If Trump Follows Through The Result Will Be Shit

In the film “Carry On Again, Doctor”, Peter Butterworth  plays someone who shuffles into a hospital, walking awkwardly. Two doctors, watching him speculate as to what his complaint may be, before apprehending him, to check which of them was wrong in their diagnosis.

“I thought it was just wind,” responds Butterworth, “but it turns out that I was wrong,” he says, as he heads for the toilets.

A Republican establishment that never wanted Trump as its candidate, and never thought he was going to be elected, is now putting a brave face on his election, and hoping that all of Trump's ridiculous comments were just the words of a TV celebrity, playing to the audience that should never have been taken literally. That view has been presented by Peter Thiel, for example. In other words, just as no one should have believed the words of the Brexiteers when they made ridiculous comments that millions believed, so no one should have believed the words of Trump that he was going to build a wall on the Mexican border, start a trade war with China and so on. But, both the right-wing populists that made ridiculous promises during the EU referendum, and Trump have rode to power on the back of a monster that was not politically educated and sophisticated enough to understand that what they were saying was nonsense, and could not be taken seriously. They will both be forced to follow through to some extent, or else they will quickly face a backlash from the monster they have created.

In Britain, the consequences of the Brexit vote have already unleashed a carnival of reaction, with a sharp rise in racist attacks, as that large reservoir of racism that the liberal elite have tried to deny existed, was given confidence to come out more openly. The same has happened in the US with already an increase in racist and anti-semitic attacks. Now the Republicans have a majority in both houses of Congress, as well as the Presidency, and in the new year, they will be able to strengthen their control also over the Supreme Court. They will own what happens in the next few years.

In the days after Trump's victory, the US stock market has taken off, whilst the US bond market and bond markets around the globe have sold off. Whether it would have been Clinton or Trump who won, the reality is that the US government, like governments across the globe will have to shift from a reliance on monetary stimulus to fiscal stimulus. A large part of the reason for the Brexit vote, and for Trump's victory is that the political centre, and the representatives of the ruling class have sought to keep the prices of financial assets and property inflated for so long, at the expense of the real economy.

Ordinary people who have seen their wages stagnate, the nature of their employment become ever more precarious, and their urban environment decay, whilst they have seen a tiny group of owners of fictitiouswealth become ever more wealthy, ever more indulgent, have turned away from that political centre that offered them nothing but more of the same. That they have swallowed the easy but obviously bogus solutions offered up by the right-wing populists and demagogues is unfortunate for anyone who might have hoped that this rebellion would naturally lead these sections of the population to their door. That shows how facile were the politics of all those catastrophists on the left that have seen their best hope as being a serious crisis of capitalism.

In reality, it is not at all surprising that these sections of the population have been attracted in large numbers to people like Trump, or to Farage and Bojo, or to Le Pen and others in Europe. For at least the last 60 years, workers in the US and Europe, and other developed capitalist economies have been fed on a diet of welfarism, and the idea that someone else would always be there to pick up the tab, and to solve their problems. It is the fundamental basis upon which social democracies have functioned, and acted to contain working-class discontent. If you are unhappy with the current state of things, don't worry, there will be an election along shortly, and you will have the opportunity to vote for an alternative set of politicians who will offer to put everything right.

The most common thing heard ahead of the election was “Donald Trump understands our problems, and we have faith that he will deal with them for us.” And, this is the society we have across all these developed economies, where all problems are resolvable, and they are resolvable not by the collective action of members of society themselves via their self-activity and self-government, but by a select group of people whose vocation itself is only to be elected so as to resolve those problems. Nor do those who seek to obtain employment in that role seek to do so, by first drawing up a series of considered principles and policies derived from those principles, which they seek to convince members of society to support. Rather they seek to have no discernible principles that might encumber them, no policies they might be held to, and rather they seek only to issue forth vague statements that might be popular in terms of being what voters want to hear.

The left, including nearly all of those that call themselves revolutionary Marxists have peddled this paternalistic welfarism for the last 60 years too, only embellished by more rrevolutionary phraseology, be it calls for the nationalisation of the top 200 monopolies, or other calls for the working-class to put its faith in the bosses state to solve their problems. It is a million miles away from the revolutionary politics of Marx and Engels that was founded upon minimising the role of that bosses' state, and instead building up in direct opposition to it the self-government of the working-class.

“However different the means proposed for the attainment of this end may be, however much it may be trimmed with more or less revolutionary notions, the content remains the same.”

(Marx – The Eighteenth Brumaire of Louis Bonaparte)

It is no wonder that workers who, over the last sixty years, have been fed a diet of that welfarism, on the idea that all of their problems are resolvable – usually at the expense of someone else – by the actions of the state, and that all that was required was to get the right leadership, the right set of politicians to resolve those problems, that sections of workers who for the last thirty years, have been increasingly atomised and depoliticised, and fed on a diet of fast food, immediate gratification, including the idea that salvation could come from becoming a celebrity themselves, would be attracted to those demagogues that offer them immediate gratification, and simplistic solutions to their problems.

