The new president and the new global order

What if Trumpism was made to serve the aims of US capital? Mike Macnair speculates

Ripe for another configuration?

Donald Trump has been inaugurated and there was no ‘constitutional coup’ through the electoral college or otherwise; he has not been assassinated. Whatever the purpose of the leaking of the ‘Trump dossier’, it has not obstructed his taking office.

Moreover, his rhetoric of US nationalism, trade protectionism, possible deals with Putin, and overt threats to China, with which Trump won the election, has continued after his election. His nominees have said somewhat different things to Congress; but, at the bare minimum of immediate operative effects, Trump has repudiated the Trans-Pacific Partnership. He has continued as president to welcome Brexit. And he has threatened European states that if they proceed any further with steps towards European military cooperation he will pull funding from Nato.

It remains possible that Trump will be impeached or assassinated in the short term. It remains possible that the rhetoric will have no more substance than the initial statements, and Trump’s real policy will turn out to be ‘pure Republican’ tax-cutting. It equally remains possible that Trump will be ‘hedged in’ by the US state bureaucracy glacially continuing, in spite of presidential policy, on its existing course in world affairs.

If so, the US core state will continue to pursue its attempts to obtain control of the central Eurasian ‘heartland’ by winning supporters in the borderlands of Russia. It will continue its doublethink relations with China. It will continue its use of the European Union as providing a means of unfettered US corporate access to the single market, and in addition a diplomatic cover for its operations in eastern Europe. And it will continue its alliance with Saudi Arabia and its Islamist proxies in the Middle East.

Nonetheless, it is right that we should consider now the possibility that Trump’s victory signals a fundamental turn in the geopolitical orientation of the US state - and with it, the beginning of the end of the remaining elements of the geopolitical regime established in the late 1940s-50s. And we should consider - inevitably very speculatively - why such a turn might be happening.

Unexpected geopolitical reversals are far from unknown. The Entente Cordiale of 1904 represented the abandonment of slightly more than two centuries of Anglo-French antagonism and of a British alliance policy towards Prussia/Germany which had lasted more than a century. In the more recent past, Nixon’s 1972 ‘China turn’ overthrew alliance systems on both sides which had lasted since 1949. Carter’s 1977 ‘human rights turn’ meant the abandonment of a US policy in Latin America which had operated since the transfer of control from Britain (gradually after the 1914-18 sale of British interests), and brought down the regimes of a number of former US allies.

For the US to break with its pro-EU policy and, potentially, make deals with Russia for the redistribution of influence in western Eurasia looks, from our Brit perspective as inhabitants of islands off the northwest coasts of Europe, larger than these former turns; but perhaps it is less striking in a global perspective.

It is possible, therefore, that Trump’s apparent break with fundamentals of the US state’s orientation since the late 1940s will prove to be not a reason for US capital and its state to dump or constrain Trump, but a harbinger of wider support among US capitalists and state actors for a radical turn in policy.

There is no more than a possibility that this is happening. But if it is, why?

Immediate

The immediate cause is plain enough. In a certain sense, ‘the west’ is affected by the conditions Lenin characterised as showing revolution on the agenda: the ruling class cannot rule in the old way, and broad masses are decreasingly willing to be ruled in the old way.

The second of these is more immediately obvious. It was reflected shortly before Trump’s victory in - in succession - the election of Jeremy Corbyn as leader of the Labour Party, the fact that self-identified socialist Bernie Sanders gave Hillary Clinton a serious contest for the Democratic nomination, and deformedly in the Brexit vote, attracting votes in Britain’s equivalent of the ‘rustbelt’ where Trump also attracted votes. Both Brexitism and Trumpism are nationalist-populist responses from the right to the visible unacceptability of the neoliberal order. It has been reflected in the elite assembled at Davos going on and on about inequality. Benoît Hamon’s lead in the first round of the French Socialist primaries is the latest example.

The perception of increasing inequality within nations, stagnating wages and rising unemployment, has reached the point at which it is very widely seen as unacceptable, and candidates directly associated with the left wing of the ‘old order’ in place since the ‘Reagan-Thatcher revolution’ are punished. Former neoliberal rightists, however, can escape responsibility by reinventing themselves as nationalist, patriarchalist and traditionalist champions of the ‘common man’ against the ‘liberal elite’.

Meanwhile, it is also independently true that the ruling class is having problems keeping the ‘neoliberal order’ going. More than eight years after the collapse of Lehman Brothers, the very widespread use of money-printing stimulus seems to be running out of steam - without the world economy dramatically picking up speed, as it did in previous iterations of ‘cheap money’ policy since the 1980s. Four years after the beginning of ‘Abenomics’, in Japan results are still pending.1 China’s position is also doubtful.2 The US economy strengthened significantly in 2016, but neither to the point of dragging others with it by way of increased exports to the US, nor in such a way as to revive well-paid employment, or productive investment, in the US itself.

