By THOMAS PIKETTY*

Trumpist national capitalism likes to flaunt its strength, but in reality it is fragile and in trouble

For those who had doubts, Donald Trump at least has the merit of making things clear: the right exists and speaks loudly. As so often in the past, it takes the form of a mixture of brutal nationalism, social conservatism and unbridled economic liberalism. Trumpism can be described as national liberalism or, more precisely, national capitalism.

Donald Trump's rhetoric on Greenland and Panama shows his attachment to the most aggressive authoritarian and extractive capitalism, which is basically the real and concrete form that economic liberalism has most often taken in history, as Arnaud Orain has just reminded us in Le monde confiscated. Essay on the capitalism of finitude, XVIth-XXIth century.

Let’s be clear: Trumpist national capitalism likes to flaunt its strength, but in reality it is fragile and in trouble. Europe has the means to confront it, as long as it regains confidence in itself, establishes new alliances and calmly analyzes the advantages and limits of this ideological matrix.

Europe is well placed for this: for a long time, it based its development on a similar military-extractive model, for better or for worse. After having taken control of the world's sea routes, raw materials and textile markets by force, the European powers imposed colonial tributes on all recalcitrant countries throughout the 19th century, from Haiti to China and Morocco.

On the eve of 1914, they were engaged in a fierce struggle for control of territories, resources and world capitalism. They even imposed increasingly exorbitant tributes on each other, Prussia on France in 1871, then France on Germany in 1919: 132 billion gold marks, or more than three years of Germany's GDP at the time. As much as the tribute imposed on Haiti in 1825, except that this time Germany had the means to defend itself. The endless escalation led to the collapse of the European system and of European pride.

This is the first weakness of national capitalism: when the powers are inflamed, they end up devouring each other. The second is that the dream of prosperity promised by national capitalism always ends up disappointing popular expectations, because, in reality, it rests on exacerbated social hierarchies and an ever-increasing concentration of wealth.

If the Republican Party has become so nationalistic and virulent toward the outside world, it is primarily because of the failure of Reaganite policies, which were supposed to boost growth but have only slowed it down and led to stagnation of incomes for the majority. Productivity in the United States, measured by GDP per hour worked, was twice as high as in Europe in the mid-1990th century, thanks to the country’s educational leadership. Since the XNUMXs, it has been on a par with that of the most advanced European countries (Germany, France, Sweden, and Denmark), with differences so small that they cannot be distinguished statistically.

Arrogant and neocolonial stance

Impressed by the market capitalizations and the billions of dollars in total, some observers marvel at the economic power of the United States. They forget that these capitalizations are explained by the monopoly power of a few large groups and, more generally, that the astronomical amounts in dollars are largely due to the very high prices imposed on American consumers. It is as if we were analyzing the evolution of wages without taking inflation into account. If we reason in terms of purchasing power parity, the reality is very different: the productivity gap with Europe disappears completely.

This measure also shows that China’s GDP surpassed that of the United States in 2016. It is now more than 30% higher and will reach twice that of the United States by 2035. This has very concrete consequences in terms of its ability to influence and finance investment in the South, especially if the United States continues to maintain its arrogant and neocolonial stance. The truth is that the United States is on the verge of losing control of the world and Trumpist rhetoric will not change anything.

Let us summarize. The strength of national capitalism lies in exalting the will to power and national identity, while at the same time denouncing the illusions of naive discourses about universal harmony and class equality. Its weakness lies in the confrontation between powers, and in disregarding the fact that sustainable prosperity requires educational, social and environmental investments that benefit everyone.

In the face of Trumpism, Europe must first and foremost stand up for itself. No one on the continent, not even the nationalist right, wants to return to the military stance of the past. Instead of devoting its resources to endless escalation – Donald Trump is now demanding military budgets of 5% of GDP – Europe must base its influence on law and justice. With targeted financial sanctions, actually applied to a few thousand leaders, we can make our voice heard more effectively than by piling tanks into barracks.

Above all, Europe must listen to the demands for economic, fiscal and climate justice coming from the South. It must resume social investments and definitively overtake the United States in education and productivity, as it has done in health and life expectancy. After 1945, Europe rebuilt itself thanks to the welfare state and the social democratic revolution.

This program is not complete: on the contrary, it should be considered as the beginning of a model of democratic and ecological socialism that must now be thought of on a global scale.

*Thomas Piketty is director of research at the École des Hautes Études en Sciences Sociales and professor at the Paris School of Economics. Author, among other books, of Capital in the XNUMXst century (Intrinsic). [https://amzn.to/3YAgR1q]

Translation: Fernando Lima das Neves.

Originally published in the newspaper Le Monde.

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