Trump, Tariffs and the arc of History

President Trump Postlaunch Remarks (NHQ202005300037) by NASA HQ PHOTO is licensed under CC-BY-NC-ND 2.0

Availability bias: it’s one of the great errors of the human mind, from selection of romantic partners to the decisions of statesmen on whether to enter major geopolitical wars. We get cross because a Minister says this, or a football manager makes that decision. So it’s refreshing to come across an article that puts the stories flickering across our screens into a broader context. And this(uncredited) opinion piece from the Guardian does exactly that. Weaving threads of tariffs, Supreme Courts, President Trump, China, and economics it finds a historical parallel for all that’s going on-and why it matters.[1]

The writer asseverates that Mr Trump is trying to restore a lost America of the 1970s when its manufacturing and technological capacities were unchallenged. Now China, which has concentrated on manufacturing, has obtained an edge which increasingly threatens the US global position. And once that happens, the consequences for powers that go down are not nice. The historical parallel is clear: Britain neglected its manufacturing base from the 1870s onwards, relying on financial services and the strength of sterling to maintain its dominance. In the end it was displaced by the manufacturing strength of the USA, and the inevitable loss of reserve currency status was the final nail in the coffin of British Power.[2]

Unlike many, we do not question Mr Trump’s intelligence, nor patriotism by his own lights at least. But these qualities may not ensure optimal decisions. Nostalgia is a dangerous force. For often the golden ages it longs for were exactly the times when the fatal decisions were made. America chose the path of financialisaton over manufacturing in the 1980s : so to want to go back there is to want to repeat that mistake. Mr Trump has come too late to arrest America’s decline, whatever he decides about tariffs, immigrants or anything else. The basic problem of the United States is a hopelessly skewed balance of money and information between rich and poor, Until that is fixed, the trajectory will continue one way.

[1] The Guardian view on Donald Trump’s tariffs: a nostalgia that misreads a changed world | Editorial | The Guardian

[2] Barnett, Correlli. The Collapse of British Power. New York: William Morrow, 1972. ISBN: 0688000010

#economics #history #USA #china #great britain #reserve currency #financialisation #manufacturing

R+D=GDP A maths lesson the Swiss can teach the world

Sit quietly in any pub or cafe and you will soon learn why the economy is performing so badly. Most of the diagnoses centre round a few simple tropes: wages are too high, holidays too long, taxes are too heavy, hours worked are too short…….Now, we would not dare to cross the opinions of the towering intellects you find in the bar of the Dog and Duck (it’s physically unsafe anyway ) But we dare to offer an alternative explanation for why economic growth works so well for some countries, just for your consideration, gentle readers. And the answer is: the amount that each country spends on Research and Development,

Let’s take Switzerland as our shiny example. It’s a tiny country constituting only 0.1% of the world’s population. But its R and D spend (3.4% of GDP) puts at 6th place in the global ranking of R&D. The result is a highly diverse export orientated economy, a well embedded public-private sector ecosystem of research institutes, universities schools and so on. All of which puts it almost at the top of the GDP per head league. . There are local advantages: it has strong stable institutions, membership of the EU single market and a low defence spend. Other countries share all or some of these advantages to a greater or lesser extent. We could argue for paragraphs about the pull and tug of these various factors. But we think one lesson is unavoidable, writ both large and small

Writ large, technology is the true game changer for economies. The advent of steam power in the industrial revolution utterly transformed both the out put and wealth of the nations which adopted it. However many hours humans and their animals laboured, they could never match the colossal output capabilities of powered engines. And technology only grows from a huge ecosystem of more general research and scholarship. Current debates aside, Industrial Revolutions are rare. But they can be mimicked by a pipeline of small steady innovations in many fields, which achieve the same things. This is the lesson writ small, which the Swiss have learned par excellence. Tap room philosophers may be excellent at the book keeping needs of their various small enterprises. But they are blind to the bigger lessons: on this matter and many others.

