Sunday, June 02, 2019

Fighting the course of history

Donald Trump is not Adolf Hitler, and today's Republicans have very little in common with National Socialists. While Trump and Hitler are both demagogues appealing to a certain kind of nationalism, Trump is operating within a completely different context.  Hitler rose to power because international capitalism had collapsed, while today, it is thriving, at least on its own terms.  The first half of the twentieth century was an age of fierce national loyalty and numerically huge military establishments, while we live in a more globalist age with comparatively tiny militaries.  Trump's hard-line, neo-Fascist supporters are a tiny group compared to the National Socialists, and they do not march in uniforms by the thousands every weekend.  Hitler in 1935--the third full year of his rule--had transformed Germany to an extent undreamed of by Trump and his acolytes in 2019.

Yet the two men and their regimes have something important in common:  they are fighting with history, and to some extent, with the same history.  Both are fighting with globalization and its consequences--and in both cases, they are losing, rather than gaining ground.   The steps they took or are taking to alter the course of history are not working--the problems that they focus on got, and are getting, worse.  For Hitler the key problem was the accumulation of military power.  For Trump the key problems are immigration and trade.

As I found 45 years ago researching my first book, Economic Diplomacy and the Origins of the Second World War, Hitler took a particular lesson from Germany's defeat in the First World War. The future of the world, he believed, belonged to superstates on the scale of the USSR, the British Empire, and the United States.  Germany could only take its place among this company by radically expanding its territory to the east and securing critical resources, particularly in food and energy, that it had hitherto purchased on the world market.  International trade had already fallen by 2/3 when Hitler came into power in 1933, and his regime continued to regulate it tightly, while stimulating the German economy with public works and rearmament.  That in turn stimulated demand for foodstuffs and raw materials which Germany could not produce, leading by 1935 to shortages of both.  In a temporary solution to the food problem, Germany bought very large amounts of grain from poor countries in Eastern Europe who had to accept German Reichsmarks, which had lost their value as an international currency, in payment.  By 1939 Germany was also very short of labor.  Germany was not yet ready for war with Britain, France, or the USSR, but war had become the only way to solve these resource problems and continue building up more armaments.  To win wars, the Germans successfully used the blitzkrieg strategy against Poland and France, breaking through their front lines and bringing about a French political collapse in 1940.  That in turn persuaded him to try the same strategy in 1941 against the USSR, gambling that a series of victories on the frontier would produce its political collapse as well.  When the regime survived intact into the fall, while the German forces fell short of critical supplies, the strategy had failed.  The German divisions that reached the outskirts of Moscow in early December 1941 had almost no functional tanks left.  A Soviet counterattack drove them back, and by 1942 Hitler found himself in an all-out struggle with three economically superior powers. His defeat was only a matter of time.

Donald Trump isn't interested in military expansion, but something similar is happening to him regarding his signature issues of immigration and trade.  He came into power determined to stop the flow of illegal immigrants over our sudden border, but after falling briefly, that flow has now increased and keeps increasing.  I personally believe that this is a real problem for the US, certainly politically and perhaps economically as well, and that a carefully thought out plan to reduce immigration would not be a bad thing--a plan such as Barbara Jordan's commission worked out in the 1990s.  Trump, however, is staking everything on his proposed wall and changes in our asylum procedures, and is getting nowhere.  This week his frustration boiled over, and he overruled nearly all his senior advisers (except Stephen Miller) and announced an almost immediate new tariff on Mexico to force that country to stop the flow of migrants.  This last step strikes me as about as realistic as Hitler's plan to destroy the USSR: I honestly don't know how Mexico could make this happen even its government wanted to.  This has been too much for the Republican establishment in the Senate, but that will probably only encourage Trump. I am very concerned over what Trump and Miller might decide to do after this step clearly fails, as well. 

