Saturday, April 5, 2025
TRUMP’S TARIFFS, THE GOLD STANDARD, GLOBALIZATION, AND MONETARY SOCIALISM
How the U.S. Reached Its Current Point According to the Trump Administration and Its Ideological Circle
The ideological circle surrounding Trump describes how the United States arrived at its current situation based on the following sequence of economic events:
Since World War II, the U.S. spearheaded a process known as globalization. Countries with previously closed markets worked to open and integrate their economies, driven by technological advancements in communication and transportation as well as political decisions aimed at eliminating trade barriers and fostering international partnerships. The motivations behind this opening were as follows: Economically, the Theory of Comparative Advantage suggests that if each nation specializes in producing what it can do most efficiently, the resulting trade will benefit everyone. Politically, especially after World War II and during the Cold War, the United States sought to strengthen anti-communist alliances. Granting access to the U.S. market was deemed critical and, later, integrating former Soviet countries and China into the global economic system was seen as a way to promote their liberalization and democratization. As Thomas Friedman put it: “Countries with McDonald’s never go to war with each other.” “If we’re all so economically dependent on one another, we’ll have to find a way to get along, and that’s the policy we’ve been pursuing.” However, these theories didn’t materialize as expected. China strengthened its economy, yes, but it didn’t democratize; on the contrary, it also bolstered the Chinese Communist Party (CCP) and its military power, often exploiting the system it was integrated into at the expense of the nations that promoted its inclusion. Economically, instead of a balanced exchange of goods, many industries moved out of the United States. Supply chains shifted from the U.S. to countries that implemented policies to attract manufacturing, resulting in significant trade deficits for the United States. This led to the loss of industrial bases and the transfer of national assets abroad, mortgaging future economic prosperity in exchange for cheaper goods. Economists like Paul Krugman argued that trade deficits would self-correct. When this didn’t happen, others suggested it didn’t matter, as the primary goal was to maximize consumption. This perspective overlooked critical aspects like job quality, the trajectory of innovation, and national security. Globalization hasn’t worked as anticipated. It has harmed many communities and workers. It’s essential to reconsider and reverse some of these policies. Thus, the Trump Administration reflects a rejection of the globalization model that dominated for so long and failed to meet expectations.
