Creative (or just) Destruction? (II/IV)

This is the second post in a four-part series. I’ve been thinking about all the dislocation the Trump administration has wrought, what it means, and what will follow it. Today’s installment is about that dislocation.

Sometimes the world seems to change on a dime. You can look at an event, almost always after the fact, and say, “yup, that’s where everything changed.” Take the assassination of Austrian Archduke Franz Ferdinand in 1914. New technologies were already revolutionizing travel and the spread of information. Global trade was booming. The shifting alliance system of Europe, developed after the shock of Napoleon’s reign in the early nineteenth century, had generally kept the peace in Europe and even among the many world-wide colonies for a century. That assassination triggered World War I, destroyed several empires, began the deconstruction of colonialism, undid international trade, and set the table for a far more destructive and disruptive sequel, World War II.

It didn’t happen all at once. There was a month of build-up after the assassination, and of course several years of war and decades of tumult, but it all tied directly back to the gunshot at the carriage in Sarajevo.

Many might suspect the terrorist attack on 9/11 was another such event. It’s too early to tell, but did the world change that day, or in the twenty-some years since? The US got involved in foreign wars: some justified, some not. People all over the world had to adjust to tightened security at airports. Islam received greater attention concerning its relationship with modernity. Oh, it was traumatic, especially to those who suffered a loss or were in the targeted cities. But the world remained remarkably similar. And it was that world which is now fundamentally changing.

Other times the entire world changes fundamentally but slowly. China retreated inward and disappeared from the world over a few centuries at the end of the first millennium. The United Kingdom took forty years or so to understand, address, and finally solve “the German Question.” Which only opened the door to “the Soviet Problem” the US had to understand, address, and finally solve after forty-five years. We appear to be in one of the those cycles of history, where things are changing fundamentally, but slowly.

The changes in the international situation can be neatly summed up: we have returned to a multi-polar world. For a period between 1989 (the collapse of the Soviet Union) and perhaps 2008 (the Great Recession), the US was the sole remaining superpower. It could throw its unchallenged weight around financially, militarily, morally and politically. However, throughout that period, China and the European Union (EU) were growing more economically resilient and resistant to US leadership. For the EU, it was arguing at the margins of the international free-trade order which had benefited both the EU and the US. For China, it was using that order to undermine the US and the order itself. Western leaders believed if they invited China to play by the rules, the benefits of global free trade would liberalize the Communist regime. The Chinese believed they could rig the game, make the West dependent on them, and emerge as a global power. Guess who was right?

Meanwhile, the US military edge dulled and atrophied. Our military remains dominant, but too small and perhaps too centered on legacy capabilities for modern warfare. It is a potent force, but brittle, and not resourced for longer engagements, which is a disastrous weakness when confronting powers that are. I’ll spare you the details on military capabilities, but if you even look at modern combat in Ukraine, you see radically different capabilities. Our military can master these new requirements, but will they be prepared?

Not to mention the erosion of American will. America’s willpower was always the secret weapon of American success. We may not win at first, but we persevere and win in the end, whether its battle, business, or sports. We won early in Afghanistan, but couldn’t stay the course long enough to accomplish our enlarged goals of creating a liberal democracy in the Hindu Kush. Mind you, that was a terrible case of mission creep, but it’s not like we didn’t know how (see Germany, Korea, Japan, etc) or have the resources. And it’s not that the cost in lives was too high: in the years before President Trump negotiated our withdrawal, and President Biden comically and criminally executed it, we lost more soldiers in training accidents annually than in Afghanistan! It took almost fifty years for South Korea to become a developed democracy. We simply lost the ability to persevere.

On the home front, the economic deals we made furthering free trade undermined the American dream for millions of the factory-working middle class. Our political parties took turns reducing taxes and increasing benefits, leading to sky-rocketing deficits and national debt. Any attempt to rein in spending met with dire predictions of poverty for the most vulnerable, or economic ruin for the most productive. Social Security is now drawing down its reserves (the ill-fated “lock box”), meaning we’re paying today dollars to redeem those bonds, and interest on the national debt will soon be the biggest single line item in the federal budget.

The administrative state has gone completely out of control. In the early 1990s, the code of federal regulations contained around 60,000 pages. Today it’s close to 200,000. Even small changes in federal policies or practices run into mind-numbing requirements, such that an administration can easily add to them, but it is almost powerless to remove them. Even Progressives have come to realize that America is drowning in a mass of procedural red tape that prohibits or delays everything from tiny houses to bridges to business start-ups. And we did this entirely to ourselves.

Speaking of self-sabotage, is there anybody who still doesn’t realize our educational system is expensive, inefficient, and produces poor results? While this was largely an academic (sorry for the pun) argument in the past, the pandemic laid it bare: Unions arguing for no school, school systems wasting billions while not recovering lost learning, absenteeism at record rates. Not to mention universities producing “graduates” who can’t write a single coherent page.

At the same time, technology is racing along, changing at a fairly rapid pace. Artificial Intelligence may change everything . . . or it may not. But it will change many things, and only those countries, businesses, and people who are prepared will prosper (thus has it always been). Does the United States I have described sound like a country that is prepared to exploit the change?

Fixing any one of these (trade, military force, federal spending, education, or new technology) would be a herculean undertaking. All at once? Improbable, but that is where we are. What it calls for is drastic, fundamental change in our approach to the challenges. Practically starting over. Look at global trade, for example. Who wants to overturn the system? Nobody. It’s been good for the EU, China, developing nations, the Davos crowd, the World Bank and International Monetary Fund (IMF), even for some in the United States. But it’s not working the way we want, which means we either have to live with it, or force it to change. That is not done lightly or easily, as Trump’s tariff wars demonstrate.

There’s the one name I haven’t mentioned previously: Trump. Fans and ‘phobes both focus on him (he loves it, by the way), but he’s a symptom of the change, not its cause, and probably not its solution. One thing Mr. Trump has always been very good at is identifying problems, and he called out many of these before he ran for office the first time. I often see social media posts lamenting, “how could the working class fall for this rich phony?” I usually respond the same way: because he was the only one correctly identifying the problems the working class was experiencing. Will he fix them? I have my doubts, but the voters who support him know there is a better chance at fixing the problems when you know what they are, then if you don’t have a clue. Which was the case of the alternatives.

The case for fundamental change is pretty clear. The alternative is to avoid the pain and continue down the path to national insolvency and international irrelevance. But there are few easy fixes, and even when there are some, a few sacred oxen–conservative and progressive– will need to be gored. I am not saying the dislocation the Trump administration is causing is necessarily the right way; rather, you shouldn’t object to it simply because it is dislocation (or because it is Trump’s). We are all going to have to get used to some discomfort (ideological or economic) on the way to recovery.

Part III will talk about that path forward.