I’d like to focus today on US and global economic growth since 1945 guided by the new economic order of win/win free trade installed by the Bretton Woods conference.
The US economy has grown 11-fold since then in real economic terms. The US economy, which won the war, was just 9% as large as it is today! This is a little less than 3-fold population growth combined with 4-fold per capita production/income growth.
Visually, it is clear that US economic growth has been steady across these 80 years, only interrupted by a few severe recessions.
The US had already doubled its GDP between 1938 and 1945. So, the US economic growth was 22-fold from 1938 to 2025. Other leading countries showed flat total output in the war era.
This chart shows that the US reached its apex as a share of global GDP right after WWII. I think that president Trump mistakenly believes that the US could have maintained its 28% global market share forever. In more realistic terms, the US reached 19% of global GDP in 1913 and properly maintained that share in 2008.
Summary
The post-WW II global institutions drove 11-fold growth for the US and 15-fold growth for the world. The historical benchmark in 3x. The US experienced an extra doubling of its economy from 1938-1945. The mercantilist views of 1880-1920 simply cannot compete with the post-war free trade regime.
I believe that Charles Taylor is correct about the critical role which our background worldview plays in shaping our lives. Our unconscious mind has views of the world and uses them to influence us “all night and all day”. I think that major events and ideas find their way into our paradigms about life, science, religion, philosophy, politics, morality, character, careers, recreation, and communities. Maslow argued that safety and security are at the base of our pyramid of psychological needs. If fear and insecurity is a main feature of modern life, we need to understand why this is so. In a world of educated/acculturated individuals and mass media communications, the abbreviated “history of the world” drills deeply into our minds, shaping its categories, structure and evaluations.
I’ve reviewed dozens of lists about the most important events overall and within various categories of modern (post 1400’s) life. I documented 257 (!) greatest events with Wikipedia references. I’ll use this database to analyze their impact on fear/insecurity today.
The events are roughly equally divided between those which make the world riskier (92), safer (83) or do not have a clear, significant impact (82)
Using 40-year periods to summarize the events, there is no clear trend toward riskier or safer events. From a current perspective, the 1820-1859 period was negative with 7 riskier to 4 safer events. The 1848 revolutions threatened the integrated worldview. Spencerian Social Darwinism, even before Darwin, pointed to “scientific” national, racial and class divides. The “dismal Dane” Kierkegaard defined an existential perspective as an alternative to a confident belief in God. The western powers essentially conquered proud China in the “Opium wars”. Lyell summarized geology as the scientific study of changes in the earth, itself. Marx invoked a Hegelian, materialistic, historical, “scientific” philosophy of class division and revolution required by capitalist ownership of the means of production. Darwin’s “theory of evolution” rocked a world that was deeply invested in a deterministic, structured, certain, law based, deeply unchanging, yet socially, politically and economically changing world, philosophy and religion.
The next 1860-1899 period was also negative with 13 riskier to 9 safer events. Nietzsche’s “God is dead” and William Jennings Bryan’s populist “crucified on a cross of Gold” confronted the progressive spirit of the age. The US Civil War showcased the terrors of modern military technology. Famines, urbanization, agricultural productivity improvements, and religious wars drove millions of young Europeans to leave home for other nations like the USA. Art became abstract and individualistic, disconnected from citizens. New forms of popular music arose from the cultural melting pot of the USA. Nationalism grew. The US became an imperial power. Japan engaged with the West and decided to imitate it. The European powers discovered Africa as a new continent to colonize. These events impacted the nineteenth century and still impact all of us today.
The period from 1980 to today is also more negative, with 15 riskier events to 11 safer events. Populist politicians, including far-right partners and supporters are succeeding. Greater legal and illegal immigration from non-European countries to the US concern many citizens. The economic growth of Asia threatened American factories and workers. The transition from European to local power in South Africa raised concerns. The 9/11 terrorist attacks frightened Westerners. Russia’s invasion of Ukraine threatened the modern military world order. Innovations like “junk bonds” increased the risks in the increasingly integrated global financial system. The Great Recession was triggered by “financial innovations”. Michael Porter’s “competitive advantage” theories caused the most powerful corporations to more ruthlessly pursue success. The Reagan/Thatcher revolution undercut unions as a counterbalance for workers versus owners. ChatGPT passed the “Turing test”, indicating that computers are indistinguishable from men.
By Category
Philosophy/Politics riskier 16, safer 13, neutral 9. The breakdown of the nicely integrated “ancien regime” with certain answers for everything is a major and an ongoing source of insecurity. You either have total belief, or you don’t. Kierkegaard defined the need for a “leap of faith” in the modern world. Fundamentalist Christians redefined a world that maintains the historical certainty.
Society/Religion riskier 14, safer 9, neutral 7. Change is the dominant theme.
International relations riskier 27, safer 7 and neutral 2. WWI, WWII, Cold War dominate.
Business/economics riskier 12, safer 13, neutral 15. Process and efficiency make the world safer, while the unequal distribution of income and wealth drive political conflicts.
Physics/Mathematics riskier 9, safer 7, neutral 8. Scientific rules can be defined numerically. But they change!