In this situation the main centre-right and centre-left parties have offered only ‘Keep going with the same policy and hope that something will turn up to get us out of this hole’. It should be expected that offering some alternative to this dead-end hanging onto a failing policy - even if the alternative looks crazy - will pick up some serious support.

In another sense, of course, revolution - meaning any threat of the working class taking power - is very unambiguously not on the agenda. The idea of socialism remains extensively discredited by the Soviet and eastern European experience - in spite of the fact that the consequences of post-1989 ‘marketisation’ have largely been the creation of extensive ‘rustbelts’ and impoverishment.

The left, meanwhile, while largely abandoning the ideas of common ownership and planning in the face of the free-market offensive, continues in its large majority to cling to Stalinist conceptions. First, socialism in a single country. Second, the people’s front of cross-class alliances (now rebadged as ‘diversity’, ‘intersectionality’ and so on). And, third, bureaucratic, top-down control and monolithism (most recently described as ‘horizontalism’ or ‘new politics’). The former Trotskyists have mostly moved towards these Stalinist political conceptions.

By taking this approach, the left, first, supports the rightists’ turn to right-populism (by promoting nationalism). It simultaneously, second, traps itself in alliance with the liberals (by way of non-class versions of feminism, etc, leading to celebration of Obama as a black standard-bearer or Hillary Clinton as a feminist one). And, third, it debars itself by its bureaucratic centralism from actually building on the ground the sort of local activism, rejuvenated trade unions, cooperatives, and so on, which could begin to build a real opposition to the rule of capital; because any real local activism will imply local discussions, decisions and control.

In this situation the increasing contradictions of the neoliberal order can only find expression in the form of rightwing, nationalist populism. Trump is only the most recent expression of the phenomenon. Putin has been pursuing this approach for years; Shinzo Abe is not only an advocate of a ‘new economics’, but also a Japanese nationalist;3 Narendra Modi in India is a Hindu-communalist leader.4 This list could be much longer ...

So far, this analysis can help explain why Trump won (and why the Brexit camp won). But, if the US is actually to implement some version of Trump’s international and trade policy, it will be necessary for a significantly wider range of state actors to go along with it, at least passively. Similarly, it will be necessary for US financial capital not to engage in serious opposition to it (eg, by crashing markets in order to signal to the state the urgent need for a coup against Trump).

For this to be possible, it is necessary that there should be some basis on which abandoning the post-1948 geopolitical architecture would make some sort of sense for the US state and US financial capital - not necessarily Trump’s sense, but some sort of sense. This implies looking at what the purposes of this architecture were in the first place, and how events may have changed its utility.

Foundations

In 1945 the US emerged as the main victor of World War II and the replacement for Britain as global hegemon state and reserve currency provider. However, a part of the price of this victory was the victory also of the USSR and the presence of Red Army troops across eastern Europe and in northern Korea.

And a part of the context of the victory was a much more widespread understanding (outside the US) that free-market capitalism and its advocates had led to mass unemployment in continental Europe in the early 1930s, and therefore to Nazism and the war itself. This was expressed in the emergence or re-emergence of mass communist parties in France, Italy, etc, and also in the Labour victory in 1945.

An initial US attempt to recreate the inter-war cordon sanitaire of rightwing regimes in eastern Europe to blockade Russia, and to obtain US naval access to the Danube, precipitated the USSR ‘Sovietising’ the eastern European states. At the same time, the Kuomintang regime in China collapsed and the Chinese Communist Party took over.

The US now turned to a policy of ‘containment’ of ‘communism’. This policy entailed systematic concessions, both to the working classes of European states and Japan, and to the capitalist classes of ‘front-line states’ more generally (including, for example, Turkey, and South Korea after the end of the Korean war). The framework of these concessions was the regime of managed money exchange rates under the Bretton Woods agreement and managed trade, i.e. permitting significant degrees of protection against US imports and against US acquisition of local companies, under the 1947 General Agreement on Tariffs and Trade (Gatt I).

The idea was to create a regulated and managed capitalism, which could appear to broad masses as a better ‘deal’ than the Soviet regime. This was an aim shared by continental Christian Democrats and similar parties as much as by Social Democrats.

The European Communities set-up (more recently European Union) was part of this regime. The creation of the European Communities in the 1950s represented a compromise between US interests and those of the original six continental European participants (Germany, France, Italy, Netherlands, Belgium, Luxemburg).

