Working-Class Conservatism

June 5, 2017

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Like so many others who have been closely following current events, I can easily be caught up in the outrage over President Trump’s latest tweet or poorly thought-out policy proposal. Nevertheless, I do try to stay focused on issues that transcend any one personality, no matter how–um–large. Even if Donald Trump were to be impeached, the wave of popular anger that helped elect him would not entirely subside. The fact that so many of his supporters keep sticking by him, almost without regard to what he does, indicates that he has tapped into a strong current of public opinion that will continue to shape our politics. The country will have to come to grips with what Trump represents to people, even if his own presidency is a colossal failure.

In some of my earlier posts, such as “A Leap into the Dark” just after the election, I acknowledged Trump’s general appeal to conservative voters (using that term rather broadly), but questioned his authenticity as a champion of the working class. He did, in the end, get the support of most Republicans across the socioeconomic spectrum, and much of what he is trying to do has the support of the Republican establishment. Now however, having recently read Michael Lind’s article on “The New Class War,” I want to ask if there is a distinctly working-class brand of conservatism, even if Donald Trump represents it rather inconsistently. I want to explore how the interests of working-class Trump supporters and establishment Republicans may diverge on certain issues, even as they converge on others. An angrier and more outspoken working-class conservatism could be helping the G.O.P. win elections, but it could also prove to be a divisive force that could weaken the party and create opportunities for Democrats.

Convergent interests

Climate change is a good example of an issue where the interests of many blue-collar workers seem to converge with those of the Republican establishment. Even as the scientific consensus on climate change  grows stronger, and more and more Democrats support action to control carbon emissions, most Republican leaders support President Trump’s withdrawal from the Paris Accord and his renunciation of President Obama’s Clean Power Plan. In this respect, the Republican establishment most represents the interests of fossil-fuel industry executives and shareholders. Led by Americans for Prosperity, a group financed by the Koch brothers, the industry has poured millions of dollars into the effort to influence–perhaps I should say mislead–public opinion, support its political allies, and defeat its political opponents.

Almost by definition, the main concern of working-class conservatives is saving jobs in those established industries. For Republican leaders like Mitch McConnell of Kentucky, constituent pressures combine with fundraising incentives to motivate conservative environmental policy. Of course, those leaders almost always frame the issue as opposing “job-killing” regulation, not preserving corporate profits.

Continuing to do what one has always done, whether or not it makes sense to do it, is a simple conservative impulse that cuts across class lines. Conservative columnist Ross Douthat, who has voiced skepticism about climate change, now admits that “in actual right wing politics no serious assessment of the science and the risks is taking place….Instead there’s just a mix of business-class and blue-collar self-interest and a trollish, ‘If liberals are for it, we’re against it’ anti-intellectualism.”

Without sacrificing their environmental concerns, Democrats who wish to appeal to working-class voters need to emphasize the ways that government can promote job creation in clean-energy industries, as well as facilitate the retraining of displaced workers for new jobs. Just talking about the potential dire consequences of future climate change may not impress someone trying to make ends meet right now.

Divergent interests

Global trade and immigration are issues where working-class interests diverge in many ways from the traditional positions of the Republican establishment. In the recent past, Republicans have been the biggest advocates for free trade, consistent with the belief that unrestricted markets can best create wealth for all. They have been less united on immigration, but advocates of global free markets often welcome the flow of labor across borders to supply the labor needs of expanding industries. Cultural conservatives may worry about the threat to American culture from “alien” ideas or practices, worries enhanced by the threat of terrorism. Donald Trump’s proposals to build a wall between the U.S. and Mexico and ban travel from Muslim countries appeal especially to cultural conservatives.

If there is a distinctly working-class position on globalism, it is based again on concerns about jobs and incomes. The free flow of capital and labor across borders has enabled corporations to profit by seeking out cheaper labor, but a lot of that has come at the expense of  workers born in the United States. That is one reason why labor’s share of national income growth has been falling. (Another is replacement of human labor through automation.) This strengthens the anti-trade, anti-immigrant sentiment within the Republican Party. It is a kind of conservatism, but not the pro-capital kind that has dominated the party in the Reagan-Bush era.

