There is the view held by some that the America we see today in all its ugliness is one passing phase, a rough patch the world has landed in because the country chose a wrong leader with poor thinking, bad morals and doubtful business acumen. The temptation to attribute the tectonic shifts in US policy to the tantrums of an individual, or indeed to stretch this to see at work a Nixon's “Madman Theory” (broadly, irrationality as strategy), misses the deep fissures in American society, interlocked with rising tensions from globalisation that have been plastered over far too long. It is these fissures that in part led to the rise of Donald Trump as President, a narrow victory in 2016, and after a gap of four years, a thumping win that indicated a clear endorsement of MAGA politics, coupled with nonchalance on questions of his integrity and moral standing. 

Globalisation has many meanings and definitions, but seen from the lens of the last four decades or thereabouts, it evokes notions of a “flat world” to use the imagery of Thomas Friedman’s book with that title, in which he speaks of a conversation in Bangalore where he is told what while a steak can’t be served and haircuts can’t be remote, India can book the window seat at the restaurant and the appointment with a barber of choice, right from a call centre. That is presented as the promise of a globalised world, in which the US-based accountant who loses his job to Indians running the numbers from a remote centre at a fractional cost, will have to just live with it.  

Changing American socio-economic landscape

Interestingly, US Vice President J D Vance brought up the same question last month-end at a tech summit, referring to a 2016 conversation he had in Silicon Valley with the CEO of a multibillion-dollar tech company. Forget loss of income, what will replace the loss of a sense of purpose, loss of dignity, Vance asked, and then quoted the reply he got from the CEO: “Digital, fully immersive gaming!”. Vance said his wife, who was with him at the meeting, remarked, “We have to get the hell out of here. These people are f*** crazy.”

The tariffs war that Trump unleashed on April 03 is America getting out of a global arrangement that it now sees as “crazy”, even if it is the system that America built and ran as it pushed the narrative of globalisation as the then new growth mantra. Holding aloft a ludicrous menu card, Trump has now put out a new set of fancifully calculated numbers that will surely escalate tensions, kill global trade and signal the end of the WTO.  The pain will be global, but its roots lie in the changing socio-economic landscape of America.

The disappearing factories, the recurring cycle of layoffs, the rising consumerist culture fed by an aggressive, even intrusive marketing machine, the erosion of trade unions and voice of workers in general, and the overwhelming power of corporate America have together contributed to a situation that is now being blamed on the ills of globalisation and its companion, the outsourcing boom. Yet, Trumpism won’t or can’t see that globalisation is not disconnected from and indeed is nothing more than an extension of capitalism at work.

This is, after all, a system that goes for the lowest wages and drives the maximisation of profit, even if it be at the cost of the lives of workers; several for example have committed suicide while working at I-Phone assembly plants run for Apple in China at wages and in conditions that would make the work illegal in America. The abuse reported is the tip of the iceberg. Many excesses unknown to the world have thrived. This is in the true spirit of Milton Friedman, who famously wrote on Sep.13,1970: “The social responsibility of a business is to increase its profits”, sparking a shareholder value chase that in the end debased the very idea of capitalism by legitimising a free run of profits for business, sans responsible behaviour.

Capitalism that has lost its way?

Consider the tormenting nature of the churn today: a) corporate America in 2019 formally rejected the Friedman doctrine (as many as 181 top global CEOs at the 2019 Business Roundtable signed a new purpose of the business corporation, rejecting shareholder primacy) b) has been loud (though not effective) in its embrace of DEI principles (Diversity, Equity, Inclusivity) and c) sought to stand up for the planet and people (the “Planet-People-Profits” pretentiousness) but d) equally would stand in favour of driving down labour costs with extractive contracts in distant parts of the globe, which is globalisation and effectively Friedman’s maximisation of profits at work. Friedman was killed, it seemed, but Friedman is thriving!

Now, the mash up is complete when Trump asks businesses to a) reject DEI, b) dump sustainability and c) celebrate profits while he prepares to sharply lower taxes but d) work to make America great, which is a mission very different from the unidirectional focus on Friedmanite profits. This is a kind of caricaturised-Friedman, neither here nor there. Its ideas get truncated at the border, State power is centralised and coercive even as the State is being effectively disbanded, and discordant voices are silenced. Those silenced include businesses who have readily (and probably happily) succumbed to throwing out DEI. Also silenced are student voices and other political forces in the US today who find it difficult to stand up, a top-down government-led control abhorrent to Friedmanite thought. Some of these tears point to structural inconsistencies in a system ripe for a collapse, waiting for the right conditions.  This is what is playing out in some ways in the world’s largest economy today. An argument can be made that capitalism has lost its way and is under severe strain in the land that champions it the most, and Trump’s wild moves are the big battle to save it from collapse, whatever be the cost.

Sans principles not even claimed let alone lived (some will say it was always this way), what we have is less policy and more bullying in the hope that the bully will win.  Even if America has its way, which is not inevitable, there is little doubt that the losses added up on the American balance sheet far outweigh its proclaimed positives, presented for long as values of democracy, openness, fair trade, human rights and the like.  Forget the 1941 ‘Four Freedoms’ speech of Franklin D. Roosevelt, in which he proposed four fundamental freedoms that people "everywhere in the world" ought to enjoy: freedom of speech and expression, freedom of worship, freedom from want, freedom from fear. Some 85 years down the line, America would come poorly on all four.

An emperor without clothes

All such talk of values get struck off the chart and in effect America stands naked, the emperor without clothes who can do no more than mouth a line or two from one of its Hollywood Westerns: “You'd be surprised the things you can solve with a gun!”, signifying violence, power, the brutality of every fight for personal gain. This is not the new world order that was envisaged when the WTO was formed, or indeed when the series of multilateral institutions took shape in the aftermath of the chaos of the World Wars, or indeed the world in which countries like India agreed to go with frameworks like the new intellectual property rights regime so that we moved from process to product patents in the pharma sector.

Ashwani Mahajan of the Swadeshi Jagran Manch, the RSS’s economic wing, is right in pointing out that there is a total disregard for WTO, and with it gone, India should be free of TRIPS, or Trade-Related Aspects of Intellectual Property Rights agreement, which is a child of the WTO. According to Mahajan, TRIPS had cost India heavily in terms of outgo of royalty; the nation has moved from negligible amount of royalty to over USD 17 billion dollars. The overriding of WTO by the US lends credence to the view of many in the developing world that these complex arrangements couched in principles were always meant to protect the interests of the US and its profiteering businesses. 

However, it will not be easy to walk out, given that India has too much at stake in maintaining and building a relationship with the US. The country can do that without being enamoured of the US or being intimidated by it.

(The writer is a journalist and faculty member at SPJIMR, Mumbai. Views expressed are personal. By special arrangement with The Billion Press)