← Plain English with Derek Thompson
Plain English with Derek Thompson
Trumponomics Explained, Part 2: The Enshittification of American Power
00:52:08
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- [00:02]
A
As the 21st century was getting underway, Hollywood released a series of films that were daring, entertaining and absolutely unmissable. Films like 25th Hour, Bring It On, Zodiac, and no country for Old Men. They arrived during the George W. Bush era, a chaotic time in America. Think 9, 11, Katrina, the mortgage crisis. After the Bush years, the country would never be the same, and neither would Hollywood. I'm Brian Raft, and in my new limited series, Mission Accomplished, we're gonna dive into some of the biggest movies of the Bush years and look at what they said about the state of the nation. We'll go behind the scenes with filmmakers and experts and relive some of your favorite movies from the early 2000s, from Donnie Darko to Michael Clayton, from Anchorman to Iron Man. So slip on your sketchers, dig out your old Nokia and join me for mission accomplished starting Aug. 12 on the big Picture Feat.
- [01:04]
B
This episode was brought to you by ServiceNow. We're for people doing the fulfilling work they actually want to do. That's why this was written and read by a real person and not AI. You know what people don't want to do? Boring, busy work. Now with AI agents built into the ServiceNow platform, you can automate millions of repetitive tasks in every corner of your business, it, HR and more. So your people can focus on the work that they want to do. That's putting AI agents to work for people. It's your turn. Tap the banner to get started or visit servicenow.com AI Agents this episode is brought to you by KPMG Making an Impact is how KPMG Helps make the Difference KPMG applies advanced tools and strategic thinking to convert data into actionable knowledge and deliver value by improving improving performance through transformation, modernizing processes with technology, harnessing the power of data, navigating complex MA transactions and enhancing trust among stakeholders. Go to KPMG US Advisory to learn more. KPMG make the Difference Today Part 2 in our what is Trumponomics? In 2022, the writer Cory Doctorow coined the term enshittification to describe the process by which companies seeking to make their products more profitable invariably made them more shitty. So companies would begin with this high minded promise to build something unprecedentedly fantastic. But the motivation to shake every last penny out of the product would degrade the customer experience over time. So you think of an app that you loved that used to be ad free, for example, that's now festooned with pop ups and prompts and emails begging you to upgrade, upgrade, upgrade, while the underlying app itself gets worse over that's enshitification. In the last few months, I've been wondering about whether this term is a useful framework for understanding our economic policy under Donald Trump. MAGA came to office with grand promises for the American economy. Trump promised a golden age, but on a decision by decision basis, his strategy seems less interested in upgrading American science or energy or growth, and more interested in using power for personal advantage. Consider three examples in the realm of TikTok, crypto and AI TikTok. In 2020, Trump issued an executive order that would have effectively banned TikTok, claiming the company, which is owned by a Chinese corporation, was a threat to US national security. Congress later acted on this by passing a law forcing TikTok to sell itself to a non Chinese buyer. But last year, in 2024, Trump suddenly changed his mind on TikTok. Maybe he was inspired by his performance on the social media platform. Maybe even more likely, he was influenced by a conversation with a donor, Jeff Yass, who's also a major investor in TikTok's parent company. In either case, Trump has repeatedly stayed the execution or stayed the forced sale of TikTok, despite the fact that doing so seems to contravene the Congress stated interest on crypto, a technology that I'm not particularly fond of. I've done my best to talk to people, you know, talk to folks who say that we should change our regulation of this tech, but Trump has gone so far beyond that. In one case, a crypto billionaire named Justin sun invested heavily in the Trump family's crypto venture, and soon thereafter the administration forced the SEC to drop a case against Justin sun without a coherent explanation. This was a quid pro quo so obvious it seemed ripped from 1870s Gilded Age headlines. But here it mustered little attention. Trump essentially overruled the SEC because he was personally benefiting from this particular crypto mogul. On AI. There's a case to be made that the US should restrain from selling the most advanced GPUs, sort of advanced computer chips to China. In fact, I've heard this case often made by Republicans. But after a meeting with Nvidia CEO Jensen Huang, Trump just struck a deal with Nvidia to collect a share of their export revenue in an unprecedented and possibly unconstitutional move without the consultation of Congress. Now, I'm well aware that when I record episodes about Trump, I'm often accused of losing objectivity or of suffering, perhaps from Trump Derangement syndrome. But here I really am trying to be objective. In each case, I just listed TikTok crypto AI. You can line up the stated interests of the United States, forcing the sale of TikTok, prosecuting financial crimes, guarding our best AI chips, and then compare those to the interests of the Trump family to profit or demand tribute through one off deals. And every single time, Trump's interests outweigh the articulated interests of the United States. So again I ask, what is this thing we call Trumponomics? Earlier this week, we spoke to the Wall Street Journal's Greg IP about how Trump makes use of emergency powers to direct the private sector. Today's guest is Henry Farrell, a professor of political science at Johns Hopkins. Farrell has written extensively on how the US has in the last few years weaponized its economic power to force other countries to do our bidding through sanctions or the freezing of bank accounts. But today I want to invert this a little bit and consider the many ways that Trump has weaponized the office of the presidency, not just against other countries, but against American interests. I'm Derek Thompson, this is plain English. Henry Farrell. Welcome to the show.
