The Brooklyn Rail

The effects of the COVID-19 pandemic and the decisions made across the world to shut down normal economic and social life to contain its spread were real enough. But the idea that the global recession of 2020 could be blamed on the virus also obscured other important realities. It had been widely observed before the shutdown that economic growth in the leading industrial nations was faltering, following the improvement for which it had struggled in the wake of the 2008 collapse, with considerable deficit-financed government help. Of course, “growth” figures include state spending, which was increased vastly again ten years later, in response to COVID, to make up for the continuing weakness in the private sector (AKA the capitalist economy).

The case of the “COVID recession” reflects a general tendency among economic pundits. The existence of a business cycle—of recurrent periods of recession following periods of prosperity—has been recognized since the early nineteenth century, with many attempts to account for it. The National Bureau of Economic Research has a Business Cycle Dating Committee (which declared what came to be known as the “Great Financial Crisis” over and done by 2009). Yet the idea of a regular alternation of booms and busts finds little room in contemporary economic theory; the tendency among professionals is to diagnose each individual downturn as the result of specific and anomalous or exceptional “shocks” to the system, which is otherwise held—in violent contradiction of the observed reality of capitalism—to tend towards equilibrium. Thus economists explained the 2008 crisis as powered by greed-fueled, bad judgments in US mortgage financing, while that of 2020 was cast as an obvious consequence of the pandemic. Similarly, blame for the current slowdown is being placed at the feet of Donald J. Trump. The International Monetary Fund, for instance, cited Trump’s tariff policy in lowering its growth projections for 2025, and economists from the Organization for Economic Cooperation and Development (OECD) (as reported by the New York Times) expect “President Trump’s trade war … to slow growth in the world’s leading economies, including the United States, this year and in the years to come, unless world leaders can resolve their differences over trade.”¹

As with the case of the pandemic, blaming Trump seems both immediately obvious and genuinely not without reason: the stupidity of the idea (if anyone actually believes it) that the imposition of large tariffs on America’s trading partners will lead to the reindustrialization of the United States and universally balanced trade has been widely noted. It is equally obvious that actually carrying out this policy will inflict major harm on important American economic interests (as well as more minor interests), and disrupt the long-established supply chains on which global production and distribution depend. Meanwhile, Trump’s on-and-off tariff announcements have made it difficult for businesspeople to plan, further depressing investment and growth around the world.

Trump’s solution is absurd; the problems are not. The economic and social conditions that his administration’s policies are seeking to correct have been developing for a long time, undoing the basic US economic structure of a previous era. Indeed, it is precisely because the so-called deindustrialization of the United States has advanced over many decades that it cannot now be undone. The production system in which parts produced all over the world, from raw materials sourced internationally, are assembled in a series of places for sale at yet other locations cannot be reconfigured at the will of one politician or another. And the shift from production to finance at the center of the American economy was part of this same process. These are aspects of the world economy, not facets of a foreign plot against America.

The undermining of the economic complacency that went by the name of “globalism” (and, less positively, “neoliberalism”), inspired by the establishment of this multinational corporate framework, also was the work of long-term developments. Today’s economic nationalism (of which Trump’s is a particularly wacky incarnation) is the product, not the cause, of a stagnant world economy.² It is the insufficiency of global profitability, visible in the falling growth rates that have accompanied the cyclical ups and downs, that leads to increased competition—whether nationalist or corporate in character—for shares of the shrinking global surplus. Trump is personally no more responsible for this continuing decline than were the high-risk mortgage lenders of the mid-2000s or the virus of 2020.

The relation between political and economic developments seems easier to recognize in less globally central contexts. In an analysis of the prospects of a Romanian self-declared “Trumpist” politician, for instance, political scientist Vladimir Bortun observed in a recent op-ed piece for the New York Times that:

Far from sudden, the far right’s rise in Romania is rooted in decades of economic failure: Chronic underdevelopment, widespread insecurity and mass emigration have generated deep anti-establishment anger … Even now, traditional mainstream parties have little to say about the broken economic model that has brought us to this point. That dereliction has spurred the country’s disastrous slide to the far right … These are the fruits of over three decades of free-market orthodoxy, which has seen mass privatizations of industry, decreased security in the labor market and successive cuts to public services—all underpinned by strikingly low taxes …³

Bortun would have to change little to make some sense of the rise of the right in the rest of the world; mass emigration is not an important feature of OECD countries, but otherwise the picture he sketches fits Germany, the UK, France, Italy, Sweden, Israel, and the US provocatively well.

