The best summary of Trump's trade "philosophy" comes from Trashfuture's November Kelly, who said that Trump is flipping over the table in a poker game that's rigged in his favor because he resents having to pretend to play the game at all.
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If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2026/01/26/i-dont-want/#your-greenback-dollar
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After all, the global system of trade was designed and enforced by American officials, especially the US Trade Representative. The US created a world whose most important commodities (food, oil, etc) were priced in dollars, meaning that anyone who wanted to buy these things from *any* country would first have to get US dollars, which they could only get by shipping their valuable stuff to the US, which sends them dollars in return.
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Think about this trade for a minute: to get US dollars, people outside of the US would have to dig up or chop down or manufacture *real things* that were in finite supply. Meanwhile, to get the US dollars to *pay* for these real, finite things, the US just had to type zeros into a spreadsheet at the Federal Reserve:
https://www.youtube.com/watch?v=54fg-A1gCrM
The technical term political scientists use for this arrangement is "fucking sweet."
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Two of my favorite political scientists are Henry Farrell and Dan Davies, whose new paper, "The US dollar system as a source of international disorder," was just published by The British Academy as part of its "Global (Dis)Order international policy programme":
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Farrell and Davies explore the history of the weaponization of "dollar centrality" (their term for the arrangement where the whole world agreed to treat the dollar as a neutral trade instrument), and show how Trump's incontinent belligerence fits into it, and lay out some shrewd possibilities for where this could all end up.
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Farrell is one of the leading experts on how these boring, invisible, complex systems of financial settlement, fiber optic connections and other plumbing of the post-war era have been increasingly weaponized by successive US administrations. In 2023, he and Abraham Newman published *The Underground Empire*, an excellent book on the subject (really, the *definitive* book on the subject):
https://pluralistic.net/2023/10/10/weaponized-interdependence/#the-other-swifties
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Davies, meanwhile, is a brilliant scholar (and explainer) of complex systems. Last year, he published *The Unaccountability Machine*, about the way that the feedback mechanisms in the systems that keep the world running are badly broken, leading to much of our modern dysfunction:
https://en.wikipedia.org/wiki/The_Unaccountability_Machine
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Their paper represents a fusion of both of their approaches, and makes for fascinating reading. They start by characterizing the post-war global system as broadly "homeostatic," meaning that it can maintain stability in the face of shocks. Homeostasis requires a feedback mechanism so that it can constantly adjust itself - think of your home thermostat, which needs a thermometer so it can figure out when to run your furnace/air conditioner and when to stop.
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Political scientists have identified many of these feedback systems. For example, KN Waltz describes how, when one "great power" starts to dominate the world, the weaker states in its orbit will switch their alliances to rival powers, in order to "balance" power between the big beasts. Smaller, poorer, and/or weaker countries that have looked to the US for trade and military alliances might switch to China if it looks like the US is getting too powerful.
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Not necessarily because China offers a better deal than the US, but because a decisive global victory by the US would give it the power to squeeze these countries, because they'd have nowhere else to go.
Waltz's work is especially relevant this month, with Canada inking a Chinese trade deal and Canadian Prime Minister Mark Carney publicly declaring a "rupture" with the US-dominated order:
https://www.programmablemutter.com/p/davos-is-a-rational-ritual
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When great powers ignore the feedback of these systems, the result is a collapse in global homeostasis, and radical shifts in the global order. Farrell and Davies argue that this is what's happening with the weaponization of the dollar, which has prompted many countries to take action that should have caused the US to back off, but which the US has ignored as it doubled down on the weaponized dollar:
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Even when the US has a "rational" case for weaponizing the dollar - for example, by forcing the world into a global financial surveillance project aimed at stemming finance for terrorism - it runs the risk of making things worse. If the US's anti-terror financial demands are so onerous that they provoke other countries into setting up multiple, independent, fragmented global financial schemes, then terrorists and their backers will have their pick of ways to move money around.
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Even where the US has had limited success with financial sanctions (by isolating North Korea, or by targeting specific individuals rather than countries), it has undermined those successes by peddling and formalizing cryptocurrencies that evade those sanctions. With Trump's crypto project, America gets the worst of both worlds: ineffective financial sanctions that nevertheless weaken the dollar's centrality to the world, and the power that confers upon America.