[1]https://www.aboutswitzerland.eda.admin.ch/en/research-and-development

[2]https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1023591/niesr-report.pdf

#R&D #science #technology #universities #investment #GDP growth

Meet the influencers trying to clean up the internet

The invention of the internet has been a mixed blessing. On the one hand, you can instantly discover how many stars a Thai restaurant in Benidorm has earned. On the other, it has unleashed a torrent of unregulated and often misleading information — particularly on subjects like medicine and meteorology, where accuracy can genuinely matter. Now, a gallant group of educated rationalists has taken it upon themselves to counter some of this misinformation, as reported by Nature Briefing.: Science Influences go viral:

To combat the swathes of scientific misinformation circulating on social media platforms such as TikTok, scientists and medical experts are taking strategies straight out of the influencer playbook. Some content creators try to ‘pre-bunk’ misinformation by reaching a broad audience with peer-reviewed evidence on topics such as climate change. Others, such as Doctor Mike, challenge it head-on by fact-checking specific claims, including those by US health secretary Robert F. Kennedy Jr. The task can be difficult for individual creators, who can face personal backlash, but it’s important to meet audiences where they are, says creator Simon Clark. Research has shown that these efforts can help to shift the dial on issues such as vaccine hesitancy.Nature | 10 min read

We’ve often thought that the world of the internet is a bit like those old Victorian towns in the early Industrial Revolution, where their were no regulations about anything. So anyone could belch out anything they liked from their chimneys. And could put almost anything in a tin and call it food. Gradually laws were passed regulating pollution. Other laws imposed strict standards on what could be produced and sold. That was for physical things, of course. Isn’t time we had the same safeguards on all things digital?

#internet #pollution #misinformation #rational #fact check

Recovering Rivers: Yangtse shows the way

Photo by Lucia Barreiros Silva on Pexels.com

The greatest problem in conservation and pollution control is that as soon as someone introduces a new measure, however reasonable, someone else pushes back. Try to control traffic pollution(demonstrably toxic) and all the van drivers get up in arms. Try to restrict smoking, and there’s a huge uproar crying freedom, autonomy and the right to die in peace. Yes, progressive ideas may be rational and based on scientific evidence and of long term benefit. But all too often, they can give people something to lose here, now, in the short term. Everyone really, truly need conservation and pollution projects to succeed quickly, here, now as well. The answer suggests Jonathan Watts of the Guardian, is lying on the banks of the Yangtse river in China and its called Evolutionary Game Theory [1]

The Yangtse had got into a pretty sorry state over the 70 or so years up to 2020. Too much fishing, too many dams. too much pollution. An iconic species called the Baiji dolphin (Lipotes vexillifer) was even driven to extinction, a heart-breaking tragedy if ever there was one. Something had to be done. And instead of just imposing bans and top down heavy handedness, the authorities boxed clever Check this out form Jonathan:

[the policy}t was designed according to the principles of evolutionary game theory, to assess how the three main bodies affected – communities, local governments and central government – would behave depending on different applications of punishments and rewards……The government spent about $3bn on compensating and finding alternative employment for about 200,000 fishers, scrapping many of the 100,000 boats involved.

In other words ordinary people were not treated as reckless ignoramuses, but just strugglers like the rest of. They were both brought in and bought in. a lesson many governments and well meaning reformers could do well to learn from. Now the great river, one of the undoubted wonders of the world, is starting to recover. Albeit a little groggily in places. Combine that with China’s CO₂ emissions starting to flatten out, and their huge lurch towards renewable power, and you may get a glimmer of hope indeed.

[1]https://www.theguardian.com/environment/2026/feb/12/china-yangtze-river-recovery-after-fishing-ban

#evolutionary game theory #conservation #ecology #pollution #communities #fishing #angtse

Tariffs are starting to bite-what next?

Photo by Aleksandr Neplokhov on Pexels.com

Despite everything you read, America still counts. So when it makes a move on something as big as tariff reform, as President Trump did almost a year ago, the rest of the world is affected, Big time: and responds accordingly. Veteran readers will recall our coverage of this trope (LSS 19 5 20) and subsequent riffs on the same theme. Our misgivings were pretty clear. But, how is the world really coping with all these tariffs, counter-tariffs and all the other red tape which has appeared in the last year or so?

At first sight: it’s coping: just. In an excellent article for the Conversation Umair Choksy cites reports from both the IMF and the WTO that world trade actually increased last year. But let’s not get carried away, he warns. In the short term companies can adapt, briefly, by dipping into reserve stock or changing supplier(always to a more expensive one) But both for companies and nations, this can only last so long:

But if costs and availability remain in doubt, these temporary fixes stop working. Stock runs out. Emergency suppliers cost more. And when margins are squeezed for long enough, businesses respond by raising prices, freezing hiring, cutting hours, delaying pay rises or shedding jobs altogether.

