Is America about to collapse? Here are some reasons it’s a genuine tragedy

Francis Fukuyama made waves in recent days with a provocative piece in Prospect Magazine about how the retreat by America on the global stage is bigger than the collapse of the Soviet Union.

Meanwhile, over at the New York Times, Paul Krugman said 2016 will be remembered as the year that America crossed its own Rubicon, comparing Trump to Julius Caesar and breathlessly claiming that the end of America’s republic is nigh.

Of course, this is all coming from a very American perspective. Sure, Trump’s election up-ending conventional political wisdom, but America is not alone in rejecting politics as usual. Britain has had Brexit, and France is toying with its own version with anti-immigration nationalist Marie Le Pen soaring in the polls.

And Australia’s Trump enthusiast Cory Bernardi has been teasing Turnbull in recent days with the prospect of an Australian version of the Trump Train, with threats to split the Liberal Party in the process.

The commentators predicting America’s imminent collapse all have a running theme, which is that Trump has such callous disregard for America’s institutions that it may lead to the end of democracy in America.

Of course, anything Fukuyama says must be taken with a grain of salt, since this is the guy who in 1991 argued that we were witnessing the end of history, in his gobsmackingly inaccurate book The End of History. In it, he said that every country would become democracies and peace would spread across the world as authoritarian regimes disappeared.

But if you think that the collapse of American democracy is totally ridiculous, think again.

Just last Wednesday, North Carolina essentially abolished democracy in their state. And it looks like they’ll get away with it.

If you didn’t catch the details it’s a frightening (as well as hilariously cheeky) tale. In the November elections, North Carolinians elected a new Governor (what we would call a Premier) from the Democratic Party.

Unfortunately for the incoming Democrat, their version of the state parliament was still controlled by the Republican Party. So, brazenly, the Republicans in their state congress quickly passed a series of laws greatly curtailing the Governor’s powers.

Essentially, the Republicans of North Carolina were openly saying to the people who voted in the election: “We don’t care that you wanted a Democrat in power, we’re going to use a clever trick in the system to prevent your democratic decision from having any effect”.

Of course, it’s not like this is the first dirty trick ever used in US politics. But the fear is Trump will be much more likely to use these tricks — and that America’s two-century experiment with democracy is likely over.

After all, Trump’s power will be largely unchecked, at least for the first couple of years. The Republicans command majorities in both houses of Congress (the equivalent of our parliament), and thanks to tricky delay tactics in the lead up to the election, Trump will find himself with a sympathetic Supreme Court to boot.

And Trump’s tax policies are likely to scupper what’s left of America’s welfare system, while narrowing people’s freedom, especially if you’re black, Latino, Muslim or a woman, as most Americans are.

So it’s not shrill to worry about the future of America. But whether America is about to collapse, Soviet Union-style, or slowly, morph into an authoritarian state, one North-Carolina-style-trick at a time, seem, to me, to be beside the point.

Either way, what’s going on in politics around the world represents a seismic shift. Trump is just the populist expression of far more fundamental concerns about the system as a whole.

Since the Global Financial Crisis, global capitalism has all but run out of ideas about how to keep itself going. It’s just taken this long for our political systems to start realising that.

What people in England and the US have voted to do (like it or not) is to fundamentally change the way global capitalism will operate for the next generation.

This shift has eerie echoes with the last time a shift of this size occurred, at the end of the 1970s.

The election of Margaret Thatcher in the UK and Ronald Reagan in the US fundamentally changed the way capitalism made money. And four years later, Paul Keating followed suit with similar policies in Australia.

Ironically enough, these were the policies of globalisation and free trade. Precisely the policies that the voters of 2016 are reacting against.

Before free trade, food imports were greatly curtailed, and foreign cars were subject to punitive tariffs. It’s hard to imagine now, but Australia had a protected TV manufacturing industry. We even made all our own telephones.

In Australia, it was impossible to move more than a tiny amount of money out of Australia without filling out a form, and getting approval from the government. Next time you’re on holidays, remember that without the financial liberalisation of the 1980s, getting money out of an ATM overseas would still be an illegal act for Australians.

But Thatcher, Reagan, and ultimately, Paul Keating, dismantled that.

Since the beginning of the 1980s, the received wisdom has been that government’s role is to get out of the way of businesses, and let corporations make money wherever in the world it’s cheapest to go.

No country took this mantra up with greater zeal than America. When Trump says the North American Free Trade Agreement was the worst trade deal ever in the history of the world, he’s basically criticising the policies that Ronald Reagan ushered in. He’s saying that globalisation sucks. And it does suck for many of his poorer supporters for one very simple reason: they didn’t see any of the extra wealth that the policies of globalisation led to.

In fact, the whole reason globalisation spluttered to a halt in 2008 is because of that. Thatcher and Reagan hit upon a way for businesses to make vast mounds of money. But the people who made that money neglected to share that resulting wealth with anyone else.

And so in response, Trump run on a wholesale rejection of Ronald Reagan’s approach to the economy. He believes the government’s role is to make sure that businesses are serving America’s national interest.

Which means that from now on, they have to play by his rules. In return, he’ll protect them from foreign firms who might be able to do it cheaper, better or more efficiently. It’s no wonder the US stock markets are soaring.

It’s a huge shift. It basically abandons the past four decades of globalisation.

Last time the US decided to put nation’s interest ahead of the freedom of business, was in the 1930s and 1940s, under the Democratic President Franklin Roosevelt. He called it the New Deal, and it was an agreement between business, workers and the government to all pitch in to build America’s prosperity.

Crucially, under the deal, everyone was supposed to benefit: it was underpinned by the establishment of a welfare state that taxed the rich, with the explicit intention of making sure that nobody got absurdly rich, and nobody became absurdly poor.

But there is no hint that Trump’s intending a similar broad pact between workers, business and government. Trump’s not about to start doing deals with unionists to make sure workers get a bigger slice of the pie.

And that’s why America as we know it today is unlikely to survive Trump’s presidency. Trump may have harnessed the resentment caused by rising inequality, but ironically, his anti-democratic tendencies will only weaken the ability of the American system to redistribute wealth and power back to those suffering most, even under a new Trumpified economic system.

There are plenty of examples of countries today that operate under what Trump’s policies seem to be pointing towards, and none of them you’d call democracies. In Russian, President Vladimir Putin’s justifies his picking of winners among his close network of business associates on the basis that he’s doing it on behalf of Russia. That wealth stays with the oligarchs and their families. In China, domestic enterprises prosper but the anti-democratic tendencies mean that those who benefit are the party cadres.

Of course, if Trump finds within himself a desire to stay popular among white working-class people in America’s rust belt, he may keep enough of the American welfare system alive to keep it on a redistributive path. But the entire Republican Party around him has been aching for the opportunity to destroy the remaining vestiges of the New Deal for years. And it seems increasingly unlikely he’ll want to disappoint them.

My bet is he’ll learn quickly from Putin’s early years. Every time he needs to sell out part of his base, a minority group will suffer. Trump has already learnt how to suck the oxygen out of any debate with a simple attack on a Muslim or a Mexican. The roll back of personal freedoms is the grease that will allow the roll back of economic redistribution. It’s a genuine tragedy.

So if you think that the United States becoming more like Russia or China is a bad thing, and represents the collapse of the American project, then, well, yes. Perhaps it is time to start worrying.