The US was primarily interested in a free-trade zone, but also had a cold war interest in promoting social democratic concessions to the working class and to the petty bourgeoisie in western European countries, and the European Economic Community institutions provided a vehicle for this approach. The US also had a long-term geopolitical interest in holding France and Germany in subordination. This interest was served by the EU in connection with Nato, through reducing the freedom of action of both France and Germany by tying them to the smaller EU countries.

The founders of the ‘European project’, particularly in France and Germany, began in 1950 with a coal and steel cartel, the European Coal and Steel Community. Underlying this small step, they were concerned about the risks of a new European war and about the problem of subordination to the US (though also afraid of the USSR) and aimed to create a defence and political community: ie, a federal state. These projects were both contrary to US interests and were defeated by Gaullist opposition in France. The 1957 EEC was from this perspective a step back - to economic cooperation - with a view to moving forward, though creating judicial, administrative and political institutions, around which defence and political cooperation could later be built.

The question of holding France and Germany (and, it should be said, Britain) in subordination to the US was reflected in the US’s and Britain’s dealings with the EC and EU.

After the Suez adventure in 1956-57, the US insisted that the UK must join the European Communities (it had not been involved in the 1950-57 negotiations). But ‘Brentry’ was delayed for more than a decade, because of the opposition of French president Charles de Gaulle, who soon after his 1958 accession to power blocked EEC participation in the British-constructed European Free Trade Area, and thereafter vetoed British entry to the EU. His reason for doing so was, perfectly plainly, that Britain as an EU member would serve the specific interests of the US, as opposed to those of the European founders.

In 1968, the French événements brought down de Gaulle - after a delay, and not without the Nato high command refusing him the right to use French troops stationed in Germany to suppress the strikes. The new Gaullist government under Georges Pompidou retracted the veto, and the UK duly joined the Communities. Heath not long after fell (1974) and the Wilson government ran a referendum on EU membership, winning the ‘in’ position (1975).

Changes

But US policy was already shifting, in response to the emergence of visible French, German and Japanese industrial competition with US industry in the 1960s; to US defeat in Vietnam; and to the mass movements of the late 1960s and early 1970s. Nixon’s ‘China turn’ came in 1972; Carter’s ‘human rights’ policy in 1976; and US political intervention funds were shifted from right social democrat politicians and think-tanks to neoliberal ones in the later 1970s, under Carter. The US was moving from ‘containment’ and concessions to ‘rollback’ and free-market ideology.

UK policy in the Communities - renamed as the European Union by the Maastricht treaty in 1993 - has hence been consistently to promote a ‘wide, shallow’ community/union, pushing in the direction of a free-trade zone without regulatory capabilities and hence of a regulatory race to the bottom. The UK has used EC-EU expansion to reduce the ability to agree regulation and - since the fall of the USSR - to make the EU into a lever for the eastwards expansion of Nato.

This is in a sense not a new UK policy. UK ‘free trade’ and gold standard policy in the 19th and early 20th century was a mercantilist policy in the interests of British shipping and finance; in today’s world, ‘free trade’ is in the mercantilist interest of US and British financial capitals, US ‘intellectual property rights’ claims, US-based ‘multinationals’, and London-organised offshore operations. British opposition to political and military unification of Europe goes further back, into the 18th century. The British geopolitical interest here is shared by the US, again with a view to holding potential rivals in subordination.

With the new policy of Gorbachev (1985), the abandonment of eastern Europe (1989) and later Yeltsin (1991), the USSR’s hold on eastern Europe, and then the USSR itself, collapsed. One of the core purposes of the regime of concessions and regulated ‘managed capitalism’ was therefore knocked away. (Steps against this regime had already begun with the ‘human rights’ turn.)

Under Yeltsin (1991-99), Russia could have much of its industry (and agriculture) demolished like any other third-world country, and this was the high period of US triumphalism about the ‘unipolar world’. But the international institutions and the EU persisted and, if anything, deepened. Their function was now no longer to assemble alliances to ‘contain communism’, but they remained - as before - instruments for the subordination of potential rivals to the USA. The Maastricht Treaty (1992), like Gatt II (1994), drove towards legal entrenchment of free-trade liberalism and free movement of capital - a drive which has continued through bilateral trade and investment agreements in spite of the failure of subsequent multilateral trade talks.

The kick-back which is now in full swing began in 1999 with the Seattle protests and the ‘anti-globalisation movement’, and with the replacement of Yeltsin by Putin as Russian president, presaging - though this was not instantly obvious - less liberalism, more nationalist self-assertion.

