Donald Trump has thrown a hand grenade into the global economic architecture that was so painstakingly constructed in the years after World War II’s end. The attempted destruction of this rules-based system of global governance — now manifested in Trump’s withdrawal of the United States from the 2015 Paris climate agreement — is just the latest aspect of the US president’s assault on our basic system of values and institutions.
For millennia before the middle of the eighteenth century, standards of living stagnated. It was the Enlightenment, with its embrace of reasoned discourse and scientific inquiry, that underpinned the increases in standards of living in the subsequent two and a half centuries.
With the Enlightenment also came a commitment to discover and address our prejudices. As the idea of human equality quickly spread, societies began struggling to eliminate discrimination on the basis of race, gender, and, eventually, other aspects of human identity, including disability and sexual orientation.
Trump seeks to reverse all of that. His rejection of science, in particular climate science, threatens technological progress. And his bigotry toward women, Hispanics, and Muslims threatens the functioning of American society and its economy, by undermining people’s trust that the system is fair to all.
As a populist, Trump has exploited the justifiable economic discontent that has become so widespread in recent years, as many Americans have become downwardly mobile amid soaring inequality. But his true objective — to enrich himself and other gilded rent-seekers at the expense of those who supported him — is revealed by his tax and health-care plans.
Trump’s proposed tax reforms, so far as one can see, outdo George W. Bush’s in their regressivity (the share of the benefits that go to those at the top of the income distribution). And, in a country where life expectancy is already declining, his health-care overhaul would leave 23 million more Americans without health insurance.
While Trump and his cabinet may know how to make business deals, they haven’t the slightest idea how the economic system as a whole works. If the administration’s macroeconomic policies are implemented, they will result in a larger trade deficit and a further decline in manufacturing.
We now know that the world cannot count on the US in addressing the existential threat posed by climate change. Europe and China did the right thing in deepening their commitment to a green future — right for the planet, and right for the economy. Just as investment in technology and education gave Germany a distinct advantage in advanced manufacturing over a US hamstrung by Republican ideology, so, too, Europe and Asia will achieve an almost insurmountable advantage over the US in the green technologies of the future.
Most Americans still believe in Enlightenment values, accept the reality of global warming, and are willing to take action. But, as far as Trump is concerned, it should already be clear that reasoned debate will not work.
Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and Chief Economist at the Roosevelt Institute. His most recent book is The Euro: How a Common Currency Threatens the Future of Europe. © Project Syndicate 1995–2017