Heterodox Economics Newsletter

Issue 340 March 10, 2025 web pdf Heterodox Economics Directory

While I generally like people from the US, as most people from the US I met have been kind and amicable, I always had an ambivalent impression of the US as a leading global power. This ambivalence is rooted in the contradictory historical roles played by the US. Some examples are:

(1) Being the world's oldest democracy vs. being somewhat of a self-serving empire.
(2) Saving Europe from itself by means of a regime change some decades ago (thanks for that!) vs. having a long history of their own geopolitical ambitions being expressed through regime change operations.
(3) Embracing cultural openness, non-discrimination and affirmative action in many instances and contexts, while being coined by strong racial disparities and affirmation of traditional gender roles in others.
(4) Being graciously and politely invited to visit inspiring colleagues vs. being yelled at by the border patrol, because of the patrolling guy’s difficulties in deciphering my passport.

So, now it seems that the US is going to get rid of this ambivalence by downsizing those things I cherish about it, like, say, democracy and associated separation of powers, while reaffirming issues I am skeptical about, like, say, the conviction of American supremacy. Driven by an intrinsic desire for irony to confront darkness, one could playfully conclude that the KGB has now finally won the Cold War by replacing American democracy with a (quasi-?)authoritarian regime aiming to dismantle the US from within by the unfiltered application of core principles of Austrian economics* ;-)

In a more serious vein it looks like we are witnessing a coup from within (as succinctly summarized in this viral video) by some libertarian-cum-authoritarian project that is trying to or going to dismantle essential parts of American democracy. In my humble opinion the ideology underlying this project is plagued by inherent contradictions as it is seemingly based on the idea that strengthening one’s empire is best done by dismantling one’s collective resources. That is not very intuitive to me.

More plausibly, these moves will damage the capabilities of the US in the medium- and long-run as much of its success relies on factors actively require an open society**, especially, but not only, in the context of science and technology. Many of you will have noticed the move towards censoring scientific research (see here and here) and the related cuts and freezes on research grants by NSF and NIH, which is a glaring example of how this new administration employs a vacous conception ‚free speech‘ that is tailored to fight a culture war in 1984-style. In my humble view such moves will undermine what maybe really is ‚great‘ about the US, namely its openness, its diversity and the ability of its people to learn from as well as teach to others. However, as there seemingly is some co-movement between Trumps daily mood and his political convictions and strategies, we have to expect non-linear adaptions of this path at any minute, but, still, this is what it looks like at the moment.

While in some past editorial I pointed towards the economic trends underlying Trump’s success in the recent election, I must admit that I repeatedly find myself underestimating the impact of social media in this regard. For instance, just recently I was baffled while having a conversation on US politics with my two older sons, both at the verge of adolescence. While their arguments on current developments were intellectually nuanced in a way that made me very proud as a dad, I was irritated by the repeated disclaimer „but I have to admit I do not know for sure that is true“, which they repeatedly added after reporting simple empirical facts. As they receive their information primarily via social media, they find themselves in a situation, where they seemingly cannot form a definitive opinion – not because, they lack the capacity to analyze, but, rather, they lack a reliable empirical foundation. This lack of reliable empirics is what obviously can be easily exploited by versatile demagogues, eloquent bot-accounts and fake-pictures & videos.

In such environments truth seemingly becomes a matter of algorithmic orchestration, instead of principled argumentation. This is why Socrates probably would not have liked the internet.***

Nonetheless, all the best,

Jakob

* The obvious exception here is trade policy, which is seemingly strongly embedded in geopolitical considerations related to deindustrialization and related production capacities, but also to the power associated with international debt. Listen here for an interesting conversation between mainstream econs and a Trump trade policy advocate at the recent ASSA conference. If you prefer thinking about what heterodox economists could do in this situation instead you could try checking out this paper.

** In the traditional sense following Popper, not in the shrewd sense conveyed by what calls itself „dark enlightenment“.

*** Drawing on the Greeks, an obvious interpretation of current events could lean on Aristotle’s thesis that democracy is always endangered to endogenously degenerate into oligarchy. Drawing on radical economics instead, it would probably be apt to say that we are about to witness an hitherto unseen stage of imperialism as a „final stage of capitalism“ (see section three in this fascinating book).

© public domain

Table of contents