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The world relies on the dollar because it has to rely on *something*. There are hundreds of currencies in the world, and it's prohibitively expensive for exchange brokers to maintain deep reserves of all of those currencies so that any currency can be swapped for any other. Likewise, it is cumbersome and risky for transactions to rely on a chain of exchanges.
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If someone in Thailand can only buy oil from Norway by first trading Thai baht for Japanese yen, and then Australian dollars, and then euros, and *then* Norwegian kroner, they'll be bedeviled by shifting exchange rates, transaction fees, and, possibly, shady brokers who just take the money and run.
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After WWII, when the great powers and middle powers were hammering out the global financial system, economists like John Maynard Keynes proposed an international supercurrency that would only be used to facilitate exchanges, but he was outmaneuvered by America's chief negotiator, Harry Dexter White, who insisted that the US dollar will fill that role:
https://profstevekeen.substack.com/p/this-is-the-end-of-the-us-global
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So everyone uses the dollar, and because everyone uses the dollar, everyone *has* to use the dollar: the dollar enjoys "network effects," where the more parties there are who will accept it, the more valuable it becomes and the harder it is to find an alternative.
In my theory of enshittification, network effects are a powerful temptation to make a service worse.
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If you own a system with strong network effects, you can make it worse for all its users (and better for you) without risking your users' departure, because they are all holding each other hostage:
https://www.eff.org/deeplinks/2021/08/facebooks-secret-war-switching-costs
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Update, October 1, 2021: The original version of this essay incorrectly stated that Metcalfe's Law dictated that the number of connections in a network doubled with each new user; that has been corrected, below.When the FTC filed its amended antitrust complaint against Facebook in mid-August, we...
So it is with dollar weaponization. In order to use the dollar to settle transactions, parties must have access to systems that are directly under US government control (like a dollar account at the Federal Reserve), or are, practically speaking controlled by America (like the SWIFT system for moving money across borders).
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The fact that you *have* to use dollars, *and* you can't use dollars without the US government's say-so, means that the US can impose onerous terms on dollar users and not have to worry that they'll switch to another currency.
Farrell and Davies describe how, during the "high era" of globalization, US Treasury officials fought to insulate the dollar from control by the US security apparatus.
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Treasury officials understood that the dollar was a source of enormous US power and advantage, and they didn't want to risk all those benefits by beating up dollar users and tempting them to look elsewhere.
But ultimately, Treasury lost. This, too, is in accord with my theory of enshittification: once an institution locks in its users, the factions that want to make things worse will start winning the argument.
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@pluralistic 👍 🤞
Ah, the capitalization of this one word is different
broken: Global_DisOrder
workie: Global_Disorder
Trump is the laziest man alive
Some refs for those interested, as if they're even needed ...
Confirms my creeping suspicion that
fascism is a type of show biz.
When the lies stop working, the violence stops working.
There's certainly a lot of pageantry involved with it and it's a lot of lies.
Did you mean when the lies stop working the violence starts? That makes sense to me.
Well the violence continues, but it starts becoming counter productive to the dictator when the public sees it's all bullshit.
EG, when DHS called Good a terrorist almost no one who saw the video believed them anymore. Now the killing of Pretti has blown up in Trump's face. The more people he kills, the more power he loses.
Both Trump and Hitler seem(ed) to live in a world of theater and illusion without substance.
Or, the fascist is willing to escalate the violence to an extent it gets violent enough that people stop acting out I guess we will see which path is more accurate over the coming years.
In the real life version of Elizabeth Magie's Landlords Game, monopolists really hate when people play prosperity, or even know that those rules exist.
Perhaps, when index fund investors begin to profit from the proceeds of monopoly and can no longer be swindled, the game turns into a kind of prosperity, and it is the winners, the monopolists, who will flip the board to start a new game of monopoly.
https://publicdomainreview.org/collection/the-landlords-game/
Rüdi
Cory Doctorow
geolaw
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Jonathan
Phosphenes
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