The G.O.P. is unlikely to renounce its support for globalism anytime soon. Although the United States is now a debtor nation with an embarrassingly large trade deficit, trade is still a two-way street. American companies want foreign buyers and American consumers like inexpensive foreign goods. Powerful retailers like Walmart oppose new taxes on imports.

Some new policies might benefit American workers, but Democrats are at least as likely to propose them as Republicans. International trade agreements could include stronger protections for workers. Displaced workers could have more opportunities for education or retraining. American industries could compete globally on the basis of quality–more like the Germans do–rather than on cost-cutting.

Another area in which working-class interests diverge from Republican establishment interests is taxation and spending. Wealthy Republicans have the most to gain from tax cuts and the least to lose from cuts in social spending. Working-class people have less to gain from tax cuts, since they are taxed at a lower rate already, and more to lose from cuts in social programs on which they increasingly rely.

The current debate over repealing and replacing Obamacare has dramatized this difference. Establishment Republicans have long advocated repeal, while giving little thought to replacement. Their main aim was to eliminate the new taxes on the wealthy that financed the new insurance subsidies. Trump supporters apparently believed him when he promised better health insurance coverage at lower cost. Then he double-crossed them by endorsing a House Republican bill that accomplished no such thing.  Similarly, the President’s tax “reform” bill turns out to be mainly a huge tax cut for the rich. His budget proposal includes not only that tax cut, but extreme cuts in programs that benefit many of his own supporters.

Working-class attitudes toward social spending are a little complicated, however. The American Dream is having a good enough job so that you don’t have to rely on any government programs. You want to get good health benefits at work, so you don’t need to obtain insurance from a government exchange or an expansion of Medicaid. Working-class conservatism often takes the form of anger that so many Americans do rely on Medicaid, or food stamps, or housing subsidies. In many ways, a vote for the Republican Party is a vote for a mythical America in which everybody is successful and nobody needs such things. Just as a vote against a clean energy policy is a vote for a mythical planet where human activity has little impact on the weather.

That gives the Democratic Party the opportunity and the challenge of presenting itself as the party of the real America. That’s the America where rapid economic change creates the need for a stronger safety net, since working-class incomes have become less reliable. It’s the America where enhanced threats from foreign competition and automation force us to create new and better jobs by investing more in the talents of our own people.

In short, the Democratic Party does not have to become the party of some “liberal elite” consisting of upper-middle-class professionals. It does not have to cede working-class voters to the more conservative party, where their interests are often overshadowed by those of the wealthy. Donald Trump may have gotten a lot of their votes this time, but they are very much up for grabs if he and his party let them down.

The complexities of race and class

In many of the discussions about how the Democratic Party is losing the middle class, it’s the white working class that is the focus. That raises the question of whether the attitudes of working-class voters have a racial–or even racist–component that attracts those voters to the more conservative party. That’s true to a degree, but any such conclusion has to be carefully qualified.

Much has been written about how the Republican Party–the party of Lincoln and in many respects the liberal party of the nineteenth century–became the more conservative party on racial issues. To make a long story short, the Democratic Party outraged much of its base in the “Solid South” by aligning itself with the Civil Rights Movement from the 1940s on. Then the conservative movement that captured the Republican Party in the 1960s and 70s built its majority largely by relying on a “Southern strategy.”

As with the immigration issue, establishment Republicans often take a free-market position on race. That view treats racial discrimination as an anachronism that free-market competition and equal opportunity should eliminate. Rational employers have an interest in hiring the best person for the job, and workers can succeed if they do the right things, like work hard, stay in school, and avoid having children before getting married (without the help of Planned Parenthood, of course!). The G.O.P. is also home to some cultural conservatives who believe, deep in their hearts, in a predominantly white, Christian society. But most Republicans just tend to minimize the problem of racial discrimination and prefer to solve it more by individual changes of attitudes than by government mandates.

