Mark Blyth on Global Trumpism

In the article Discussion between Mark Blyth and Wendy Schiller on Nov. 9, 2016 I transcribed quite a bit of Mark Blyth’s discussion of Trump’s recent electoral victory. In the video linked below, Blyth holds forth on similar themes, but 1.5 months before the election. Again, I’ve transcribed what I consider to be very nicely phrased and salient points from the 1.5-hour video below.

Global Trumpism by Mark Blyth on September 29, 2016 (Watson Institute/YouTube)

When discussing how to reason about the world economy, he showed a slide that he’d cadged from an IBM for Entrepreneurs presentation. The text from the screen capture (Imgur) is shown below.

The Digital Disruption Has Already Happened

• World’s largest taxi company owns no taxis (Uber)
• Largest accommodation-provider owns no real estate (Airbnb)
• Largest telecom companies own no telco infrastructure (Skype, WeChat)
• World’s most valuable retailer has no inventory (Alibaba)
• Most popular media-owner owns no content (Facebook)
• Fastest-growing banks have no actual money (SocietyOne)
• World’s largest movie house owns no cinemas (Netflix)
• Largest software vendors don’t write the apps (Apple & Google)

Next, he discussed the main thesis behind the global “Trumpets”, as he calls them. The motivation he outlines is so strong that, once you see it from his viewpoint, it’s hard to imagine that anything will happen but that Trump be elected and that the Front Nationale sweep the French elections next month.

“Now here’s the problem. If you look at France, you look at Spain and you look at Italy—most of Italy, at least—they can’t play that game. Now, they’re not big export countries. They’re large consumption countries. Now, if they had their own money—if somebody’s running a surplus, then someone else logically has to be running a deficit—if they had their own money, then they could do essentially devalue or whatever—you can do lots of things to protect yourself—but they all have the same currency.

“And they’ve also signed a set of agreements in 2012 called the Fiscal Compact, which basically bans fiscal policy in the Euro Zone. […] If you don’t allow them to run a deficit, the only thing they can do is permanently contract their economy. So you’re asking basically the Spanish, the French and the Italians to run permanent austerity budgets so that the Germans, the Poles and the Romanians can make money hand-over-fist selling to the Americans and the Chinese. Do you think that’s going to piss off the National Front?”

The global economy has taken a lot of knocks, about every decade or so for the last 40 years. People aren’t buying this new feudalism anymore because it’s now so transparently bad for most of them. The marketing machine is crumbling, screaming desperately to ignore the man behind the curtain.

“Maybe we’re at the point now that the thing that we’ve built is unraveling. Not just in terms of the collapse of the center-left or center-right party support. But basically because it’s economically unsustainable to run this super-competitive, insanely intense, disaggregated global network of production on a consumption base that’s levered up the wazoo because people have been borrowing to make up for the real-income gains they don’t have. And that’s hit the skids because we don’t know what to do.”

When asked what his platform would be as a hypothetical Senatorial candidate from Rhode Island—“from that power base!”—Mark responded:

“First one: everyone pays their taxes. No exceptions. I’ll even consider lowering rates if it’ll increase the take. […] Back in the 70s, corporates paid 20% of total taxes; today, they pay 2% in real terms. It’s abroad, it’s hidden, it’s transfer-priced, it’s a double-Irish-Dutch-sandwich, it’s all this stuff. Nonsense. Enough. Basta. We’re done with it.

“Number two: we really need to think about whether we need people to work. Because if you’re about to add robots into the mix of already-high inequality and low pay, you’re asking for trouble. It’s a bit like nationalizing healthcare. At the end of the day, everybody saves money because everybody isn’t showing up to the emergency room. […]

“Number three: we really need to be serious about doing something to abate the effects of global warming. From now on, anybody who says it’s a hoax by the Chin thing as global warming, you put them in a bag, you tie it off, you take a stick and you beat them.

“And then, if you raise tax revenues and increase infrastructure spending, which would actually abate global warming, it would mean that Boston Harbor wouldn’t actually rise by five feet, which means that my condo, at the end of its 30-year mortgage, which has been paid off by a Chinese investor, would all come to me and I’d make out like a bandit! So ultimately it’s self-serving.”

Of course, you’d have to constantly change the system to avoid another problem Blyth has mentioned in other talks: The Lukas Criterion (any system will be gamed). But those are pretty great topics to focus on. Good thing we have Mark Blyth to mention them—or we’d never hear about them at all.