- [07:36]
C
Delighted to be with you.
- [07:38]
B
Henry. I'd like to start with a stupid, simple question. Donald Trump is, I think it is fair to say, an unusual president. As a political scientist, what is it that you think makes him most unusual?
- [07:52]
C
So I think that Trump is allergic to process. He is allergic to other people telling him what to do. And this means that in a very important sense, he is allergic to the things that have made American presidents very powerful in the last 60 to 70 years. Because if you think about the way in which the presidency works, it really is about leveraging the power of the administrative state, leveraging all of the expertise that the administrative state has built up. And these are things that Donald Trump either doesn't care about or he is actively hostile towards. I think this really does create a very, very different approach to politics than have seen before from a US Presidency, including in some important ways in the first Trump presidency, where people like God help us, John Bolton, somebody who I would never have thought of as being an avatar of order, is rushing around trying to impose some kind of process on the foreign policy, decision making administrations, the part of the administration that deals with that. And now we're in a world where more or less, I think anything goes. And so if I say, what is Trumponomics? Political scientists like me, we tend very often to try and come up with grand abstractions about. Here is the fundamental logic, Here are the five principles that drive Donald Trump. I don't think you can do this. I think that you should think instead of Donald Trump as being Kind of like a billiard ball. I'm sort of bouncing around between these different possibilities. He clearly has a kind of impetus. There are certain things that drive him, but the ways in which these intersect with the ordinary ways in which foreign policy is made is a quasi random process. And we are going to see a lot more unpredictability over the next few years.
- [09:42]
B
You just said something very interesting that I think might cause some listeners to bump a bit. You said Trump is allergic to the things that have made American presidents strong. And that implies a style of power that is relatively weak. I think most people would actually assume the opposite, that Donald Trump is commanding, insisting on powers of the presidency that make him too powerful, too strong, which is why I hear so many comparisons to strong men from other developing countries like Turkey or Argentina. How do you feel then about those comparisons?
- [10:17]
C
This is a very, very weird sounding comparison. It is to Lorenzo de Medici, who is a famous Florentine politician. So there's a great piece of sociology written by these two professors, Paget and Ansel, talking about the ways in which de Medici actually made and de Medici, he was a pretty crafty and I think a much more sophisticated person in many ways than Donald Trump. But the one thing that Paget and Ansel stress is de Medici, he never wanted to be pinned down. So they're contrasting this with standard accounts of politics in which politicians have goals and they figure out the smartest way to reach these goals. And they say that this guy instead, the way in which he operated, was to try and make sure that everybody else gets pinned down. They reveal what their preferences are, they reveal what they want, and then the Medjichi has this power, which is effectively this power to be the person who responds and to be the person to whom everybody else has to respond. Everybody else has to update their plans depending on what he decides. I think that if you can think about Donald Trump as being like a kind of a cut rate version of this, I don't think that he has that same kind of deep sense of strategy that a Florentine Renaissance politician had to have. But instead, as somebody who absolutely does not want to be constrained, and anytime that he feels that he has been constrained, he's liable to do something crazy and unpredictable just to keep everybody else guessing. And so I think that this is really the fundamental. This is the fundamental comparison that I would draw in order to explain Donald Trump. And I should say this is something that I said right at the beginning of his first administration. And I guess we all tend to remember the predictions that we made that came to pass, and we conveniently forget the ones that did not. This is the one that I would stake my reputation on, as this was a bet that actually turned out to be 100% right about how to think about Donald Trump.