We have seen something similar before. It happened in the 1920's and 1930's in Italy, Germany and elsewhere. But, today is not the 1920's or 1930's. There is a difference between Mussolini, Hitler and Donald Trump. Trump is not a fascist; he does not lead a large fascist organisation; mobilised to smash the working-class and that is a fusion of the state power with the political regime. When Mussolini and Hitler took power, they were, as Trump will be, forced to make some accommodation to those forces within a mass society they had rode to power on, in order not to immediately face a reaction from it. But, it did not take long for Hitler to squash the Strasserites, and once they had established a totalitarian state, the idea put forward by the Stalinists that after Hitler it would be their turn was quickly revealed as the nonsense it was.

But Trump is not Mussolini or Hitler, and the USA today is not Italy in the 1920's, or Germany in the 1930's. Trump faces opposition even within the Republican establishment, and its representatives in Congress, let alone from the US ruling class and its permanent state apparatus. He will act to quash the opposition within the Republican Party. The fact that the low level of turnout for Clinton, as the candidate of the old failed political centre, brought unexpected benefits for Republican Senators and Representatives will facilitate Trump in that. The fact that US political parties are not really parties, but merely electoral machines, and that the politicians of both parties are thereby largely free to do whatever they like to further their own individual prospects – a trajectory the Blair-rights in Britain sought to emulate – will also facilitate Trump in that endeavour, as all those like Paul Ryan that sought to distance themselves from him ahead of the election now beat a path to his door as loyal sycophants.

Yet, even within that the electoral coalition that is the Republican Party, reality will immediately throw up irreconcilable contradictions. The Republicans may be fairly united in their hostility to Obamacare, but Trump has offered to produce an alternative that is better and cheaper, not just to abolish it. In any case, the Affordable Healthcare Act is a huge piece of legislation that cannot simply be abolished overnight. Moreover, millions of US voters, who never had any health insurance, now do, and that may well feed its way back to Republican politicians looking to their own re-election at a local level. But opposition to Obamacare is perhaps the easiest policy area around which Trump and the Republicans might unite.

On the other hand, Trump has promised a huge fiscal stimulus based upon a massive increase in infrastructure spending. That is why the US stock market has initially risen. Firstly, the proposed increase in spending means that interest rates will rise, which is why bond markets have sold off in a big way. Some of the money coming out of bonds, has been automatically fed into stock markets by money managers. But, the anticipation is that large scale infrastructure spending will mean big lucrative contracts for construction companies, and for all those suppliers of construction materials. It will also mean that many more workers are employed in that activity, who will then have more money to spend, be it on cars, consumer durables or other commodities that will then boost the profits of all those companies producing those goods and services.

And, indeed it will, which is why the representatives of capital were being dragged increasingly in that direction, and why similar policies will be adopted in the EU, UK and elsewhere. But, the simplistic notion that this higher level of spending, of employment and of profits means higher stock prices has been proven wrong time and again. The level of profits will rise, as a direct result of this increase in aggregate demand and economic activity, but the capital employed to produce those profits will increase even more rapidly! In other words, as happened in the 1960's, the mass of profit will expand, but the rate of profit will get squeezed. As economic activity expands, especially as wages rise, every company will be forced to invest in order to increase its output so as to not lose market share to its competitors, but as it does so, the rate of profit it makes on each new investment will get smaller.

Not only will the profit that can be paid out as dividends fall, but capitals will need to borrow more to finance their own investments, and will have less free cash to pump themselves into the money markets. Interest rates will rise sharply – especially as global inflation rises – and that rise in interest rates means that the capitalised values of all assets will be slashed be it bonds, shares or property. 

Those sections of the Republican Party most connected to the interests of the owners of fictitious capital, such as the Tea Party, will recoil at such consequences. Already they are demanding that any fiscal stimulus be provided via tax cuts for the already rich, rather than fiscal spending that would put workers back to work. They will be forced to oppose any proposals from Trump to expand infrastructure spending paid for by borrowing rather than increased taxation, or withdrawal of welfare benefits etc., because otherwise they will face a backlash from within their own support base.

As I said before the election, the actual question of whether the President would be Clinton or Trump was in large part irrelevant. The reason for socialists supporting Clinton and the Democrats was not on the basis of lesser evilism, but on the basis of the need for socialists to build a base within the Democrats, to gain the ear of all those organised workers that traditionally look to the Democrats for solutions, and thereby to build a movement of workers within the communities based upon self-activity and self-government, that would at least begin to transform the Democrats themselves, if not to provide the basis for creating a mass workers party more directly based upon, and responsive to the working-class itself.

The response to Trump's victory, in the US, seems to have been healthier than has been the response to the victory of Brexit in Britain. In Britain, large sections of the left seem to have fallen victim to parliamentary cretinism, and have succumbed to the idea that we should just roll over and accept the result without organising resistance and an attempt to reverse it. In the US, there have been immediate large scale demonstrations in many cities, particularly by young people rejecting Trump's election, and if socialists have done what I suggested, and built any kind of organisation and periphery within the Democrats, and working-class communities, they can now turn that in a positive direction, much as happened with the election of Corbyn after Labour's election defeat in 2015.

The reality is not that Trump won the election, but that the old Clintonite/Blair-right centre ground whose superficial political economy was based upon the illusion of rising paper wealth and prosperity arising from ever increasing levels of household debt, collateralised upon ever more ludicrously inflated asset prices, has collapsed, and cannot be restored.