post-Davos links

I note of my past and present interests that politics and economics have rarely had my attention, and that what Harold Innis called political economy is what might be a better focus. Wikipedia:

...In its modern form, political economy is an interdisciplinary field that integrates insights from political science and contemporary economics to study the interaction between politics and markets. [in other words, the World Order]

Here's one I wish I had absorbed when I first encountered Innis ca. 1971: Political Economy in the Modern State (1946)

Amazon blurb for $$$ 2018 edition
...a collection of fifteen chapters plus a remarkable Preface selected and crafted to address four main themes: the problem of power and peace in the post-War era; the ascent of specialized and mechanized forms of knowledge involving, most particularly, the media, the state, and the academy; the crisis facing civilization and, more generally, the modern penchant for unreflexive short-term thinking in the face of mounting contradictions; and Innis's growing focus on what would be called media bias.

(see a 1946 review)

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So Davos, and a rough introduction to current global political economy in crisis: I want to collect perspectives on what was said, and how it's being commented on by sources I find trustworthy, so that I can find the material again. That begins with Mark Carney's presentation:

Mark Carney's full speech transcript via CBC

Brad DeLong:

Mark Carney has decided to take the sign out of the window.

Václav Havel's greengrocer hangs the sign every morning: "Workers of the world, unite!" He does not believe it. Nobody believes it. But the system requires ritual, and the cost of refusing is, for a small shopkeeper, potentially ruinous. The régime rests on the daily, bored, frightened performance of a lie.

Carney sees "rules-based international order" as our greengrocer's sign. The US had bound itself to obey rules. It was much much stronger by doing so. Trump broke that. Now others will band together to make weak those acting on "the strong do what they wish, while the weak suffer what they must".

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and so on to the aftermath of Trump's appearance:

Now Everyone's Saying 'Oh, Good' Parker Molloy

...This is what sanewashing looks like. You take a threat, you extract the denial, and you print the denial as if it were the news. "Trump won't use force" is technically a thing he said. But printing that without the "unstoppable" part, without the "we will remember" part, without the Venezuela reference, doesn't just fail to inform readers. It actively misleads them about what happened in that room.

...the most revealing thing Trump said all day.

"Okay, now everyone's saying, 'Oh, good.' That's probably the biggest statement I made because people thought I would use force."

He narrated the sanewashing as it was happening. In real time, from the podium, Trump described exactly how journalists would cover his remarks. He knew they'd seize on the denial. He knew "I won't use force" would become the headline. He knew the threat would fade into background noise. And he said so, out loud, while the cameras were rolling.

This wasn't an accident or a verbal stumble. Trump was telling the room, and the reporters in it, that he understands how this game works. Make the threat vivid enough that everyone hears it, then give them a clean quote they can print without feeling like they're taking sides. The threat does its job. The denial provides cover. Everyone gets what they need.

...The term describes what happens when journalists take incoherent, threatening, or unhinged statements and repackage them into the conventional language of political reporting. It's how "they're eating the dogs" becomes "Trump raises concerns about immigration." It's how an hour of rambling about sharks and Hannibal Lecter becomes "Trump holds rally in Las Vegas."

But this is something slightly different. Trump isn't just benefiting from sanewashing; he's anticipating it. He's building it into the structure of his rhetoric. The denial isn't a softening of the threat; it's the delivery mechanism that ensures the threat travels through mainstream news coverage without being flagged as dangerous.

The News: The View From The Cheap Seats Timothy Burke (the consideration of African nations is novel)

...What makes Carney's speech so powerful is not merely that he insists that we are on the other side of a permanent rupture, but that he recalls with unblinking clarity the degree to which the postwar system was a lie, maintained only by "everyone's willingness to perform as if it were true". The United States and the former imperial powers of Europe violated the principles and rules of the system they built when they saw fit, exempting themselves on the grounds that they meant well, that they were doing what was necessary to protect the global order, that their adversaries were evil—or at least worse than the West—and deserved no consideration. They looked the other way when their own proxies were violating human rights and robbing their own people blind. Carney is especially on the nose when he notes that the promises around global integration made with such confidence by neoliberal leaders in the US, UK and EU, that the connectedness and intertwining of national economies would be a never-ending high tide that floated all boats, have been broken almost from the moment they were made.

