The richest country in the world has just imposed punitive tariffs on some of the poorest countries in the world. Overnight, Donald Trump has turned capitalism into the monster that the Soviets once depicted it as being.
If you are old enough to remember the Cold War, you will recall that the message which Communism proselytised to the populations of what was then called the Third World rested on this argument: the fundamental precept of the capitalist system is that selfishness rules. The doctrine of free markets and unbridled competition is simply a licence for the rich to get richer at the expense of the exploited poor with only the most heartless likely to prosper.
The Western world countered this by arguing that free markets unleashed the social mobility and independence of spirit which created individual opportunity and self-determination on an unprecedented scale. Capitalism was not a licence to exploit the weak: it was a way to enable and reward everyone’s initiative and endeavour.
The spreading of affluence by free market economies offered self-fulfilment and the realisation of personal potential that had once been available only to those with inherited privilege. The democratising effect of capitalism was one of its strongest moral claims: the fact that the poor might rise by their own efforts and the wealthy fall by their own bad judgement, made it a forceful antidote to immovable hierarchical societies. In the interests of winning the great global argument of the time, this was applied to nations as well as individuals. Countries which had been impoverished by corruption or failure to develop their assets, had to be guided out of their backwardness and helped to establish the kind of economic freedoms that would prevent their people from falling under Communist influence.
The Soviet propaganda campaign portrayed this idealised picture of the capitalist dream as a wicked deception, a brazen disguise for naked avarice and the unfair distribution of wealth. Under capitalist rule, it claimed, it was those people and those nations which ruthlessly pursue their own interests without compunction or compassion, who will always win the game of life and they are not the slightest bit interested in the fate of the rest of humankind.
We now know how that argument ended. Communism collapsed with an ignominious whimper. It had failed in its own terms within its own borders, let alone in the assistance of what is now called the developing world much of which has embraced the principles of free markets and free trade. What happened next? Many of these countries came out of poverty for the first time in their independent histories and they did this by relentlessly pursuing the goals of emerging economies. They very sensibly made use of whatever was available to them: natural resources that were now in global demand, and the cheap labour which is in plentiful supply in poor societies, in their determination to join the modern international club. And yes, they charged those old imperial countries which had been rich for generations whatever they could for the goods they were now producing and put whatever tariffs on their imports they could get away with.
Then there was another twist to this tale. It turned out that capitalism – which had unquestionably won the economic contest – did not have to be coupled with democracy in order to succeed. In fact, totalitarian governments could be even better at it – at least in the immediate term – than liberal democratic ones: they could dispense with the need for popular consent and the sentimental tropes of benevolence and social fairness. Their brand of capitalist enterprise was quite the opposite of the individualistic, inspirational model that the West had promoted in its idealistic glory days.
The state capitalism of China and the countries that have followed its lead is making full use of all the advantages that totalitarianism offers: its policies and decisions can be as unapologetically tyrannical and merciless as its leaders claim is necessary. The assumption had once been that capitalism was the natural corollary of personal freedom. But it transpired that capitalism could grow more successfully (and quickly) without the encumbrance of freedom. China is now the second largest economy in the world. It has encouraged the growth of a rich bourgeoisie whose personal wealth contrasts starkly with the mass poverty of much of its population. It can act with impunity in the world without having to offer any pretence of conscientious concern for what damage it might be inflicting on its trading partners (or its own people) because it is still nominally a communist country.
The argument of the Cold War is over. China does not have to persuade the emerging nations of the world that it has the superior system. When it wants to pull those fledgling countries into its orbit, it simply offers them development loans under its Belt and Road scheme which it knows they will never be able to repay. Where America once dreamt of being an inspiration to the world, China has effectively become a loan shark to the world. It is using the most cynical of capitalist techniques in a race to dominate the global economy. The struggle for world domination is not ideological any more. It is not about ethical values or the social good, or the rights of the people in whose name these decisions are being made. It is about pure, naked power and the possession of valuable territory. The United States which once presented itself as a model to the world – the incarnation of conscientious democratic capitalism – is now engaged in an ugly name-calling contest while some of the poorest states in the world like Cambodia and Bangladesh simply become pawns in the stand-off.
Does Trump really believe that America – whose population, even in its present state of industrial decline, enjoys levels of affluence which would exceed the dreams of most people on the planet – is really being victimised (“robbed”, “pillaged”) by countries like Bangladesh? Or can he just say these things because there is no more argument to be won: no more need for American capitalism to present itself as standing for something more than greed and self-interest?