Technology riskier 2, safer 12, neutral 15. The world benefits from a series of energy and agricultural revolutions.
Computers/Communications riskier 1, safer 6, neutral 24. Tools are mostly neutral, able to be used for good or bad.
Biology/health riskier 11, safer 16, neutral 2. Medical advances accumulate and promise more in the future. We better understand the concerning true risks of microorganisms, evolution, public health, adaptive threats, pandemics, human changes to genetics, and human impacts on the environment.
Science and technology have a very nice 41 safer to 23 riskier ratio. The social areas unfortunately show a 69 riskier to 42 safer profile. The social sciences, arts, philosophy and religion are not winning the war.
Highest Priorities
Ignoring the 82 neutral events, there are 36 items that are most influential/important within the 92 riskier and 83 safer events.
The 16 most important “riskier” items are not evenly distributed among the 8 categories. 4 philosophical items. Rene Descartes’s radical doubt opened the way to complete skepticism. Karl Marx defined a necessary utopian solution to class conflict. The Russian revolution and Chinese Mao revolution followed. Friedrich Nietzsche explored the logical possibilities of “God is dead”. Fascism was defined as a reasonable form of nationalism. The western cultural revolution of the 1960’s provided a fully secular option where religion and culture do not control the individual. WWI, WWII, the cold war, the atomic bomb, Nazism, and the holocaust. The Great Depression. Darwin’s theory of evolution. The Spanish flu and the 2019 global pandemic. “Things fall apart, the center cannot hold”. These important events point toward a meaningless, self-destructive world.
On the other hand, there are 20 much more positive events in the modern world that surely shape our subconscious thoughts. The progressive era of 1880-1920 created governmental reforms and new non-governmental organizations to meet human needs. The post-WWII set of international institutions thrived for 80 years growing global real dollar GDP 40-fold and preventing WW III. The Cold War ended without a hot war! John Maynard Keynes invented the effective discipline of macroeconomics, allowing nations to roughly control their economies and minimize the damages of the business cycle. Scientists demonstrated that the universe is “regular”. Newton, Pascal and von Neumann defined definite, probabilistic and dynamic laws. Edison made commercial electricity practical. The second and third agricultural revolutions transformed production, society and trade. The internet and Google’s search engine made all information easily accessible. Modern surgery, pharmaceuticals, public health, DNA insights, vaccines and social medical insurance have boosted life expectancies far above 70 years.
Summary
Why do we live in such a fearful, insecure time, despite the 83 big events that make our world permanently safer?
The mass media highlights negative, emotional stories.
Politicians use negative, emotional stories to gain and retain support.
Human nature discounts solved problems and historical events. It focuses on today’s challenges. In a sense, we’re always on a treadmill.
The meritocratic, late capitalist, Schumpeterian “creative destruction” economic system leaves everyone without true financial security.
Individualistic Americans don’t really believe in a safety net or welfare state. Politicians have destroyed rather than upgraded or enhanced the welfare System to deal with the modern challenges.
Religion, a critical source of understanding reality, is losing the war against secularism. It has not found a new structure, motif, concept, killer app, theme, bridge, attraction, rationale, argument, or appeal.
Skepticism is a very powerful worldview. It feeds on the human desire for certainty, authenticity, rationality, explanation, and perfection. It celebrates superior knowledge, history, logic, insights, contrarianism, irony, modernity, and progress.
I think that the misguided belief in scientific certainty in all arenas is also to blame. People misunderstand Newton. He discovered physical laws and mathematics that described the world like no one had done before. Yet, he did not abandon the gods, Christianity or alchemy. He was not a materialist reductionist. He knew better. He recognized Aristotle’s “final causes” as deeply important and accepted that he had no idea how or why gravity functioned.
The “orange one” does not “hold all of the cards”. He is critically threatened by his foreign handlers and the US justice system. He was not elected to promote a trade war. No one expected a trade war. He merely “shadow boxed” during his first term on trade. He has made the “trade war” his first priority because it is a “sure win” politically, in the short-run. He first bluffed exaggerated 50% and 100% tariffs, and the media duly reported these crazy claims that anchor or outline the story. He now claims HUGE victories with 15% tariffs. The self-described GOAT negotiator thereby proves his standing. He claims victory. He uses this temporary bump in support to take over the government.
Citizens need to recognize that this is clearly not a “win” for the country. Import tariffs are simply taxes. They get split between the foreign exporter, the importer and the retail customer. At 15%, the typical payment split is 25%, 25% and 50%. Exporters still want to sell goods and maintain market share. They have fixed costs. They have profits. They can reduce prices in the short-term. Importers still want to sell goods and maintain market share. They can limit price increases in the short-term. Most markets are “sticky”. Brands, supply chains, habits, marketing and convenience matter. Import costs are half to three-quarters of retail prices. The consumer price increase is 5-8%. Some consumers switch to lower priced options, some don’t. The “next best” low price option for an imported good is probably another imported good. The “Trump tariffs” distort markets. They don’t deliver a “victory” for American consumers, producers, labor, finance or government. They merely “gum up the works”.
