How much do you think it costs to make a pair of Nike shoes in Asia?

The free traders also need to accept the reality that the UK’s decline started long before Brexit and disputes about fishing. In terms of per capita GDP, the UK lost its edge over the rest of Europe in the 1970s, and then simply never recovered from the 2008 global financial collapse. Without the empire, the UK’s “competitive advantage” in financial and legal services wasn’t worth shit.

I strongly suspect the US cannot maintain its outsized per capita wealth, on the back of the reserve dollar, in a world where China has an economy twice the size. Just as the UK couldn’t when the US economy overtook the British empire and the dollar replaced the pound as the reserve currency.

The question, instead, is how we’ll be able to adapt to that new reality. And I suspect we’d rather be Germany in that future than the UK.

I think Germany is a bit of a special case due to what happened after the war, I think a more objective comparison might be say France.

Yeah this is arguably the tail wagging the dog - Trump is a reaction to the end of US hegemony, not the cause

Trump has zero to do with previous level of US hegemony. He represents what large part of Americans are - for internal reasons that have nothing to do with geopolitics.

German engineering etc was famously rather good before the war too. The Ruhr valley is part of the reason for this: energy sources (coal) and minerals (iron, copper, etc) very close together. It was the ideal setting for an industrial awakening.

Also, even after the marshall plan, Germany kept its existing advantages in industry in large part simply by actually encouraging them to exist. The UK has no industrial policy and actively shed most industries in the 1980s, relying instead on direct investment and deliberately not growing domestic companies.

"Make America Great Again" - the geopolitics are literally right there on the label!

Americans might not know their number is up explicitly, but they can smell it. The days of US hegemony are numbered. In one way or another, people get it. Why else would they want to Make America Great Again? It is an inherent recognition of decline.

It wasn't a criticism of Germany at all, just that I think alot happened there that was special politically with the east and west, support for reunified Germany was massive, it's just therefore a bit hard to say what would of happened if after the war it was lumped with huge debt and ignored.

The US appears to be trying to end the reserve dollars. Something that surprisingly few people have mentioned recently is that having the biggest trade deficit is the same thing as being the global reserve currency. Because they're the same thing, ending one of them also ends the other.

There does seem to be some sort of cycle in play: first a slave-driver-type economy creates a whole lot of wealth, then people get human rights, then they stop being driven like slaves and coast off the accumulated power, but forget the basic principles of wealth creation in the process (see also "good times create weak men" etc) and just spend all their resources arguing about who gets the wealth that is there instead of creating more. And I'm not saying that in an individualist framework - the reason individuals can't do it is a problem with the whole society, not with those individuals.

> Something that surprisingly few people have mentioned recently is that having the biggest trade deficit is the same thing as being the global reserve currency.

Can you explain this a little more? Why does having a trade deficit make your currency more valuable? My naive assumption is it would put more dollars in other countries, so they don't need them as much, making dollars less valuable.

"Why does having a trade deficit make your currency more valuable?"

Its the other way around, having the reserve currency drives demand for it and therefore imports are cheap and budgetary deficits are free (since interest rates are low).

You get free stuff and free debt, but over time your industry collapses

Your currency being valuable increase imports!

Ultimately you get out of this trap by making work sustainable and trying to level the playing field.

Almost nobody is spending resources in the US. And that's half of the problem. It's spent elsewhere, therefore labor stagnates or falls, only leaving low tier jobs to work. No factories locks out advancement reducing morale and draining the best that could have their kids advance.

In the US, you had skyrocketing prices on basics like healthcare and housing too, way more than elsewhere. UK has a lot of this problem too.

That together ultimately causes a reduction in teaching and educational standard, which further shrinks the high end advantage.

Short version: economy and people hollowed out in the middle is unsustainable.

The (relatively) uninformed US population is 100% an intentional domestic outcome of US geopolitics.

Other counties need dollars to settle their international trade (particularly oil but practically a lot more), and to hold in reserve. The dollar is actually the only currency that's been printed enough to serve this purpose alongside its other benefits. This demand for dollars makes the US less attractive to import from as the price of the dollar is driven up by this extra demand.

> Ultimately you get out of this trap by making work sustainable and trying to level the playing field.

And you can't make work sustainable and level the playing field when you have free trade with developing countries.

People cite Ricardo like gospel, but the math of free trade treats every safety net, worker safety protection, etc., as a loss of "comparative advantage." You know how Texas takes jobs from California by having lower standards, lower wages, etc.? That's what happens when you have free trade with third world countries. It's a race to the bottom.

> Trump has zero to do with previous level of US hegemony.

> He represents what large part of Americans are - for internal reasons that have nothing to do with geopolitics.

No, it's all about geopolitics. Perhaps the most thorough analysis of the 2024 election concluded that Trump won 18-25 year old men (white + non-white). Trump did better among younger men than men 75+. Trump also won young white women. (See: https://www.nytimes.com/2025/03/18/opinion/ezra-klein-podcas...)