White working-class attitudes about race tend to be conservative for at least two reasons. First, less educated people tend to be less enlightened about race. They are less aware of how systematic and enduring racial discrimination has been in American history. They are more likely to attribute the present condition of Black Americans to defects of character like lack of will power. But in addition, they do not have the greater economic security that comes with solid job credentials. Whites who cannot claim high status on the basis of educational attainment or income may take pride in being white, just as lower-achieving men may take pride in being real men, whatever they think that is. Putting down non-whites or women is one way of bolstering one’s own status. People who feel that way, whether they consciously articulate it or not, are more likely to be drawn to the political party that is less associated with movements for racial or gender equality, and less supportive of government assistance to the “undeserving” poor.

That, however, is not an unmixed blessing for the Republican Party. Racial and gender attitudes have changed so much in this country that no major party wants to be known as the party of white or male supremacy. The party establishment has to walk a fine line, tolerating some unenlightened attitudes without fully embracing them. The Democrats, on the other hand, will remain–and should remain–the party identified with the struggle for equality. Their best hope for winning over working-class voters is to try to alleviate the causes of working-class status anxiety. Again, promote investments in education and job creation, so that working people of all races and ethnicities can get ahead without having to be afraid of one another.

Although I thought that Donald Trump was going to lose the election because of his own failings, I did not agree with Hillary Clinton’s campaign strategy of attacking him and his followers instead of focusing primarily on economic issues. I thought it was a big mistake to describe his followers as “deplorable” racists and other kinds of bigots. Racial attitudes are now too complex and subtle for such a large segment of the population to be characterized that way. Economic insecurity and class tensions are no doubt complicated by the country’s unfortunate racial history. But I think that the best course for the more liberal party is to address the economic concerns that working families of all races have in common. Reject outright bigotry where it does exist, for sure, but do your best to convince people that a flourishing society has no need for it.


Immigration Ban Poorly Thought Out

January 30, 2017

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In my last post, I questioned the wisdom of cutting off funding for international family planning agencies in an effort to reduce abortions. Since organizations like Planned Parenthood help women avoid the unwanted pregnancies that often lead to abortions, impeding their work is more likely to increase abortions than reduce them. In public policy, good intentions are not enough. Political leaders also need the expertise to assess the real-world consequences of ideas that sound good in speeches or fit neatly into some political ideology.

Experts on terrorism are raising analogous questions about President Trump’s executive order, “Protecting the Nation From Foreign Terrorist Entry Into the United States.” No one questions the goal of protecting Americans against terrorism. Whether a ban on immigration from seven Muslim countries is an effective way to do that is questionable.

The administration issued its executive order hastily, apparently without much consultation with our own government agencies and experts. Although one of the objectives was to allow time to develop better vetting techniques, the administration did not conduct any review of existing vetting procedures before concluding that they are failing. The order was so broad and vague that it appeared to apply to green card holders who were already living in the country legally, but happened to be traveling abroad when the order was issued. The legal basis for the order is murky, since one federal law gives the President the authority to suspend the entry of some classes of aliens in the national interest, but a later federal law bans discrimination among immigrants on the basis of national origin.

The order singled out the Muslim countries of Syria, Iraq, Iran, Libya, Somalia, Sudan and Yemen for a 90-day ban on visas. In addition, it halted refugee vetting and admission for 120 days for all countries, but indefinitely for Syria, where the refugee crisis is particularly acute. Critics noted that the list of countries did not include any from which the 9/11 terrorists had come, such as Saudi Arabia or Egypt. According to Scott Shane’s analysis in the New York Times, “Since the terrorist attacks of Sept. 11, 2001, no one has been killed in the United States in a terrorist attack by anyone who emigrated from or whose parents emigrated from…the seven countries targeted….” As Shane and many others have noted, the list also did not include any Muslim countries in which Donald Trump has business interests. The order may be something of an overreaction, because only 123 out of 230,000 US killings since 9/11 have been attributed to Muslim terrorists. Better vetting of Americans buying guns would probably do a lot more to save lives than keeping foreigners out, but the Trump administration is ideologically opposed to that.

