Monday, December 19, 2016

Is Doux Commerce the Upside of Trump's Conflicts of Interest?

by Michael Dorf

In prior essays I joined the chorus of people condemning Donald Trump's woefully inadequate efforts to ensure that his business interests do not interfere with his official duties as president. I first explained that in addition to the obvious problems created by Trump's conflicts of interests, the appearance and perhaps reality of corruption could spread corruption. I then explained how, notwithstanding the personal identification of the Trump brand with Trump himself, Trump could indeed sell his interests in his businesses and put the resulting proceeds in a genuine blind trust, but only if he is willing to forgo what I called the "corruption premium." Trump continues to provide evidence that he nonetheless intends to pocket the corruption premium

Meanwhile, a persuasive new paper by Norman Eisen, Richard Painter, and Laurence Tribe concludes that Trump will be in violation of the Emoluments Clause from the moment he takes the oath of office. I urge readers of this blog who are interested in the Emoluments Clause issue to read it or at the very least the brief executive summary.

What will come of the Emoluments Clause issues? Congress has roughly three options: (1) it could "consent" to Trump's receipt of "present[s]" and "Emolument[s]" from foreign governments, thus, per the terms of the Emoluments Clause, eliminating any constitutional violation (but not addressing the underlying risks of corruption and foreign influence); (2)  it could impeach and remove Trump for violating the Emoluments Clause; or (3) it could ignore the problem.

Because I think ignoring the problem is by far the most likely path, I want to focus here on the consequences of Trump's conflicts of interest. I shall indulge a little bit of what passes for glass-half-full optimism these days by asking whether there could be an upside to the fact that Trump will remain keenly aware of his own business interests, even if he does not handle day-to-day operations. According to the doux-commerce thesis (which has been around at least since the 18th century) the sentiments necessary for and activated by participation in a market economy conduce to peaceful relations between individuals and nations. At its core, the idea is that war is bad for business.

Doux commerce is pretty obviously false as a universal claim. Some businesses--e.g., munitions manufacture--benefit from war. Moreover, there are contexts in which a president's business interests will lead him to turn a blind eye to immoral or illegal conduct by governments and private actors. As Kurt Eichenwald reports, that already appears to be happening in various locations, including the Philippines, where Trump-harbinger, Hitler-praising President Rodrigo Duterte's campaign of killing suspected drug dealers without any semblance of due process has earned praise from Trump, perhaps because, as Eichenwald puts it, "[r]ooting out crime in the Philippines is good for the real estate values" and Trump has substantial interests in real estate market in the Philippines.

So no, doux commerce is hardly a panacea. The glass is at most half full.

But half full, indeed, even one-tenth full, is still better than completely empty. The relevant question for the doux-commerce hypothesis as applied to Trump is not Will Trump's business interests pull his foreign policy in a good direction? The question is Will Trump's business interests pull his foreign policy in a better direction than it would head in the absence of those business interests? The answer to that question could be yes.

Consider the Middle East. A few days ago, Trump announced that he plans to nominate David Friedman as ambassador to Israel. Friedman is a bankruptcy lawyer with no diplomatic experience, which is not in itself all that unusual. Presidents of both parties frequently dole out ambassadorships to political allies, although usually they send actual diplomats to hot spots. In any event, Friedman's lack of qualifications are much less troubling than his views, which are about a full standard deviation to the right of those of Bibi Netanyahu.

Perhaps Trump chose Friedman as payback to Orthodox Jews, who were much more likely to support him than were American Jews generally. (According to Pew, a higher percentage of Jews voted for Clinton than did members of any other religious group, although the data lump Muslims in with "other." If broken out separately, I suspect that the data would show that Muslims rejected Trump by a larger percentage than any other religious group.)

It's also possible that Trump chose Friedman because he saw him as a kindred spirit--as a man given to outrageous statements for which he does not apologize, like calling American Jews who support a two-state solution to the Israel/Palestine conflict--which is to say a clear majority of American Jews--worse than kapos, the Jews who assisted Nazis in the death camps.