- [12:19]
B
I had never heard that Trump is the modern Medici. I will definitely remember that one. You've written frequently, including in books, about the way that America weaponizes its economic power to get what it wants around the world. And one thing I've been struck by is Trump's willingness to weaponize power internally to get what he wants from American entities, whether it's law firms, colleges, cracker barrel. He seems to delight in creating pain and then demanding tribute in exchange for the removal of that pain point. You can see the tariffs in this way in which he negotiated, or claimed to have negotiated $1.5 trillion of foreign direct investment from countries like Japan in exchange for changing their tariff rate. You see it with the deals he made with Disney and Paramount and all these law firms. I wonder how this fits into your Medici diagnosis, this interest in willingness to weaponize the power of the executive branch to create pain for the purpose of removing it in exchange for tribute.
- [13:25]
C
So I think that there are some very, very deep comparisons there. And I should say that this was work which a co author of mine, Abe Newman, and I develop together. So the two of us came up with this idea of what we called weaponized interdependence to describe the way in which the United States, even before Trump, had looked to try and use various forms of really boring seeming infrastructure. Financial payment systems, the way that the Internet works, supply chains of semiconductors. But the short version of the argument was we said that these boring forms of infrastructure turned out to be incredible sources of structural power in the global economy, that this was the plumbing of the global economy, which nobody paid attention to until the plumbing became political. So here I would say two things in response to you. First of all, that we are really seeing, as you say, this is being developed on the domestic stage as well. If you want to understand the ways in which, for example, the Trump administration has been repurposing money flows. For example, we read today in the New York Times about how Trump appears to be applying a kind of a pocket rescission. And there's a bunch of other ways in which the Trump administration has been diverting money. This is in large part thanks to their mastery of various obscure seeming bureaucratic structures, their mastery of this treasury payment system, all of these, again, seemingly dull parts of the infrastructure of the American administrative state, which turn out to be incredibly powerful when you use them in unexpected ways. So I think that part of the reason why people have had so much difficulty in adapting to the world of Trump is because people simply did not expect or understand that this was going to happen. They did not perceive these vulnerabilities ahead of time, except for a few people, of course, who were yelling and who were not getting enough attention paid to them.
- [15:23]
B
The Trump administration is really aggressive about using esoteric statutes to justify its actions. You just mentioned the pocket rescission, which is a move. Let me see if I can explain it very simply. The president essentially withholds funding that he doesn't like, say, foreign aid. And typically, Congress would have months to respond by voting to release the funds. But there's thinking that if you withhold certain funding at the end of the fiscal year in September, Congress doesn't have enough time to vote again to authorize that spending, to force that spending. And so you essentially, in the executive branch, control spending in a way that is typically illegal. I think that's basically how it would work. And it's exactly what you said. It's. It's a dull part of the infrastructure of the administrative state, but it. It allows Trump to assume that we typically think of as being beyond the presidency. One thing I struggle with, personally, as I try to think about this administration, is to what extent should we see it as evolutionary versus revolutionary? So the book the Imperial Presidency was published by Arthur Schlesinger Jr. In 1973. That's over 50 years ago. So we've been talking about imperial presidencies for at least 50 years. Do you see Trump as an extension of the historical broadening of presidential powers, or is this a real break from tradition?
- [16:48]
C
So I think it's really hard to make distinctions, and we're also trying to figure out all of this stuff as it is happening. But I think that there are some interesting and important differences between the Trump administration and what people in the Biden administration were looking to do. So, absolutely, if you look at people in the Biden administration and people around them, say, for example, the folks in the Roosevelt Institute, there very clearly was a sense there that we needed to get away from, Call it neoliberalism, call it whatever you want to, but we needed to get away from the set of assumptions that the market knew best, and we needed to get to a place where the state played a more important role and a more important role in figuring out some of the challenges that we faced and in which, for Example, the state was going to be willing to spend on a very large scale in order to, in order to bring through, for example, some kind of a transition to the green economy. And instead, I think we're seeing two things which are quite different here. First, we are seeing a kind of something which is much more autocratic. That is, we are seeing a world in which there are favored companies and disfavored companies. And if you do not enjoy the favor, you can have extremely harsh penalties applied to you. You can find that your ideals do not go. You can find yourself potentially subjected to massive fines, not being allowed to do business with government. All of these things which really go much, much further and are much more punitive. The second thing that I think we see is we see a process of enrichment happening of people associated with the Trump administration, the Trump family, and a variety of financial relationships, relationships being built up, which simply was not true during the Biden administration. You may agree or disagree with the things that Biden people did, but the kinds of frank, out in the open air corruption is a huge, huge part of this new system that is being built up. So I think that you can certainly look at this as a world in which the state plays a much more important role. But the state here under Donald Trump is not necessarily a state that is looking to achieve some kind of general set of policy aims and is prepared to be a bit tougher with industry than in the past in order to get this done. This is a state in which the financial self interest of a lot of actors at the core is absolutely an essential part of the process and in which I think we're seeing this new weird hybrid coming into being. During the Biden administration, of course, there was a lot of. There was a lot of firewalling between the interests of business and the interests of government. And now it's really, really hard to tell where the one ends and the other begins. I think on the one hand, you certainly see people like Adam Tooze or people around the Roosevelt crew who are suggesting that we don't necessarily want to completely roll back on state power if we ever come back, but they are absolutely concerned about using the state power for fundamentally different purp and I would imagine are absolutely as committed to the rolling back of some of the problematic relationships which have sprung up and which are going to get much worse over the next few years, that this is really part of their goal to get rid of this.