The richest country in the world has just imposed punitive tariffs on some of the poorest countries in the world. Overnight, Donald Trump has turned capitalism into the monster that the Soviets once depicted it as being.
If you are old enough to remember the Cold War, you will recall that the message which Communism proselytised to the populations of what was then called the Third World rested on this argument: the fundamental precept of the capitalist system is that selfishness rules. The doctrine of free markets and unbridled competition is simply a licence for the rich to get richer at the expense of the exploited poor with only the most heartless likely to prosper.
The Western world countered this by arguing that free markets unleashed the social mobility and independence of spirit which created individual opportunity and self-determination on an unprecedented scale. Capitalism was not a licence to exploit the weak: it was a way to enable and reward everyone’s initiative and endeavour.
The spreading of affluence by free market economies offered self-fulfilment and the realisation of personal potential that had once been available only to those with inherited privilege. The democratising effect of capitalism was one of its strongest moral claims: the fact that the poor might rise by their own efforts and the wealthy fall by their own bad judgement, made it a forceful antidote to immovable hierarchical societies. In the interests of winning the great global argument of the time, this was applied to nations as well as individuals. Countries which had been impoverished by corruption or failure to develop their assets, had to be guided out of their backwardness and helped to establish the kind of economic freedoms that would prevent their people from falling under Communist influence.
The Soviet propaganda campaign portrayed this idealised picture of the capitalist dream as a wicked deception, a brazen disguise for naked avarice and the unfair distribution of wealth. Under capitalist rule, it claimed, it was those people and those nations which ruthlessly pursue their own interests without compunction or compassion, who will always win the game of life and they are not the slightest bit interested in the fate of the rest of humankind.
We now know how that argument ended. Communism collapsed with an ignominious whimper. It had failed in its own terms within its own borders, let alone in the assistance of what is now called the developing world much of which has embraced the principles of free markets and free trade. What happened next? Many of these countries came out of poverty for the first time in their independent histories and they did this by relentlessly pursuing the goals of emerging economies. They very sensibly made use of whatever was available to them: natural resources that were now in global demand, and the cheap labour which is in plentiful supply in poor societies, in their determination to join the modern international club. And yes, they charged those old imperial countries which had been rich for generations whatever they could for the goods they were now producing and put whatever tariffs on their imports they could get away with.
Then there was another twist to this tale. It turned out that capitalism – which had unquestionably won the economic contest – did not have to be coupled with democracy in order to succeed. In fact, totalitarian governments could be even better at it – at least in the immediate term – than liberal democratic ones: they could dispense with the need for popular consent and the sentimental tropes of benevolence and social fairness. Their brand of capitalist enterprise was quite the opposite of the individualistic, inspirational model that the West had promoted in its idealistic glory days.
The state capitalism of China and the countries that have followed its lead is making full use of all the advantages that totalitarianism offers: its policies and decisions can be as unapologetically tyrannical and merciless as its leaders claim is necessary. The assumption had once been that capitalism was the natural corollary of personal freedom. But it transpired that capitalism could grow more successfully (and quickly) without the encumbrance of freedom. China is now the second largest economy in the world. It has encouraged the growth of a rich bourgeoisie whose personal wealth contrasts starkly with the mass poverty of much of its population. It can act with impunity in the world without having to offer any pretence of conscientious concern for what damage it might be inflicting on its trading partners (or its own people) because it is still nominally a communist country.
The argument of the Cold War is over. China does not have to persuade the emerging nations of the world that it has the superior system. When it wants to pull those fledgling countries into its orbit, it simply offers them development loans under its Belt and Road scheme which it knows they will never be able to repay. Where America once dreamt of being an inspiration to the world, China has effectively become a loan shark to the world. It is using the most cynical of capitalist techniques in a race to dominate the global economy. The struggle for world domination is not ideological any more. It is not about ethical values or the social good, or the rights of the people in whose name these decisions are being made. It is about pure, naked power and the possession of valuable territory. The United States which once presented itself as a model to the world – the incarnation of conscientious democratic capitalism – is now engaged in an ugly name-calling contest while some of the poorest states in the world like Cambodia and Bangladesh simply become pawns in the stand-off.
Does Trump really believe that America – whose population, even in its present state of industrial decline, enjoys levels of affluence which would exceed the dreams of most people on the planet – is really being victimised (“robbed”, “pillaged”) by countries like Bangladesh? Or can he just say these things because there is no more argument to be won: no more need for American capitalism to present itself as standing for something more than greed and self-interest?