Donald Trump’s victory in the US elections has already happened and many more legitimate, explanatory and counterfactuals will emerge.
What if the Democrats had someone other than Kamala Harris or Joe Biden as a candidate? What if the Biden administration had chosen fiscal prudence-induced economic pain during the pandemic, rather than a stimulus that many economists (though not all) argue would have boosted inflation, causing them to suffer in the election? What if the Biden-Harris administration had done a better job of managing the consequences of the ongoing conflict in West Asia? These are questions that will probably keep polling and data experts busy for a long time.
This column has no comparative advantage in framing or answering these questions. What it can ask and wants to ask is the following. Forget winning or losing. How can one explain the fact that Donald Trump has increased his popular support in each of the three elections he has contested, as seen in national vote share?
Clearly, they have a message that is growing; Albeit slowly, traction among voters in America is increasing. What exactly is that message?
Is this the exact opposite of the political civility that has earned him bipartisan hatred within the old establishment but helped him portray himself as an anti-establishment warrior? Is it a set of inconsistent, perhaps even counter-productive, but seemingly powerful economic rhetoric that has made him an attractive political option for the American underclass? Or is it something more profound yet simple?
The answer, to this writer’s wisdom, can be found in Trump’s promise to put “America First.” Trump’s USP for American voters, more than anything else, is that he will force their country to step back from the responsibility of being the leader of global capitalism, and hence its costs; Which Marxists also like to call empire. Let’s take a brief summary of the story so far.
American leadership of global capitalism is, historically, a much more recent phenomenon than the advent of modern capitalism. It became a contender for this position only after World War I and assumed it after World War II, by which time America’s economic and military strength was far ahead of the then European powers, especially Britain.
The rise of American capitalism (or empire) took a different path than that of the older imperial powers. The capitalist development of the latter was critically dependent, at least for a significant period, on their colonies in what is today the Global South. America’s economic rise, on the other hand, is primarily a story of exploiting a large domestic market after getting rid of colonial dominance and then using export markets in Europe for both capital and goods.
The Americas are the first geography outside mainland Europe to achieve full development of the productive forces of capitalism. While capitalism and the spread of its productive forces gave America an early advantage, the proverbial Rubicon of capitalism crossed many rivers in later periods.
First, it was post-war Japan, which ironically tasted success under America’s guidance and ultimately became a threat to America’s dominance. Then there were the South-East Asian tigers who assimilated capitalist dynamics. To summarize both these success stories and their threat perception to the US, it was reduced by US dominance in the financial and money markets, which left these countries vulnerable to financial crises arising in the currency or asset markets. Later forced to embrace deflation. , And then, came China, which is a very different story.
A comparison of global GDP shares from World Bank data is useful to illustrate this point. In 1960 the US’s share of global GDP (in current dollars) was about 40%. It fell to 25% by the 1980s and returned to this level by the mid-1990s. It is almost the same even today. Japan’s share of global GDP rose steadily from 3.5% to about 18% between 1960 and 1995, before declining monotonously to just 4% today. Japan’s economic decline roughly coincides with China’s rise. China’s global GDP share reached almost the same level in 2018 as Japan’s when it peaked in the 1990s.
The difference between the Japanese and Chinese situation is that the Japanese have a much more interventionist regime in their financial markets, which has made taming the financial market-driven Chinese dragon a far more difficult task, at least so far. Certainly, there are ample indications that the Chinese state’s manipulation of its financial and asset markets has created systemic problems in the economy. However, it would be premature, if not downright delusional, to predict China’s Japan-like economic decline.
While there has been a paradigm shift in the geo-economic game between the economic rise of Japan to its decline and its replacement by China, the US economy has gone through a significant economic churn due to the plight of its economic underclass. In its transition from what can be described as a global factory to a global boardroom, America has seen a steady shift in income distribution across the working classes over the past five decades. Its political mitigation – the lower class still held decisive political power – was first managed by denouncing the so-called communist contamination of American animal spirits under the neoliberal revolution. This was followed by a period of mediocre growth based on asset market-based and financial sector-generated cocktails on steroids, until everything came crashing down in the 2008 global financial crisis.
When the American electorate is viewed in retrospect, they embraced progressive and multicultural harmony in embracing the obviously reactionary and sectarian Donald Trump in 2016 and electing Barack Obama to two terms before voting in large numbers for him in 2020. Displayed a proverbial dead cat bounce version of prioritizing. 2024.
While Trump’s social message has been a sharp contrast to Obama’s unity-and-prosperity rhetoric, his economic message has had clear bipartisan appeal. Nothing explains the resurgence of things like industrial policy in America to bring back manufacturing jobs. Where Trump has scored a point over Biden-Harris and the older political establishment at large is his claim that tariffs or Chinese factories are not the only stranglehold on America’s neck.
An additional criticism of Trump, which is completely distasteful to the old American establishment or the deep state, is that the US abdicates and disregards its self-appointed responsibility of being the global policeman in ensuring the existing geopolitical order. Does. If that means weakening NATO against Russia, retreating from consensus on the climate crisis, or even messing with some of the world’s most despicable autocratic rulers, so be it. Their justification for propagating this renunciation is essentially economic. In his view, empire has sometimes become a punishing, unrewarding proposition.
Of course, Trump isn’t the only First World politician selling this idea. There are many in Europe, from Germany to Hungary, who are increasingly advocating a sacrificial geopolitical stance – to the detriment of democracy and freedom (of Ukraine) – in the name of alleviating the economic pain of such efforts. Are gaining political power. Of course, the geopolitical implications of the United States advocating such a line and some provincial leader in Hungary or Germany doing so would be quite different. So where does this leave America and more importantly, the world?
“The crisis really lies in the fact that the old is dying and the new cannot be born; In this interval, a variety of morbid symptoms appear”, wrote the Italian Marxist Antonio Gramsci in his Prison Notebooks.
The leading rebels against (or saboteurs of) the American deep state that has built and maintained the global economic order since the 1950s have been funded by the super rich and voted in by the lower class, which has virtually put a spotlight on the American It has created a different kind of disease. democracy. There is enough economic knowledge to tell us that the nonsense of Trump’s economic plan cannot offer any meaningful deal to the poor who have been voting for him in large numbers since 2016. This means that this is nothing but a progressive change in America’s political economy.
The cardinal sin that Trump’s opponents committed was to reverse Gramsci’s dictum of “pessimism of the intellect, but optimism of the will.” He did little in terms of practicality to protect the economic interests of the lower class over the long term, but showed great arrogance in believing that the poor were choosing to suffer economic hardships because of some spiritual commitment to America’s liberal and democratic values. will continue. And also its geopolitical power. They can choose to engage themselves in counterfactuals or begin an honest process of realigning optimism and pessimism between their intellect and political pragmatism. Either way, the world is sure to be affected.
Roshan Kishore, HT’s data and political economy editor, writes a weekly column on the state of the country’s economy and its political fallout, and vice versa.