Supporters of the ban defend it as a preventive measure. Even if immigrants from these troubled countries have not killed any Americans yet, they might in the future. Although we cannot rule out that possibility, we can reasonably ask whether the proposed solution alleviates or aggravates the problem it intends to address. Middle Eastern terrorists are political extremists who often try to justify their actions with an extreme interpretation of Islam. The United States cannot fight terrorism in Iraq or Syria–or at home for that matter–without the cooperation of the more moderate majority of Muslims. That’s why both George W. Bush and Barack Obama took pains to say that we are not at war with the Muslim religion itself. The new administration denies that this order is a ban on Muslims as such, since many Muslim countries are not included. But that distinction is likely to be lost on many in the Muslim world, since Trump is on record calling for a Muslim ban, and the executive order does make a religious distinction by exempting religious minorities (no doubt intending Christians) within the Muslim countries. Trump has expressed far more sympathy for the Christian victims of ISIS than for the larger number of Muslim victims. He has even claimed that Muslim refugees have been getting into this country easily while Christians have been kept out, but the actual numbers admitted are nearly the same for both religions. The order lumps all the Muslims together in these war-torn countries–the radicals and the moderates, our enemies and our allies, the terrorists and their victims, the adults and the children–and sends a message loud and clear that none of them are welcome here. Extremists can then use that message to advance their anti-Western agenda.

Alienating our friends and reinforcing our enemies’ talking points sounds like a formula for further radicalization, conflict and insecurity.

 

 

 


Economic and Fiscal Consequences of Immigration

September 27, 2016

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Last week, the National Academies of Sciences, Engineering, and Medicine released a new report, “The Economic and Fiscal Consequences of Immigration.” It was prepared by a panel of the same name, chaired by Francine Blau, Professor of Economics at Cornell University. The report comes at a time when blaming the country’s economic problems on foreigners and immigrants is very popular. The panel’s research shows that the actual impact of immigration is both less simple and less negative.

Immigrants to the United States and their children number a little over 80 million, or about one-quarter of the population. They are divided about evenly between those born abroad and the children born here, who are automatically U.S. citizens. Of the 40 million who were born outside the country, about 11 million are undocumented, having entered without legal authorization.

Since 2001, legal admissions have averaged just over one million per year. Illegal immigration was increasing up until the financial crisis of 2007, but it has since stabilized. About 300,000 to 400,000 unauthorized immigrants come in each year, but about the same number go out.

When most Americans think of a typical immigrant, they may think of an unskilled Mexican willing to take any job, or an Indian doctor with a medical specialty. There is some truth to these contrasting images. Immigrants are more educationally diverse than the native-born population, being overrepresented both in the lowest educational group (not completing high school), but also in the highest (more than a four-year college education).

Economic impact

The study examined the impact of immigration on wages, employment and economic growth. In general, the effects were smaller and less negative than popular rhetoric would suggest. A lot depends on whether the immigrant labor is competitive with native labor or complementary to it. Immigrant labor is most competitive when it is redundant, just creating or expanding a surplus of workers in a certain kind of work. This is most likely for low-skill work. The workers whose job prospects and wages are most likely to be damaged by competition with newcomers are, interestingly enough, prior low-skill immigrants whose economic position is still tenuous. Native-born high school dropouts are the next most likely group to be hurt.

Even for these low-skilled workers, the economic effect of immigration is not simple. While being threatened as workers, they can benefit as consumers. An ample supply of immigrant labor helps hold down the cost of goods and services in such areas as child care, food preparation, house cleaning and repair, and construction.

