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Trump and his impending showdown at the World Economic Forum

by JT Young, opinion contributor - 01/22/18 12:00 PM ET

President Trump is committed to changing the global status quo; the World Economic Forum in Davos, which is scheduled to take place from Jan. 23-26, is committed to retaining it. The stage thus appears set for a clash between iconoclast and paradigm. However those preparing only for confrontation miss that altering the components does not necessarily mean abandoning the prevailing paradigm’s essential feature of the global leadership of Western political and economic values.

The World Economic Forum convening in Davos, Switzerland next week humbly describes itself as “a global platform unmatched … [its] depth and breadth make it a true summit of summits.” It is easy to poke fun at anyone taking themselves as seriously as the divas of Davos do. It is worth considering: How smart can anyone be who holds a meeting in Switzerland in January?

As a gathering of “leaders from business, government, international organizations, academia and civil society,” this is the synod of the status quo; its mission: “Creating a Shared Future in a Fractured World.” Into this china shop of consensus, comes the bull.

{mosads}Davos sees Trump as threatening the global paradigm they view as having acquitted itself quite well. Following the world’s two most horrendous wars, the 20th Century’s second half was comparatively peaceful. It concluded with communism’s — the West’s greatest military, political, and economic threat — peaceful collapse. Having navigated existential threats, how could this paradigm not be retained for the 21st century?

America served as the paradigm’s linchpin. Immediately following WWII, it was the sole military (by virtue of the atom bomb) and economic superpower. The former position would be fleeting, the USSR and China — through absolute state control — harnessed their nations into formidable military machines. Wars in Asia further limited U.S. desire to compete in anything more than a Cold War.

The shift of competition to economic and political systems greatly favored the West. In comparison to the relative military stalemate existing from the 1950s into the mid-1970s, once the economic struggle became “hot,” the USSR collapsed within two decades, joined by communism’s across Eastern Europe and the Chinese government’s forced relinquishing of significant amounts of economic control. Democratization followed communism’s failure.

The unmatched Western economic model was assuredly capitalist, but nations played particular roles within the paradigm. America served as its allies’ market for goods and investment. It became the preeminent consuming nation — a role no other could fill — thus aiding its allies’ economies. America thus utilized its immense wealth, but also the world’s, in an increasingly large global fund. America could afford large deficits — government and trade — its role as investment magnet keeping costs manageable.

In addition to serving as an economic engine, America’s wealth supported the lion’s share of Western defense — an exchange trade its allies needed to offset increased social spending.

The cycle was simple and effective. America offered itself as an export and investment market; other nations underwrote its consumption in exchange for economic and military security. The West’s competition — thanks to its rejection of capitalism — could neither generate wealth individually nor harness it collectively.

Despite this contest being waged economically and politically, it was not without casualties. America saw its relative economic advantage erode, especially in certain sectors. This erosion resulted in large scale job losses in certain industries and regions.

As in every nation past and present, those asked to fight demand an economic price in a democratic system. The welfare states of post-War shattered Europe are cases in point.

America’s economic fight did not entail the immediate life and blood sacrifices of a military battlefield. The political effect was therefore slower and more subtle, but not unlike those occurring throughout Western governments decades ago: Demand for an economic reordering. In America, a decades-long economic erosion, punctuated by a particular slowdown over the last sixteen years, triggered the response of November 2016.

Trump won in large part on America’s demand for economic change. However, Trump’s candidacy did not create his followers, any more than it created forces driving them. The same happened in 2016’s Democratic nomination battle too. Therefore, demand will not simply disappear with Trump.

In office, Trump has committed to realigning the parameters of the existing paradigm — in trade agreements, international relations, defense commitments. Many of these changes are seen as threats by other Western nations. Because they endanger the status quo, they are labeled pejoratively “nationalist” or “protectionist.”

However, threatening the status quo is not the same as endangering the paradigm itself. If we see the paradigm in its encompassing form — the reliance on Western political and economic systems to address the world’s problems — precisely how Davos professes to see it.

Seeking to change the status quo within the paradigm is a demand Western governments have faced. And which they had little choice but embrace. That the same pressures should manifest, albeit more slowly in America, should come as no surprise. Blaming them on President Trump is not a solution; it is an evasion and ignoring of their own past.

The surest way to retain the overall paradigm is to allow change in the specifics of the status quo — just as Western governments successfully have done internally. Seeking to make America more competitive and addressing the economic demands of a growing portion of Americans are not threats to it. The largest threat comes instead from trying to defend the status quo at America’s expense.

J.T. Young served under President George W. Bush as the director of communications in the Office of Management and Budget and as deputy assistant secretary in legislative affairs for tax and budget at the Treasury Department. He served as a congressional staffer from 1987-2000.

Tags Davos Donald Trump Donald Trump economy JT Young World Economic Forum