...I am curious how Carney and other heads of state who harken to his message will think about those shared values in practice. Because one of the original sins of the old order that Carney is rightfully calling out is its hypocrisy about breaches committed by the powerful but also about overlooking profoundly illiberal authoritarian regimes in many nations that had either extractable resources or that provided access to strategically important territories for the superpowers and the former empires. The historian Frederick Cooper has talked about "gatekeeper states" in sub-Saharan Africa, in which the ruling sovereigns collected rents from developed nations and from international institutions like the World Bank by permitting them to breach or bracket off some portion of their sovereignty for all sorts of ends—leasing oil extraction off the shore of Angola, allowing the building of "millennium villages" as an experiment in ending structural poverty, letting conservation NGOs have administrative authority over ecological reserve areas, allowing Africom to carry out operations against Islamist insurgents, and so on. Many of those projects were articulated as benevolent and all of them notionally respected the sovereign authority of the gatekeeper, but they also all accentuated the inequality and difference between the rentiers and their international tenants. Gabon is not sponsoring an NGO to preserve marshland in the Camargue in France, Nigeria is not underwriting a development project in Appalachia in the United States, Kenya is not bidding to build wind farms in the North Sea. (Though there was Africa for Norway...) The difference between a gatekeeper and a power traversing the gate was not just relative poverty and relative wealth: it was an organizing principle of the world order that held through the Cold War into the neoliberal era.

...the world that Carney is point towards shakes out differently for different countries in different places. If the great powers will now act without restraint or liberal values, if they will act more like gangsters, what is that to Africa? Latin American states now live in the renewed shadow of Trumpist America. Eastern Europe and perhaps Iran need to keep their eye on Russia. Japan, South Korea, Taiwan and Southeast Asia must watch China carefully. Nations in those regions must take an interest in Carney's league of "middle powers" for reasons of self-protection alone. Sub-Saharan Africa, on the other hand, entirely loses one major kind of rentier wealth in the new order. Development institutions will be packing their bags and going home, whether they are from the great powers or the middle powers. If Europe is trying to fend off both Russia and the United States, it will have to adjust its guns-and-butter ratios. "Soft power" doesn't buy much of value in the new world order, because the institutions where it was leveraged are curling up into irrelevance.

...African states are too far from the centers of hegemonic power for any of the great powers to want to extend their military power in a substantial way onto the continent. This is in fact one of the things that the middle powers in Europe can do to fuck with the great powers—walk away from the maintenance of old imperial holdings or post-imperial networks that the United States has relied upon. It's one reason that Trump is flipping out about the UK giving up sovereignty over the Chagos Islands and thus control of Diego Garcia. Trump isn't going to have the network of treaties and internationalist institutions that the US leveraged in the old system. Wherever the US wants to maintain military assets or have privileged extraction rights beyond its hegemonic frontiers, it's going to have to pay directly in a market where the price is going up, and wherever it wants a military base, it's probably going to have to actually exert military force to take it and hold it continuously. Which, protip hint: will be harder and more expensive in an era of global gangsterism than it was before. So if you're if you're a citizen of an African nation-state that is not obviously invited to be part of the Middle Power Supper Club, how should you look at what Carney is envisioning? It's not a good picture, in that the gangster great powers are likely going to violently constrict the availability of aspirations they underwrote through permitting or encouraging diasporic relocation, leaving mostly the violently exploitative kinds of expatriate labor that the Gulf petrostates specialize in contracting for. Or signing up—accidentally or otherwise—for mercenary work in a great power military. It's also not good in that gatekeeper regimes provisioned a narrow slice of work within their national territory through NGOs and so on, at least some of which is already gone or will be going soon.

...The suffering from the end of the old era in sub-Saharan Africa is going to be enormous. It has already—I don't doubt the figures that people have been citing of deaths that are directly attributable to the sudden cut-off of aid from the United States during last year's DOGE follies and afterwards. But African citizens—and African sovereigns—need to accept the finality of Carney's vision and rethink a lot of things accordingly. If no one is coming, if there is no traffic through the gate from which to collect rents, then there is no choice for many African nations to save themselves, to save each other, and build new relationships with the middle powers that are no longer about being a superpower's proxies or a development organization's experimental subjects.

...African sovereigns should stop collecting rents and start raising their prices. The gangsters will be stretched thin, because they've got nothing left but bullets and money. The countries that have agreed to take American deportees have been operating by gatekeeper rules, figuring they collect a bit of rent now and it'll be a steady income flow in the future. That's not the way. Make Trump pay through the nose to buy even one jail cell. Raise the price on American firms pumping oil, mining rare earths, cutting tropical woods. If we're in a world beyond globalization and beyond multinational companies, then make a gangster power pay what the resource is worth. Dare them to pull a Venezuela, if you must, because I guarantee you this: Gangster America is a much weaker military power already than its predecessor and it will be weaker still. Trump can't be invading Congo and South Africa and the Chagos Islands and Colombia and Angola and Greenland and the Panama Canal and anywhere else where there's something he wants or needs. He doesn't have a Wehrmacht that can cross contiguous borders, he has a volunteer army that was stretched to its limits occupying Iraq and Afghanistan. The United States has already demonstrated how easy it is to overextend itself, and no matter how lunatic Trump himself might be, that's a hard material limit. If they're going to be gangsters, then don't collect rents, take big payments. If they overextend themselves on territory beyond their frontiers, make them pay a price in blood and treasure for the miscalculation. The current rulers of many African states, being full of avarice and short on imagination, have sold away valuable resources and important services for almost nothing because they wanted the steady rents that the old order provided. This is a transactional world now, with no certainties to rest upon

Courageous Carney vs. Demented Donald Paul Krugman

quotes Carney:
We are in the midst of a rupture, not a transition.

