Entrenched interests?

Reader question:

Please explain this sentence: “However, change was unlikely due to entrenched interests.” What are “entrenched interests”?

My comments:

We’re talking about some kind of reform here, aren’t we? Anyways, someone was talking about changing something apparently but later conceded that it was not going to happen because people with influences were resistant to the idea.

So entrenched interests are people with influences? Yes, strong and deep-rooted influences, too, but let me explain.

First, interests here refer to interest groups. That’s another jargon, but a common enough one. They’re people with common interests who stick together for a common goal. They can be business groups, the oil industry for example, or politicians and bureaucrats.

Entrenched? If you remember watching soldiers on film digging ditches right before battle you’ll have no problem coming to grips with the word entrenched. Trench and entrench, you see, share the same root. That is “trench”, a narrow hole or tunnel soldiers dig for themselves as extra protection in warfare. To “entrench” therefore is to reinforce, make something stronger and more resilient. If something is entrenched, it cannot be easily changed or destroyed.

Metaphorically speaking, if one’s beliefs are entrenched, then one firmly believes in them and will not budge.

Hence and therefore, we may safely infer that entrenched interests are interested groups whose interests (benefits) are deeply set in the system strong. It is quite easy to understand, then, why entrenched interests are resistant to change because they’ve gained the most from the status quo. The status quo, by the way, is the way things are as they are. It is, after all, entrenched interest groups who have established the so called status quo in the first place.

You may, I think, even equate entrenched interests with the establishment itself.

Establishment? Well, that’s another general word for the powers that be.

Powers that be? Yeah, another useful expression but never mind. Too many words at once often lead to indigestion. Let’s be quite content with coming to terms with “entrenched interests” for today.

Yes, I mean it. Entrenched groups are not the most pleasant people. They’re certainly not progressive but you have to accept them as they are. Got to understand your enemy, you know, before you can do anything about it.

If you do intent to do something about it, understand that this particular enemy, the entrenched interests in general, hides in trenches that are firm and fortified. In other words, prepare for prolonged battle.

And here are media examples for you to see exactly who these so-called entrenched interests may be:

1. Last week, the senate fell one vote short of passing an energy bill with moderate support for renewable energy. The main reason for this was simple. Funds dedicated to tax incentives for renewable energy were to be paid for by the repeal of incentives for oil companies and utilities (industry spun this as “raising taxes”). Democrats’ “Pay as you go” policy required that funding for renewables would have to be paid for by cuts elsewhere, which is why the repeal of incentives for fossil fuel industries, which are enjoying record profits, was proposed. But why be surprised? Oil companies and utilities spend tens of millions of dollars on lobbying and campaign contributions.

The bill did contain some positives, e.g., a 35 mpg fuel economy standard by 2020, but compared to what technology is capable of, that is only a very modest gain. Europe, and even China have more stringent fuel economy standards. If the American auto industry can’t do better than that, then there simply may be no American auto industry by 2020.

Utilities, e.g., Southern Company, argued that the renewable energy portfolio standard of 15% by 2020 (utilities would be required to obtain 15% of their energy from renewable sources by 2020) would raise prices on customers (as if prices aren't going to rise anyway - especially with spikes in natural gas and transportation). The arguement, specifically for Southern Company, was that renewable energy potential is not equally distributed geographically, such that the southeast U.S. is not as advantaged as solar rich areas like the southwest, or wind rich areas like the great plains. But that arguement is specious. Even Canada is installing solar systems, and sunny Germany plans to obtain 30% of its electrical energy from solar by 2020.

The breakdown in the energy bill was: Nuclear $25 Billion, $10 Billion for coal to liquids, $10 Billion for renewables, $2 Billion for uranium enrichment (isn’t this what Bush says Iran shouldn’t be doing?), $2 Billion for coal to gas - this amounts to $39 Billion for entrenched energy industries and $10 Billion for renewables. These amounts still have to be appropriated in congress, and Scott Sklar at Renewable Energy Access states that if appropriations are consistent with past history, the $39 Billion for entrenched interests will be fully allocated, while the $10 Billion for renewables will not. And, of course, these figures do not include the hundreds of billions being spent in Iraq “to protect our vital national interests in the region.”

An overwhelming majority of Americans favor the deployment of renewable energy. 40 republican senators seemed not to understand that last week. And as long as entrenched interests win, you lose.

- The Energy Bill: Entrenched Interests Win, America Loses, Gather.com, December 17, 2007.