The “orange one” understands leverage, populism and persuasion. He really doesn’t understand markets, as demonstrated by his dozens of business failures. A 15% import tariff will cause pain for foreign exporters, US importers and consumers. It’s not large enough to cause a domestic firm to invest in expanded capacity. They will use all of their existing capacity and even cut prices a little to win market share. Manufacturing investments require 20-30-40 year timeframes to be viable. They require confidence in government policies on trade, regulations, antitrust, labor, environment, intellectual property, lobbying, property taxes, inventory taxes, corporate income taxes, international taxes, international finance, transportation, supply chains, labor costs, etc. Trump’s policies strongly work against such investments.
US industries don’t import goods to save just 10%. They import goods because the total cost of imports is at least 20% lower and trending in the right direction. Importing always has extra costs for transportation, communications, delays, coordination, property risks, quality control, product development, supplier management, flexibility, tariff risks on both ends, legal risks, capital controls, financial transactions, inventory, obsolescence, etc. There is a “step function” involved here. US firms from 1970-2000 only relinquished their domestic manufacturing because when they completely ignored all fixed costs and only looked at short-term variable costs, they had to outsource production. There will be no overall manufacturing renaissance. There will be some very low labor cost manufacturing that returns to the states. That is, only where labor costs are a small percentage of the total production cost. Hence the “job creation” impact will be tiny, impossible to measure.
So … if they won’t build new factories, what will be the leading responses of domestic importers? They will find ways to import/reroute goods from lowest tariff countries. They will find ways to reclassify goods and avoid tariffs. They will lobby for exemptions. They will import only key components and do “final assembly” locally in highly automated factories. They will hold imported goods in a Free Trade Zone. They will split physical products from services and intellectual property to minimize tariffs. They will lobby for domestic government subsidies. They will offer “service hour models” to customers as in aircraft engines and never sell the physical goods and incur the tariffs.
Will the import tariffs reduce the federal budget deficit? Yes. The US imports 15% of GDP. Tariffs will be applied to about half of the imports. Imports will be reduced and replaced by domestic production, a little. 15% of 5% is about 0.75% of GDP. The federal budget deficit is 6.5% and climbing. This will help a little. Consumers will pay for half of this as in a sales tax.
What are the secondary impacts of the tariffs? Domestic firms will invest management time and money in managing the system instead of developing better goods and services. Lower import competition often leads to higher prices overall. Domestic producers experience higher input costs and attempt to pass them along to consumers. Foreign countries will increase their tariff and non-tariff barriers to US exporters. The US loses its moral advantage as a promoter of “free trade”. The US loses opportunities to reduce trade barriers through global and regional “free trade” agreements. The US loses the opportunity to drive global labor and environmental standards. The US loses the opportunity to expand free trade in services, the industries of the future. The US’s “unfair advantage” as the manager of the US dollar as the global currency will be challenged. The US’s soft power in language, arts, education, language, culture, and global leadership will be questioned. The US’s role as a stalwart ally will be undermined, leading to merely costlier and unreliable transactional relations with former allies. Foreign citizens will choose to not consume US goods and services. The US will have to pay directly for its global military bases. The US will have to pay for allies’ support on the “war on terror”. The US will have to pay for all global initiatives. The US will have to directly control “rogue states”. The indirect costs are HUGE and unappreciated.
Why did the US pursue the post WW II new world order? Ending imperialism and colonies. Forming the United Nations and trying to use it to manage some conflicts. Principles of political self-determination and human rights. Global bodies for better health. Investments in Germany, Italy, Japan and Europe instead of reparations. International Monetary Foundation and World Bank to support developing nations and manage currencies. GATT and WTO to promote lower trade barriers and multilateral deals. NATO and other alliances rather than colonies and protectorates. The win/lose approach of the 1800’s, WWI and WWII had failed. The world was ready to try a win/win approach. The US, with its history of isolationism, exceptionalism and national independence, chose to not pursue “world dominance”. The post- WWII institutions were not perfect, but they demonstrated that they were much better than those that had governed international relations for the prior 500 years.
Again, put everything in perspective. The US imports 15% of GDP. 15% import tariffs on half of goods. Consumers adjust and substitute domestic and lower total price imports. US consumers pay a 1% sales tax on imported goods. US military and influence costs rise by much more than 1% of GDP. Consumers pay higher prices. The US has less global influence. Where is the win? Marginal manufacturing plants and jobs are not returning to the US, no matter what the “orange one” says unless they are subsidized by the local, state or national government.
This is just another “con” by the “orange one”. We want to believe that American jobs have been unfairly stolen by government subsidized factories and low-cost labor without environmental protections in foreign countries. There is a grain of truth in each claim. Foreign governments do subsidize export firms. They try to maintain low currency values to support exports. They accept low total labor costs and environmental damages. Every country tries to be globally competitive.
No “magic wand” exists to force or entice everyone into embracing win/win institutions or deals naively. There is always an incentive to be a “free rider”, taking advantage of the global deals and quietly not really complying, just like some oil producers in OPEC. There is always an advantage for a single country with enough power to “hold out” or bluff or play “chicken” to extract a better deal for that country than for the others. This is the real world of bargaining, negotiations and deal-making. No system, philosophy, institutions, social pressure, or trump card easily delivers win/win results without overcoming the win/lose incentives of the game’s players.
