Trumpism and crony capitalism

Some tentative thoughts, for a chapter I’m writing about the decline of neoliberalism, and the crony capitalism I see as replacing it (unless we can achieve a leftwing alternative)

An important difference between Trumpism[1] and neoliberalism (in both hard and soft variants) is that Trumpism is associated with crony capitalism, rather than global corporations and finance. This is obscured to some extent by shared interest in corporate tax cuts and deregulation. But it’s a clear pattern,exemplified by Erdogan, Modi, Orban and Putin (search “X + crony” for illustration). Why is this? The core appeal of US Trumpism is a negative kind of identity politics, reaffirming the rightful dominance of the “unmarked category”, or default identity, that is assumed when a term like “real Americans” is used. Unmarked categories in the US context include white, male, employed, English-speaking, Christian and cis-het.

Trump’s global counterparts have the same kind of politics, but their unmarked categories are different, most obviously with respect to language, race and religion. These differences are problematic for global corporations, who want to operate in different national markets and employ the best talent they can find anywhere.

As long as neoliberalism was dominant, Trumpist voters could be bought off with gestures, while policy was run in the interests of global business. But now that the Trumpists are in charge, they are demanding measures that harm global businesses both economically (restrictions on trade and investment) and culturally (by making ascribed characteristics, rather than market outcomes the measure of esteem). By contrast, local capitalists (like Trump himself and the billionaires who now back him) mostly benefit from these measures as well as from pro-rich policies in general. Even under neoliberalism, many operated largely on the basis of connections. Provided they can stay in the good graces of the strongman (not guaranteed, as various Russian oligarchs have discovered), they are well placed in the new environment. And, unlike global corporations, crony capitalists can operate with a short time horizon. Even if Trumpist policies are ultimately disastrous in economic terms, they have time to make their pile and cash out.

fn1. In 2016, I used the unsatisfactory term “tribalism”, for want of a better alternative, but Trumpism fits the bill perfectly.


As was the case with Economics in Two Lessons, I’ve been struggling with the material for my book-in-progress, The Economic Consequences of the Pandemic. But I’ve now managed to put together a synopsis I can work with. I’d very much appreciate comments, including but not limited to: topics I should be covering; issues raised by the brief summaries; and useful references. Thanks for comments so far, and thanks in advance for more.

Is nuclear power the answer

The last (I hope) extract from the climate change chapter of Economic Consequences of the Pandemic. I’m in two minds about whether this is really needed. The group of pro-nuclear environmentalists seems to be shrinking towards a hard core who can’t be convinced (and some of them, like Shellenberger turn out to have been concern trolls all along). But every now and then I run across people who seem open-minded enough, but haven’t caught up with the bad news on nuclear.

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A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

To be clear, the sandpit is for regular commenters to pursue points that distract from regular discussion, including conspiracy-theoretic takes on the issues at hand. It’s not meant as a forum for visiting conspiracy theorists, or trolls posing as such.

A zombie loan proposal re-emerges

2020 has not been a good year for thermal coal. Trends that were already underway have accelerated as a result of the pandemic. As the energy source with the highest marginal cost of operation coal has borne the brunt of reductions in electricity demand. As a result, planned closures have been brought forward, and new closures announced.

Financial institutions have announced ever more stringent divestiture policies, making new coal mines and coal-fired power stations increasingly uninsurable and unbankable. Insurance premiums for new and existing coal projects have risen

National governments including tmajor coal consumers like China, South Korea and Japan have announced plans to reach zero net emissions by 2050 or 2060. Reaching this target implies a rapid end to new coal projects, and an accelerated phase out of existing ones.

It is striking, then, that emerging reports suggest that the State Bank of India might lend $1 billion to Bravus, the absurdly renamed Adani Mining, to finance its Carmichael coal and rail project in the Galilee Basin. A similar proposal, which reached the stage of a memorandum of understanding, was considered and rejected back in 2014.

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