The Free World Has a Bad Case of the Trumps. But That's Only a Symptom.

Brit journo, Paul Mason, is no friend of America's Mango Mussolini but, like a growing chorus of critics, he sees Trump as a symptom of a greater contagion. Mason has a few interesting ideas about what should be Act II for the developed nations. I can't say that I embrace them or even fully understand them but we find ourselves in a mess and we have to begin thinking about where to head next.

From The New Statesman:

With the G7, we knew it was coming. Trump ran on the slogan “America First” and has delivered on it: he has promoted economic growth at the expense of the US’s lenders, and by saddling future generations with unpayable debts; created jobs at the expense of America’s competitors and launched a trade war.

For certain, Trump looked stupid and, with hindsight, weak throughout the entire two days. He got pushed by his diplomats and the other leaders into signing a document he didn’t believe in. But that doesn’t matter: because, in the geopolitical turmoil that is about to deepen, the USA has three important things: the dollar, the world’s biggest military and a $6trn debt to the rest of the world.

Three years ago, in Postcapitalism, I outlined two scenarios if the world’s elites refused to contemplate a break from the free market economic model. The first was long-term stagnation and austerity. In the second: 

“The consensus breaks. Parties of the hard right and left come to power as ordinary people refuse to pay the price of austerity. Instead, states then try to impose the costs of the crisis on each other. Globalisation falls apart, the global institutions become powerless and in the process the conflicts that have burned these past twenty years – drug wars, post-Soviet nationalism, jihadism, uncontrolled migration and resistance to it – light a fire at the centre of the system.

The Last True Believers

... There were only two committed defenders of globalisation in its old form – Macron and Justin Trudeau - and, as they will now find out, the changed situation will soon force them, too, into measures needed to survive the breakdown of a rules-based order.

The question: “what do we do?” should be on the minds of all political people who understand, from the example of the 1930s, what happens when a rules-based order is fragmented. But it’s not. 

The reason for is that, for 30 years, neoliberal ideology has been founded on the perfection and unchangeability of the current system: not just of the free market economic model and free trade, but of a global order underpinned by unipolar American power, Chinese isolationism and a Russia contained and constrained by its economic weakness.

Mason's Question - What Then Must We Do?

...what do we do about long-term economic stagnation, which has led to a rush for the exits from the multilateral global system, posing the possibility of trade wars, the fragmentation of the global finance system, military conflict and a threat to the global architecture that protects universal human rights? 

I fear the moment is past where that question can be answered inside a global institution. Indeed, the true global institutions, like the IMF and the Bank for International Settlements must be asking themselves searching questions about who they will serve in future. Is it conceivable that, within 20 years, the IMF will become a tool for China to impose its values and economic doctrines on the world, as it was for the US in the 1980s and 1990s? Is it conceivable that a globally co-ordinated central banking system can survive when treasures and central banks take up the game of beggar thy neighbour in earnest? 

...The answer is: design and execute a new kind of capitalism that meets the needs of people in the developed world. The design is not impossible: the elements of it lie in the provision of universal basic incomes or services, a Green New Deal, rapid automation and the creation of increased leisure time, massive investments in education, and an end to outsourcing, offshoring and privatisation. 

We can either do this collectively, as Europe, or the G7, or as NAFTA. Or, more likely, as a series of national projects where borrowing to invest, printing money where necessary and stimulating moderate inflation creates the same - albeit unstable - synergies as in the “thirty glorious years” after 1945. 

...We now need an alliance of parties, movements and individuals who are not going to fight for the system that has failed but to imagine a new one: a capitalism that delivers prosperity to Wigan, Newport and Kirkcaldy, if necessary by not delivering it to Bombay, Dubai and Shenzhen. 

Is that an argument for economic nationalism? No, rather an internationalism that says to the rest of the world: if the developed, democratic countries of Europe, America and Asia collapse into authoritarian rule, the 400-year upswing of industrial societies alongside democracy will have, once again, stalled - and, with China's inevitable hegemony, it might go into reverse.