Don Davis raises a topic that goes in many directions.
- Why can’t governments anywhere make life better for ordinary people?
- Is Trump an anomaly or part of a broader global rejection of political parties?
- Is there another road that can address the needs of the majority?
- How can we help move the political discussion in a more constructive direction?
While some may see Donald Trump as a bizarre anomaly, he’s not. Incumbents the world over are being rejected by their constituents. And for good reason: Life has been getting harder for most people the world over for decades, and no government seems to be able to make their lives better.
That translates into anger—and votes for somebody other than who we’ve got. Consider that in the past year the UK’s Conservative party suffered its worst electoral defeat in its centuries-long history, Macron’s party in France was trounced in legislative elections and governments collapsed in Germany, Japan and Canada. And, of course, U.S. voters kicked out the Democrats in favor of Trump.
Brexit also stands as a stinging rebuke to the UK’s elites. Both the Conservative and Labor parties supported staying in the EU, as did the UK media overwhelmingly. But the working-class voters of northern England voted in big numbers for Brexit. They may regret that now, or not, but it suggests they had little confidence in the mainstream political parties or the commentator class.
Then consider less developed countries, which are facing a rapidly escalating debt crisis. As a UN agency has pointed out, 3.3 billion people now live in countries that spend more on interest payments than education or health.
That’s forcing poorer nations to reduce subsidies for food and fuel, cut pensions and fire government workers, fueling massive protests. That anger showed up in incumbents across Africa getting rejected by their voters in the past year.
Why are people pretty much everywhere so angry? Why can’t political leaders anywhere make life better for most people?
I believe the answer is that capitalism is in decline and has been for 50 years. The postwar economic boom that benefited our generation came to an end in the 1970s. By that time, Europe and Japan had rebuilt and their corporations were competing effectively with U.S. companies, cutting into profits. Ever since, companies and capitalist governments have been driving down workers’ wages, speeding up production and slashing social benefits.
See Don’s comments and add your own.
The problem with too much freedom is that it unleashes the greediest, most narcissistic and least empathetic of leaders on society. Monarchy was not so great for the average citizen to say the least. Trump isn’t a whole lot better. So checks and balances, and government programs to protect the interests of its citizens, particularly the most vulnerable are needed. Creating more billionaires, or even millionaires, is not the path to social peace and prosperity. We certainly don’t want to stifle ambition, when it serves the public interest, but I don’t think capitalism has a strong track record in looking out for the interests of the yeomanry, hence the regulatory revolution of the 20th century.
That said, Bill is certainly correct that capitalism has provided the greatest prosperity for the greatest number of people in human recorded history. I think the scientific method and the retreat from entirely faith based/religious political leadership has been the greatest asset to this progress. So balancing freedom of individuals, with government control of individual’s sociopathic tendencies is the challenge of 21st century capitalism in my view.
If Bill Ivers, a serious and thoughtful business person who has dealt with businessman Trump, has qualms about whether bullying is a useful tactic and can only “hope” that Trump will live up to his hype, then I for one have another reason to be in the streets.
A week ago at church, a friend who lives in a rural part of this Iowa county reported that two of her farmer neighbors had finally torn down their Trump/Vance signs and given her an earful about how badly Trump was handling just about everything.
Trump appears to enjoy grousing and complaining much more than the peace and profit of mutually beneficial commercial relationship.
We have learned all we need to know about the downside of relatively unrestrained and untaxed capitalism from the wealth disparities now seen in many countries. Balance has been lost between freedom and security. There was a reason the French Revolution got out of hand. One factor is that the poverty of the French people was more extreme than that in many other countries, and the excesses of the nobility and monarchy/wealthy were more excessive. At least that’s my take.
Locally in the USA, our inability to provide adequate education, health care and an economic safety net for large proportions of the population represents a risk of social decay that we never envisioned growing up in the 1950s and 1960s. Hopefully we can move beyond the incompetents, narcissists and ideologues who are now dominating our national life, and improve key social institutions and government policies to the benefit of a larger proportion of our people.