Something parallel is happening on trade.  While Trump rails about the trade deficit and crows about the supposed effects of his tariffs, the trade deficit continues to get bigger, thanks to our debt-financed economic expansion (that increases imports) and, by some accounts, to his tariffs, which are cutting demand for some of our exports.  This does not seem to have affected Trump as profoundly as the surge in illegal immigration.  Mere numbers, which he has blown off throughout his career, do not affect him as much as more people crossing the border.  He was initially prepared to content himself, it seemed, with very limited changes to NAFTA and relatively small concessions from the Chinese.  These however the Chinese refused to provide, and he is talking about increasing tariffs on them rather than reversing course as well.  And this could again fail to do anything meaningful about the trade deficit, while disrupting more segments of the American economy, and putting him under more pressure to do something before November 2020.

The biggest danger that the Trump administration poses, in my opinion, is not authoritarian rule, but rather its attempt--in which most of the Republican Party joins, on many fronts--to govern a complex society in defiance of simple facts.  This seems especially dangerous since Trump seems unable to re-evaluate his positions or reverse course.  None of this is entirely new.  Reaganomics also defied simple facts, and ballooned the federal deficit until a Democrat, Bill Clinton, got into office and got it under control.  The Bush II administration got us into a series of disastrous wars, and allowed the mortgage boom almost to destroy the world economy, leaving Barack Obama to put it back together.  Trump's administration, however--increasingly shorn of independent thinkers--has far less grasp of reality than either of those.  That, not his unsuccessful attempts to get Robert Mueller fired before he finished his report, is the real danger that he poses  to the United States and its political traditions.











4 comments:

Energyflow said...

Well Germany, like Japan was attempting modern industrial growth from a small piece of land, about like Montana. Continental powers likd USA, Russia, China can be relatively self sufficient. Eventually though also these outgrow their capabilities due to mass consumption and waste and population growth. Generational theory says that after a war that people are peaceful, rebuild and create a new society but also that the population grows again and that by the end of the saeculum they press against limits. This is the reason for the crisis today. Our current system is based on petroleum. WWI saw the British switch to petroleum from coal in warships. Afterwards Henry Ford mae mass automobile use a reality. The war was fought over oil access in the caucasus and Indonesia. Germany lost the war but now has with the EU and Euro all that they desired under an American military. Japan has a similar export outlet. It is the contact with China, Russia and the 3rd world which makes problems for America. Absorbing or controlling these is too much. Cooperation is needed on the basis of equality as the first two are relatively autarch and the last unwieldy. America must give up its concept postwar of global dominance. Also the modern system of growth is untenable due to resource overusage of all types. Petroleum, metals, coal, gas, sand even for construction is hard to come by. We are driven by the machines we have created. This is a pandora's box. Clearly any leader caught in a situation of economic limits will make unpopular decisions. This leads inevitably in one direction. In such times generally people in command grew up under lax morality or wastefulness and are therefore not saints, living among similar types. The swamp is just the term for late roman decademce, corruption in politic, business, media. Painting the values of the center left parties in the West as more moral, rational, sane even in comparison to Bush, Reagan, Trump might not hold up to a penetrating analysis of their economic and military policies and democrat's ooperation when out of power with same. These presidents merely weild brutal power more openly. I read too often that the press trumpets Trump's mistakes, ignoring identical behaviour by Obama. If a hillbily crashes a party he will never be accepted regardless. Social decorum is everything. Bush sr. was left unmentioned by you for example, being of different ilk, but he had his own private CIA, knew Russia was doomed as VP and left everyone believe tbeir fantasies. Cloak and dagger as machiavelli of Obama and Clinton against Trump, Sanders is ok while Conan Trump barbarian, imposiing tariffs to save the rust belt is uncouth. Both support beheadings, whippings in Saudi Arabia and curse Iranians for less evil behaviour. Everything is aboiut oil there. Oil era is waning. Growth is dying and hard choices must be made. Close borders to foreigners, stop trade, reduce consumption. Whoever takes that job seiously is called evil. The soft heated president though is just leaving a basket case for the next one.

Bozon said...

Professor
Much food for thought here.
Hitler rode the course of history, it seems.

This passage struck me first:
"...Hitler rose to power because international capitalism had collapsed, while today, it is thriving, at least on its own terms...." DK

Your implication here is, of course, that a robust international capitalist system is necessary to ward off Facist threats like Hitler.