- [20:27]
B
It's not just Donald Trump who's different. This moment, as you said, is different too. And I think it's different for at least two reasons. Number one, you've written for years about the way that America has weaponized its economic power to get the world to do what we want them to do. But right now, there's another player on this world stage that is, in some ways and in some capacities, just as dominant as we are, and that's China, with its ability to build, to scale its technologies, to be dominant across manufacturing, and to have access to materials and commodities, whether it's steel or lithium, that they can use to threaten counterparties and make them do what they want to do. So one. One new aspect of this moment, I think, is the geopolitical power of China. Another aspect of this moment that I think is really powerful is artificial intelligence and the enormous bet that America has made both economically and politically in AI. And in a recent essay, you said something very interesting. You said, a year ago, the US Appeared to have a coherent worldview that tied together AI, American power, and China. But now that worldview is crumbling. So help me out here. What is the coherent worldview that we had and how has it been shattered?
- [21:48]
C
I think the coherent worldview goes something like the following. We have, on the one hand, we've got a bunch of people in Silicon Valley who are moving away from a notion about how it is that technology is going to reshape the world in liberal ways. And they're becoming increasingly concerned with geopolitics for a variety of countries, complicated reasons that probably aren't worth getting into right now. On the other hand, we have an administration, the Biden administration, which is increasingly worried about China. And this is something where there really is a lot of continuity between the very final part of the Obama administration, the first Trump administration, and the Biden administration on foreign policy. They are all increasingly worried about China, and they are, in particular concerned about the relationship between China and technology. So this focuses on, for example, the Chinese telecoms company Huawei, which initially is targeted under the Obama administration, They're beginning to get worried about it. And then under the Trump administration, there are various efforts to try and restrict semiconductors. But in the Biden administration, I think we begin to see something new getting added into the mix. And this is, as you say, AI. So we are beginning to see, around the time the Biden administration comes to power, people are beginning to have some kind of a sense of large language models of what possibilities might be associated with them. And we also have, according to Graham Webster has a great piece that came out in Wired about a week ago. We also have A number of people in D.C. policy who are connected into this world and who are very concerned about what kinds of consequences we might be in a world in which effectively China gets to AI first in some sense they are worried about, or AGI.
- [23:48]
B
I guess you mean. Yeah, general intelligence, super powered AI.
- [23:51]
C
Yeah, exactly. So we see, and I'm sure this is a much messier process in practice than it is in the ways in which academics describe it. We see a kind of consensus coming together relatively quickly, which is something along the following lines. That first of all, AGI, there's a moment of breakthrough, is probably going to happen sometime sooner rather than later. Secondly, that this is the entire ball game, that whoever has AGI is going to be able to shape the 21st century. Because the idea is that AGI is going to be self improving. It is not only going to provide you with better health care, better military technologies, better hacking, but it is going to be able to improve itself in an iterative way so that AGI creates better AGI, which then figures out how to create better AGI. So it becomes a kind of a runaway process. And so this obviously is something that if you believe that this is going to happen, you want to make sure if you're American, that this is the United States which gets this rather than China. A world in which AGI has Chinese characteristics sounds like a profoundly unhappy world for America and America's allies. So you see, first of all, a focus on trying to make sure that China does not have access to the machinery that it would need to make its own advanced semiconductors to train. There's less attention paid to the inference stage of AI, but that's a whole different question. And then you see a decision being made that not only are we going to make sure that China does not have the capabilities to build its own fast advanced semiconductors for training, but that it does not have access to fast chips, period. That it is denied access to the cutting edge technology and that it is effectively forced to make do as best as it can with the leftovers with semiconductors, which don't work nearly as well in training. AI.