The long term consequences are admirably summarised by this report from the Word 360 {2] In a nutshell, they are reduced trade volumes, higher inflation and reduced business confidence, which really does chime with the message of our earlier blogs. It’s quite simple really: if tariffs are such a good idea would Scotland do better by imposing them upon England? Or Kansas upon Arkansas? It was David Ricardo who summarised the benefits of free trade when he wrote:

Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the universal good of the whole.” [3]

We have written before on the possible advantages of a World Government. One would be the immediate abolition of all trade tariffs for they would be no longer necessary. The world would function as a single unit, with all the same internal tariff-free advantages currently enjoyed by the nations mentioned above. Time for serious consideration?

[1]https://theconversation.com/tariffs-might-seem-manageable-now-but-theyll-quietly-squeeze-households-later-274594?utm_medium=email&utm_campaign=Latest%20from

[2]https://theword360.com/2025/09/13/the-long-term-effects-of-global-trade-wars/

[3] David Ricardo, On the Principles of Political Economy and Taxation (1817), Chapter 7

#tariffs #wto #IMF #trade #economics #manufacturing #inflation

Everyone hates Keir. Here’s why

As we write. the current troubles of UK Prime Minister Sir Keir Starmer are profound. One of the reasons they are so bad is that, almost before he took office, almost no one has warmed to him: many evince active dislike. Meaning this serious, intelligent man can draw on no reserves of public goodwill in the way that a more raffish character like say Boris Johnson could. Why?

We think part of the answer lies in this article by Larry Elliott. For it charts Britain’s fall from manufacturing powerhouse to fragile services-led house of cards in a few punchy paragraphs, while noting China’s almost inverse trajectory to high tech manufacturing superpower. How so? Elliott compares the policies of two politicians who took power at around the same time in their respective nations: Deng Xiaoping and Margaret Thatcher. While the former did everything he could to foster manufacturing, the latter, a true disciple of unfettered free markets, believed:

…… market forces should determine which businesses thrived. If Britain excelled in financial and business services……… That’s what the country should concentrate its efforts on, while other nations made the ships and the machine tools

Underwritten by the short term unearned bonanza of North Sea Oil, this catechism was applied unchecked. With the results we see today. No British Government will ever again have the resources to satisfy the clamours of its citizens-for hospitals, for thriving high streets and clean water, nor create the booming economy they crave. But, used to abundant wealth and easy answers, these citizens still think like spoiled heirs burning through the last remains of the family patrimony. So any sensible family lawyer like Starmer, who tries to utter the self-earned nature of their plight, will pass unheeded, or worse, actively scorned. Such people will always prefer a story teller to a truth teller. And for a way forward? Restore manufacturing, to which end Elliott has some policy recommendations of course . But his real answer is psychological, not economic.

The bottom line is that to rebuild manufacturing Britain has to see the world through the prism of a developing country not a developed one.

In other words -forget its pride.

[1] How can Britain regain its manufacturing power? Start thinking like a developing country | Larry Elliott | The Guardian

#economics #UK #China #Deng Xiaoping #Margaret Thatcher #manufacturing #politics

Narco Warriors: brilliant new podcast on the war that’s shaped two centuries

Photo by Journal of Studies on Alcohol and Drugs on Pexels.com

We’ve always been pretty much against the illegal drugs trade, if that is still a safe thing to say. For its reach and power give it the heft of many a nation. Its turnover is estimated to be between $300-$600 billion per year. If you throw in all the deaths-from assassinations, associated diseases and economic disruption, then these at 500 000 a year are more than many nations’ mortality statistics. And like any State, it has organised armed soldiers, trained and ready to kill. No wonder so much effort has gone in to controlling the sale and distribution of illegal drugs since the nineteenth century. when the Chinese attempted to control the illegal importation of opium. Narco Warriors, a podcast series from highly experienced journalist Lindsay Charlton is the latest attempt to chronicle the long decades of this deadly and interminable war.

Charlton and his team of researchers have assembled hardened veterans of the war-customs officers, investigators, police officers- as well as those who operate in its shadowy intelligence led nooks and corners. The listener is taken on a vast sweep of lands and seas, of shootings, confrontations, agency turf wars and many earnest intelligent brave people trying to do the best jobs they can for their countries. And we salute them, above all for their endless dedication to the public good: for its clear that people of this calibre could have made a lot more money a lot more safely in many other walks of life. And there we might end it. Except for one thought, which that old Devil has just come round and whispered into our ear.