There was a time when “Republicans” were supposedly the party of realism, pragmatism, common sense, business, efficiency, logic, finance, trade, capitalism, science, industry, proof, objectivity, best practices, and elite opinion. “Democrats” allegedly appealed to emotions, wishes, utopias, fairness, justice, perspectives, hopes, possibilities, oppression, victimhood, persuasion, popular opinion, populism, and ideals. The post-WWII institutions were supported on a bipartisan basis for more than 50 years. In 1992, President Clinton and the Democratic party embraced the “third way”, fully supporting these policies, capitalism and limited government, despite criticisms from the progressive, new, far left. The post – WWII system of international institutions has been criticized as “globalism” and “neo-liberalism” by the left wing of the Democratic party.
The post-WWII institutions were not perfect for Democrats, Republicans, the USA or the global community. But they worked incredibly well. Real global GDP has increased by 40 times since 1945, from $2.5 trillion to $100 trillion!!!!! That is 4.72% real growth compounded year after year after year for 80 years, coming out of a world war, encompassing a cold war, the Vietnam War, the Korean War, a global pandemic, the collapse of birth rates, business cycles, financial panics, energy crises, Middle East wars, and terrorism.
A comparable 80-year period before the Great Depression shows just 4-fold global real GDP growth, not 40-fold. Of course, much of this difference is due to differences other than the post-WWII institutions. This was a time of 1.75% annual growth rather than the modern 4.72%. The 3% annual difference compounded across 80 years delivers 10 times greater growth. This is not a marginal advantage. This is an UNBELIEVABLE advantage. This is difficult to communicate. Small percentage differences across a lifetime.
The “bottom line” is that the “orange one” only believes in “win/lose” and rejects any form of “win/win”. The post-WWII institutions are win/win, so they must be rejected. Capitalism, alliances, partnerships, joint ventures, corporations, modern supplier relations, families, communities, nations, treaties, fraternities, sororities, ecosystems, clubs, cooperatives, unions, study partners, mentors/mentees, credit unions, mutual insurance companies, social enterprises, not-for-profits, churches, service organizations and many others are win/win. The “win/lose” framework supports the “orange one’s” desired position as a great leader needed to save the people.
Free trade has provided truly amazing benefits for the US and the world. The post-WWII cooperative institutions have reduced wars and conflicts. The “Trump tariffs” will slow global economic growth. They will not provide any material benefits for the US.
The US has enough economic, social, political and military power to force country by country “deals” that appear to benefit the US, when considered in a short-term win/lose framework. These deals will harm the US and the global economy.
From 1945-2000 “free trade” was Republican economic orthodoxy. “Free trade” benefitted US multi-national corporations which had the ability to take advantage of global markets. The US economy and labor markets were flexible enough to manage the changes. Capitalism was supported as the best economic system versus communism, fascism, socialism, protectionism, imperialism, colonialism or mercantilism. US financial institutions were well positioned to facilitate trade. US universities were ready to educate the world. Imported goods and immigrant labor drove lower US wages.
Trump is appealing to his populist base to oppose the “others” of immigrants, non-whites, non-fundamentalist Christians, criminals, thieves, rapists, sweat shops, subsidized factories, polluters, underpaid workers, etc. “We should produce everything we need in America. We have the factory capacity, finances and skills to do so.” He appeals to nationalism while ignoring the critical principle of comparative advantage. Countries export only what they are very best at growing, producing or serving. They do not produce everything themselves just like states, firms and individuals that are not fully self-sufficient.
1984 – Eli Goldratt offers a “theory of constraints” as a way to understand and manage complex systems effectively, leading to true “lean manufacturing” and “lean operations”.
Process standardization. Financial innovation. Highly focused strategies. New business forms. Markets and international trade deliver desired products, lower prices and competition. A role for government regulation remains. The macroeconomy can be managed to reduce the impact of business cycles and shocks.
Colonization and de-colonization. Opening of Asia. World Wars. Nuclear threats. International integration. Economic progress. Bipolar, superpower, multipolar world.
Trump focuses only on win/lose. If the US earns $1 trillion from trade and the rest of the world (ROW) earns $1.2 trillion, he sees this as a $200 billion loss. The ROW is winning, taking advantage of the USA and its unenlightened deal makers. If the US earns $500 billion from trade and the ROW earns only $400 billion then we are winning by $100 billion. Trump sees the second scenario as far superior to the first. Relative winnings (win/lose) are the bottom line rather than actual winnings (win/win). This is a fundamental flaw.
The Wrong Measure
Trump only sees costs; he doesn’t consider benefits. Net benefits, benefits minus costs is the right measure.
The Wrong Timeframe
Trump only looks at the short-run. He ignores the long-run. He believes that he can always renegotiate any situation.
International Relations is Complicated
Trump only sees dollar signs. The trade balance can be measured. It is positive or negative. The cost of defense can be measured. Either we pay or others pay. We trade goods and services. Defense/security benefits matter. We care about immigration, crime, taxes, personal security, climate, health, economic development, investments, rule of law, intellectual property, labor, the environment, etc. Other countries care about all of these dimensions. We must too.
