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Trump Didn't Destroy the Working Class

May 15, 2018


PORTLAW, IRELAND - Why was Donald Trump elected? What kind of accident was this?

The liberal intelligentsia has been trying to come up with an answer - not just any answer, but one that accomplishes two very important purposes.

It must point the finger of blame at someone else... not itself. And the answer must help put its fat butt back in the driver's seat.

Cometh the Brandeis professor, Robert Kuttner to the rescue! What can he blame for The Donald's rise? Capitalism! The New Yorker summarizes in a recent review:

  • Today, as in the nineteen-thirties, strongmen are ascendant worldwide, purging civil servants, subverting the judiciary, and bullying the press. In a sweeping, angry new book, Can Democracy Survive Global Capitalism? (Norton), the journalist, editor, and Brandeis professor Robert Kuttner champions [Karl] Polanyi as a neglected prophet. Like Polanyi, he believes that free markets can be crueler than citizens will tolerate, inflicting a distress that he thinks is making us newly vulnerable to the fascist solution.
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It's not exactly a secret — but very few people know of this.

Here's what it's all about.

What do you think? Could this theory have some merit to it?

Read all about it — and let us know.

Balance of Baloney

Today, we rise neither to attack Donald J. Trump nor to defend him. Our purpose here at the Diary is to connect the dots.

The Donald is a man of action... a media star. To his everlasting credit, he is not trying to force his ideas onto the nation.

He's not interested in ideas. And he knows that Americans, in the main, detest them and generally mistrust anyone who thinks about them.

He just follows his instincts... hoping that they will lead him towards more fame and greater fortune.

But that leaves him out of the picture for today.

We're talking about ideas... specifically, the boneheaded ideas of the Democrats, The Donald's most vocal enemies.

We begin by pointing out the elegant balance of baloney that characterizes the modern American political system.

The Donald pretends to be a conservative; but there is nothing conservative about him. The liberals pretend to be "progressive," but their most urgent priority is to take aim at the future... and shoot it dead before it gets too close.

Nobody knows what tomorrow will bring; neither Republicans nor Democrats want to find out.

The liberals want more power and more money for their pet projects, schools, welfare programs, medical care... and, of course, their wars.

Remember, it was then-Secretary of State Hillary Clinton who expanded America's hapless role in the Middle East. We'll let The Huffington Post summarize:

  • Hillary was a staunch defender of the military-industrial-intelligence complex at every turn, helping to spread the Iraq mayhem over a swath of violence that now stretches from Mali to Afghanistan. Two disasters loom largest: Libya and Syria.

The "conservatives" go along with the "liberals'" domestic boondoggles (they don't want to lose elections). Then, when it comes to overseas misadventures, they up the ante.

"America needs a strong military," they say, not realizing that military spending reached "hormegeddon" territory - where each additional dollar makes Americans less safe - long ago.

We coined the word, "hormegeddon" ourselves. We used it as the title for our last book. It's a shame the neologism never caught on. It describes what happens after the law of diminishing returns runs its course: The returns go negative.

Some military spending may be good, even necessary. But too much can get you killed.

Deep State First

Both parties represent, first and foremost, the interests of the Deep State, the loose collection of insiders, chiselers, and hustlers who use the government to get wealth and status for themselves.

And what is the common enemy of both the right and left wings of the Deep State? Corruption? Incompetence? The Devil himself?

No... it's capitalism.

Economist David Ricardo, in his 1817 work On the Principles of Political Economy and Taxation, introduced the term "capitalist" to describe a person who owned wealth-producing assets.

But people had learned, centuries before, that they were better off if they respected private property, honored the commitments they made to one another, and used honest money to keep track of who owed what to whom.

"Capitalism," in other words, is what happens when people are left alone and free to make win-win deals among themselves.

This is not to say there aren't plenty of cheaters in the capitalist world. But they are the exceptions who are constantly weeded out. Most people pay for what they get... and get what they pay for.

Capitalism is not a "system." It can't be improved, reformed, or redesigned.

Like freedom itself, all you can do is take it away - by breaking contracts, stealing property, and counterfeiting money.

Gratuitously Cruel

But the aforementioned Brandeis professor sees it differently. Kuttner rehashes the work of Hungarian intellectual, Karl Polanyi, who fled Hitler in 1933.

Neither Polanyi nor Kuttner seem to have thought much about how capitalism works. They think it can be "gratuitously cruel," for example.

Of course, free people doing win-win deals with each other are bound to make mistakes. And the people doing these deals are bound to try to take advantage of each other when they can get away with it. The result appears chaotic, undisciplined, and unfortunate at times.

But capitalism is only indifferent; never cruel.

The word "cruel" is better applied to the deal breakers and property stealers - Lenin, Hitler, or Mao, for example. Their big ideas - "national socialism"... "from each according to his ability"... the "Great Leap Forward" - sent 100 million to early graves.

How many were killed by capitalists such as Henry Ford, Andrew Carnegie, or Steve Jobs, for example? How many lives were ruined by automobiles and cheap computers?

But Polanyi saw capitalism as a big danger. It caused economic hardship. And when people feel pinched, they get upset and vote for rabble-rousers like Donald Trump. Capitalism, in other words, leads to fascism.

Therefore, more power and money should be handed over to the "liberal" wing of the Deep State... to prevent the rise of fascism!

Knife in the Back

There is a piece of this that is probably correct.

When people think they are being cheated... they will want to try something else. Typically, someone will come along with a "New Deal," or promise to "Make America Great Again," or urge "Workers of the World, Unite!"

But it was not capitalism that cheated America's working class... nor even capitalism in Austria that led to Hitler's rise in the 1930s. Austria had been ruled by coalitions of Marxists, fascists, and social democrats since the end of World War I, with varying degrees of meddling.

And in the U.S., the peak in win-win was probably in the late-19th century.

Since then, the Deep State has grown, with its taxes, regulations, the Fed, its Great Society, and its wars - all of them meant to hobble capitalism and keep the money flowing to the insiders.

As we have seen in these pages, the new, gold-free dollar of 1971 probably did the most damage. It perverted the capitalist system.

"Capitalists" no longer needed real capital; they could get it from the Fed - free money that no one ever earned.

The Deep State no longer needed tax revenues, either; it could borrow trillions without voting for a tax increase.

The rich got richer on all this unearned cash. The working classes got poorer, as their major asset - their time - declined in value.

Why did the masses vote for Trump? The answer is easy: They felt the knife in their backs.

They didn't know who had put it there... but they knew it wasn't Donald J. Trump.

BILL BONNER Founder, Agora Inc

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Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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