2. Since 1985, China has been attempting to reform its public institutions, but the progress was slow and there was regression in some areas.

For example, Shanxi, Zhejiang and Guangdong provinces and Shanghai and Chongqing municipalities were chosen to pilot the pension reform for public institution employees in 2008. But so far none of the five provinces and municipalities has really started the reform.

In 2009 Guangdong planned to carry out an ambitious reform of higher learning institutions. But even before implementation began, the reform program met strong opposition from the university teaching staff and was set aside.

“Except lacking the motivation to reform, many public institutions and their staff resist changes due to entrenched interests,” said Huang Hengxue, a professor at the School of Government of Peking University.

- Cracking a Hard Nut, BJReview.com.cn, July 1, 2011.

3. COULD America survive the end of the American Dream? The idea is unthinkable, say political leaders of right and left. Yet it is predicted in “Average is Over”, a bracing new book by Tyler Cowen, an economist. Mr Cowen is no stranger to controversy. In 2011 he galvanised Washington with “The Great Stagnation”, in which he argued that America has used up the low-hanging fruit of free land, abundant labour and new technologies. His new book suggests that the disruptive effects of automation and ever-cheaper computer power have only just begun to be felt.

It describes a future largely stripped of middling jobs and broad prosperity. An elite 10-15% of Americans will have the brains and self-discipline to master tomorrow’s technology and extract profit from it, he speculates. They will enjoy great wealth and stimulating lives. Others will endure stagnant or even falling wages, as employers measure their output with “oppressive precision”. Some will thrive as service-providers to the rich. A few will claw their way into the elite (cheap online education will be a great leveller), bolstering the idea of a “hyper-meritocracy” at work: this “will make it easier to ignore those left behind”.

Mr Cowen’s vision is neither warm nor fuzzy. In his future, mistakes and even mediocrity will be hard to hide: eg, an ever-expanding array of ratings will expose so-so doctors and also patients who do not take their medicines or otherwise spell trouble. Young men will struggle in a labour market that rewards conscientiousness over muscle. With incomes squeezed, many Americans will head to the sort of cheap, sun-baked sprawling exurbs that give the farmers’-market-and-bike-lanes set heartburn. Many will accept rotten public services in exchange for low taxes. This may sound a bit grim, but it reflects real-world trends: 60% of employers already check the credit ratings of job candidates; young male unemployment is high and migrants have been flooding to low-tax, low-service Texas for years.

The left is sure that inequality is a recipe for riots. Mr Cowen doubts it. The have-nots will be too engrossed in video games to light real petrol bombs. An ageing population will be rather conservative, he thinks. There will be lots of Tea-Party sorts among the economically left-behind. Aid for the poor will be slashed but benefits for the old preserved. He does not fear protectionism, as most jobs that can be sent overseas have already gone. He notes that the late 1960s, when society was in turmoil, was a golden age of income equality, while some highly unequal moments in history, including in medieval times, were rather stable.

Even if only a fraction of Mr Cowen’s vision comes to pass, he is too sanguine about the politics of polarisation. Inter-generational tensions fuelled 1960s unrest and would be back with a vengeance, this time in the form of economic competition for scarce resources. The Middle Ages were stable partly because peasants could not vote; an unhappy modern electorate, by contrast, would be prey to demagogues peddling simple solutions, from xenophobia to soak-the-rich taxes, or harsh, self-defeating crime policies. Yet Mr Cowen’s main point is plausible: gigantic shifts are under way, and they may be unstoppable.

Politicians are skittish about admitting this. Barack Obama calls America’s wealth gap “our great unfinished business”, describing a crisis of inequality decades in the making. Think of technology, he tells audiences, and how it has thinned the ranks of travel agents, bank clerks and other middle-class gateway jobs. At the same time, global competition has reduced workers’ bargaining power. People have “lost trust in the capacity of government to help them”, he sorrows. But then Mr Obama implies that political villainy is the real culprit. He accuses entrenched interests of working for years to spread a “great untruth”: that government intervention is either harmful or a plot to grab tax dollars from the squeezed middle and shower them on the undeserving poor. Politics risks becoming a “zero-sum game where a few do very well while struggling families of every race fight over a shrinking economic pie.”

- The American Dream, RIP? The Economist, September 21, 2013.

About the author:

Zhang Xin is Trainer at chinadaily.com.cn. He has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.