International Relations is Irrational
Citizens have an irrational commitment to their nations. They are willing to die for them. Nations have sovereignty. Each has certain minimal rights. Politicians respond to these irrational beliefs. Ignoring this reality is irrational, even though it is very frustrating.
Alliances are Cheaper than Empires
The US learned from European, Japanese and American experiences. Empires are very costly to establish and maintain. Nations can be enticed into becoming reliable allies at a fraction of the cost. They are rationally willing to evaluate costs and benefits, risks and rewards, short-term and long-term, labor and capital, sovereignty and influence, security and opportunity. Trump is right to negotiate, but wrong to discount this basic approach.
Global Agencies are Cheaper than Individual Deals
The US has greatly benefited from the post-1945 system of global governance, finance, economic development, health and trade. Global deals designed by the global leaders provide a framework for low-cost transactions. Trump believes that the strongest nations can extract even more net value through individual deals. Too many countries. Too much complexity to negotiate all of these topics effectively.
Single Deal or Repeated Deals?
Trump comes from the real estate world where each deal is “one off”. International relations and trade are repeated deals. The optimal strategy is different when the “tit for tat” strategy can be used. Firms and nations will punish any bully, even at a significant cost to themselves. The strongest players must consider the weaker players’ strategies. When firms or nations find that they cannot trust someone the total costs go up significantly.
Playing Chicken
There are many strategies in the game of chicken. The strongest player does not automatically win. Bluffing matters. Posturing matters. Resources matter. The ability to endure losses and pain matter. Allies matter. Insurance matters. Flexible resources matter. Capacity matters. Creativity matters. Credibility matters. Non-negotiable factors matter. Trump seems to confuse simple economic might with certain winning.
Comparative Advantage
Trump does not understand David Ricardo’s theory of comparative advantage from 200 years ago. You can be better than someone else in everything, at least in theory. You cannot have a comparative advantage in every production process. Between any two individuals, firms, states or nations, there will be differences in relative productivity. This is the basis for trade and specialization. The U.S. cannot be better in every industry. We can be relatively better in many industries, but not in all. As our incomes and standard of living increase, we will be relatively less competitive in those activities that can use lower cost labor. This is an unavoidable fact. We can choose to subsidize low skilled manufacturing employment, but we are fighting against very strong market forces.
Dealmaking Strategy
Trump focuses on simple short-term one-time win/lose. The best negotiators know that the greatest value comes from “growing the pie” in the long-run (win/win). They don’t assume a fixed-sum game. They cooperate to grow the pie, perhaps at the expense of suppliers, competitors, labor, investors or customers. They exploit comparative advantages to lower overall costs, lower risks and increase benefits. They share or signal their relative priorities. They fulfill their commitments. They create incentives for sustained cooperation. They cooperate to build market power. They manage customer expectations. They under promise and over deliver. They manage the government. They build shared cultural expectations and priorities. They build personal relationships. They manage large risks. They manage and coordinate supply chains. Modern business is complex. The real winners understand and deal accordingly.
Summary
Trump’s dealmaking approach fails on every critical dimension. It is a losing approach for almost all firms and for all countries. His supporters need to understand that he cannot win with his approach and force him to change. His opponents need to highlight these failures. The United States has too much at risk from Trump’s losing strategies.
The US imports and exports about 1/8th (12%) of its Gross Domestic Product. Argentina, Brazil and Pakistan have a similar level of trade to GDP. China and Russia are closer to 1/5th (20%). The world imports and exports 30% of it’s GDP. European countries import and export 45% of GDP. The US is the most self-sufficient country in the world. It imports select commodities, labor intensive goods and luxury products. It exports high value-added goods and services supported by its high value-added and compensated workforce. As the US president threatens the large benefits of global trade to the US and the world, it’s very important to place the US within this context. U.S. trade may be less advantageous than someone’s vision of ideal, but based on size alone, international trade is clearly not a first-class priority for the country, its firms or citizens.
Journalists, artists, pundits, entertainers and politicians all scheme for our attention. Once upon a time … we briefly thought that the internet and social media might usher in a new age of information, selection, objectivity, useful filtering, wisdom and cooperation!!!! Unfortunately, we are now deluged by “least common denominator” communications skillfully targeted to lure us into a non-stop cycle of clicking on marketable links. These communications very effectively use every trick and technique to appeal to our emotions, prejudices, weak attention, surface thinking, fears, hopes, exaggerations, etc.
Politicians of all flavors have conspired to convince us that the whole world is comprised of “good versus evil” people, politicians, parties, religions, states, policies and institutions. Everything is “win/lose”. Disagreement is motivated by bad ideas and motives rather than differences of opinion or interests. Compromise is a sign of weakness. Every political actor is purely motivated by self-interest.
We each have a moral, political, social, religious and personal responsibility to evaluate these “conclusions”. Let’s start with overturning the idea that we have nothing in common, that we must rely upon politicians to define opposing policies, parties and philosophies and fight to the death for one or the other to finally win.
Human Nature
Biologically we are all the same.
We intuitively and rationally combine thinking, feeling and doing; conscious and unconscious drives.
We each think that we are “right”. As in Lake Wobegon, we are all “above average”. We struggle to maintain self-awareness, to consider the needs of others, to even pursue our own goals consistently and effectively. We are functionally and morally imperfect.
