Nothing is more productive for stale academic debates than a momentous yet unexpected political event. 2016 has seen at least two such events: Brexit and Trump. As a sometime-participant in a stale political debate on ideas versus interests in political economy, these two momentous events have been nothing if not intellectually productive.
My hunch is that the next big conceptual move for political economy is to take identity seriously. The task for political economists now is to integrate identity into our theoretical architectures as a conceptual primitive rather than as a nuisance, a behavioral distraction, or as merely a consequence of something else.
[If you are reading this and pounding the table, saying “I’ve been doing this for years,” please bear with me. I recognize that scholarship on identity and political economy has a long history. I am proposing that we need to do it more, and rather differently.]
What would this look like? Take, for example, the literature about preferences for economic integration. One view holds that people’s preferences are a function of their economic interests: in the simplest Stolper-Samuelson world, low skill workers in advanced economies should oppose trade, and high skill workers should favor it. In a world in which ideas are foundational, individuals favor trade because they have learned (or come to believe in) a cosmopolitan worldview in which trade is good—they possess a causal belief about what trade does. In a world in which identity matters, people oppose trade because they are part of a community that opposes trade.
The first thing to observe about this identity-based explanation is how vacuous it seems. “One does X because one is an X-doer” is infinitely generative claim, but that is because it is nearly tautological. Here is a more pointed way to think about identity in political economy. When people search for information about what they should do, how do they go about it? One view is that they consider costs and benefits, although not necessarily in a materialist or egoistic way. Another view is that they consider their existing beliefs about how the world works, and then try to apply them by analogy. The third is that they look for cues among the beliefs and actions of people whom they consider to be like them. That third possibility is an argument for identity in political economy.
Another example: Why does Spain remain in the Euro? An argument about interests would suspect that it is in the interests of Spain’s leading sectors or a majority of citizens to remain within a monetary union with (most of) the rest of Western Europe. An argument about ideas would imply that the Spanish public and/or Spanish policymakers holds a belief about what leaving the Euro would mean. An argument about identity—one that seems consistent with my own impressions—would hold that being part of the Euro means identifying with a particular European project and aspiring to take part in that. My point is not that this argument is novel; far from it. Rather, my point is that explanations such as this one must be brought in to the “hard core” of political economy, whether it be from the perspective of open economy politics or critical political economy.
The good news is that there are many places to start for integrating identity into political economy. At the individual level, social identity theory is (in my view) among the most productive literatures in the social sciences. At the aggregate level, so-called “constructivist international political economy” has tended to be more interested in ideas than in identity (there are exceptions) but can otherwise offer useful insights. There is a rapidly growing literature on identity and political economy in comparative politics and development economics, although this literature has tended to be more interested in either explaining why identity comes to matter (why nationalism? are ethnic groups “real”?) or on the political and economic consequences of ethnic diversity or polarization. In American politics, racial orders are an obvious place to start, but even something as simple as partisan identity ought to taken seriously by political economists as not just an uninteresting control variable but as a theoretically meaningful explanatory concept.
So what should the road ahead look like? No one seriously believes that identity doesn’t matter at all in politics; the debate should be about when, under what conditions, how much, and in which domains? The first step will be to establish some empirical domain in which identity explains some political economy outcome that neither interests nor ideas can explain. The second and more interesting step will be to integrate ideas, interests, and identity into a coherent theoretical framework. Fortunately, there is good new theoretical work to build on. George Akerlof and Rachel Kranton and Moses Shayo and Sharun Mukand and Dani Rodrik have made essential contributions. The smart money is to follow these leads.
There are some interesting conceptual challenges that political economists working on identity will need to ponder. In a political economy of identity, how one comes to understand one’s own identity is itself interesting. I suspect that one of major conclusions that we will draw from Brexit and Trump is that modern political economies and communication technology are more communally isolating than ever before, making it easier and easier to construct everyday social worlds in which we interact meaningful only with people who are “like us.” Sociology’s perspective on this is homophily in social networks. How do these networks facilitate identification itself, or shape how one understands new information about an in-group? As an exercise, pause for just a moment and ponder just what the concept of a “basket of deplorables” signified in this light.
Another challenge is how to put identity into a causal model? Identities are not fixed or static, but emergent and situational—they can be shaped, they can evolve, and they can themselves be the consequence of identities and interests. One reason why identity has struggled in much political economy is that it is plausibly epiphenomenal on some other deeper thing. I outlined one version of this debate several weeks back, and my own thinking has evolved even from there.
A related issue is the distinctiveness of identity as an explanation. At a recent meeting of the International Political Economy Society, one argument introduced by a colleague is that standard mainstream IPE fared relatively well in explaining the outcome of the 2016 election. Those who stand to lose the most from globalization and deindustrialization voted against the incumbent party. So do we conclude that our existing theoretical architecture “worked”? Or do we include that we must ask different questions, why a particular class of distributional losers understood their interests to be represented in one particular way by a party campaigning using a particular discursive strategy? There are no easy answers. But these are essential questions for knowing whether a research community, in this case IPE, must adapt in response to a momentous political event.
I expect that this issue of identity in political economy will be a major theme in my own work over the coming years (see a preliminary output here [PDF]). I hope to see others take up this task as well.