to run for that office? After Hillary Clinton, will Chelsea run, too? Must one have gone to Eton, or at least Oxford or Cambridge, to reach the cabinet? In France is it Sciences Po and Éna?

The vote for Brexit, Trump and the rise of the far right are, beyond doubt, reactions to this sentiment. And they bear out Pareto’s theses: the new elites have aligned themselves with the people to challenge the old elites. The lions are challenging the foxes. Needless to say, the lions, too, are prototypically elites. Trump is a plutocrat. Boris Johnson, the co-leader of the Leave campaign, is as “establishment” as they come (he is an Old Etonian and an Oxford graduate). Nigel Farage is a public-school-educated, multimillionaire ex-stockbroker. Marine Le Pen is the daughter of Jean-Marie Le Pen. Putin is ex-KGB.

Pareto placed his hopes for the continuing circulation of elites in technological, economic and social developments. He believed that these transformations would give rise to new elites that would challenge the old political ruling class.

We are now living through one of the biggest ever technological revolutions, brought about by the internet. Some have argued that social media tipped the vote in favour of Brexit. Arron Banks’s Leave.EU website relentlessly targeted disgruntled blue-collar workers through social media, using simple, sometimes grotesque anti-immigration messages (as a recent profile of Banks in the New Statesman made clear) that mimicked the strategies of the US hard right.

Trump’s most vocal supporters include the conspiracy theorist Alex Jones, who has found the internet a valuable tool for propagating his ideas. In Poland, Jarosław Kaczynski, the leader of the Law and Justice party, claims that the Russian plane crash in 2010 that killed his twin brother (then the country’s president) was a political assassination, and has accused the Polish prime minister of the time, Donald Tusk, now the president of the European Council, of being “at least morally” responsible. (The official explanation is that the poorly trained pilots crashed the plane in heavy fog.)

It need not be like this. Silicon Valley is a world unto itself, but when some of its members – a new technological elite – start to play a more active role in politics, that might become a catalyst for change. In the UK, it has been the legal, financial and technological sectors that so far have led the pushback against a “hard” Brexit. And we should not forget how the social movements that grew out of Occupy have already been changing the nature of politics in many southern European countries.

The pendulum is swinging back to the lions. In some respects, this might be welcome, because globalisation has left too many behind and they need to be helped. However, Pareto’s lesson was one of moderation. Both lions and foxes have their strengths and weaknesses, and political elites are a combination of the two, with one element dominating temporarily. Pareto, as he did in Italy in the 1920s, would have predicted a return of the lions. But as a liberal, he would have cautioned against xenophobia, protectionism and violence.

If the lions can serve as correctives to the excesses of globalisation, their return is salutary. Yet the circulation of elites is a process more often of amalgamation than replacement. The challenge to liberal politics is to articulate a balance between the values of an open, welcoming society and of one that takes care of its most vulnerable members. Now, as ever, the task is to find the balance between the lions and the foxes. l

Hugo Drochon is the author of “Nietzsche’s Great Politics” (Princeton University Press)

This article first appeared in the 12 January 2017 issue of the New Statesman, Putin's revenge