Alex Pretti's death and the elite bargain
The one true omnicause is defending the rule of law.
Saturday morning, a U.S. citizen was pushed to his knees, a gun to his head. Moments later, he’d been shot dead by federal law enforcement.
This time, left-of-center voices weren’t alone in expressing shock, horror, and outrage.
The National Rifle Association spoke up to condemn an assistant U.S. attorney for claiming that merely carrying a gun could be legal justification for a public execution.
Jason Calacanis, host of the All-In podcast, who has been a pivotal pro-Trump voice among the tech right, called Stephen Miller “disgraceful.”
The Minnesota Chamber of Commerce even released a cautious letter signaling growing alarm from business leaders including the CEOs of Best Buy, Mayo Clinic, the Minnesota Vikings, Target, and UnitedHealth Group.
Looking back on the first year of the administration, the clearest moments of broad, cross-industry elite resistance have largely been constrained to a few key moments: Trump’s major tariff announcements and threats against Jerome Powell, chair of the Federal Reserve. That is, moments when the administration has directly threatened the economic plumbing of the U.S. economy.
It’s a simple formula: Defend markets, ignore everything else.
In some ways it’s been successful: Trump Always Chickens Out or TACO has become the shorthand for the president’s quick about-faces whenever market reactions signaled widespread elite fears. But markets, and elites, are not pricing in what it will mean if we lose the rule of law.
The logic of this strategy isn’t ridiculous on its face. Fear of recrimination is well-founded and the incentives are clear: avoid wading into partisan fights and narrow your public objections to only when your direct business or economic interests are threatened. But if elites continue to defend markets but not the rule of law it will be a catastrophic mistake. Institutional decay will inevitably destroy the market order they are trying so desperately to protect.
The one true omnicause
The progressive omnicause ended up undermining its own interests by binding them all together. If being an environmentalist meant you also had to be pro-choice and also had to be anti-cop and also had to be anti-Trump, then well, that shrinks the set of people willing to be environmentalists.
But there is one omnicause worth joining. It presented itself on Saturday when an American citizen was shoved to the ground and sprayed with gunfire.
The problem for elites who wish to silo their politics in the realm of pure economics is that it is not actually possible to cleave the “rule of law when it comes to dealing with protesters” away from the “rule of law that enforces contracts.” The rule of law isn’t two separate systems, it’s one set of institutions (police, prosecutors, courts, and executive compliance) applied to different domains.
Despite some cracks in the foundation, the logic of shying away from all this liberal democracy talk retains its hold on many of the elite actors whose opposition could force the administration to change course.
When an OpenAI employee remarked that there had been “far more outrage from tech leaders over a wealth tax than masked ICE agents terrorizing communities and executing civilians in the street,” Ben Dreyfuss, a well-known centrist writer, argued bluntly that it’s unclear why corporate executives were obligated to say anything about “political issues that have nothing to do with them.”
Nothing to do with them? They should be so lucky.
Against GDP monomania
I understand why many people may think simply focusing on core economic issues is not just politically smart but defensible on the merits. When I first began to understand how important economic growth was, it was like a blinding light had turned on in my brain.1
Economic growth, innovation, and GDP sound like sterile and uninspiring terms for out-of-touch economists and wonk-brained journalists.
But this is what we talk about when we talk about GDP: the sewage system, electricity, flush toilets, a snow shovel, cell phones, audiobooks, a warm winter coat, fresh fruit, preservatives that keep your food from going bad, antidepressant medication, thick woolen socks, sunglasses … all goods and services and all improvements in those goods and services are what are contained in the antiseptic terms economic growth and productivity improvements.
Throughout the 19th century and into the first half of the 20th century, Argentina and France were basically neck and neck when it comes to GDP per capita. But starting in 1950, small relative changes in economic growth compounded, turning France into a modern developed marvel and leaving Argentina in the dust.
My back-of-the-envelope calculations using the Maddison Project’s data indicate that, on average, Argentina grew about 1.14% every year while France grew roughly 1.77% every year. That’s a gap of just 0.63 percentage points a year.
One way to think about this is that France achieved modern-day Argentine living standards more than 50 years ago! This is what “small” differences in growth can cost you: Argentina today has roughly two- to three-times greater infant mortality rates than France.