- [25:58]
B
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- [26:35]
D
To you by NBA 2K26. A favor to my sons and me. All right, quick break. NBA 2K26 stacked this year. Game new motion engine. Smoother catch and shoot. The rhythm shooting is dialed in. My team added the W. So now you can get Caitlin Clark pulling up from deep. Larry Bird talking trash mid game. Jokic casually dropping triple doubles. It's absurd in the best way. My career has a whole new storyline. The city's tighter and you're on the court way faster. I've been playing video basketball games. I think the first one was early eight. I'm stunned. Like when I. When I go and my son's playing with his friends and I go in and I barge my wound and I start playing with them. I'm just amazed by how good, how detailed all the games are, how they really look like NBA players. 2K26 is finally here and yeah, it is absolutely loaded if you care about basketball, even though literally you're checking it out today. Ball over everything. This episode is brought to you by Prime. Prime Delivery is fast. How fast are we talking? We're talking a cooler for your snacks, a folding chair, a Bluetooth speaker, and a six pack of your favorite Celtics are delivered by tomorrow.
- [27:43]
B
Fast.
- [27:43]
D
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- [27:59]
B
Let me make sure I understand the consensus you're describing, and then I want to understand why you think that consensus is falling apart. So if we're on the cusp of AGI, artificial General intelligence, which is a technology unlike anything ever invented because it's a superweapon that can teach itself to become ever more super. Well, if we're on the cusp of that, then we should do everything we possibly can to develop it as fast as possible and do everything we can to prevent our geopolitical adversaries from catching up. And so that would, would speak to export controls and keeping China from having access to the most advanced GPUs and genuinely doing everything we can to beat China to that finish line. There's ways in which I feel like the Trump administration still believes some of this. I mean, the state just took a 10% stake in intel, which speaks to the Trump administration wanting to be very intimately involved in the success of our major chip makers. I feel like if we brought Trump AI advisors onto the show and said, do you want to make sure that America reaches the AGI finish line first so that we can control the 21st century? They'd say, absolutely. That's absolutely what we want. So explain to me exactly how and why you think think the consensus under Biden has begun to fall apart.
- [29:32]
C
Okay, So I think that the first thing I should add is that there's a part of the consensus that I didn't describe, which is that this is really the argument which is coming out of the National Security Council, the people who are concerned with national security. There are also people in the White House, some people in the Office of Science and Technology Policy, who I think are much more interested in a different set of questions about whether or not we should be looking to try and fix, figure out how to regulate AI really hard to do that given the way that Congress works and given the limited powers of the presidency, but doing whatever they could to limit some of the problematic consequences that they saw about AI. So that is one thing, this consensus that I've described is also fighting back against, I think, a less influential, but nonetheless a somewhat determined rear guard action from people who have a different understanding of what the things are at stake. So the first big difference is that the Trump administration gets rid of all of this stuff it more or less announces. And this is the big switch. If you think about the Biden administration, the Biden administration really wanted to control all of these, to impose an extremely ambitious system upon the world. So when the dying days of the Biden administration, they announced a new policy which they hope is going to be taken up by the Trump administration, under which they will use export controls to control the exports, both of semiconductors and of the weights of the more powerful models, so as to divide the world into three different zones. One is the zone of America's enemies, which will get more or less nothing. Then there is the zone of America's friends, where there will be very, very liberal access to these technologies. And then there's a much bigger zone in the middle, including some traditional allies of the United States, who are going to have whatever they, under very stringent conditions which are going to be enforced via export control. So this is a very technocratic view of the world. And then when the Trump administration comes in, after a few months of internal discussion, if you hear various rumors breaking out here and there, they come up with an approach which is completely different, which says that the way in which America dominates is by spreading this technology among its allies as much as possible. You see Trump Going to the Gulf states, beginning to make deals with the Gulf states about data centers and about training and doing all sorts of things, which Biden administration officials have been very nervous about. They were worried that Saudi and the uae, as authoritarian countries, would be much more willing to get into bed with China. So they wanted to just have a drip, drip access to technology to ensure that these countries stayed in line. The Trump administration is much more interested in making big deals. But here is where I think the stuff that we talked about at the beginning comes in. Because on the one hand, you see announcements and you see speeches and you see people like Kratzios, who's the head of the Office of Science and Technology Policy, making it clear that he thinks that the Biden administration was much too weak on allowing access to technology to China. That he sees a world in which the United States, through this kind of freer, less regulatory approach, less technocratic approach, is going to build up power via markets, but also keep a strict use export controls, clean them up, make them simpler, make them more brutal and ruthless against China. But then you see scenes such as when Jensen Huang, the head of Nvidia, goes into the White House, more or less. He comes out with an apparent deal from Donald Trump, which was apparently negotiated on the spur of the moment, where Trump says, if you export, you're allowed to export semiconductors, these weaker semiconductors to China, China, but on the condition that you give 20% of this to the government and they dicker and they horse bargain and they come up with a lower figure. And everybody in the semiconductor industry is, what the hell just happened? So here I think this is an exact example of how you have people in AI, sort of in the AI world. And Grazios is coming up with something which, like it or dislike it, it is a coherent intellectual approach. It fudges some stuff. But there is a lot of plausible argument in which comes up with some kind of a broader strategy. And then you have Donald Trump more or less being sort of, screw this. I want to do what seems good to me at the time. And coming up with this on the spot bargain, which looks on its face to move directly against what I suspect many of the people actually engaged with AI policy actually wanted to see happen.