Whatever Trumpian logic led the president-elect to select Friedman, if he is confirmed and given real power, Friedman is very likely to pursue policies that increase the odds of war, terrorism, and human suffering more broadly. Or, what amounts to the same thing, even if Friedman himself does not call the shots but if his selection reflects the priorities of the Trump administration, that will have terrible consequences. Friedman's support for "annexation" of the West Bank and for moving the U.S. embassy to Jerusalem will severely undercut the already-slim chances for the making of "a deal" between Israel and Palestine, Trump's at least nominally stated aim.

More broadly, Trump's ideological approach to conflicts in the Middle East is to throw fuel on the fire. As I noted previously, his views are incoherent. He simultaneously demonizes Iran even as he wants to work closely with Iran's Russian pro-Assad allies in Syria. The incoherence undoubtedly stems from Trump's unwillingness to acquire the knowledge possessed by even a reasonably well-educated 20-year-old, much less to sit through intelligence briefings. To make matters worse, Trump's basic approach is reflexively aggressive.

To be sure, Trump is not exactly a warmonger. He broke with the neocon wing of the GOP and in some ways ran to the left of Clinton's Scoop-Jackson-inflected muscle flexing. Trump doesn't seem to want to get the U.S. into more foreign wars. It's just that his ignorance, arrogance, and bombast pose a risk of starting them. Likewise, his overheated rhetoric on terrorism will likely produce blowback.

Put simply, if left to do what they think is best, all things considered, Trump and the top people that carry out his administration's foreign policy will very likely do things that are horrible because of their arrogance, ignorance, and (for some but not all of Trump's people) ideology. Thus, it is at least possible that by pulling the Trump administration away from what Trump and his people think they ought to do, Trump's business interests will push U.S. foreign policy towards better (though still not ideal) positions.

To illustrate, let's stick with the Middle East. Despite a few efforts to strike deals with local developers, apparently Trump does not currently have any substantial property interests in Israel, but he does have substantial business interests in other parts of the Middle East. If Trump rationally pursues his own economic interest, he will try to moderate the likes of David Friedman, because war between Arabs and Israelis is bad for the Trump brand throughout the Middle East.

The same point should be true in other regions. Peace is good for business. War, terrorism, and trade wars are bad for business.

I'll end with two caveats. First, by invoking doux commerce, I do not mean to suggest that Trump actually internalizes the cooperative attitudes that, according to Albert Hirschman, commerce induces. I agree with Prof. Buchanan when he writes that Trump does not believe in capitalism, because Trump only understands win/lose, not win/win. However, Trump doesn't need to understand capitalism to respond to economic incentives. Even a minimally rational Trump would understand that war and terrorism are bad for the luxury hotel business.

That brings me to the second caveat: Trump is not necessarily even minimally rational. After all, if he were, how could he have run a blatantly anti-Muslim campaign and designated Mike Flynn as his National Security Advisor despite the latter's notoriously anti-Muslim statements? Wouldn't a minimally rational Trump have realized that these actions would be bad for his brand in majority-Muslim countries?

The short answer is yes. Trump may not be even minimally rational. Accordingly, I conclude that Trump's business interests in other countries have the potential to moderate the terrible course he would otherwise choose if he were guided only by his own policy preferences and those of the people who will surround him, but that they probably won't. At best, the glass has a drop of water in it, but perhaps it is indeed empty. It is Schroedinger's glass.


Shag from Brookline said...

Here's a link to a 2010 Brad DeLong post on doux commerce, a term with which I was unfamiliar despite 4 years of French in the Boston public school system in the 1940s:

In applying this to Trump, the phrase might be modified to "douche commerce" with the "corruption premium" in mind.

If Trump were to follow his personal business interests while serving as President, I would imagine he might obtain daily briefings of the status of such business interests particularly in foreign countries, which in turn might cause Trump to take daily intelligence briefings to determine impacts upon such business interests, and act accordingly, in engaging in doux commerce foreign policy. But doux commerce foreign policy in the Middle East would barely trickle down in Muslim countries, except perhaps to terrorists who might be tempted to address Trump-related properties in such Muslim countries.

Shag from Brookline said...