Looking at this, it’s easy to see why people may convince themselves to stay out of seemingly non-economic issues. Yes, it’s bad when governments undermine rights or the rule of law, but in the grand scheme of things that’s simply less important than continuing to make that line go up.
My favorite economist-philosopher Amartya Sen confronted this type of GDP monomania in his book Development as Freedom where he wrote that development isn’t just about economic growth, rising personal incomes, industrialization, technological advance, or social modernization but rather as “a process of expanding the real freedoms that people enjoy.”
The purpose of economic growth isn’t just to help people buy nicer coats, it’s to enable them to live lives of meaning. What is it that a thick coat may enable you to do? It may make it possible for you to wait at the bus stop so you can go to your friend’s house in cold weather. It could enable you to shovel your sidewalk so that elderly pedestrians can walk around without worrying about a dangerous fall.
Sen offered a heartrending example from his own childhood in Bangladesh during the pre-partition days, when religious-ethnic conflict between Hindus and Muslims was commonplace. A Muslim day laborer named Kader Mia had been knifed and came screaming through Sen’s back gate while he was playing. Sen cried for help and as his father rushed the man to the hospital, Mia recounted how his wife had begged him “not to go into a hostile area in such troubled times” but he needed work to feed his family.
“The penalty of his economic unfreedom turned out to be death, which occurred later on in the hospital.”
Improvements in GDP alone could not have helped Mia. Access to economic opportunity without commensurate improvements in the rights of religious minorities2 would not constitute meaningful development. The point of making people richer is that it is a way to buy access to freedom.
So when I watched a video of Alex Pretti being shoved, pepper-sprayed, beaten, and finally shot by officers of the state, it’s hard to care that he lived in a country with a high GDP per capita. Yes, he had glasses and a smartphone and all the human capital of an ICU nurse. Yes, he had warm winter wear and a handgun and a body nourished by a varied and rich diet.
But when he was killed by his own government; when his elected officials went into hyperdrive to smear his name and call him a would-be murderer; when his family learned of his death not from law enforcement but from journalists; when witnesses to his murder were detained or ran away, afraid to return home; how much economic growth would he have traded away for the freedom America promised him?
There is no progress without freedom
The idea that democratization and economic growth went hand in hand used to be a more widely held view. But the continued rise of China, even under authoritarian governance, and the influence of technologist Peter Thiel’s anti-democratic views, have weakened many people’s priors.3
So, it’s worth going through what we know about the links between economic growth and liberal democracy. First, at the theoretical level, we know that economic growth is usually the result of technological innovation. Where does technological innovation come from? It comes from people with access to education and investment capital who are left free to come up with and test new ideas.
By “free” I mean that people are operating in an environment that protects experimentation and open inquiry while institutions (public and private) fund research and reduce the cost of testing new ideas.
The best economic research on what has separated advanced industrial Western democracies from the rest of the world has pointed to the role of institutions. In particular, it points to property-rights institutions and contracting institutions that constrain government as well as set fair and balanced rules for resolving disputes.
The decay of the rule of law will inevitably destroy the market order. Arbitrary enforcement makes long-horizon investments irrational, politicized courts make commercial life unpredictable and increase transaction costs, and fear and repression drive talent out and reduces innovation.
If you can’t expect today’s rules to remain in place tomorrow, if permits and regulations shift with the political winds, then businesses will shift too: toward shorter projects, higher required returns, more cash on the sidelines, and more spending on political insurance and quasi-bribery than innovation.
Innovation depends on dissent, experimentation, and people taking risks without fearing arbitrary punishment. Repression doesn’t just silence activists, it scares off scientists and entrepreneurs. Mobile talent will flee, startups will relocate or perhaps never form in the first place, universities and labs will self-censor.
Negative polarization is a hell of a drug
Perhaps you look at the Minneapolis protesters and you get PTSD. You see a repeat of 2020 when a sympathetic cause turned into calls for defunding the police that went far beyond what many of the original supporters wanted.
Maybe you’re turned off by what seems like an overly leftist movement, or one that is populated by people you find cringe. Or perhaps you’re worried that public outrage will only polarize the issue and undermine your ability to advocate on other, less hot-button topics.
