TRUMP THE SEquel, STIGLITZ & sTARMER

Nobody knows what awaits us as we brace for another Trump Presidency.  Probably not even Trump.   His “drill, baby, drill”, if heeded, threatens the future of the planet.  Imposition of damaging tariffs is probable.  Against China in 2018, he imposed $200 billion’s worth of tariffs creating a full-blooded trade-war. Such a trade war bodes ill for the UK, Canada and Mexico.  
 
Both the immediate and more distant future are deeply worrying.  One possible palliative for jangling nerves is People, Power and Profits: Progressive Capitalism For An Age of Discontents, Penguin, 2019, by Joseph Stiglitz. 
 
Why bother to review a five-year old book by an American economist?  Stiglitz is much published, renowned and reviewed.  The clue is in the publication date.  He was writing in reaction to the first Trump Presidency when policies were emerging from the chaos. He has a lot to say of relevance to Britain’s future. 
 
John Maynard Keynes, 1886-1946, believed investment, government spending and consumption raised output of goods and services, demand-side economics for short.  A ‘New Keynesian’, Stiglitz diagnoses imperfect competition and a variety of market failures that require stabilisation by government’s deployment of fiscal policy, as well as nuts-and-bolts interventions, to increase growth.  Think of Rachel Reeves’ budget which raised government spending by increasing borrowing and new taxes. 
   
Stiglitz served as Chairman of President Clinton’s Council of Economic Advisers from 1995-1997 and, for the following three years, as Chief Economist of the World Bank where he became senior Vice-President.  Awarded the Nobel Prize for economic sciences in 2001, he became an honorary member of the Pontifical Academy for Social Sciences from 2003-2023.  He is obviously comfortable in the world of Laudato Si, 2015, and Fratelli Tutti, 2020, embodying Pope Francis’ thinking on the environmental crisis and society.  As the title hints, he would be no less comfortable in a European social democrat government though MAGA-minded Americans would consider him a rampant leftist socialist. 
 
There is nothing narrowly economistic in Stiglitz’s thinking.  He writes about Trump’s contemporary attacks on the US economy and political system but also links them to wider themes of society and science. “There are two pillars to the increases in our standards of living over the past 250 years: better understanding of how to organize society (checks and balances, rule of law), and better understanding of nature – the advances in science and technology.  We’ve seen how Trump and his team have tried to undermine both”.  Trump today is now more aware of the constraints on him restructuring society and economy to serve the wealthy 1% of the US population, which has more than 40% of the US’ wealth, and to which he belongs. 
   
Stiglitz repeatedly underlines the importance of research and innovation as the wells-springs of economic success; “That is why it is essential for there to be large public investments in research, especially basic research, and in the kind of education system that can support the advance of knowledge”.  But is there enough weight and funding given to this by Starmer in his quest for growth long-term? 
 
Much of what Stiglitz writes about trade, globalisation, inequality and social justice today’s Labour Party would sign up to, even if initially facing tight, inherited financial constraints.  These limitations show up most acutely in the difference between Jo Biden’s massive financial commitment demonstrated in the August 2022 Inflation Reduction Act to counter climate change, some hundreds of billions of dollars on clean energy, electric vehicles and carbon capture. 
 
During his first term, President Trump was working to sideline scientific and environmental experts while promoting industry executives and lobbyists, who were eroding the capacity of the Environmental Protection Agency (EPA), the Department of Interior and other government agencies intended to serve the common good.  He was unpicking some 125 environmental rules as Stiglitz went to press. 
 
National debt and global warming are rightly considered as matters of intergenerational justice.  Stiglitz served as an expert witness for the plaintiffs in a 2021 Supreme Court case on the admissibility of a lawsuit, Juliana versus the United States of America, first filed in Oregon in 2015 seeking an injunction to phase out fossil fuels.  It involved 21 children aged between 8-18 and a non-profit (NGO) Our Children’s Trust specialising in what is known as Atmospheric Trust Litigation, based on the idea of the atmosphere being held in trust for future generations.   Kelsey Cascadia Rose Juliana, who gave her surname to the case, was 15 at the time.  Litigation on it is still in play and such cases have been brought to court, or attempts made to get cases heard, for a quarter of a century.  Here, Friends of the Earth in UK have spearheaded climate change related lawsuits with varied success. 
 
Where Stiglitz is vehement and Starmer subdued is on the significance of the global 2008 banking crisis and the failures of the financial services sector which Stiglitz sees as serving mainly themselves.  The reckless greed of the bankers went unpunished in the UK and money that might have gone to public services went to bail-out those with the incredible gall of very rich who continued to award themselves with bumper bonuses.  Part of the investment crisis faced by the UK government clearly comes from the perverse asocial, amoral, modus operandi of the banking sector.  The problem is the market power of the bankers and the information technology giants.   We need both, but regulated, as both, in practice are indifferent to our spectacular levels of inequality. 
 
The USA has the advantage of a written constitution which embodies a set of values.  People, Power and Profits holds together with this scaffolding of values, the social and moral norms sustaining the human need for social cohesion and approval of The Theory of Moral Sentiments which Adam Smith published in 1759.  We too need to hear and understand how core values inform our economy and democracy, social and intergenerational justice, equality of opportunity.  We too need more reason, less emotion, and tolerance for those who have suffered persecution, in determining the path to a fair society.  And the Labour government needs to present its policies more coherently as the outcome of its values. Yes, it’s still ‘the vision thing’.  Stiglitz decries the way the American dream is more myth than reality.  Labour Party dreaming seems to stop short at growth and grim pragmatism. 
 
We are lucky that our mistakes, cutting ourselves off from the European Customs Union and Common Market, isolating ourselves as a pretentious offshore island at a time of global perils, Prime Ministers who made us the laughingstock of the world, cannot compare with those of America.  Despite our reduced means we do have a vision of what needs to be done about climate change. If Trump indeed dismantles all of Biden’s good work on green energy, I don’t think it would be unreasonable to describe it as a crime against humanity.    
 
When considering the forthcoming Trump Presidency we may come to hear Karl Marx’s adage “first time as tragedy, second time as farce” as words of hope.   Meanwhile it’s good to know there are people like Stiglitz still around, smart, secular, surviving and offering a way forward. 
 
  
See TheArticle 11/12/2024