What is a drug anyway? If you say that cannabis, cocaine and heroin are highly dangerous and addictive substances, then you must say the same for alcohol and nicotine. But these are sold openly on the streets in many western countries. Indeed the attempt by the United States to prohibit alcohol from 1919 to 1933 was one of the most unhappy and unsuccessful enterprises which that country ever undertook . For one thing, it was an object lesson in facilitating the rise of violent organised crime, a historical irony not without relevance to present policy. The real problem is that the appetite for cocaine, heroin and alcohol are all driven by human demand. Gangsters are simply those capitalists who supply the illegitimate part and operate according to the same laws of supply and demand as their peers in legal sectors of the economy. As for that demand -there is strong evidence that it is fuelled by rampant economic inequality and the associated poor housing and social and economic insecurity which that entails. In which case the State’s resources would be better spent on building homes, schools and raising the minimum wage rather than on all those flashy speedboats and burly types in uniforms. But: society made its choices long ago, and who are we to call them wrong? If you want to know the consequences of those choices, told by the people who were there, then listen to the first episode [1] And all the subsequent ones of course!

[1]https://audioboom.com/posts/8855552-narco-terrorism-the-forever-war

#drugs #addiction #narcotrafficers #law enforcement #police #transport #smugglingm #opium wars

Neo Liberalism to National Market Liberalism: is this a Great Global Transformation?

“The nine most terrifying words in the English language are: ‘I’m from the government, and I’m here to help.’”

These words of Ronald Reagan were the best and most concise summary ever of the creed of Neoliberalism, which he shared so avidly with Margaret Thatcher. They called themselves Conservatives: but their belief was utterly radical, dominating all public discourse and transforming the world at least until the Great Crash of 2007-2008.

The radical nature of that transformation is laid out by Branko Milanović in The Great Global Transformation. We have two reviews for you, one via the inestimable Nature Briefing [1] and the other by Ivan Radanović for the equally prestigious London Review of Books [2] As ever we won’t spoil these excellent pieces, humbly begging you to read both. However we could not resist this passage from Radanović’s review. For it highlights the contradiction at the heart of the Reagan led project which would ultimately bring it crashing down:

For Branko Milanović and many others, China is at the centre of the current ideological paradigm shift. China’s rise, enabled by global neoliberalism, also made the end of global neoliberalism inevitable, by growing too big to be integrated into a global order whose rules are written by the US and its allies.

The Chinese saw a blindspot which the complacent westerners had missed: if you build an economy where the private sector is good and the state bad, how do you cope when foreign governments act like private companies? In Britain many utilities privatised by Thatcher are owned by foreign governments: is that Socialism or Capitalism? The shrewd rulers of China simply flipped this conundrum: the State and the Communist Party oversee the activities of a thriving private sector. Is that Socialism or Capitalism? In which case, what do words like “Conservative”, “Liberal” and Neo Liberal” really mean?

Milanović worthily joins a list of critics of the Neoliberal project including Wilkinson and Pickett, Thomas Piketty, and Will Hutton. It is easy to see Neoliberalism’s faults now, but it was very popular once. And before we rejoice its final passing, what follows may be very much darker indeed.

[1]“Nationalism grows on the terrain of never-satiated mass plenty and greed,” writes economist Branko Milanovic in his new book, The Great Global Transformation. Milanovic argues that globalization benefited previously poor populations, notably those in China, and the already rich, but left the middle and lower classes in countries such as the United States behind. The result is “the exponential growth of ‘nationalism, greed and property’”, writes sociologist Roberto Patricio Korzeniewicz in his review. “For Milanovic, greed is the iron cage of our times, and our future is bleak.”

Nature | 7 min read

[2] Branko Milanović – is neoliberalism being replaced by something more capitalist? – LSE Review of Books

The Great Global Transformation: National Market Liberalism in a Multipolar World. Branko Milanović. Allen Lane. 2025.

#politics #economics #Ronald Reagan #free markets #capitalism #socialism #communism

Gold is King #3: How one of our old blogs really has come true!

Long standing readers (surely “long suffering”?-ed) will recall our two blogs Gold is King….(LSS 26 10 24) and ….Did we actually get something right?(LSS 23 4 25).Which severally predicted that a deteriorating security situation in general, and the policies of the Trump Administration in particular, would have two consequences. First that the dollar would start to lose reserve status. And that in the absence of any credible alternative, Gold would become the only reliable safe haven, and that its price had la way to rise. Now help has arrived from someone who really knows what they are talking about, the astute Richard Partington of the Guardian. Have a look at this killer quote from his succinct article The Dollar is losing Credibility: why Central Banks are scrambling for Gold: [1]

Investors – private and sovereign – believe their strategic reserves are no longer safe in dollar terms, as they can be confiscated overnight. The dollar is losing the credibility as the nominal anchor of the global monetary system because the Fed is losing credibility, and US Congress is losing its credibility.