Economist Tyler Cowen (a friend and early investor in The Argument through the Emergent Ventures fund) argued yesterday not to “let your emotions make you into a counterproductive political force.” Cowen, who is opposed to recent interior deportation efforts, cautions people that increasing the issue salience of immigration through “emotions and self-righteousness” could end up aiding the MAGA cause.
But I think Cowen gets this issue precisely wrong. The risk that this moment will become polarized into yet another left vs. right issue is heightened if nonpartisan and right-wing voices choose to remain silent.
This is how it always works. When inflation dogged the Biden administration, the White House insinuated frustrations were the result of right-wing media, but it was unable to do so as left-of-center voices also demanded relief. Trump’s handling of COVID-19 in 2020 was opposed not just by Democrats but also by Independents and Republicans, the latter saw a 26 point drop in net approval between May and July 2020. While the president tried to blame discontent on Democrats, such arguments fell flat in the face of reality.
The truth is, widespread discontent across industry, ideology and interest groups is the most effective way to halt governments in their tracks.
Even in fully authoritarian countries, mass discontent is incredibly effective at securing policy change. The best recent example of this is China’s obvious display of weakness as it implemented its COVID-Zero policies.
Widespread protests in 2022 as draconian lockdown measures led to anger that boiled over after 10 people died in a high-rise fire. Following the protests, the CCP quickly loosened restrictions to calm fears.
This isn’t just about Trump and what this administration will do over the next three years. Every other political leader who seeks to follow Trump is watching. They’re learning the limits of what the American people will tolerate, what banks will tolerate, what businesses will tolerate, and what wealthy donors will tolerate. Don’t let them think you will tolerate this.
Even now, I think the average political commentator and politician spends far too little time thinking about economic growth relative to its importance.
Muslims were a minority nationally but technically a majority in Bengal
Thiel in particular, who has gone so far as to claim that freedom and democracy are incompatible, has had an enormous impact on the tech right as well as leaders like Vice President JD Vance.
Great post! I have two thoughts:
1.) At various points this essay seems to move back and forth between the rule of law and freedom, which can be confusing and misleading. They are not the same thing. Of course they are related: both are features of modern liberal democracies, the rule of law is probably a necessity if one wants but to secure freedom within a political order, etc. But it would have been nice if the piece said a bit more about what sort of background theory it’s relying on to link these two things together.
2.) I’m not as sure about the point that the rule of law can’t simultaneously exist and not exist. David French had a great piece in the New York Times last week about the Good shooting in which he drew on Edward Fraenkel’s dual state theory of the Nazi legal order by way of an earlier piece by Aziz Huq in The Atlantic. The core idea is that, under the Nazi system, there were two parallels legal tracks: the “normative state”, in which the law functions as we expect (corporations can be formed, contracts are enforced, property rights are respected, adjudication in legal courts under impartially enforced rules occurs, etc.), and the “prerogative state”, where the normal system of law ceases to operate and the state can act with arbitrary, unchecked power. This is a system that worked for an extended period of time under the Nazi regime, with the result that ordinary Germans did not feel they were living under an extraordinary repressive regime (at least in the first years) while Jews and many other disadvantaged groups were being politically persecuted. Lest this point be dismissed because of its association with the Nazis (the first person to bring up the Nazis loses, right?), one can point to other examples of the dual state. The American South during Jim Crow operated in a dual state regime as French points out in a recent podcast, as it involved a normative state governing white Americans while a prerogative state oppressed black Americans; Huq points to Singapore, which has a kind of dual state where normal private activities are governed by a legal system that looks a lot like the English legal system, whereas politically sensitive activities are subject to political repression that is largely immune from judicial intervention (indeed, the judiciary is often a mechanism for this repression); etc. (The dual state theory resonates with an adaptation of a William Gibson phrase I’ve heard and read Ezra Klein use a lot recently: “Authoritarian is already here, it’s just unevenly distributed.”) I think it’s possible to sustain this situation, with its two parallel legal tracks, for a surprisingly long time, provided most Americans interact with normative state rather than the prerogative state. And if this is so, then appealing to the self-interest of elites, particularly commercial elites, may be challenging.
Thank you.