We are historically shifting from the attitude this country had in its universities,
in its public statements, in the minds of most of its people. Much of the last half century [was] a
period often called neoliberalism or globalism or globalization. The idea was that the United
States would do best if there were no barriers to trade and capital moving around the world.
We should bring everybody into the global free market. No government interference,
no letting politicians mingle in. The economy will work best for everybody if everybody is free to
wheel and deal, and buy and sell, and invest and borrow as the market dictates. You know,
it's the application of one understanding of Adam Smith to the world today. And so the United States
was the champion of open markets, free trade, no government interference. It pressured the World
Bank and the International monetary fund and other organizations to promote that all over the world.
That period is over. This is a historic end of that period. What we have now is rampant economic
nationalism. The government, far from being told to stay away from the economy, not to mingle,
not to interfere, not to render it inefficient, but to leave it to the free market, all of that's
gone. The government is called upon to enter into [and] to control trade. You can't trade with him,
he can't trade with her, she can't do [that], the tariff on this one, the tariff on that one.
The government is spending huge amount of money subsidizing certain industries because we want to
make the decision for companies where you locate. We're going to bring you here by giving you a
tax-based subsidy. The government is managing everything. The government is literally brought in
because it seems that the American leadership has given up on globalization.
[They’ve] given up on neoliberalism not because millions of people lost their jobs because of it
(which they did), not because it widened the gap between rich and poor (which it
did). That's not their problem. Their problem is that the domination of the world economy by the
United States was undercut by the neo-liberal globalization. Why? Because capitalists around
the world did what capitalists always do. They looked for the best profit situation.
And the capitalists who once found it in the United States, in England, in France,
in Germany, and Italy, in Japan, figured out that they could make more money by
moving their production to China. Which in huge numbers for the last 40 years is what they did.
The Chinese likewise, looking at the situation, welcomed them.
The Chinese decided they would not, over the last 40 years, follow the Soviet Union
and have the entire economic system owned and operated by the government.
Russia had gone quite far. The Chinese made a decision not to go that far. The Chinese Communist
Party leadership made the decision that their best interests would be served by a system that
included a large, private capitalist industrial bloc (the Soviet Union did not allow that)
and a large government-owned and operated bloc within the Chinese economy. And the private
capitalist bloc could be foreigner owned (American, Japanese, British,
Italian…) or chinese-owned. And that's what they've done. They operate a mixed system
under the control of the Communist Party. That's an alternative to the Soviet Union system. It's
also an alternative to the American system.
That alone would be a historic new way to think about economic growth and success,
but more important even than that in our immediate situation was the fact that that Chinese
innovation (what the Chinese call “socialism with Chinese characteristics,” this mixed
system under the control of a Communist Party) grew much faster than the Soviet Union had or
than the United States could. And for decade after decade they made this difference clear. So that by
Mr Trump's presidency the United States, in a kind of peculiar way, woke up and realized
that they needed to change because the system that had been very profitable
(from 1980 to 2010 we had an explosion of profitability, an explosion of our stock market),
we'd done real well but the Chinese grew faster. The Chinese have become the United States's first
serious economic competitor in a century. Wow and this war exposes all of that. It has exposed that
the world is no longer in neo-liberal globalization phase. It has passed into
economic nationalism phase. And the United States isn't dominant the way it was, not even close.