Putinism

Putin, in turn, assisted the US in holding on to the international institutions, Nato and the EU, as instruments for the subordination of potential rival states; already by the time of the Ukrainian ‘Orange revolution’ of 2004 the ‘Putinite threat’ could be talked up.

It is plain enough, however, that in spite of its military capabilities the Russian republic under Putin is neither a power comparable to the old Warsaw Pact nor a real potential rival to the US as a world hegemon.

Sending the Kuznetsov,Russia’s only full-scale aircraft carrier, to the eastern Mediterranean in support of operations in Syria in October 2016 if anything served to emphasise the military point: the US has 10 nuclear carriers in service. Further, a large part of the old Soviet industrial base was destroyed under Yeltsin, and the ‘reform period’ also largely destroyed the captive market in eastern Europe and in some third-world countries for Russian-built military equipment, which supported Russian military production.

The Russian economy has been to a considerable extent, though not (yet) completely, reshaped as a primary-products (oil, etc), extractive economy in the ‘third world’ class. In this way, Russia is moving in the opposite direction to China.

Nor, in spite of a certain nostalgia among ex-communists and a certain admiration from rightist nationalists, does Putin’s Russia have anything like the degree of ideological purchase outside its own borders that the old ‘Soviet bloc’ had.

The US’s ‘proxy war’ endeavours on Russia’s borders (Russia-Georgia war in 2008, ‘Maidan’ coup and subsequent operations in Ukraine since 2014) have demonstrated that the Russian republic still has substantial military capability and can confidently handle US proxies in its own borderlands. This implies that an attempt actually to wage aggressive war against Russia (otherwise than by nuclear weapons) would still face the logistical obstacles which, in the end, defeated Napoleon and Hitler.

But, at the same time, the weakness of the Russian economy implies that the logistical problems would also work the other way round. So there is not a real threat of Russian invasion of western Europe - in spite of the talk coming from military sources in search of better budgets about how UK, or Nato, forces are too small and would be rapidly overrun by the Russians.5

It is true that US planners aspire to Halford Mackinder’s ‘Who controls the heartland controls the world-island (Eurasia); who controls the world-island controls the world’; and, therefore, that they aspire both to exclude Russia from direct access to the sea (and especially to the Black Sea) and to further break the country up. But that aspiration is not completely urgent; and talk of a present ‘Russian threat’ has really been about controlling France and Germany.

Euro zone

The old Soviet threat died, then, in the early 1990s, and with it the foundations of the European Christian Democrat and Social Democrat regulatory projects. For the US, a potential threat remained: that of European political and military unification creating a potential imperialist rival to America. The question posed was whether French and/or German capitals and states could lead Europe towards this sort of unification. As it turned out, the answer is no.

The route to failure is via the project of European monetary unification without political and tax unification. The US’s turn to floating currencies with the abandonment of Bretton Woods in 1971-73 posed for the EC countries, tied together by a customs union, increasing difficulties in managing exchange rates. The problem for the Germans was that the Bundesbank’s long established hard-currency policy began in the 1980s to press hard on the competitiveness of German exports - and German industry, with a high-tech engineering core, was and is heavily export-oriented.

The German regime has since that time continued to endeavour to press down on workers’ wages and conditions, to mitigate the hard-currency effects; but there are limits to the extent that this can work. The European Monetary System, created in 1979, was a local European version of Bretton Woods; it fell into crisis in the early 1990s (and the British withdrew). Full political unification was blocked by the British veto, and came off the table with ‘enlargement’ from the 1990s.

The 1990s saw prolonged preparation ending with the creation of the euro as a common currency for the majority of EU members - as a ‘currency of account’ in 1999 and as circulating cash in 2002. The idea was that a common currency, with an independent central bank and treaties controlling budget deficits, could be workable without a political and taxation union.

With the financial crash of 2008, this project came unstuck. It turned out that without a common tax policy and redistributive operations, when banks failed, it fell not to the euro zone as a whole, but to the individual states, to bail out the banks. Now, predictably, the crisis of bank creditworthiness turned into a crisis of state creditworthiness, and we began to hear about the ‘PIGS’ (Portugal, Ireland, Greece, Spain) as weaker brethren.

To construct Europe as a potential power capable of acting independently of the US now required of the European, and particularly of the German, leaders that they go immediately for full political and tax unification (with, without or against any dissenters, including the Brits).

But this was too risky a decision for the European leaders. No doubt, this was partly a result of the decisions which had already been taken to ‘enlarge’ and in doing so to create EU institutions which could very easily be paralysed; but it is also pretty clear that neither the German political leadership nor German state actors and the Bundesbank, nor German capital as such, were prepared for the gamble.

