Trump Wins, Neoliberalism Is Dead

As I predicted, on Sunday, Trump has won the US Presidential election, and his Trumpist Party looks set to sweep the Congress too. Already, he has received the fawning congratulations of his co-thinkers in the British Blue Labour government, who have been pursuing their own Trumpist, reactionary petty-bourgeois nationalist agenda, based around Brexit. As their own reactionary fantasy about a Blue Labour Brexit inevitably collapses around their ankles, destroying any shred of credibility of their claims about growth, they will, no doubt, as Bojo and Truss before them hoped, now be desperate for Trump to offer them some kind of trade deal, to save their blushes, as Trump sees it as a means of also further subordinating Britain, and undermining the EU. That is also a goal of his ally Putin in Russia too, already, facilitated by Blue Labour's Brexit agenda, in support of Putin's greatest strategic success, so far.

It spells the death of conservative social democracy (neoliberalism) that has, in reality, only existed in zombie form since 2008, kept on its feet only by the repeated attempts to slow economic growth, so as to hold back the demand for capital and labour-power, and so, hold down interest rates and wages, combined with a tidal wave of liquidity, pumped into worthless financial and property assets to keep their prices inflated, following the reality imposed on them in the 2008 global crash in those asset prices. It is a perfect example of a situation in which the ruling class could no longer rule in the old way, and the masses were not prepared to be ruled in the old way, but, with the working-class, as the nascent ruling-class, but lacking any consciousness of its historic role, and severely misled, it has resulted in the only way it could, by the rise of the political fortunes of the reactionary petty-bourgeoisie, which has itself grown in size by more than 50% since the 1980's.

That's not to say that Trump's election win means that the petty-bourgeoisie will now rule. As Marx set out in The Eighteenth Brumaire, they, like the peasantry, are too amorphous, to form a ruling class, which is why they always require a Bonapartist, like Trump, to whip them into line. But, also, as witnessed time and again, their electoral successes, can also, never translate into anything solid, and they too, become demoralised and disappointed, as their hopes are again dashed, as reality imposes itself upon them. The petty-bourgeoisie do not, and cannot control the state, and that state will continue to represent the interests of the ruling class, as Trump, Truss and Johnson found over the last few years, and as, in the past, was found by Allende.

Already, the ruling-class, as it did in response to Truss's 2022 Budget, has hit US Bond Markets, pushing up interest rates that have been rising significantly, already over recent weeks. With headline inflation having fallen over the last year, this rise in nominal interest rates, means a much larger rise in real rates. The US Ten Year has risen by 14 basis points to 4.43%, at the time of writing, whilst the 2 Year has risen by 7 basis points to 4.26%. The 30 year has risen 18 points to 4.62%. The latter is important as its the basis of US mortgages.

The sell-off in bonds has been accompanied by a rise in shares, but, ultimately, as US interest rates rise this rise in share prices, reflecting simply a shift of speculators money from bonds to shares, will also be reversed. Rising interest rates/bond yields, in conditions where there is no likelihood of rising profits, and so no likelihood of being able to drain even more into the payment of dividends, means that the only way higher yields on shares can be sustained is via, a significant fall in share prices. And, given Trump's stated policies of protectionism, huge tariffs on trade with virtually everywhere in the world, meaning a further huge rise in the costs to the US economy, much as with Brexit, there is no chance of any significant increase in US profits, other than via a move of large-scale US capital to elsewhere in the world, a result seen also with Brexit, and the opposite of what Trump has promised.

As with Brexit, the impact of that will fall on workers and the petty-bourgeoisie, particularly the poorest sections of those classes, many of whom, living in similar deprived and backward conditions, cast into despair by the failure of bourgeois-democracy, imperialism, and of social-democracy to provide them with any hope, as Trotsky, described in the 1930's, will have been the ones that turned to the likes of Trump. Unfortunately, as seen with this video posted by Owen Jones, even now, the potential socialist alternatives, also, have no clue either in understanding the current reality, or offering any progressive solutions.

The representative of the DSA, interviewed by Jones, for example, saw the aspects of Harris' politics that were “progressive”, as being her claims that “inflation” in the US was down to “monopoly profits”, and proposals to deal with it by breaking up monopolies, imposing price controls, and other such reactionary, utopian, petty-bourgeois policies.

I have dealt with the reactionary notion that inflation is a result of “monopoly”, in response to such claims by Michael Roberts, as well as setting out the roots of those kinds of ideas in the writing of Proudhon and Duhring. The reality is that the inflation of recent years, is the result of the huge amounts of liquidity/money tokens thrown into circulation by central banks, and handed to households to compensate them for the ludicrous and irrational lockdowns imposed on them, in response to COVID. Those lockdowns, of course, were supported and called for by the likes of social-democrats, including Michael Roberts, and large sections of the “Left”. The inflation is a direct result of the policies they advocated, not of monopoly. Indeed, the monopolies remain, but, as economies have grown, whilst the amount of additional liquidity has shrunk, the inflation has fallen. Go figure!