We have a variety of needs and desires that cannot be fully met. Safety, acceptance, achievement, agency, transcendence, control, familiarity, influence, consistency, love, health, growth, expression, authenticity, loyalty.
We are primarily “analog” beings.
Human Experience
We face death, evil, suffering, disappointments, violations, violence and pain. Random, irrational, unavoidable experiences. We often respond with fear, anxiety, cautiousness, anger and victimhood. We search for ways to “manage”.
We experience life through time, learning, relationships, lessons, goals, planning, dreams, hope, commitments, doing, feeling, thinking, feedback, taking risks, managing risks and opportunities, engaging, disengaging, focusing, relaxing, looking outward, looking inward. The journey is complex and the perspective changes.
We balance and prioritize. Limited resources. Unlimited desires. Personal, family, social, community, religious, financial, and health dimensions compete. At best, we fight the many demands to a “draw”.
We struggle to keep up in a world that becomes more complex every decade: personal choices, goods and services available, information available, technical complexity, political complexity, social choices, religious choices, communications options, philosophical choices, scientific results, business complexity, international options, cultural options. More options, more choices, greater expectations.
We live in a culture that prioritizes the economic dimension of production and consumption. We have embraced a meritocracy that offers great rewards to the winners and a modest “safety net” to those who are not winning. Economic and status anxiety are very high in the most economically successful nation in history. We promote an extreme personal responsibility that undermines those who don’t always achieve and sustain their highest goals.
We live in a world that has been labelled the “therapeutic society” or the world of “expressive individualism”, summarized by the US Army slogan of “Be all that you can be”. The individual is responsible for living and achieving a great life of personal expression reflecting their talents and possibilities. The individual has many coaches, advisors, mentors and therapists, but is alone in choosing their “destiny”. They cannot rely upon tradition, religion, culture, nation, village, parents, personality profiles, or skills assessments. This radical secular humanism view places the responsibility for identifying and achieving a “world changing” destiny upon each person. Wise individuals find some way to “balance” this personal responsibility with other influences, refusing to adopt a godlike stance. They avoid becoming like Icarus and flying too close to the sun.
We live in a world that highlights the individual above nature, community, culture or religion. Complete individual liberty, freedom and opportunity are desired. No trade-offs with the other dimensions of life. “Natural consequences” frustrate those who embrace this libertarian ideal.
Life is hard. So many advances in society, business, education and technology. The challenges to “living a good life” are greater than ever. The progressive promise is undermined. All individuals must now make choices that were once reserved for kings, priests, princes, monks, scientists, philosophers, artists, governors, generals, financiers, industrialists, explorers, entrepreneurs, and presidents.
Culture
We digest the beliefs, norms and values of our culture subconsciously. The legacy of Christian Western Civilization continues. The legacy of secular humanism continues. We live in a “secular age” where deep faith and unskeptical religious commitment is unusual for the highly educated one-third. We’re “neither fish nor fowl”. Culture really matters but is today a blend of two streams like “oil and vinegar”. There is much in common. There are some big differences. We generally share the political, economic, social, religious, scientific and literary history of Western Europe, even though parts of the intellectual community have promoted disturbing alternate views for almost 200 years.
Despite living in a “secular age” and an “individualistic age”, we all need to be connected to various communities. Although community participation frequency, manner and depth vary greatly across the decades, humans always need to be connected.
We share a legacy and currency of art, media, design, architecture, music and entertainment. High-brow and low-brow. Mass market and specialized. Push versus pull connectivity. We are connected.
The US remains an unusual Western society where the not-for-profit, religious, social, volunteer world performs major social welfare functions. We share our experiences of funding, volunteering, leading and consuming from these organizations. The individual and community experience of managing these organizations shapes our world view. Our individualistic bias combines with our social/religious obligations to create and support these organizations.
We share our experiences in pre-K, elementary, high school and college education. Mainly public schools. The content shapes our perspectives.
We have moved from 6 to 4 to 3 to 2 to 1.X children per family. We invest like never before in the growth, education, experiences, guidance, mentoring, support and direction of our children. Helicopter parents. Summer programs. Internships. International experiences. The youth orientation reigns supreme.
We continue to value the “social esteem” provided by others. We comply with social norms in every dimension of life. We seek approval. We consume good and services to signal our social status. We achieve, perform and consume based on social influences.
We adopt “tolerance” as a supreme moral value. We don’t advise, influence or interfere with others, even when we strongly disagree.
We continue to struggle with the idea of a “class structure” in America despite the obvious growth in economic, social and political influence of the wealthy (top 1%) and the professional class (top 10%).
Communications
We share the American “English language”. It dominates the whole world.
We share the mass media, local newspapers, industry and professional journals, scientific and academic journals, the entertainment industry, social media platforms, community forums and the internet.
We share modern communications and information technology. A “smart-phone” is in every pocket, instantly accessing the cumulative knowledge and information of mankind.