- [34:30]
B
And this is where I find Trumponomics so hard to pin down as NID ideology, because it's almost as if you can imagine non AI policy versus AI policy as pointing in very different directions. So the non AI policy, as I see it, often involves punishing our friends, punishing our allies. Hey, here's a new 30% tariff. Oh, you don't like that? Here's a 50% tariff. Oh, you want it to be 20%? I demand $500 billion of foreign direct investment that I can direct. Like that is not a friendly. Let's all work together in a global free market policy, it's the exact opposite. It's going back to the mercantilism of the 19th or 14th centuries. Meanwhile, in AI, what you're telling me is that it's the opposite. It's selling more to allies, build more in Saudi, build more in uae. Let's have a more free market approach to artificial intelligence. And also, by the way, if Trump has a fun meeting with Jensen Huang, he might decide to trade even more of the best AI chips to China in exchange for a little bit of an export tax. So am I wrong or crazy to see that our non AI economic policy feels like it's going back to sort of the mercantilism of 150 years ago, while our AI policy is in a weird way like even more free market than the Biden administration?
- [35:55]
C
So, crudely speaking, and let me just stress I'm not an economist. My working definition of mercantilism is that you are somebody who sees more or less you are extremely skeptical about the benefits of trade and the benefits of comparative advantage. So if you look at economist Ricardo most famously established this argument that the countries like companies, they benefit from the division of production, they benefit from being able to specialize in different things. If you're in a world where, for example, the United States, it specializes in the design of software for semiconductors, and where Taiwan is a country that specializes in the actual production of high end semiconductors, both of them are going to end up much, much better from that. So we're in a world where I think Donald Trump and other people don't believe, particularly in that set of assumpt, they are more mercantilist, which is that they believe more or less that we should have our hands on as much of the stuff as possible. So this is why both Trump and Vance want to see as much as possible of the production come home. And they are extremely skeptical about the benefits of free trade. But the thing that I think complicates that is that we live and this gets back to the work that Abe and I have done. We live in a world in a certain sense of platform and that in the world of classical mercantilism, this was really all about trade. This was all about what you bought and what you sold. This was about tariffs, this was about trade restrictions. And we're now in a world where we have all of these complex technological infrastructures that we rely on and that our allies rely on. And one of the things where I think Trump is going beyond mercantilism is that he and his administration, administration are looking specifically to weaponize other countries reliance on these platforms, whether these be weapons platforms, whether these be communications platforms like Starlink, in order to try and squeeze concessions out of them. So Abe and I, we steal a term from Cory Doctorow, the science fiction writer. He has this notion of inshittification which he talks about the ways in which Google has gotten so much lousier over the last decade or 15 years. And we see that this is hegemonic inshitification. So this is more or less the hegemonic power of the United States being applied to intify platforms that it thinks that others depend upon. But the problem is that this of course, means that these platforms become less and less attractive. And especially if you're trying to create new platforms, this becomes deeply problematic. So on the one hand, at the moment, we have the United States trying to persuade, as we have just discussed Europe and other places, to buy into this notion of build on the American, American AI stack. This is going to be awesome. We're all going to go forward together. On the other hand, you have people like Tom Cotton sponsoring legislation in the United States which more or less says, we want to build into these chips that are used for training AI and perhaps for AI inference as well. We want to build in capabilities that they can phone home, that they can tell where they are in the world, and if they are somewhere in the world that they oughtn't be, they can shut down. The argument for this is a national security argument vis China. But equally, you can think about this. If you are a member state of the European Union and you're buying in a ton of really advanced Nvidia chips to power your data centers, you may very plausibly worry that Donald Trump is going to feel grumpy at you six months or two months or two years down the line, and he is going to decide basically all your data centers go by, and there is going to be precious little that you can do about it because you have bought into this technology. It's like mercantilism in many ways, but it's mercantilism superimposed on a world of deep interdependence and uncommonly created infrastructure, which poses a whole bunch of other problems that go way, way beyond the standard mercantilist versus free trade divides.
