In a nutshell

Mark Blyth argues the economic-political justification for Global Trumpism around the world is simple: debts are too high, wages are too low to pay the debt off, and inflation is too low to eat the debt. The Right Trumpist response is to blame immigrants and globalization for pushing wages down and wrecking the labor and product markets. The Left Trumpist response is to blame Capital and globalization.

In “A Brief History of How We Got Here and Why” and “Global Trumpism and the Future of the Global Economy“, Blyth sketches out the historical trajectory of the global economic systems, using a soft hardware/software metaphor to describe the global economic system and the ideologies that are adaptable with them. In order to adapt to the revised hegemonic economic goals of the era, we tend to switch between hardware with deflationary biases (capitalist/creditor’s paradises) and inflationary regimes (labor/debtor’s paradises), and we’re now in an interregnum between the two systems.

The big external twist this time is Climate Change. Outside of his slides & analysis, when asked during Q&A, he figures that Left Trumpism will win and we will eventually reconstruct a more localist/nationalist Bretton Woods-flavored system that is incentivized to take on Climate Change and other serious structural issues for narrowly-defined reasons. China is already taking its population health seriously as it plays economic catch-up with the western world at a breakneck pace, massively polluting itself in clear and visible ways; Europe’s Green parties are also mobilizing and building local experience tailored to their respective nation’s needs. Only America needs to follow suit- these three actors alone can transform roughly three quarters of global consumption.

Blyth’s Predictions

Although it hasn’t been formalized in slides, during the Q&A on his Global Trumpism talk, Blyth makes a few bets that are also very interesting:

Random: I had an odd dream last year that Jon Stewart (of the Daily Show) ran for President in 2024. What is it with comedians in politics all over Europe?

The Failures of the Current Economic System

Neoliberalism solves many of the ‘bugs’ that plagued the Bretton Woods system through the 1970s. In turn, the bugs of the Neoliberal system surfaced catastrophically in 2008. Instead of allowing for another 30 year reset, the political class resuscitated the neoliberal system at great expense. Those issues as we see them now:

(1) Neoliberalism eats labor markets, killing wage growth through a flexible global system

(2) Neoliberalism eats product markets, creating massive price deflation by hyper-competition

(3) Finally, the political cartel that made the post-war regime possible (center left/right parties) are eaten away by scleroticism

The political class broadly found a way to ‘save’ the financial system, at a steep financial (and legitimacy) cost. With limited ability to provide public services (largely due to socializing private bank debt), protect wages (due to the globalization of the labor system), or effectively levy taxes against the plutocrat class, the institutionalist governments flounder, and the system’s bugs continue to contribute to debt, leverage, and inequality problems.

Prior International Economic Systems

The following is a condensation of a few slides of his, basically word-for-word, setting the context of three different systems of “economic hardware” that the global economic orders ran on for the past century.

The Gold Standard Era (1880-1914)

The Bretton Woods Era (1945-1980)

The Neoliberal Era (1980-2008)