- cross-posted to:
- news@hexbear.net
- usa
- cross-posted to:
- news@hexbear.net
- usa
While a lot of people are now gloating how Trump is destroying the economy, it’s important to keep in mind that economic crashes can serve as a strategic tool for the oligarchs to consolidate power. They will use the resulting chaos as an opportunity to restructure society in their favor. There is a calculated logic here of using destruction as a tool for entrenching elite dominance.
The key idea is to expand the reserve army of labor by engineering mass unemployment and flooding the labor market with desperate workers. Availability of surplus labor suppresses wages, erodes workplace rights, and dismantles collective bargaining power. This forces workers into accepting worse conditions allowing the rich to maximize their profits. The 2008 financial crisis serves as a recent example where mass layoffs and austerity measures significantly weakened labor power.
Rising cost of living also forces people to let go of their assets such as homes and businesses as workers and small businesses start defaulting on their debt. Oligarchs, insulated by their massive capital reserves, swoop in to acquire these assets at a fraction of the cost. David Harvey referred to this process as accumulation by dispossession. During the 2008 housing crash, private equity firms like Blackstone purchased over 200,000 foreclosed homes, converting them into a rental empire. Similarly, during Covid, billionaire wealth surged by $4 trillion while millions faced eviction and bankruptcy.
Naomi Klein’s Shock Doctrine provides a solid analysis of how disasters are inevitably weaponized to privatize public goods, slash taxes for the wealthy, and dismantle regulations. As an example, the bailouts in 2008 prioritized banks over homeowners further entrenching “too big to fail” institutions. Similarly, corporate lobbyists pushed for liability shields and austerity during Covid. Such policies consolidate oligarchic control, ensuring future crises disproportionately benefit the elites.
Finally, political volatility during a crisis can be leveraged to promote right-wing populists, and justify increasingly draconian measures such as measures forcing striking workers back to work. Just as fascist politics gained momentum during The Great Depression, modern oligarch funded politicians and media weaponize xenophobia and anti-labor rhetoric to fragment working-class solidarity.
The important part to keep in mind is that the oligarchs are able to easily weather the crisis by moving their vulnerable assets into offshore tax havens, getting to state bailouts, and so on. Their wealth will not suffer during the collapse. Bezos saw his wealth grow by $75 billion during Covid lockdowns, while the working majority was pushed further to the margins. Likewise, quantitative easing after 2008 crash inflated asset prices, enriching shareholders while wages remained stagnant. Each time a crisis happens, the oligarchs only emerge stronger with and with deeper control of the restructured economy. The collapse that’s currently being engineered through the trade war is an an opportunity for the rich to reset the system in their favor.
Yes. I saw that. Very interesting for a rabid diehard imperialist like Rubio to admit that. It certainly appears to signal that the Trump administration intends to wind down the global empire and retreat into a more manageable, smaller but more well fortified position.
I believe Arnaud Bertrand recently also made this point, while also warning that this doesn’t mean the US will stop its aggressive, destabilizing action across the world. On the contrary, it may begin to sow even more chaos now that it is no longer interested in maintaining the stability of the post-war system.
My argument is that its ability to do so will be directly proportional to the degree to which it can hold on to its economic and industrial power. The US’s addiction to the neoliberal financialized model will make this very difficult for them, it will be a constant struggle against the natural tendency of this system to destroy its own industrial base.
For the time being they still have a buffer in the form of their vassal states, in particular the EU, whose industries they can absorb after having made the economic conditions (energy prices first and foremost) in these countries sufficiently hostile to industry. But there’s only so much blood you can suck out of Europe before it runs dry.
Very much agree with all that. I think that the US underestimates the effort involved in rebuilding domestic industry. China didn’t do this overnight, they literally spent decades of sustained effort to get where they are today. Doing this would require creating whole new supply chains, building factories, infrastructure, and so on. All of that requires massive capital investments, and it’s not clear where they would come from. They’d also have to create a trained workforce to operate all that somehow, which would mean providing services like education. I don’t see any realistic path towards doing any of these things in the current political climate in the US.
So, what we’re likely to see is that the standard of living will keep dropping across the west, and that will likely cause at least some of the vassals to reconsider their allegiances. It seems like this is already starting to happen in Europe. Once the war ends, I think it’s now highly likely that at least some European countries might join BRICS.
We’re headed for some very interesting times ahead I imagine. The good news seems to be that the US is starting to recognize the limits on their power which might mean we avoid a world war after all.
Moldbug apparently admires Deng Xiaoping and his views are adopted more or less in whole by the current regime. But Deng’s strategy depends on the people’s democratic dictatorship to develop the productive forces. We don’t have that here and the infighting and lack of coordination between the companies and billionaires that will be running the country directly in the present and near future likely means the plan for reindustrialization won’t work, even if prison slavery is substantially expanded to make labor costs more acceptable to the American ruling class.
Exactly, they want to copy what China did at superficial level without actually understanding the fundamental structural differences between the two systems.
The strategy of the regime is to let the CEOs figure things out, as if they could ever figure anything out besides how to lay people off.