- [40:08]
B
And I think one of the difficulties of defining Donald Trump in economic terminologies is that he's more psychological than he is economic. I mean, when facing a choice, we think about political economy as representing the image interests of a country. But when I think about a lot of decisions that Trump has made in the last few years, when Trump faces a choice between amassing personal power or acting on behalf of the greater good of the country, Trump seems to me to consistently choose the former over the latter. I mean, here are just a few examples that I believe I partly drew from your own work. In 2020, Trump issues an executive order to effectively ban TikTok as a threat to US national security. Then there's a law that's passed by Congress that bans TikTok, and now Trump is extralegally keeping TikTok on life support, in large part, it seems, because Jeff Yass, a major investor in TikTok's parent company, essentially told Donald Trump at a private meeting in which money was almost certainly exchanged that he would prefer the TikTok not be banned. So here you have a stated national interest being superseded by a personal interest to keep Jeff Yassin happy on AI, there's a case to be made that the US should strategically be restraining itself from selling the most advanced GPUs to China. But Trump has a really nice meeting with Jensen Huang, CEO of Nvidia, and says, you know what I want to do? I want Nvidia to pay tribute to the US government and I want credit for it. So Nvidia, for every GPU that you sell to China, the US Government's going to collect a share of that export revenue, even even though these export taxes are technically constitutionally legal. And it's very hard for me to see a coherent strategy that can contain these kind of moves. I'm not even sure I've heard a Republican attempt to explain all of them as being part of a coherent whole. But rather, in each case, what I see is that the narrow interests of Trump, or the narrow interests of Trump's esteem win out over the larger articulated interests of the state. And it's funny that you brought up insidification, because in to order way, you could argue that this is an example of the inshidification of American power. If insidification is the process by which a product attempting to eke out profit drives down its functionality, then maybe you could say that one thing that's happening to American governance is that the effort to eke out profit from crypto and TikTok and investors and AI and law firms and colleges is in shiddifying the governance of the country as a whole. And I guess I wonder what you feel about that as a thesis.
- [42:49]
C
I think that's right. And I think somebody who I think is absolutely fantastic, actually on two of these questions is the deceased economist, Albert Hirschman. So he has two ideas that I think are his big ideas. One is the idea he talks about, exit, voice and loyalty. And so here the idea is, he argues that economists don't think necessary nearly enough about the quality of the goods that are provided. They just assume that these are uniform. And when the quality of goods gets shittier and shittier people, they can have the choice of voice that they begin to yell about it, or they can have the choice of exit. And I think that the Trump administration's foreign policy at the moment is based on the notion that voice doesn't matter and that nobody has the opportunity of exit, that nobody has the opportunity of getting out from the system. And I think that therefore, fundamentally, they're probably wrong in the long term about the systems that exist, and they're absolutely wrong about the new systems that they're trying to get people to begin to come into. I think that if we think about, and this is a broader problem, which is that I think that US Policymakers, they are really bought into the idea that there are these choke points in the global system. And this is what Abe and I have worked on. So I guess we are part of that story and that they, these choke points offer control, but what they are not bought into is the ways in which offering people stuff that they actually want to have and providing them guarantees that they are not going to be screwed if they buy into this, that this is a form of power as well. The other part of this, I think, is you can think about this as a battle almost between two different theories of power. One is the theory that you build up power through long term, credible commitments, through establish, establishing your word, establishing your reputation, being willing to deliver on that reputation even when it is costly. And this is something that, of course, Donald Trump, when he signed his oath of office, he signed basically to protect the full faith and credit of the United States of America. And I think this is a way of talking about that kind of power. And that kind of power is very, very valuable to have in the longer term. In the short term, of course, it's a pain in the ass because there's always ways in which you want to deviate. There's always something specific you want to do that cuts against this, but you're trying to make sure that long term interests prevail over short term interests. And then there's the other kind of power, which is perhaps the de Medici notion of power, which is that power is around maximum flexibility. And so here I think if you want to say that there is something to Donald Trump beyond straightforward greed, and of course, greed is an important part of the story, I think that this notion of power is as being always being able to be flexible, always being able to screw the other guy and not having to pay attention to the consequences. I think that is the Donald Trump theory of power. Whether this is Trumponomics or not, I don't know. But I think the persistent pursuit of the short term at the expense of long term interests on the assumption that either those long term interests are going to look after themselves or that they didn't matter all that much anyway. I think that that is probably maybe where I'm coming from to after a lot of conversation as to how to pin down what Trumponomics might be.