One problem with this view is that international capitalism is subject, by necessity, to the same boom and bust cycles, for a wide variety of reasons, that domestic economies, such pathetic things as they now are, are still subject.

Ask most all economists really, when they are being honest which is seldom,and they will tell you the same thing. It is really an economists' litany, that the global economy is fragile, not really thriving, very unbalanced between open economies and attacker states, and needs ever more equalitarian level playing field globalization to become more stable.

Let's put it this way: Hitler rose to power because of international capitalism, not in spite of it, because his political aspirations and his story of betrayal, caught, and corresponded to, its bust cycle, (why not talk cycles, a term familiar to S & H acolytes, but just not generational ones) after WWI.

All the best

Feryl said...

" The biggest danger that the Trump administration poses, in my opinion, is not authoritarian rule, but rather its attempt--in which most of the Republican Party joins, on many fronts--to govern a complex society in defiance of simple facts. This seems especially dangerous since Trump seems unable to re-evaluate his positions or reverse course. None of this is entirely new. Reaganomics also defied simple facts, and ballooned the federal deficit until a Democrat, Bill Clinton, got into office and got it under control."

Clinton got the deficit under control because the Cold War ended and significant cuts were made to defense spending. But Clinton also did not support better regulation of the markets, in fact the markets were further de-regulated in the 90's

"The Bush II administration got us into a series of disastrous wars, and allowed the mortgage boom almost to destroy the world economy, leaving Barack Obama to put it back together. Trump's administration, however--increasingly shorn of independent thinkers--has far less grasp of reality than either of those. That, not his unsuccessful attempts to get Robert Mueller fired before he finished his report, is the real danger that he poses to the United States and its political traditions."

There's no question that questionable funding and/or use of the military has marked every Republican regime since Reagan. Unfortunately, since the 80's, neither party has made a full commitment to restoring the economic norms of the 1930's-1970's. These norms included:

1)Tight regulation of the financial market to prevent abuses and excessive booms/busts
2)Tight regulation of labor policy to assist low-middle class workers (e.g. low immigration levels, generally accepting private worker unions and relatively high wages
3)Affordable housing/other important expenses being kept at a reasonable level (which is aided by reduced immigration and the prevention of real estate speculation)
4) High taxes on the wealthy, to reinforce solidarity between elites and commoners (commoners generally feel as if the privileged ought to share a great deal of the burden)
5) Emphasis on infrastructure funding and quality; the literal physical decay of railways, roads, dams, buildings etc. is alienating and sends a message that those in charge would rather spend resources on cronyism, nice cars, and 2nd or 3rd homes.

The blue print to a well-functioning society is right there, plain as day. But elites on both the Left and the Right are evidently in stubborn denial as to how our politics, finances, and foreign policy have gotten so dysfunctional.

Bruce Wilder said...

The Democratic establishment and much of the political Media has been obsessed with the narrative of Russian interference in the 2016 election and the Mueller investigation that resulted and which has now concluded. Whatever else one might say about that episode, it does not reflect a political system much interested in facts.
.
I tend to think that a common response to the events and experience of the 1920's and 1930s would have to have been bewilderment. The Second Industrial Revolution had begun quickening in the 1870s and its transformation of life had gathered momentum in the decades leading to the First World War, but the full realization that a singularity had been passed came with the peace and political transformation. Automobiles, radio, movies, airplanes -- progress and the future were startling and ubiquitous. Centuries old empires were historical footnotes.

We live with a very different zeitgeist indeed. James Howard Kunstler summarized it very well in an essay only published yesterday: "Guess what: the global economy is winding down, and pretty rapidly."

Like you, Kunstler notes the debt-financed momentum that is overwhelming Trump's retro strategy of tariffs, but he also refers to overpopulation and resource depletion. The facts do not present a pretty picture.

I fear neither American political party wants to face facts and deal with them responsibly. The news media would rather "report" emotionally stimulating speculation and "narratives" than engage in sorting thru the mounting evidence of climate and ecological catastrophe to come, let alone attempt to arrive at sensible judgments that might help to shape public opinion in rational and adaptive ways.