A lot of immigrant labor is not redundant, even at the low end of the skill spectrum. Employers have trouble filling some jobs just because the work is too unpleasant to appeal to native-born workers. When immigrants accept such jobs, they do not directly threaten the employment and wages of native job-seekers. (One could argue, of course, that if immigrant labor were not available, employers would have to improve wages or working conditions to appeal to native workers, so that immigration hurts the labor force in a general way. That argument has a counter-argument, that if employers couldn’t employ immigrants in the worst jobs, more of them would move their operations over the border. Even if we could wall foreign workers out, we couldn’t wall domestic employers in.)

Another reason why immigrant labor is complementary rather than competitive is that some immigrants have technical skills that are in short supply. The American educational system has not been doing the greatest job producing mathematicians and scientists. Highly qualified immigrants can fill specialized positions that otherwise would go unfilled, or become entrepreneurs or innovators creating jobs and income for others. “Several studies have found a positive impact of skilled immigration on the wages and employment of both college- and non-college-educated natives. Such findings are consistent with the view that skilled immigrants are often complementary to native-born workers; that spillovers of wage-enhancing knowledge and skills occur as a result of interactions among workers; and that skilled immigrants innovate sufficiently to raise overall productivity.”

The panel also concluded that immigration contributes positively to long-term economic growth, with general economic benefits that go beyond the impact on particular categories of job-seekers. Many economists have warned that the aging of the population in developed countries may hold down the rate of economic growth. Because people have been living longer but having fewer children, many countries are facing a situation with more elderly people to support but fewer working-age people creating the wealth to support them. The influx of foreign workers in their prime working and child-raising years helps alleviate that problem. If the foreigners bring valuable human capital, in the form of needed skills, ambition or a good work ethic, so much the better.

Fiscal impact

Another familiar concern about immigration is its impact on government finances. The fear is that immigrants will consume too much in government services but generate too little in taxes. There is some truth to this, but the actual impact is more complicated.

First, the study makes a generational distinction: “In terms of fiscal impacts, first-generation immigrants are more costly to governments, mainly at the state and local levels, than are the native born, in large part due to the costs of educating their children. However, as adults, the children of immigrants (the second generation) are among the strongest economic and fiscal contributors in the U.S. population, contributing more in taxes than either their parents or the rest of the native-born population.”

One way to think about this is to see it as the normal investment we make in public education, educating children of all income levels in order to reap the rewards of their higher productivity when they are adults. We would do the same if the population grew through a higher native birth rate instead of through immigration. The children of immigrants may need some special services, but so do many native children, especially at the lower end of our increasingly unequal society.

A second important distinction involves levels of government: state and local versus federal. While state and local governments bear the costs of educating children, federal benefits go especially to the elderly, particularly in Social Security and Medicare payments. Since most immigrants are fairly young, they will have many years of paying employment taxes before they can withdraw those benefits. In the long run, much of the fiscal burden of immigration on government is offset by tax contributions of one kind or another, but the trade-off is not as favorable to states, especially those that are points of entry for many low-skilled immigrants, such as Texas, New Mexico, Arizona and California. Federal assistance can even things out somewhat, spreading the costs of serving immigrant families across many taxpayers. Taxpayers will support this only if they see the benefits of immigration and not just the costs.


Two Nations Indivisible (part 2)

November 15, 2013

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In reflecting on Shannon O’Neil’s account of U.S.-Mexican relations, I was struck by the similarity between the choices facing international policymakers and those facing investors. Financial planners have often identified two enemies of sound investment–fear and greed. Fear leads an investor to flee from the ups and downs of the market by sticking to only the safest and most predictable of investments, thus settling for too low a return. Greed leads an investor to chase extravagant returns that often turn out to be illusory. Most sensible investors neither bet the farm on the latest hot stock, hoping to make a killing, nor run for the exits at the first sign of trouble. They maintain a diversified portfolio of assets with calm confidence that they will receive their fair share of a growing economy’s benefits.