Similarly, the monopolies, like all large-scale socialised capital, is, objectively, now, the collective property of the working-class. As Lenin, set out, also in Left-Wing Childishness, it is the most progressive form of capital, and basis of the next stage of human social development, i.e. of Socialism, so why on Earth would a socialist want to break it apart?

“they reveal their petty-bourgeois mentality precisely by not recognising the petty-bourgeois element as the principal enemy of socialism in our country...

A hundred and twenty-five years ago it might have been excusable for the French petty bourgeoisie, the most ardent and sincere revolutionaries, to try to crush the profiteer by executing a few of the “chosen” and by making thunderous declamations. Today, however, the purely rhetorical attitude to this question assumed by some Left Socialist-Revolutionaries can rouse nothing but disgust and revulsion in every politically conscious revolutionary. We know perfectly well that the economic basis of profiteering is both the small proprietors, who are exceptionally widespread in Russia, and private capitalism, of which every petty bourgeois is an agent. We know that the million tentacles of this petty-bourgeois hydra now and again encircle various sections of the workers, that, instead of state monopoly, profiteering forces its way into every pore of our social and economic organism...

“. . . Try to substitute for the Junker-capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state-monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!

“. . . For socialism is merely the next step forward from state-capitalist monopoly.

“. . . State-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs. ””

The oligopolies are socialised capital, the collective property of the workers, the programme of socialism does not involve braking up the workers property, but ensuring their rightful, democratic control – even bourgeois-democratic rightful control – over their own property, and to end the usurpation of that control by its creditors/shareholders. Progressive social-democracy moved in that direction in the 1970's, prior to its political defeat at the hands of conservative social-democracy, as it confronted the challenges posed by the crisis of overproduction of capital, after 1974. Even a return to that progressive social-democratic agenda, would represent a step forward compared to the utter confusion, and pointing in the wrong direction by social-democracy, and the “Left”, today.

Trump's win, means that the fate of Palestine, and of the Palestinians is sealed. A large part of Trump's base, as with that of Blue Labour, is closely connected with Zionism. In this, Trump's Zionism ties in with the interests of US imperialism to exterminate the Palestinians, and establish a large Zionist state, “from the river to the sea”, which will also involve the annexation of further territories in Lebanon, and Syria, and potentially Jordan, though the role of the Jordanian regime in supporting western imperialism over decades, might offer it some hope. Lebanon is well on the way to being flattened, as Netanyahu promised, in similar manner to Gaza. The further settlement of the West Bank will intensify, as will the genocide against the Palestinians within it. An offensive against Syria, is likely in 2025, annexing further land, in addition to the Golan Heights.

On the other hand, Trump's election probably, though not necessarily, spells the end for Zelensky's corrupt regime. Forces in Ukraine are likely to look for his rapid removal, with other Ukrainian oligarchs taking his place, and suing for peace with Putin, on the basis of facing the reality of having already lost Eastern Ukraine and Crimea. They will look to rebuild their unnecessarily shattered economy, resulting from NATO's proxy war, by inviting in that same imperialism to rape its natural resources, and cruelly exploit its workers who were misled into supporting their own ruling class, and whose leaders, thereby, as with the social-imperialists in the West, have disgraced themselves. Trump may well make possible that exploitation, in conjunction with the Russian oligarchs, as he seeks to draw Russia towards the US, and away from US imperialism's main competitors, China and the EU.

Similarly, as Trump uses his influence within the ranks of Blue Labour to draw Britain away from the EU, at the same time as drawing Russia towards the US, the EU will be incentivised to consolidate more rapidly, as happened, also, after Brexit. It will be facing, itself, Trump's tariffs, as his trade war develops, and with it having followed a similar path with its tariffs on China, and having subordinated its own interests to US imperialism, in relation to the boycott of Russian energy and so on, it may be led to reverse course on those policies. The EU has a clear incentive, itself, to form closer links with Russia, and other economies on its own borders, as well as to remove its tariffs on China. That is particularly the case in respect of Germany, for which China has been a significant export market for its high end manufactures.

In the end, Trump and the petty-bourgeois agenda can offer no way forward. His election, much as with Brexit, is both an indication of the fact of the failure of conservative social-democracy (neoliberalism) over the last 40 years, as it contented itself with the fantasy of producing wealth out of thin air, via speculation, and the inflation of asset prices, whilst its abandonment of real capital accumulation meant a 50% growth in the size and social weight of the petty-bourgeoisie, it is also a sign of the rapid decay of the ruling-class, and of US imperialism, but in conditions where, as yet, the nascent ruling-class, the working-class, has not yet become conscious of its role. The need to build resistance to the onslaught coming from Trump and the reactionary petty-bourgeoisie, is part and parcel of creating that revolutionary consciousness.