Don has framed things very well.
My father-in-law, a retired bank president, said in the 2009 recession he was very happy not to be a bank president right then.
I am really happy not to be a student radical right now.
One problem is that I am not well-calibrated for the present challenges. All my experience and training are about opposing consensus liberalism. Well, that’s not useful stuff right now.
It’s also hard to go back to single issues, because Trumpism is like what we sometimes used in high school debating — a shotgun case. They put up several new provocations a day.
My triggers are mostly around immigration and multiculturalism.
I see, or think I see through the smog, the most troubling developments as the deportation process marginalizes sections of the resident population and we all watch. This is where the courts and Constitutional boundaries are breached, and the administration selects individuals and groups to oppress.
It’s weird as a Jewish person to be “Good German” in today’s reports.
Globalization makes racialism workable in different ways than we are used to.
Watchful waiting has two sides. We may see what James Carville predicts: the powers that be punch themselves into exhaustion and the majority exerts itself. Or, as the recession develops (invisibly, or with stagflation, or openly declared) — we may not remember the discussion of cognitive dissonance back in Psych 10a. We may begin to feel that the oppressed are the cause of our problems, and deserve their treatment.
So, who can decide between the Nero timeline, the Hoover timeline, the Hitler timeline, the Orwell stasis, etc?
In Don’s terms of what government takes care of the people — they all do at least sometime or at least for some people. The tendency is to do so early (see the Nero and Caligula timelines, and what Jose Giron tells me about Batista in Cuba.) In the old norms of two-party republic in the US, the incumbent party would be stricter in the first years, lose the Congress in the mid-term election, and then give out some benefit in time to be re-elected.
There is also the old dilemma intensified — what does a social critic owe to the “stability party?” If the FBI and the CIA are being purged, do I really step up for them? Me?
Or is that also standing aside?
If the glorified “disruption” actually crumbles capitalism, what comes next?
If the capitalists fight the trade war and start the shooting wars (as they did in WWI), do I pick a side?
Or is all this history just a confusion, and Karl Popper was right about historical materialism, that (gross simplification) it fails because genuinely new things happen?
Sorry to go on so. Hope I’ve left more questions than answers.
–Mark Zanger
Trade wars lead to shooting wars. Competition for markets among the world’s leading economies led, in my view, to the two world wars of the twentieth century, which claimed 100 million lives. Today’s sharpening trade conflicts could lead to far more destructive nuclear war. More on that in a moment.
As for Bill Ivers’ assertion that there’s been a massive expansion of economic output since 1890, there’s macroeconomic data and then there’s real life.
Real life includes people making decisions about whether to have children, which most people want. Increasingly, all over the world, they’re deciding to have no children or just one. Keeping in mind that for a country to maintain its population the fertility rate must be 2.1 births per adult woman, here are current fertility rates: U.S. and Canada 1.6, Europe 1.4, Japan 1.2, South Korea 0.7.
Raising children is one of life’s richest experiences. But many people around the world are deciding it’s out of their reach. That’s a sign of a global system, namely capitalism, that’s deeply flawed.
To be sure, capitalism in its early years was a progressive force that swept aside feudalism and opened the way to great advances. From roughly 1400 to 1900 capitalism provided a powerful impetus for the expansion of human knowledge, technology prowess and productive capabilities.
But by 1900 the leading capitalist powers had divided up the entire world. To gain new markets and resources they had to take land from other countries, an imperative that was especially strong for the last great capitalist nations to emerge: the United States, Germany and Japan. That led to a series of wars for control of markets in the late 19th and early 20th centuries, including proxy conflicts like the Balkan Wars of 1911-14.
But those limited wars didn’t fully resolve the matter. That took two world wars of unprecedented destruction.
At the end of World War II, Europe and Japan were devastated, while the U.S. economy was more powerful than ever. For 25 years, U.S. corporations made healthy profits, including from rebuilding Europe and Japan, with little competition. U.S. corporate profits were high in the 1950s and 1960s, allowing for a steady increase in the real standard of living of U.S. workers. That’s the period during which we grew up. We thought economic growth was normal, and many wonder why we can’t return to the policies and growth of that era. But times have changed.