Religion
Americans are much more “religious” than “Europeans”. We mostly believe in God and spirituality and Christianity. We have seen that shared cultural/religious beliefs can be maintained in a religiously pluralistic society. We believe in objective “right and wrong”. We intuitively accept “the golden rule”. We see “America” as part of God’s plan and history. A place for the pilgrims. A land of religious diversity. The overturning of slavery. American victories in the 2 world wars and the cold war. The moral dimension of life matters.
Economy
We still live in the world that Adam Smith described in 1776. The degree of specialization is only limited by the extent of the market. Our world is extremely specialized. A bewildering variety of products are available. Outsourcing of many functions. Regional, national and international sourcing.
We all specialize in our most productive functions today. Profession, sub-profession and industry. We all have talents. There are most highly rewarded in their professional roles.
We are producers and consumers, investors and suppliers, professionals and managers, entrepreneurs and directors. We are deeply engaged in the financial system, markets for labor, money, trade, property, goods and services. We sometimes elevate this role to be “everything”, to our detriment.
We are interdependent. We rely upon “essential workers”, universities, governments, builders, contractors, consultants, bankers, utilities, media, lobbyists, politicians, unions, secondary markets, employment firms, lawyers, engineers, IT and communications folks, etc.
We rely upon the US macroeconomy. Budget deficits. Fiscal policy. The Federal Reserve Bank. Monetary policy. Federal banking and industry regulators. The bond markets. The credit rating agencies. Animal spirits. Wall Street. Mutual funds. Municipal bonds. Mortgage bonds.
We rely upon our commitment to the capitalist, free market, free enterprise system. Laissez faire. Limited government regulation. There are specific situations and metrics that warrant government intervention, but we lean towards allowing the natural incentives of the market to police the behavior of great firms.
We believe that economic growth provides the opportunity for the political system to effectively “redistribute income”, ensuring that the economic value added by scientific and business innovation through time does not all accrue to the owners.
Globe
The benefits from international trade are well understood and have been demonstrated for 75 years.
There are opportunities to engage all nations to manage diseases, food supplies, hunger, human rights, refugees, public health, travel, immigrants, trade, communications, and ocean resources.
There are global threats that must be managed: climate change, nuclear war, chemical and biological weapons, computer hacking, artificial intelligence, species loss, food production, energy production.
Philosophy
An objective physical reality exists. An objective moral reality exists.
The individual really, really matters. Human rights.
The scientific method applied to technical issues is great. It is not everything.
Instrumental logic is a tremendous asset for science, business and life.
Pragmatism is always worth considering. “Show me the money”. Does this theory produce measurable results?
We reject anarchy, atheism, pure commercialism, communism, fascism, necessary progress, libertarianism, national socialism, racism, sexism, totalitarianism, utopian socialism, white nationalism, Christian nationalism. In essence, we reject extreme views. We’re comfortable with a “checks and balances” political system that slows changes until they’re embraced by a solid majority.
Politics
The US is a world of skeptical politics. Less is more. Trust no one. Engage the local community to find a solution. Accept the individual bias in economic and social laws. America is a special place, worthy of patriotic respect.
Political participation is a sacred duty.
Despite the structural constraints on change, the US has generally been a positive, constructive, progressive supporter of political changes through time.
Americans are willing to sacrifice for the good of the nation.
The US constitution is framed by the rationalist enlightenment. We deeply believe in “the rule of law”.
Differences can be resolved, technically, rationally, politically.
We are comfortable with “suboptimal” results from our political system. We accept that the federal, bicameral, functionally divided system is designed to prevent the “worst case” outcomes of raw democracy or concentrated power.
In general, we strongly support our government institutions, especially at the state and local levels. Judges do their jobs. Political parties hold each other accountable. Citizens participate in the democratic process as voters, poll workers, jurors, donors, and volunteers.
Summary
We live as individuals in a complex, interdependent world. We have more opportunities but less authoritative guidance for our lives. We worry about our freedom and liberty. We make many choices. We do the best that we can. We agree on many things yet disagree on many others.
Today, we understand the world better than ever. We also understand ourselves better, our strengths and weaknesses, our possibilities and limits. We manage complex technology and institutions very effectively. We know that some political and economic options don’t work or pose unacceptable risks or threats. The U.S. and Europe developed “limited government” systems apart from religious authority because disagreements were inevitable. We need to relearn those lessons today. We’re going to have a “mixed” capitalist/government economic system. We’re not going to empower any religious denomination or secular group to impose its views on society. We can delegate issues to the states and learn from their experiences. We can compromise. We can “agree to disagree”. Ideally, we can accept that there are some intractable political differences in our society and focus on those areas where we can find agreement.
1981 Oldsmobile 98. The “Main Street” Republican party of 1981. Practical, shiny, powerful, white walls, chrome trim, leather interior, accessible, landau roof, 4 doors, large, American, fender skirts, superior, a known and consistent item.
The 2024 Trump organization has few remaining connections to the 1981 Reagan Republican Party, or that of Eisenhower in the 50’s, Nixon in the 70’s or the Bushes in the 90’s or 00’s. Let’s highlight some of the big differences.
Fiscal conservatism. Balanced budget. No debt. Trump used debt throughout his career, ran record deficits during his presidency and is now trying to eliminate the debt ceiling.
