Economic crisis and Trump

The perception and treatment of economic crises are impossible within classical economic doctrine, because in classical doctrine, a subject under the heading of business cycle waves is taught, and the issue is glossed over superficially, with no room given to the concept of crisis; for according to the classical view, if market rules are followed, everything proceeds smoothly and in order. However, despite all the optimistic approaches of the doctrine, we cannot seem to escape crises. 

Returning to the title of the article, I will not enter into a detailed discussion of the crisis here. I only want to briefly discuss it by comparing the proposal of a prominent professor of mainstream economic doctrine with Trump's latest policy in the context of the crisis. First, let us look at the discourse and policies of the relevant figures under headings. The discourse and views I will contrast are as follows: on one side is the 'factor price equalization' view of Paul A. Samuelson, a famous representative of mainstream economic doctrine, and on the other is Trump's customs tariff policy. Now, let us briefly examine these views and policies, and their compatibility and contradictions. 

Samuelson's theory is based on the logic that as production shifts from high-wage cost regions to low-wage cost regions, wage differences between regions decrease or even disappear, despite wages stagnating or even declining in the first region while rising in the second. In the theoretical formulation of this view, it is clear that the internationalization of capital, in other words, one of the pillars of globalization policies, was created as a partial solution to economic crises. There is no direct goal of globalization in the explanation of the theory, but it can be thought that the economic distress of the period may have instinctively suggested to thinkers, including Samuelson, that such a solution would be appropriate. The connection between Samuelson's factor price equalization view and crises can be established with a very narrow-minded approach as follows: One cause of capitalist crises is given as demand contraction, stagnation of sales, and declining profit rates. As a solution to the contraction of markets, on one hand, the geographical expansion of markets, i.e., globalization, and on the other, the temporal expansion of markets, i.e., financialization, were proposed and, as is known, implemented. It is a fact that the essence of the policy package known as neoliberal practices lies in the aim of resolving the economic stagnation that began in the 1970s. However, it is interesting that although neoliberal policies covered the entire globe, the desired result could never be achieved. As we will discuss further, despite all the brilliant expressions of mainstream economic doctrine, the crisis would not be solved this way, because mainstream doctrine does not delve into the root cause of the crisis and cannot develop policies to eliminate the root cause; or rather, the scope and ideology of mainstream theory do not allow for such a radical transformation. Indeed, as can be seen, despite all the efforts made for nearly half a century, the global crisis could not be solved, and it does not look like it will be solved in the near future. Leaving the discussions on why crises are so stubborn and why they cannot be solved with classical market understanding and methods for future articles, let us briefly discuss the place and meaning of today's madman Trump's latest measures in this context. 

We can address Trump's customs policies, which are perceived as crazy, on two levels. First, pulling production inward as a remedy for the problems of employment, public deficits, and current account deficits experienced in the economy; second, the consolidation and maintenance of the global dominance of the USA, which is gradually melting away and facing disappearance, by pulling production inward to prevent technology leaks. Without going into detail, we can say that it can be accepted that the announced implementation policies could be effective in achieving the mentioned goals. However, while these policies may be in line with the short-term goals of the USA, they may cause non-US economies to be dragged into a deeper crisis. In other words, not only will Trump's policies not be a remedy for the general global crisis, but unfortunately, non-US countries are being sacrificed for the sake of the USA's salvation for a temporary period. If we gather these views on a main axis, it is that Trump has no effort to produce a remedy for the global crisis; his main goal is, first, to produce a partial remedy for the local crisis within the USA, and second, to ensure the continuation of the USA's global dominance.

The idea intended to be expressed here is neither that Samuelson's theory and thoughts are insufficient, nor that US policies are short-term and local. What is meant is that, whether local or global, it seems that neither Samuelson nor Trump could produce a comprehensive theory and solution because they did not understand the issue. It is inevitable that capitalist crises stem from the internal dynamics of the system, and therefore, in both understanding the problems and producing permanent solutions, the operating dynamics of capitalism must be examined and systemic changes and transformations must be made accordingly. However, since systems and the ideologies that are the guardian angels of these systems are under the dominance of the social elite class that owns capital, neither can a satisfactory solution be expected from academia on this subject, nor can permanent policies and actions that solve the problem be brought to the agenda by state apparatuses, which are the political representatives of capital.