Fear and greed have often characterized U.S. attitudes towards Mexico and Mexicans. Those who would close the door to migration and trade are afraid that Mexicans will take our jobs, undermine our culture, or become a burden on taxpayers. And some of those who advocate more open policies are greedy for one-sided economic relationships in which businesses exploit Mexican laborers and take advantage of their lack of rights. Having a poorer country with a weak democracy so near can be profitable, as U.S. businesses learned in the nineteenth century. Employing Mexican migrants in the U.S. while keeping them undocumented and vulnerable to deportation has also been profitable. With greater confidence in the future of both countries, we could base policies on the expectation that our peoples can prosper together, and that their relationship can be a win-win instead of a loss for one side or the other.

Mexican immigration

Compared to the brief spurts of immigration from countries like Ireland, Germany and Italy, Mexican immigration has been going on for a long time. Among the forces driving it have been “economic needs, demographic trends, and deep family and community connections on both sides of the border.” O’Neil says that a particularly large wave of immigration has occurred since the 1980s, but “this wave is already receding, and is unlikely to ever rise again.” Net immigration reached zero in 2011, with the U.S. economy still suffering from high unemployment, but the reasons for tapering immigration go deeper.

One cause of the recent wave of immigration was the 1982 Mexican debt crisis and its aftermath, which left unemployment higher in Mexico than the United States. A return to economic stability and growth, especially since the late 1990s, has alleviated the pressure to migrate. Another temporary factor was demographic. As in most developing nations, health improvements brought down the mortality rate–especially the infant mortality rate–and the surviving children were too numerous for the labor force to absorb. More recently, this population explosion has been slowed by a dramatic decline in the birth rate, with the average number of children per family dropping from about six to two since the 1970s. O’Neil also notes that as fewer young adults enter the Mexican labor force, the large baby-boom generation will be leaving the U.S. labor force, so migrant laborers may be seen as less of a threat and more of a blessing.

Many readers may be surprised to read that “nearly all economists agree that immigration presents a net benefit for the U.S. economy and for U.S. wages.” The harm that migrants may do by taking low-wage jobs may get most of the attention, but everything migrants add must be factored into the equation:

[T]he U.S. job market is not a zero-sum game. Immigrants and their families help spur growth and new jobs by buying groceries, going out to dinner, and shopping at the local mall. Also, long-time locals and new arrivals gravitate toward different jobs. U.S.-born workers are more likely to serve food in restaurants, check out shoppers as retail clerks, check in families at hotel front desks, hold manufacturing jobs, or manage construction or janitorial crews that have less-than-perfect English. In fact, study after study shows that foreign-born and native workers more often complement than substitute for one another.

States with large immigrant populations do not generally have either lower wages or higher unemployment than other states. Some groups of workers may be hurt by immigrant competition, especially men with a high school education or less, but the impact on wages is generally small.  And where wages are held down, the solution may be to upgrade the status and rights of workers rather than trying to get rid of them.

Academics also find that the pressure on low-skill wages stems not from immigration per se, but from the illegal nature of so many of today’s arrivals, which allows unscrupulous employers to underpay, undercut, and underprotect employees. One such study suggests that if immigrants were legalized, wages for all workers— citizens and noncitizens alike— on the bottom educational rungs would increase rather than fall.

O’Neil also debunks the claims of some cultural conservatives that Hispanic immigrants are less assimilable than earlier waves of immigrants. She finds the Mexican story similar to those of other ethnicities: the first generation struggles and clings to many of its traditions, while the next generations quickly adapt. Ninety percent of second-generation Hispanics speak English very well, and educational attainment approaches the national average by the third generation. Assimilation weakens many other traditions too, such as the close-knit Hispanic family: “Native-born Hispanics now divorce their partners just as frequently as native-born whites (three times the rate of recent immigrants.” (Not everyone’s idea of progress, but at least it shows assimilation!)