Sometimes in traffic a driver sees an accident beginning to happen, and the only chance to avoid it is not to brake, but to swerve and accelerate out of trouble. The German leadership, faced with such a situation, braked - and their car slid into the back of the stopped vehicle ahead.

By making themselves and their European institutions into the open oppressors of the masses in the southern European and other debtor countries for the benefit of creditor interests, the German leadership wrecked any political chance of their being able to lead further European unification. This is now, unexpected events apart, off the table. The European Union, whose euro currency and institutions have produced the ludicrous-if-it-wasn’t-tragic Greek debacle, cannot hope to claim political authority for any strengthened European institutions. If anything, Brexit is likely to be the harbinger of further unravelling of the EU project as such.

This is not my (speculative) judgment only. It is that of the more intelligent wing of the Brexiteers, represented in commentary in The DailyTelegraph and elsewhere: that Europe’s failure in the euro zone crisis inevitably signals the unravelling of the whole project, so that the Brits both are right to get out before the coming collapse, and can be safe in doing so, because the EU’s paralysis in face of the euro zone crisis means that it will be equally paralysed in dealing with Brexit.

But then, if there is no chance of Germany and France creating an effective European political and military unity, that has fundamental implications for US geopolitics. The first pillar of the foundations of the north Atlantic geopolitical architecture fell with the collapse of the Soviet Union. The second pillar - the need to block a form of European unification which would potentially create a rival to the US, by tying France and Germany to the smaller states and controlling the EC-EU through British membership - has now fallen, at least for the immediate future.

‘Trumpist realism’

This analysis is not Trump’s. But it would support a sort of ‘realist’ version of ‘Trumpism’, or a reason to back Trump, even if his policy potentially shatters the post-1948 architecture of the international system.

Russia is now out of the picture as a ‘real’ enemy, for the reasons already given, though it could serve and has served as a paper tiger to shoot at, as long as the US wished to hang on to the existing EU and Nato arrangements.

Controlling Germany and France was a fundamental object of the EU arrangements - and in particular of US insistence on British membership. But, with the euro zone crisis, the EU, and Germany and France as its leaders, have knocked themselves out of the running for potential rivalry with the US for at least the next 20 years; if anything, the trend will now be towards disintegration and in the end towards a European war. Since the Europeans have counted themselves out for the moment, US attention to controlling France and Germany can wait until they have got themselves out of the hole they have dug for themselves with the euro fiasco.

China, on the other hand, has experienced rapid economic growth, a sharp development of proto-imperialist overseas investments and significant expansion of both its mercantile and its military naval capabilities.6 It is probably not actually capable of replacing the US as world hegemon, just as Germany was not actually capable of replacing the UK as world hegemon. But in the near future China probably will be capable of mounting a challenge to the US comparable to the German challenge to the UK in the 20th century.

The Obama administration already spoke - through Hillary Clinton in 2011 - of the need for a “pivot to Asia”.7 Perhaps all that a Trumpist orientation does is to get rid of European distractions from this policy ...

It may therefore be considered that it is not in the interests of the US to get further embroiled with US troops, etc, in eastern Europe. Nor is it in the interests of the US that the EU should continue. Rather, the moment may be considered to have arrived at which the US should let Europe go hang itself, make whatever deals with Putin are necessary and focus on containing the ‘Chinese threat’.

As I said at the outset, this is a speculative analysis. It asks: what might be the reasons for the US actually to pursue a version of a Trumpist policy? The point is to establish that there might indeed be good, ‘realist’ reasons for the US to travel down this path. If that is indeed what is happening, we are in for seriously interesting times ahead.

mike.macnair@weeklyworker.co.uk

Notes

1. Eg, Japan Times editorial January 2 2017.

2. Eg, ‘Cities offer a glimpse of China’s economic future; Beijing’s options are narrowing and it faces stagnation or crisis unless it reforms’ Financial Times January 3 2017.

3. www.policyforum.net/japans-national-interest (January 6 2017).

4. See, in particular, C Jaffrelot, ‘Narendra Modi between Hindutva and subnationalism’ India Review No15, pp196-217 (2016).

5. Eg, ‘How Putin’s Russia could overrun the Baltic states in three days: US war planners say Nato has been caught napping and would be hopelessly outgunned’ Daily Mail February 4 2016.

6. See, for example, ‘How China rules the waves’ Financial Times January 12 2017.

7. ‘Engaged America is vital to Asia’s future’ Foreign Policy November 2011:

8. http://iipdigital.usembassy.gov/st/english/article/2011/10/20111011161233su0.8861287.html#axzz30Ph1DmRw.