For over 30 years America believed that globalisation and free-market economics would succeed in making America Great — through “trickle down” theory of wealth distribution at home and in converting China into a liberal-democratic manufacturing vendor-colony.
As the Chinese guy in the video-clip rightly explains, it didn’t quite work out that way . “American 1-percenters” , the greedy oligarchs of Wall Street and Main Street just perverted every single core value of classical Capitalism that had made America once in history truly Great as the “new world” of the world ! The “trickle-down effect” of wealth in America — that which would flow slowly down from the oligarchs to the commoners — remained theory and a pipe-dream . The rich got richer and the middle classes stagnated .
Today , yes, America needs a Revolution— “back to the future” kind of revolution , which means going back to fundamental values that have for long been abandoned by both its governments and its businessmen throughout the post-Reagan, Post-Clinton, post-Greenspan years :
- private property, which allows people to own tangible assets such as land and houses and intangible assets such as stocks and bonds;
- self-interest, through which people act in pursuit of their own good, without regard for sociopolitical pressure. Nonetheless, these uncoordinated individuals end up benefiting society as if, in the words of Smith’s 1776 Wealth of Nations, they were guided by an invisible hand;
- competition, through firms’ freedom to enter and exit markets, maximizes social welfare, that is, the joint welfare of both producers and consumers;
- a market mechanism that determines prices in a decentralized manner through interactions between buyers and sellers—prices, in return, allocate resources, which naturally seek the highest reward, not only for goods and services but for wages as well;
- freedom to choose with respect to consumption, production, and investment—dissatisfied customers can buy different products, investors can pursue more lucrative ventures, workers can leave their jobs for better pay; and
- limited role of government, to protect the rights of private citizens and maintain an orderly environment that facilitates proper functioning of markets.
Trumpian economics today alas, doesn’t seem to be anywhere near even slightly resembling .. forget embracing.. the above cardinal values ! …. His MAGA philosophy in fact is the very exact opposite of them.
Any engineer and any accountant in the world would have educated Trump about some basic facts of economic history: that it takes decades and decades for investments in manufacturing industrial capacity-building to get them transformed all into real productive assets …. a well-oiled giant manufacturing complex , nay , a cathedral !
America took only 2 decades to complete its divestment of its manufacturing assets and capacity that it had taken several Pre-World War decades to build!
It outsourced it all away thinking that the Industrial Revolution was the relic of the past and the future was hi-tech Information Age revolution.
Now , America caught with its pants down, wants to retrace its steps …. To go back to Industrial Revolution V.2! But that’s like trying run backwards to lurch forward to try and catch a bus that China already has driven so far away from the station !
Trump doesn’t seem to understand he’s acting like Don Quixote, an eccentric knight in heavy armour, armed with a lance called Tariffs, charging at every country in the world he thinks is a baleful windmill “ripping off America” !
Trump believes that the word “Tariffs” is the 5th most beautiful word in the English lexicon , after God, Love, Family and Country … His predecessor Ronald Reagan thought the same of “trickle-down” too …
Sudarshan Madabushi
Sir,
Perhaps it would be trivial to say that political theatre often entertains the public with events quite different from those taking place backstage.
Mentioning President Ronald Reagan in the context was both appropriate and timely. Many agree that one of his most significant accomplishments in international affairs was the Plaza Accord.
It was a coordinated effort in 1985 by the G-5 nations—the United States, Japan, West Germany, France, and the United Kingdom—to deliberately depreciate the U.S. dollar relative to the Japanese yen and the German Deutschmark. The Plaza Accord led to a sharp depreciation of the U.S. dollar, about 50% against the Japanese yen and the German Deutsche Mark over two years. Coincidentally or not, the justification given then very much reminds the rhetoric we hear today on the subject of tariffs. Actually, we heard a very similar economic strategy outlined by Secretaries Heggset and Lutnick in the US administration. This time around though, we cannot see any “coordinated effort”, but this is just the beginning. Let’s see what the future brings.
Well said ! Spot on ! 👍