O’Neil concludes that recent immigration policy has been based too heavily on unfounded fears. The benefits of trying to exclude immigrants are too meager and the costs too high. Now that the border has been “hardened,” many immigrants who might have made the crossing more easily still manage to get here anyway, but with the aid of organized crime. The proportion of immigrants who settle here permanently instead of temporarily has risen, perhaps because border enforcement has made traveling back and forth too difficult. Economic studies have concluded that rounding up and deporting undocumented workers would be extremely expensive, and would actually shrink the economy of any state that accomplished it.

O’Neil would maintain the distinction between legal and illegal immigration, and even enforce laws against the employment of undocumented workers more strictly. However, she would allow more immigrants into the legal category, for example by making it easier for relatives of Mexican-Americans to be admitted. She would also provide more avenues to citizenship for migrants who are working here legally.

Free trade

O’Neil regards the North American Free Trade Agreement (NAFTA) as a “net win for both countries.” Since its approval, Mexico’s exports to the United States have increased by a factor of five, but U.S. exports to Mexico also increased by a factor of four. Mexico is now second only to Canada as an importer of U.S. products.

The free trade agreement made it much easier for U.S. firms to invest in Mexican production and then import the products back to the United States. That aroused the fear voiced by presidential candidate Ross Perot of a “giant sucking sound” as jobs were lured south of the border. While many manufacturing jobs did go south, they were offset–maybe a little more than offset–by jobs created by U.S. production for the expanding Mexican market. And while more Mexicans did find jobs in booming border cities, workers in small-scale farming and other traditional employment lost work as markets became more open to international competititon.

If the impact on overall employment has been modest, the benefits for economic growth, income and consumption have been large, especially in Mexico. Mexican per capita income more than doubled between 1996 and 2011, while the new flood of manufactured goods dramatically reduced the cost of consumer goods.

The main effect of free trade has been to closely integrate the two economies in processes of production and distribution. For many products, the distinction between “made in America” and “made in Mexico” is no longer meaningful because workers in both countries do the making. “The Chevy Malibu sold in Omaha, Nebraska, may have crossed the border not once but multiple times, as parts combine into components, components into systems or modules, and finally modules into cars. Every Ford Fiesta sold in Guanajuato, Mexico, is no different.”

Continued


Two Nations Indivisible

November 14, 2013

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Shannon K. O’Neil. Two Nations Indivisible: Mexico, the United States, and the Road Ahead. New York: Oxford University Press, 2013.

The title gets straight to the heart of the matter. The author’s thesis is that Mexico and the United States have become irrevocably interconnected, although neither public opinion nor public policy have entirely come to terms with that fact. They stand to gain more than they lose from acknowledging their ties and working together on the economic and political issues that affect them both. “Perhaps no other nation affects the United States on a day-to-day basis as much as Mexico. Geography, environment, companies, supply chains, people, communities, beliefs, and cultures bind together the two nations and their futures.”

Shannon O’Neil is Senior Fellow for Latin America studies at the Council for Foreign Relations.

Mexico is a country of 116 million people, the second largest (after Brazil) in Latin America as well as the second largest (after the U.S.) in North America. Public opinion in the U.S. may focus primarily on Mexico’s problems–poverty and drug-related violence–but that misses the bigger picture: “Mexico’s real story today is one of ongoing economic, political, and social transformation led by a rising middle class, increasingly demanding voters, and enterprising individuals and organizations working to change their country from the inside.” O’Neil is not saying that Mexico’s future is assured, but only that it has come far enough to have a decent shot at democracy and prosperity. She describes the country as being at a crossroads, facing two possible futures: “It could evolve into a highly developed democracy such as Spain, or it could deteriorate into a weak and unreliable state, dependent on and hostage to a drug economy, an Afghanistan.”