Whatever preconception you have about what motivates Trump voters, you're incorrect. MAGA is about the impending loss of America's stature due to immigration and free trade. It's all about geopolitics.

> impending loss of America's stature

Impending cause of loss of stature.

The special case was that big chunks of Germany ended up under the control of capitalists. The pattern in Germany, Japan and even Korea is that in the post-war era the US understood how to build up a country's economy and their policy formula was effective.

The observation is depressingly simple - competent economic management leads to great results. Typically that involves investing a bunch into developing industrial capability. Listen to people like Ed Deming. Let people build things. The US isn't doing that, we haven't seen any new industrial capability out of them in decades. Silicon Valley is the closest thing they have in the modern era and it is mostly services.

If you ask where the wealth is supposed to come from in the Chinese economy there are a lot of obvious answers - it could be energy innovations from the nuclear or renewable sectors. It could be manufacturing innovation as they work on improving their factories. Maybe they're going to come up with hot new products out of Shenzhen. They're big players in the AI revolution and working to build up domestic semiconductor capabilities. Maybe they're just going to wait for other people to come up with good ideas and copy them with speed and scale on their side.

The US has a much less obvious story. Biotech could be an amazing path, but they've left the ring for a lot of the more promising industrial options. And holding the health industry up as being the way to a bright future seems a bit weird. Maybe they succeed in building a services economy that impresses people; that'd be a cool first.

US is the alpha consumer. If you can sell in the US, you won. You want to sell in the US. You get dollars for what you sell in the US and since everyone else also wants to sell in the US, you trade with everybody using dollars. Also, your government goes batshit crazy statistically more often than the US, so your currency risk is smaller if you're settling trade in dollars.

Having the global reserve currency is another way of saying other countries have a lot of your currency.

Having a huge trade deficit is another way of saying you've sent a lot of your currency to other countries and haven't received it back yet.

I'm sure you can see how those are the same thing.

Yes and no. The MAGA revolution is internally carried by the lower class not associated with and uninterested in geopolitics. In fact they believe in exceptionalism and don't understand why they feel exploited and don't know who is doing it. However it would not be possible politically if not tolerated by the upper class who is smelling decline (of their wealth), because competition has moved into their part of the value chain, so they do two things. One, they now support protectionism to shield from competition. Two, they wish to exploit the lower class harder, so they point them outwards to avoid a physical revolution or an amicable redistribution.

If you want to explain MAGA you have to understand it's a convenient alignment of the upper class and the lower class for different reasons.

I’d say it’s the opposite.

So much of the US government has been focused on maintaining the global hegemony, US citizens wellbeing was sacrificed.

Trump was elected in reaction to rising global hegemony, or at least the effort put to maintain it, not the end of it.

To say US hegemony is numbered doesn’t make much sense. The US economy has only pulled headed further from any Western rival, and China’s economy is stumbling to the point it’s questionable if it can grow enough before it’s population starts shrinking. Russia has been stagnant since the 1990’s.

If anything, US ability to project power is greater now than any time in the past.

> If anything, US ability to project power is greater now than any time in the past.

Absolutely not. It caved to Russia in the first place, it is weak against Russia. It WANTS to project power, but while doing so, it is showing itself crumbling into itself.

It was about inflation, prices, hate toward trans and immigration. That is judging based on pre-election topics. They did not cared about geopolitics.

> Whatever preconception you have about what motivates Trump voters

By a large, based on what they themselves say and write, they wanted to cause harm to their perceived enemies and have fun watching it. That is primary reason for why conservative and republican voters vote.

So the knee-jerk reaction is to knock it all down and speed up things while making literally every human in the world hate you?

Thats dumb to be polite but not surprising when considering where it comes from. Republicans simply can't admit their candidate is incompetent pos, superior ego thing or something. The incompetent part is what matters in this specific discussion, way worse than first term which was tampered by more reasonable people delegating actual tasks.

The US unwillingness to project power is a direct result of its current leadership. The US capability to project military force is, for better or for worse, pretty extreme in the global context. The ability to support a protracted conflict would depend on the support of the population, but it’s unwise to think that the current administration is a reflection of potential. When the court jester carries the sword, it’s a blunt and careless rod, but that same sword in the hands of a master is an instrument of lethal precision.

The sword remains unchanged.

Not being allowed a real military, protected by US resources instead, means a huge amount of investment freed up for the civilian sector (similar to Japan/Italy to some extent)

I am deeply curious to see how people on the left will digest Trump if he doesn't get reined in by congress/wealthy people. I think a lot of them are going to be caught flatfooted if he gets his way with taxes (no income tax under $150k, no tax on tips), and if he gets his way with global trade restructuring (on shoring of blue collar work).

Trump is currently causing an earthquake on behalf of the middle-lower class. Maybe blue tinted glasses prevent them from seeing it, but right now he is definitely doing the opposite of "entrenching the power of billionaires and the elite".

Unfortunately, I believe that this is a severe miscalculation on Trumps part, as the "kill the billionaires" class seems to be much more fueled by anger than by rational understanding.