Over the past two decades, a series of crises in finance, health, energy and geopolitics have laid bare the risks of extreme global integration. But more recently, great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited.

You cannot live within the lie of mutual benefit through integration, when integration becomes the source of your subordination.

...I used to joke that Canada was closer to the United States than it was to itself. Nature wants Canada and the United States to be closely intertwined. And for this reason Canada is arguably more exposed to the consequences of Trumpian wrath than any other nation.

Trump Gives a Stump Speech at Davos David A Graham at The Atlantic

...Where does one start in summarizing such a speech? The straightforward racism? The economic illiteracy? The determination to alienate allies? The many moments where the president said things that were blatantly, provably false? And because he rambled through more than an hour, he covered a lot of ground.

...Trump seemed determined to alienate allies. He mockingly imitated French President Emmanuel Macron's accent. He took a swipe at Canadian Prime Minister Mark Carney. He ridiculed the United Kingdom as too incompetent to extract oil from the North Sea. "Sitting on one of the greatest energy sources in the world, and they don't use it," he said. But he continued his administration's outreach to Europe's far right, blasting immigration to the continent. "Certain places in Europe are not even recognizable, frankly, anymore—they're not recognizable, and we can argue about it, but there's no argument," he said. He claimed that prosperity and progress in Europe and North America were a result of a shared culture that was incompatible with immigration.

Let companies set prices Matthew Yglesias

I don't think the argument is that hard to follow. It's something like: I think that's sort of all there is to it. The way the post-WWII American alliance system works is that in most cases, if you look at the arrangements piece by piece, the United States is giving its partners a good deal. To Trump's way of thinking, that's America being a sucker country. His view is that if we're going to help defend South Korea, we should do so on terms that are so painful to South Korea that it's a very close call for them whether they want to accept our help.

In fairness to Trump, this philosophy has worked pretty well for him in life. If you'd asked me abstractly about the idea of just refusing to pay his contractors back when he was a hotel developer, I would have told you that this kind of short-term thinking can't pay off for a businessman. Sure, it's probably true that most of the people you stiff won't have much recourse in practice. But the damage to your reputation will be too severe to make it possible to continue doing business.

In reality, though, Trump managed to move on from scamming contractors to scamming shareholders to becoming a reality television star. He then did things like run a scam university. And then pivoted into politics and became President of the United States! Trump, at least, has shown that you can get pretty far in life while having a bad reputation.

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After the thugs Adam Tooze

...Next morning rumors circulate, about a dinner, an egregious speech, heckling, walk outs.

It rings true. I felt that energy a few hours before.

That night, powerful men slept badly.

The next morning, whispered exchanges:

"He embarrassed himself".

"Four nightmares!" A shocked look of sympathy. "Four nightmares...". Head shakes of disbelief.

We were warned.

If you don't give him what he wants, the President reminds us on Wednesday afternoon: "he will remember".

The speech another onslaught on the senses. Meandering, bizarre, aggressive, threatening, vaguely conciliatory, absurd and yet compulsory.

The impression hardens in me, or being part of an abusive dynamic. A kind of co-dependent performance.

I remember the evening before, the stony-faced CEO warning me:

"Be clear. Don't be surprised. When he comes through the door ... They will beat up on you. You will squeal. Then they will beat up on you again. You will hurt some more. They don't mean to kill you. In the end you will settle on a spectrum of terms that they dictate. This is how it works. Time you understood it."

It wasn't said with an apology or any embarrassment. It was delivered impassively. He did not distance himself from what he was describing. This wasn't mere repetition of propaganda formulae, as in Havel's idea of "living in a lie". This was more active. He was instructing me like an uncomprehending "sub"

The Carney Doctrine: A Catechism for Corporatism JM Smith at Harry's Last Stand

...I've been thinking a lot about Mark Carney's speech at Davos this week. It offers no hope for the average worker, but is very optimistic for the wealthy and the managerial class. The news media is now calling it the Carney Doctrine, but it really should be called the Corporate Catechism.