Which would we rather have as a neighbor sharing a thousand-mile border, a Spain or an Afghanistan? On the one hand the U.S. could have the security of an alliance with a strong democracy and the financial rewards of trade with a strong economy. On the other hand it could have larger waves of poor migrants pouring into the country and prohibitive security expenses. “The troops and resources required to secure the U.S.-Mexico border from drug traffickers, migrants, and terrorists would far outstrip those sent to Afghanistan or Iraq.” O’Neil considers policies based on fear alone unrealistic and counterproductive. Trying to wall ourselves off from Mexico geographically, economically and politically will make it harder for Mexico to become the kind of country the U.S. would prefer it to be.

Historically, the United States has had a very troubled relationship with Mexico, often characterized by political and military dominance, uneven economic benefits, and mutual suspicion. After Mexico’s independence from Spain in 1821, the U.S. took advantage of its political weakness to acquire large chunks of its territory, including the border states of Texas, New Mexico, Arizona and California, as well as parts of Colorado, Utah and Kansas. The U.S. intervened in Mexican affairs on a number of occasions, partly to protect its economic interests against interventions from European nations. Mexico was especially open to U.S. investment during the Porfiriata, the long rule of General Porfirio Diaz (1884-1911), resulting in substantial U.S. control over Mexico’s resources, with profits primarily for U.S. businesses and a small Mexican elite. After the civil war that began in 1910, Mexico struggled to regain domestic control over its resources, culminating in the nationalization of the oil industry in 1938.

For much of the twentieth century, relations between the two countries were rather distant and mutually suspicious. The United States allowed Mexicans into the country when it needed their labor, as it did during and after World War II, but excluded them when jobs were scarce, as in the Great Depression. In Mexico, the ruling political party for over seventy years, the PRI, “justified its own excesses as necessary for defending the nation against the ‘Yanquis’ next door.” And yet the forces that would eventually strengthen interconnection were already operating. Mexico relied on U.S. capital investments to modernize the economy. Rapid population growth and displacement from traditional occupations encouraged Mexicans to seek jobs to the north. The bracero guest-worker program (1942-64) allowed millions of Mexicans to establish a foothold in the U.S., which encouraged many others to follow legally or illegally.

The recent history of U.S.-Mexican relations includes new forms of cooperation, but also new insecurities and resistance to closer ties. The Immigration Reform and Control Act of 1986 (IRCA) created a path to citizenship for over two million undocumented immigrants. The North American Free Trade Agreement (NAFTA) signed in 1992 reduced trade barriers, with complex and controversial results to be discussed later. Since 2000, however, security concerns and economic fears have come to the forefront, and U.S. public opinion about Mexico has turned more negative. The comprehensive immigration reform proposed by George W. Bush failed to get through Congress [and the one proposed by Barack Obama also faces serious opposition]. Positions on these issues don’t divide neatly along party lines. On immigration reform, pro-business Republicans are more supportive than culturally conservative Tea Partiers. On free trade, “blue-dog” Democrats are more supportive than pro-labor Democrats concerned about the potential loss of domestic jobs.

Whether the United States stands to gain or lose from closer ties with Mexico depends on what Mexico is believed to offer. If it offers only drugs, violence, economic dependency and subsistence wage labor, then the losses might outweigh the gains. But in O’Neil’s view, that is not the Mexico that is coming to be:

Ask most Americans— and not a few Mexicans— about Mexico and they will emphasize poverty, corruption, and violence. Though not patently false, these views are misleadingly incomplete. Poverty continues, but the middle class now outnumbers the poor. Corruption is widespread, but Mexico is more transparent today than at any time in its past. Violence, though widespread, is still concentrated, and Mexico is taking steps that, if they continue, will stabilize and deepen its democratic rule of law— the building blocks for long-lasting security. Lost in the headlines, Mexico’s real story today is one of fundamental political, economic, and social transformation: from authoritarianism to democracy, from a closed to an open economy, and from a poor society to a middle class nation. Mexico’s hard-fought changes are creating a very different country on the southern U.S. border.

Later posts will explore several aspects of U.S.-Mexican relations in more detail: immigration, economic development, democratization and drug-related violence.

Continued