Bortun followed his diagnosis with the usual call for the “mainstream parties” to come up with fixes for the “broken economic model.” But if they could, surely they would have by now. They can’t, because the model isn’t actually broken; capitalism, which never corresponded to the image in the minds of liberal economists, has simply evolved into its latest (not to say “late”) form. The economists’ notion of capitalism as a self-stabilizing system is at obvious variance not just with the business cycle, but with the basic fact that this form of society has been continuously disrupted as it altered what is produced, who produces it, how it is produced, and who gets to consume it, as it expanded across the world. Across this history, four large-scale changes have shaped today’s economy: Thanks to the growth of mechanization since the Industrial Revolution, productive labor now occupies a greatly diminished percentage of the workforce worldwide, with the lion’s share performing various kinds of services (or simply under- or unemployed). The inadequate profitability which has led to a slowdown in investment and growth rates in favor of short-term financial speculation also encourages inflation while putting downward pressure on wages and government-financed supplements to wages, such as spending on healthcare, education, and food and housing support. At the same time, slowing growth has led governments, which always played a role in creating conditions for capitalist investment, to become so deeply involved in the functioning of the economy itself that the latter is now dependent on the state, leading to the long-term growth of national debts. Finally, what was once a minor side-effect of mechanization—the atmospheric accumulation of carbon dioxide—now threatens to make the earth unlivable, as the centrality of petroleum to the production system and the scale of business investment in extracting and refining it make it seemingly impossible to escape from climate catastrophe.

These are, as the current phrase has it, features and not bugs of today’s economy, and they necessarily have repercussions in political affairs. Extreme-right “populism” has taken electoral advantage of the inability of the political center as well as the left to counter the degradation of life demanded by capitalist development, which would entail initiatives such as limiting the destruction of small by big business, improving living and working conditions for wage-earners, and undoing climate change. (Of course, the right has no intention of doing any of this either.)

Trump is commonly compared to heads of peripheral kleptocracies like Hungary’s Viktor Orban and Serbia’s Aleksandar Vucik, and it’s easy to see why. But just as Romania’s recent history is a local example of a worldwide development, the rise of Trump—like the generally rightward shift of governments everywhere—is also a product of that development. Trump’s is a particular, extreme response to a situation faced by all nations and politicos.

This is why, while Trump enjoys violating the rules of political and diplomatic decorum, his policies are at base mainstream ones, well beyond the core economic nationalism represented by the tariff push. Take Trump’s assault on universities and governmental research institutes, in response to which European governments are propagandistically setting aside millions of euros to lure defunded and fired American scientists. But the UK, France, and Germany have been cutting scientific research budgets for years, not because those governments hate science or even an educated populace, but because they are broke.⁴ The same is even more dramatically true for the arts. In a low-growth period, all governments must choose between subsidizing science and culture and making sure that the wealthy receive the money due to them as owners of capital.

Even Trump’s corruption—which hardly makes him unique among political chiefs—is only an extreme privatization of the state’s economic activities. It is fortuitously timed for a moment when governments not only don’t care, but can no longer afford to pay much attention to the general welfare. His embrace of crypto, similarly, only signals his belated recognition that the present-day path to riches leads through the Ponzi scheme, not industrial—or even real-estate—investment. And his fevered promotion of fossil fuel production and use makes a virtue of the world’s actually existing energy policy.

What differentiates Trump from other big-country politicians is less the direction of his policies than the all-American crudeness of their announcement and implementation. Presidents Obama and Biden initiated the recent revival of the traditional American cruelty to migrants with family separations, mass incarcerations, and deportations, before Trump made a point of pride out of it. This was hardly a uniquely American predisposition: Australia long confined would-be immigrants (of color) to an island concentration camp; a UK government dreamt up the notion of sending migrants to Rwanda; Italy, actively encouraging the drowning of boat-born refugees, attempted to send those who made it to Libya; and Europe as a whole paid huge sums to Turkey to keep Arab and African migrants in camps outside the borders of the EU. But while European political classes too try to keep themselves on top by amplifying their constituents’ dislike of foreigners and darker-skinned people—especially Muslims—in general, they still pay lip service to ideals of human rights and the evil nature of the Nazis of yesterday. Trump, in contrast, feels free to draw on a long tradition of open racism for such publicity stunts as inviting Afrikaner victims of “white genocide” to immigrate. Yet even as a personality he follows in the wake of others, combining the buffoonish, media-centric Silvio Berlusconi with the toxic masculinity of Vladimir Putin. It is a mark of the United States’s continuing position as the leading economic and military power (despite its grossly-indebted economy and its inability to beat even the minor-league Houthis at aerial warfare) that makes the former failed businessman Trump the face of present-day capitalism.

Instead of blaming Trump for economic and political disarray he has exacerbated but not produced, it may be more useful to consider why it is so hard for commentators and the population at large to see that it’s the economic system, stupid. It’s not just that Trump’s megalomaniac viciousness, his illegality, his venality provide mighty distractions for some, while the failures of liberal politics lead others to turn to Mar-a-Lago. It's also really difficult to grapple mentally—not to mention physically—with the social system, in which the economy plays such a central role, as a whole. It’s one thing to propose that “another world is possible,” but it actually seems impossible even to curb police violence, much less reconfigure the whole apparatus of production and distribution. And yet this is what must be done.

Will voters finally stop both blaming politicians for their troubles and depending on them to end them? Will voters—and non-voters—transform themselves into people who act for themselves, in their own interests, instead of allowing others to act for them? That would be what social change looks like. The survival of the human race may well depend upon it.