Pragmatism in capitalism always builds a road to authoritarianism and concentration camps. Pragmatism in capitalism allowed for slavery, colonialism, and the systematic exploitation of workers from the industrial revolution onward — a logic that has never been abandoned.

What is presented as realism is, in fact, resignation &mdash and resignation has always been the language of decline. That is not leadership; it is the managed acceptance of inequality as destiny.

There is a better way. My father and many others have articulated that the better will always be when democracy is a tide that raises all boats, not just the rich. That tide must be for socialism now. And the fight for socialism must be done in earnest this year, with general strikes, mass civil disobedience and the disruption leading to the dismantling of the corporate news media, which shackles citizens to xenophobia, ignorance, exceptionalism, anti-science and groupthink.

24i26

Convening, staging, acting ... and was it never about Greenland and mainly about the Fed? Which Davos-theory won? Adam Tooze

...structural problem of all forums convened by business interests. Ultimately, though business may have might and wealth and technological expertise, an effort by business, as business, to convene a public forum is always going to be shot through with severe conflicts of interest. “Total corporatism” rarely works, as Charles Maier demonstrated in his classic Recasting Bourgeois Europe with regard to the 1920s. Which is why conventional media businesses tend to operate at arms length. In Davos, especially when it is BlackRock doing the convening, that mediation collapses.

...is it plausible that by convening the crowd and offering up the stage at the WEF for Trump to do his thing, Larry Fink raised BlackRock’s visibility on Trump’s radar? Surely he did. Larry runs a pretty impressive “club”! He has quite the board. And Trump loves himself a board. Fink convened the show and offered Trump the chance of the kind of applause that he loves.

A Nation on Thin Ice Sarah Kendzior

... It was novel not to be lied to, even though the honesty was about the evils of my country. I'm glad Carney dispensed with the notion of the "rules-based international order." Belief in institutionalism — and denial that institutions have been protecting transnational organized crime all along — is how we got to this crisis. I discuss that (normalcy bias, savior syndrome, etc) in my book They Knew. My one major critique of the speech is that, while of course the US government is responsible for its actions, those actions are made possible by global oligarchs, mobsters, and plutocrats. As I've been saying for a decade, the US is a transnational crime syndicate masquerading as a government. In order to defeat the US mafia state, you need to defeat the billionaires backing it. That means confronting so-called "allies" like Israel and so-called “enemies” like Russia. Their worst actors are one and the same: men of multiple passports and digital currency. It means addressing Silicon Valley and the emergence of a global surveillance state shaped by fanatics like Musk and Thiel. Overall, I found his speech encouraging. I just hope he sees the big picture.

...Trump operates as president the same way he did as a "businessman": he is entrenched in organized crime. His main tactics are bribes, blackmail, and threats. His main weapons are the courts, propaganda outlets, and lawyer fixers and operatives, some of whom will privately threaten to kill you. We saw the Trump model in the lead-up to January 6. It began with denial, then a threatening call to a Georgia official, then court battles that he lost, and finally a violent attack — and then ensuring complicit actors are installed to protect the elites behind that attack. This is the same strategy for Greenland. It is currently being approached as a "deal" in which inhabited territory, largely populated by indigenous people, is treated as real estate. This plan is more elaborate than “purchasing Greenland”: it involves mineral licenses and Arctic trade routes and other oligarchs. Military invasion is not Trump's first line of offense — but threatening it has other advantages, like making Europe hate the US and want to kick it out of NATO. That's a longtime Trump/Putin goal. It is important to note that the Greenland plot was devised by lifelong Trump partner Ron Lauder. Lauder is a fanatical Zionist deeply connected to Netanyahu and Russian/Israeli oligarchs like Roman Abramovich and Lev Leviev. His brother, Leonard Lauder, was one of the men who arranged for Trump to be sent to the USSR in 1987, along with Soviet ambassador Yuri Dubinin and future Russian ambassador to the UN Vitaly Churkin, who died under suspicious circumstances in 2017 and was revealed in 2023 to be an Epstein associate. I wrote about Lauder and Churkin in my 2020 book Hiding in Plain Sight.

...There is no line Trump will not cross. There is only self-interest. His pursuits are now rooted in greed and sadism, because he has already attained impunity and power. He is old and afraid of his mortality. He is also incapable of shame. However, he does understand shame. He knows there are universal taboos that, if exposed, will give him a level of infamy that he does not want. There are very few taboos that cause this fear. Those universal taboos are pedophilia, child murder, and incest. Trump's usual response to committing a moral offense has been to shift political culture so that his offense is normalized, as he has done with his extreme bigotry and crime. Keep your eye out for new attempts. It's notable that there is a propaganda effort to normalize child murder — for example, the genocide of Palestinian children — and the advent of AI child pornography all while the Epstein case looms in the background.