By the mid-1970s, Europe and Japan had recovered, and competition from the likes of Volkswagen and Toyota drove down profits of U.S. and other competitors. That led the capitalist classes throughout the world to seek to boost profits by driving down the wages and social benefits of workers, breaking unions and limiting democratic rights.
However, the capitalists face a problem when they suppress workers’ income: Who will buy their goods? In response, they dramatically expanded credit. Today millions of people are burdened with debt from credit cards, auto loans, student loans and mortgages. U.S. household debt topped $18 trillion in late 2024, according to the Federal Reserve Bank of New York, more than double the 2004 level of just over $8 trillion.
Tens of millions of consumers are too weighed down by debt to buy much more. One data point recently cited by the Wall Street Journal: The top 10% of individuals by income now account for 50% of U.S. consumer spending, up from 36% 30 years ago. Many in the bottom 90%, particularly at lower income levels, are struggling financially and voting their frustration.
The economic pressure on consumers helps explain Trump’s tariff policy. If capitalists can’t sell more domestically, they have to sell more internationally. (Companies in the S&P 500 derive 41% of their revenue outside the U.S., according to the WSJ.) Trump is trying to leverage access to the huge U.S. market as a bludgeon to force other countries to allow their consumers to buy more from U.S. companies.
But the capitalists in those countries won’t just acquiesce. They will demand their own governments retaliate economically, while also preparing to take on the U.S. militarily. Germany just passed legislation allowing it to raise $1.1 trillion for spending on infrastructure and the military. Before long, Germany will again be a major military power. Other countries in Europe and Asia also will spend more on their militaries.
Where will this end? Trade wars lead to shooting wars. If the workers of the world don’t take political power out of the hands of the capitalists, the end result will be a third world war of unimaginable devastation.
The stakes are very high. That’s why these questions are worth thinking about seriously.
Don,
I’ve seen analyses suggesting that the trade war might actually be part of a deliberate *preparation* for a shooting war.
Trump’s executive order regarding the tariffs states that trade deficits have “rendered our defense-industrial base dependent on foreign adversaries”, significantly compromising military readiness.
So while the tariffs may seem daft from an economic perspective, there may well be method in the madness. Even casual viewers of 60 Minutes should be aware that plans for war with China are well advanced and have been actively pursued under Democratic and Republican administrations alike, with this war often portrayed as virtually inevitable within a relatively short timespan.
Such a war would of course be its own special kind of madness, but here we are.
Freedom, for me, is a very loaded word. On the one hand, we’d all like to be free to do whatever we please. On the other hand, when everyone does just as they please, society (with special reference as to how we treat each other) can strain and occasionally break. I think what we’re facing now is a degree of individual selfishness we have not seen in quite some time. It’s all about how much can I get for myself, and I don’t care about the consequences. If Trump’s election was a repudiation of Biden’s approach to life, the economy, and politics, what we’re now dealing with is an outcome well beyond complaints about egg and gas prices and government cost and interference in people’s lives, which seem to have been the main motivation for voting for him. Tens of thousands of people have been left jobless (without a care as to the trauma inflicted on these people and their families–my daughter included), well over a trillion dollars has disappeared from people’s investment accounts, long term alliances which have supported world peace for over 80 years have been fractured, and the trade war that has been instigated will impoverish numerous of us as inflation skyrockets. The bottom line here is that we’d all better give some thought to what we can do to help our neighbors, re-discover some sense of charity, and extinguish the zero-sum approach we currently employ to deal with others. We need to learn how to give a little to get a little. The Smoot-Hawley tariffs were just one contributor to the Great Depression. The other was pure greed. It took a visionary with a sense of compassion and decency and, yes, charity to a degree, to restore the lives that were so devastated in the 1930s. As has been pointed out, this is not just an American problem at present, though we seem to be leading the way down the rabbit hole (insert whatever other adjective you might choose before “hole”). As I said in my commentary on optimism, the question is just how bad things will need to get before we learn that we can no longer rely just on ourselves but might benefit from some help from our friends.