And he explains how and why all the most astute and powerful people in the world can see nothing but gold as the only safe place in which to park their assets in the foreseeable future.

At the risk of blowing our own trumpet,(oh, come on!-ed) and in the sure and secure knowledge that we never offer financial advice, only economic commentary, and that wistful, we wish to adduce the following points:

1 Is LSS possessed of an eeerie mystic prescience? No. Even a stopped clock is right twice a day. But when real professionals like Partington confirm our thoughts, it means the facts are pretty grim indeed.

2 Isn’t this a lot of log rolling by the Guardian, which has a bit of a reputation for being a Lefty at times? No-all commentators are starting to agree, including a pretty astute lot at the Financial Times. And if you believe they are Lefties, then you might as well believe in a Flat Moon and the Abominable Yeti.

3 Is the dollar finished as the world’s reserve currency? Not yet. But its fall from 66% of global reserves to 57% in a single decade suggests all is not as healthy as it once was and that alone gives cause for concern.

4 So why has another currency not replaced the dollar? The experts we consulted think that Europe is too weak for the Euro to be a runner. While China’s yuan is just not convertible, and its political system is so different, that they rule it out altogether

5 What about all these ‘ere funny digital currencies, wotsit? We don’t even go there, we know nothing about them.

6 Is this more Trump-bashing? No. We think Mr Trump has a right to act in what he believes is America’s interests. We merely report the consequences of what happens when everybody acts like that.

7 Does LSS like what’s happening? No. we hate it. A world in which the principle economic activity becomes digging a metal out of the ground and then burying underground again somewhere else is operating far, far below its optimal economic potential. It would do much better with a single reserve currency, peaceful trade and stable international relations based on Law. But some of you will have found our thoughts on that matter elsewhere in our sequence of blogs.

[1]https://www.theguardian.com/business/2026/jan/16/the-dollar-is-losing-credibility-why-central-banks-are-scrambling-for-gold?CMP=Share_iOSApp_Other

#dollar #gold #economics #trade #currencies #international relations

Has Donald Trump just brought a World Government much nearer?

Last year we ran a series exploring the pros and cons of a World Government.(LSS 8 1 25 et seq) The general consensus was that it was a nice idea in theory: but utterly unattainable in practice. And the reason our critics gave was very strong: the incredibly firm attachments of people to their national states, which had served them very well up until now. “Sovereignty-it’s all about sovereignty,” they averred, “the right to make our own laws, and defend our own frontiers.”

The recent actions of Mr Trump in Venezuela have dealt that concept a heavy blow. We are ignorant of Mr Trump’s reasons, and lack the learning to judge the legality or the policy implications of his deeds. We know even less about Mr Maduro and his fitness to govern. But we do know that it is quite easy for a large power to enter the territory of a supposedly sovereign state. To take that state’s leader and to put him on trial for malfeasance in office, as though he were a provincial governor in an empire. And if this can happen to a country the size of Venezuela , it can happen to any nation. We ask: in such circumstances, what use is the concept of sovereignty as a practical guide to human action For all except the three very largest powers, Russia, China and the United States of America.

Citizens of lands with incomplete sovereignty will notice this difference in practice. If a businessman wants a law changed, will he attempt to influence his local government-or save time and address the real centre of power? Will an ambitious lawyer find her career served best in her native province? Or should she change her dress, language and manners to thrive in the Imperial Capital? The same choices will confront many-soldiers, sports professionals, entertainers…..Each choice will weaken attachments to the local, and strengthen the central. It will be slow at first, but the identity and culture of the old nation state will atrophy. At best they will be like the former City States of Italy, Venice and the others, venerable relics of lost dominion. . At worst, quaint tribal lands, endlessly repeating their plays and dances for the amusement of tourists, and selling quaint fabrics and pottery to make ends meet. No doubt ethnic jealousies and wars will flare between them, as they still do in lesser nations in various parts of the world. But these will be essentially tribal, and should suit the dominant Power. For people fighting among themselves can never unite to threaten its overarching force.. But their days of commanding the unconditional loyalties of the brightest, the most hard working, the most ambitious, will be numbered.

We didn’t really believe our World Government theory much ourselves after we wrote it. . But now the number of objections to our theory has suddenly dropped from 193 to 3. Which of that three finally brings it true remains to be seen; but has just become more likely that one of them will.

#united states of america #donald trump #china #russia #venezuela #sovereignty #international relations