World-class agriculture exports. Trump accepts that US agriculture might take some hits from his “trade wars” approach. He uses various subsidies to partially offset the damages.
Industrial policy. Trump has an activist approach, promoting individual industries and firms that support him and penalizing those who oppose him. Republicans have historically concluded that the market alone is best positioned to invest for growth and the national government role should be minimal, preserving the institutional context.
Competition policy. The Republican party has supported a “hands off” approach. Trump prefers to intervene in the media, high technology, electronics, manufacturing, energy and banking industries. Manufacturing and extractive energy are preferred industries!
Rule of law. Republican investors and owners have relied upon a stable legal environment. Trump asserts that all laws and regulations are subject to his review and interpretation.
Imperial presidency. Republicans pushed to restrain presidential power during decades of liberal activism. Trump has permanently expanded the “rights” and powers of the presidency. Hayek’s “Road to Serfdom” was an early warning.
Fair play. Republicans traditionally sought to build citizen support for core institutions. Trump undermines the FBI, DOJ and IRS.
Free trade. Republicans supported free trade for 70 years as a way to benefit American multinational corporations and citizens. Trump takes a 1920 mercantilist approach to trade, believing that individual country trade deficits are harmful to the US. He believes that the “wins” from individual negotiations are greater than the net benefits of a free trade system for America’s strong world leading economy.
Military strength. Republicans have typically been hawks. Trump views defense spending as an optional investment which should be minimized as possible. He believes that a “strong enough” military and economy, combined with strong deal making and threats is “strong enough”.
Limit military strength. Republicans supported the WWII agreements that limited the military strength of Germany and Japan. Trump sees no reason to limit their military strength.
Alliances. Republicans have supported American alliances with Europe, Japan and other supporters of the “American Way”. Trump views these alliances as “welfare” for other countries. The U.S. is providing military, economic and institutional support without extracting tributes from the allies.
NATO. Republicans have always supported this counterweight to threats from Russia. Trump sees Russia as a “reasonable” adversary which is not interested in threatening the US. Europe should protect itself from Russia.
Global international order. Republicans have generally supported the various global organizations supporting the Western-defined economic and political systems following WWII. UN, associated organizations, WTO, IMF, World Bank. Trump views these organizations as an extra investment for the US and a threat to US interests. He prefers one-to-one negotiations rather than this universal approach to defining and enforcing US interests.
Institutions. Republicans have supported the main US institutions which have supported the American way. Trump questions all government departments, public education, universities, the mainstream media, journalists, and Hollywood.
Science. Republicans have historically supported American science and scientists, based on military, social and economic results. They have believed in professionals and objective reality. Trump believes that many scientific views are really political views, subject to political control. The contrast in medicine/public health is greatest.
Conservative philosophy. Starting with William F. Buckley, conservatives developed a consistent “conservative” world view that linked together social, political, military and economic dimensions. Trump has no conservative philosophy. He is purely transactional.
National Leaders. The Republican Party was based in the Northeast and Midwest. It dominated the country from 1860-1930 and again in the 1950-80’s. Traditional large metro areas provided intellectual and political leaders. Trump has abandoned the east and west coasts.
Conventional. Republicans embraced the preservation of history and convention. Trump is a revolutionary, seeking to overturn the “modern” FDR, LBJ “new deal” consensus on economic, social and political issues that he opposes. Judicial overturn of abortion rulings is “exhibit one”.
States rights. Republicans have supported “states’ rights” to preserve conservative social positions. Trump seeks to enforce national decisions.
Separation of Church and State. Republicans quietly accepted the need to preserve religious rights and allow the state to be “neutral”. Trump and religious conservatives question this solution. They worry that secular interests are indoctrinating students.
Anti-communist, anti-fascist, anti-totalitarian. Republicans generally embraced the “American Way” and opposed alternate views. Trump is purely transactional.
Western culture. Republicans believed that the post-war consensus of democracy, human rights, mixed market capitalism and international order was effective and right. Trump does not believe that the US should promote its ideals. All international relations are purely transactional.
Fixed monetary policy. Republicans have pushed for a “rules based” monetary policy to limit the risks of an “active” monetary policy. Trump wants to control the Federal Reserve Board to promote low interest rates.
Character. Republicans have highlighted “character” as an essential trait of any national leader. Trump dismisses “character” as irrelevant.
Russia. Republicans fought the cold war against Russia. Trump sees Russia and Putin as just another global competitor, no better or worse than many others.
Special relations. Republicans have supported historical US relations and agreements. Trumps sees everyone as transactional. NATO, Japan, Korea, Australia, Canada, Mexico, UK, France, Germany.
Summary
Republicans, like all political parties, have shuffled their coalition partners through time. The Reagan coalition was not the Eisenhower coalition, but the differences were minor. The Bushes generally embraced the broad “conservative” Reagan tent. Trump is clearly not a “philosophical” conservative. He is not trying to conserve a culture and its main institutions. He believes in a radical individualism closer to libertarianism and realpolitik. The world is dangerous. It is only win/lose. Only great deal makers can deliver results. The whole is the sum of the parts. “Trial and error” is an essential approach. There are very clear differences between the historical Republican Party and Trump’s views. I think they will become more apparent as Trump tries to implement his views.
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