I think most liberals like me would agree you can swing your fist freely without consequence as long as you don’t hit my nose while doing so. A good example of ‘your fist’ hitting my nose is pollution. (Climate change is another example.) Without enough government, with rules enforced through (even imperfect) democratic processes, human nature being what it is, we’ll make messes, dangerous ones, that evidence shows we don’t clean up, causing big problems for others. And the problems seem more and more consequential (e.g. the effects of a 3-degree C world we’re headed for seems well worth heading off or minimizing with strong government action). In 18th and 19th century America notions of liberty nourished by the concept (see Frederick Jackson Turner) of a Western frontier that seemed to offer limitless space for unconstrained individualism, and the good things that go with it, like heightened personal responsibility for results. So we could often sidestep the messes we made. But the fact of an industrializing population of 300+ million people (100X the population at our founding) and a world population that has almost tripled in our lifetimes) must necessarily shorten the arc of our free-swinging approach to life, if you will, as we are all more than ever necessarily in each other’s business. So yes, the question is: what are ‘reasonable societal boundaries’ these days, given the stakes? I believe they’ve got to be tighter than maybe we’d like. And these restrictions and requirements will challenge our ability to keep our birthright liberties intact, for sure. It’s a very tricky and consequential time. Not a time for pat ‘answers’. I like Don Davis’ asking why governments can’t seem to deliver in ways that ‘make life better’. The underappreciated growth of prosperity world-wide that Bill Ivers references in his response was achieved somehow with a mix of government and individual initiative. Maybe muddling through as we have been is the best we can do. If so, I hope it’s enough.
Wrong question. Instead ask: How can we continue the astonishing improvement in the standard of living of the average citizen that has occurred between 1890 and 2025? There is a broader global rejection of “more government spending is the solution to everything”. The road to address the needs of the majority is less government and more freedom. We need to trust the citizens by setting them free within reasonable societal boundaries.
Bill,
(Non-)reciprocal tariffs–yea or nay?
If you are asking, from an economics perspective, what level of tariffs should be enacted between two countries operating free-trade economies in good will, the answer is clearly zero – that would maximize benefits for everyone. But if one country, seeking military advantage, attempts to destroy another country’s steel industry through massive subsidies, then the answer gets more complicated – national security demands that the US not be dependent on hostile countries for critical resources, and it is fair for a country to protect an industry’s companies and employees under unfair attack. Or, if one country, for internal political reasons, adds tariffs or the equivalent of tariffs through bureaucratic constraints to artificially protect, say, its dairy farmers because they are an important voting block, then we no longer have a “free-trade economy operating in good will” and the reciprocal country needs to reconsider its zero tariff policy. Aiming for zero is good, but it is a two-way street.
More importantly in today’s situation, there is the question of “tariff as a negotiating club” which is used as a “big stick” to bully other countries to take certain actions, some of which, like closing borders to drug flow, aren’t even related to economics. This bullying, if done carefully by a powerful country, could clean up a lot of wasteful stupidity that currently hampers inter-country trade and fairness. But then, bullying itself has significant problems: 1) what if the club is used for the wrong purpose or unfairly? Currently in the US we have no oversight to act as a check and balance against unreasonable use of tariffs by the President; 2) what if the country wielding the club doesn’t have sufficient power to back it up, thereby attracting major conflict instead of submission?; 3) Bullies always attract retribution; 4) Bullying does not build good will. If the US can couch its tariffs as “reciprocal” and quickly reach agreements that move us closer to zero, that would help avoid the “bully” flavor of these negotiations. Perhaps the broad application of tariffs will quickly get resolved through mutual reduction in tariffs/other restraints of trade, leaving just a few countries like China, Russia and Iran in the cross-hairs. There is no question bully-tariffs are a powerful and dangerous ploy. I hope Trump lives up to his hype about being a deal-maker and moves past this bully-tariff stage.
Bill,
Thanks for thoughtful & detailed reply.