Regarding Trump's rationality particularly as it relates to foreign policy, the NYTimes features an article by Manny Fernandez "When Donald Trump Partied With Richard Nixon" (in Houston in 1989) and an OpEd by Evan Thomas "Will TrumpPlay Spy vs. Spy?" (comparing Nixon to Trump) that might shed some light. One might also keep in mind that Trump in his early business years was mentored by Roy Cohn. Also, a major foundation of Trump's business acumen was he 1986 best selling "The Art of the Deal," which was actually written by someone else with very little input from the Donald. It was subsequent to the publication of this bestseller that Trump got into the casino business in New Jersey that eventually went belly-up at the expense of investors, resolved in bankruptcy, which I assume was not part of the original deal, via bankruptcy attorney David Friedman who is Trump's nominee for ambassador to Israel. In my book I'm coloring Trump irrational. I don't have confidence in a Two-Trump foreign policy.

Joe said...

Is "doux" a necessary term? I presume it means "soft" commerce, a basic concept that I'm aware of and think net (as noted, with exceptions) a good policy. Relatedly, there is soft power in general. I agree with the remarks. The concerns, along with other things, were put out there beforehand.

I will continue my argument -- and the fact the Republicans won't do it doesn't erase the importance of promoting the message -- that the Emoluments Clause provides Congress the power to put in at least minimum safeguards such as disclosure, standing to sue for those fiscally (otherwise?) affected, oversight hearings and perhaps other things. The "consent" can be via strings.

The idea put out there by some that impeachment is the only solution for this and other things are woefully misguided. Impeachment is a nuclear option that nearly never occurs even for judges. Anyway, happy Electoral College Day.

Shag from Brookline said...

As noted in my initial comment, I was not familiar with "doux commerce." Perhaps the "doux" part may be redundant but it may have special meaning for a President Trump. President Coolidge once said "The business of America is business." For that, "doux" may not be necessary. However, as I have noted on earlier threads, Trump's variation on Coolidge may be: "The business of America is the President's business," in the context of Trump's personal empire, not in the sense of Article II's "take care" clause which might require equality of treatment.

Bob Hockett said...

Wonderfully thoughtful set of reflections - thanks again, Mike. Two quick complementary observations:

1) I'm struck by how we have each sought our water droplets in two distinct glasses. (I might have said 'mutually excluding' glasses, save that Trump is apparently either a dialetheist or a big orange Schrödinger cat.) My own hope had been that, as a septuagenerian who's already lived out the billionaire life, Trump might be more interested now in leaving a Pharaonic legacy of revived American infrastructural grandeur and manufacturing prowess than in just raking-in several more private billions. His actions since November 9th have all but dissipated that hope, however, and it looks increasingly as though Trump's pyramids are apt to remain hotel/casino type fare. He is, in short, more Bugsy Siegel than FDR. Against that backdrop, doux-commerce might be the only drop remaining in our desert.

2) There's fine irony in falling back on doux-commerce where Trump's concerned. In its original, Enlightenment-era articulation, the doux-commerce thesis had it that trade *softened* and *civilized* the members of commercial societies by eliciting and propagating habits of responsibility and reciprocity among them. The contrast was that between the cultivated Bourgeois on the one hand, the martial Prussian Junker or religious zealot on the other. The Trump we've come to know and loathe would seem a one man disproof of the thesis understood in that sense - unless, of course, he would have been even worse if he'd had principles. Perhaps, then, we can think of Trumpery as *dur*-commerce, and count our blessings (thus far) that at least it isn't dur-Déluge!

David Ricardo said...

Two scenarios to consider.

1. Trump is all rhetoric and no action with respect to inflaming the middle east. His appointment of Friedman to head the delegation to Israel is to give the appearance of a hard line ultra right wing approach, but he does nothing to change the status quo with respect to American policy and that region.

2. Trump follows through with approving the movement of the embassy to Jerusleum and for Isreal to annex part (or even all) of the West Bank. In response terrorist attacks target Trump properties around the globe in which case Trump makes a major increase in U. S troops and resources and military action in the middle east.

Which of these is more likely? Does Trump even realize that his properties are highly vulnerable and consequently he will moderate his foreign policy for purely selfish and avricious reasons. (That does sound like him, in which case Mr. Dorf's analysis is correct)

Shag from Brookline said...

Query: Is it unfair to compare the Electoral College with Trump University? If so, unfair to which?

Shag from Brookline said...

Further on the matter of Trump rationality, his unpredictability on foreign policy may be what he learned from that 1989 meeting with disgraced ex-President Richard M. Nixon in Houston. How did it work out for Tricky Dick? "Small Hands" Trump just might emulate Nixon in other ways.