- [46:20]
B
So we've talked about two themes today. We've talked about Donald Trump's theory of power and we've talked about the economic challenge at the moment, which certainly involves the artificial intelligence race against China. If I were a Trump fan listening along, I think what I would be screaming in the back of my mind is nerds and academics like Derek and Henry don't understand something really important. The US Needs a strongman to take on a strongman. China is an autocracy. And maybe we need a dose of autocracy in order to compete with it. And it won't look pretty and it won't treat the administrative state the way previous presidents have treated the administrative state. But we have to smash the processes that got us into this mess. And that means an approach that some liberal nerds will consider authoritarian. What is your response to that articulation?
- [47:13]
C
So I think that we whoever. So it's pretty clear from this interview and if you read my stuff, that I am not a fan of Donald Trump and of the particular form of Republican. And I do think that we are in for a world of hurt. And the best case scenarios involve decades of work trying to reconstruct how to reconstruct so that we can get back somewhere better. But I do think we are definitely pushing allies away who would want to have anything to do with the United States at the moment if they didn't absolutely have to do it. We are in a world where many countries are not unreasonably looking at the choice between the United States and China and deciding that China is the more reliable partner, deciding that an autocratic regime which is responsible for genocide, which is notoriously ruthless when it comes to its neighbors, is a better deal, because at least you can see where Xi is going in a way that you perhaps cannot see where Trump is going. And that is just absolutely crazy. The long term advantage of the United States has always been a certain degree of reliability and a fair amount of opponents, but at least a nominal willingness to be confined by the rule of law so that it does some things and doesn't do others. So I do think that this is very much against the long term interests of the United States of America.
- [48:46]
B
Before we go, my very last question is, I would love you to try to make that answer concrete to a middle class family in Iowa, a single guy in Phoenix. One thing I think that is behind Donald Trump's ascendance is the idea that liberals have failed to make the value of global alliances clear to the sort of folks who vote for people who want to destroy those global alliances. Right. I have my own kind of abstract notion of why it's good to have what I called an avengers network of international alliances, both economic and political and even militaristic. But I would love to hear from you if someone says, said Henry, people who are worried about the cost of groceries and the cost of housing and maybe at some abstract level, the concept of American greatness, they don't care about this issue of alliances. The question is, what have alliances ever done for us? So how would you make it concrete? What could alliances do for us in this new weaponized moment that you been describing?
- [49:58]
C
So I think that in a weaponized world, we're going to see less and less trade, we're going to see less and less people wanting to use American technology. We're going to be in a world like one of those really nasty British soccer clubs. This is the best case scenario where they basically are, everybody hates us and we don't care. And that's a kind of a source of identity. That's a kind of a source of, of whatever. You don't want to be that world. You don't want to be Russia. You don't want to be somebody who basically everybody outside and treats as being somebody who simply is untrustworthy. My other worry, and this is a bigger worry and a more abstract worry, is when I worry about where the United States might be if we manage to get beyond Trump, is I worry that I look at Keir Starmer in the United Kingdom and I worry that if we are in a world where we have a, a Democratic administration that comes in and says we're going to clean things up, that unless you figure out genuinely different forms of politics which can move beyond the we are going to be slightly less shitty than the other guy to we are going to figure out more positive sum stuff for everybody. I think you are in a world of hurt and you are in a world where you are basically encouraging even worse people to come back in. And there's a whole other conversation we could have about the way in which in certain senses having somebody like Donald Trump in control for a number of years to some degree becomes a self fulfilling prophecy because things get worse and things get worse in ways that are really hard to build back in the shorter term so that even the best case scenario, you know that you're in for several years of hurt. So I do want to see us, the United States, not just, I'm sort of thinking about this in terms of how do we weaponize against China, how do we sort of keep control, control of our allies. We need to have much more genuine, positive, some visions in the United States. This is how the United States actually did manage to build up all of this power which it has been living off for the last few decades. And if we don't have that, we are, I think, in for a very, very unhappy world indeed.
- [52:14]
B
We'll leave it there. Henry Farrell, thank you very much. Thank you for listening. Plain English is produced by Devin Beraldi and we are back to our twice a week schedule. We'll talk to you soon.
- [52:46]
C
Sam.