Empire Diminished.

Self-inflicted wounds hurt just the same.

Photo by Glen Carrie on Unsplash

Since “Liberation Day” last week when President Trump placed tariffs on every country in the world. That list included the Heard and Mcdonald Island in the southern Indian Ocean which has a population of 0 humans and is quite a few penguins, resulting in the best thing about last week, memes, like this:

The formula for the tariffs was less than the best economics, just taking the US trade deficit with a country and dividing by the country’s exports to the us. Those that had a trade surplus with the US were slapped with a flat 10% tariff. This of course makes no sense.

For example, the tariff on Madagascar, which sends the US vanilla extract, was slapped with a tariff of 47% because apparently, they aren’t buying enough of our high-ticket exports like aircraft, weapons and financial services. Madagascar had a very polite response, but I doubt they are high on the President's negotiating list. It may be a mistake to mess with Madagascar. They could just cut off the US from vanilla, (they provide 75% of the world’s vanilla) and then all of our cakes and cookies would taste like crap.

What is going on?

I’ve heard many explanations from hyperventilating news analysts and financial pundits over the past week, including”

• Really, this is about leveling the playing field. Honest.

This is laughable. See the Madagascar example above. Madagascar is naturally going to have a trade imbalance with the US. They aren’t going to buy the high-end services that the US sells in any kind of meaningful way. Also, why are there 10 percent tariffs on countries with trade deficits to the US? This will almost surely cause a recession, perhaps a depression. That just isn’t worth it.

• This is about rebuilding US manufacturing.

This is laughable. The US doesn’t manufacture as much anymore because it is cheaper to do so elsewhere. The world economy works the way it does because countries that can do low-cost work (t-shirts and shoes in Bangladesh and Vietnam) do so and ship those goods to the US. If those t-shirts and shoes were made in the US, they would be much more expensive, because US labor is more expensive.

The amount of money and time to build factories to re industrialize America is longer than the 4 years that Trump has left. The next president, even if it is a Republican, will likely listen to sane economists and reverse these tariffs, so companies are likely not going to invest in building big plants in the US. Historically, tariffs only build industries when paired with investments and education. That isn’t happening.

• Tariffs are a way to get consumers to fund coming tax cuts for the rich, while telling them that other countries are paying for it.

This might be part of the plan, but people are going to see pretty quickly that their egg prices, and car prices, and everything prices are going up while the rich get tax breaks. This may build up to a pitchfork moment where people take to the streets. We will see. The levels of inequality we see now historically don’t end well for the 1%. If this is the plan it is poking the bear of the 99%, who will be angry and well-armed. I would advise against this strategy. The oligarchs may control the media but telling people “All is well” when they can’t eat is usually when the guillotines get rolled out.

• Trump is tanking the economy on purpose so that we all become serfs again and the tech-oligarchy I wrote about a few weeks ago, asking if the oligarchs are trying to sweep out our current form of government and take over.

This may indeed be part of the plan. See the above example. I don’t think a country with more guns than people is going to take too kindly to tech-bros running their lives. These oligarchs do not live in reality. So if they 1% really do try to govern the 99% so that they can play tech-bro kings - get your popcorn, that is going to be interesting to watch. Bloody and terrible as well, but interesting.

• Trump just wants power.

This is the one that seems the most realistic to me. Trump admires strongmen and gangsters throughout history. He has surrounded himself with yes men who will let him do what he wants, and this is him playing king. I think when things get really bad, they will get bad for him. Yes, he can kill someone on 5th avenue and his supporters will look the other way. But when those same supporters can’t afford food, shelter and healthcare at all, that will change.

The parallel that people may miss.

The parallel to America now and a similar historical moment, are the Great Leap Forward in China and the Chinese Cultural Revolution. America now and China then are much different places, but the similarity is that one man was able to capture the party in power and push through a plan that was ultimately self-destructive and set his country back - and no one could stop him. Moa then and Trump today are at the apex of a cult of personality that ushered in profound change but change that was ultimately quite detrimental to their people.

There is great scholarship on the Great Leap Forward and the Cultural Revolution. If you are interested, I highly encourage you to read up on what happened. The parallels won’t be comfortable to see, but we need to address them. I recommend Half the Sky, as an engaging way to enter the topic. But I’ll summarize both events for the purpose of this essay.

The Great Leap Forward was an economic and social campaign within the People's Republic of China (PRC) from about 1958 to 1962. It was led by Mao’s Chinese Communist Party (CCP) and aimed to move the country from an agrarian economy to an industrialized society through the formation of people's communes. The results were disastrous, due to mismanagement, nonsensical agricultural reforms undertaken in a harsh natural environment. What resulted was a collapse of the Chinese economy and between 30 to 45 million deaths by starvation, execution, torture, forced labor, and suicide.

Mao Zedong’s Cultural Revolution, which began in 1966, was aimed at throwing out the remnants of capitalist and traditional elements from Chinese society. It consolidated Mao Zedong’s control over the Communist Party of China.

And the damage done.

The details of the strife in China 50 - 60 years ago and what is going on now in America, are light-years apart. But the broad strokes are quite similar. A part in power looks to tear down the old system, consequences be damned, in order to radically change the country and consolidate power in one man.

The United States spent the last 80 years building a system that they largely ran, that benefited them and their allies to a great degree. It helped create the greatest economic prosperity the world has ever seen. And in a very short amount of time, America has shown the world that it isn’t interested in defending that system anymore. Trump is the one man who is running the ship into the ground, but it has taken a whole party of cowards behind him and an American public unaware or uninterested in their own long-term self-interest to get us to this point.

We are witnessing the great leap backward, and a definite cultural revolution in the United States. Most people are just waking up to what they have signed up for. But there is no going back.

The United States has declared economic war on the whole world. The whole world will not forget that. A global recession and possibly a global depression is on the way because one man who doesn’t understand economics wants to play mob boss, and the party behind him is too afraid to tell him no.

How are America's allies ever supposed to trust them again? America has shown that it isn’t interested in the old system, or economic cooperation and alliances. The rest of the world is learning fast that they are on their own. They will not quickly come back to the American partnerships and friendships that America has shown to not value at all. These former allies and friends are learning that America no longer sees them as friends and equals. Those former allies see an America that elected a narcissistic con man as the leader of the free world. The rest of the world realizes now that America isn’t really interested in reality. Those former allies are walking away, likely for generations. Ironically, this will undoubtedly be good for China, who will take up some of the leadership that America has abdicated.

As Arnold Toynbee said: “Civilizations die by suicide, not murder.” We are seeing that real time.

What comes next?

Is degrowth the answer? Maybe. The old system is dying, just more quickly now, and new systems will jockey for position to fill the void. Will people accept techno-serfdom at the hands of Oligarchs? I don’t think so. People will be too furious and too well armed to be serfs under oligarchs in America. If it is tried, it will be bloody and ugly.

Will Trump succeed in becoming America’s Orban, Putin or Erdogan, manipulating the media and elections to stay in power indefinitely. Again, I think that is doubtful. America is too big and too unruly for that. This may also be tried and may get bloody and ugly.

Will America limp along for a few more election cycles as the two political parties continue their decline into irrelevance? This is what I think is most likely. Climate change and ecological overshoot will likely make governing even harder and bad populist options from both sides of the aisle might be our political future.

Or we could decide to build community, elect our representatives through sortition, focus our passions on restoring our bioregions to support that building of community, and adopt degrowth policies like universal basic income, a four day workweek, universal basic services, a phasing out of industries that harm us and investing in health education and care. Right now, this is the most radical option.

But take a step back and look at history. Radical from the bottom up is what we need. Not radical from the top down.