Trump’s presence at last month’s World Economic Forum in Davos was about one thing: showing the rich and powerful who is boss. As his commerce secretary made clear in the Swiss resort: “With President Trump, capitalism has a new sheriff in town.”
In the run-up to the summit, Trump ramped up threats against Greenland, forcing Western leaders to finally recognise that underneath the bluster, Trump may be serious about shaking up their world. Taken together with Trump’s invasion of Venezuela and ongoing tariff wars, the United States president’s actions suggest an emerging model of capitalism built less on market rules and more on direct state coercion and geopolitical competition.
Canada’s Prime Minister Mark Carney put it eloquently when he said that Trump represented “a rupture, not a transition”. The international rules-based order is shot through with hypocrisy and double standards, Carney argued, but still, this American-dominated economy has delivered a degree of stability for countries like Canada; today, “this bargain no longer works”.
Carney is right. Trump is leading an attempt to transform the international order. And that means changing the way capitalism works.
For decades, we have lived under a neoliberal form of capitalism. In theory, this system was based on the rule of the free market. In reality, it was a highly monopolistic system, with major decisions about how we live being taken by an ever more concentrated group of business leaders and wealthy investors. Such a system has driven historically unprecedented levels of inequality and environmental destruction and eroded democracy to the point where it barely functions.
We have been here before. In the late 19th century, a globalised “free market” economy also created massive inequality, dominated by a small number of robber baron industrialists and financiers. As these business empires worked with nation-states to expand their markets across the world, war became inevitable.
In some countries, fascist leaders came to power, clearing away democratic opposition to the business titans, merging them into an aggressive nationalist project, using the full force of the state to drive corporate profits and incorporate that profit-making into a world-dominating project. In many ways, fascism was the ultimate expression of monopoly power. Fascist economies were characterised by the fusion of state power with corporate monopolies, the mobilisation of industry for nationalist expansion, and the suppression of democratic economic oversight.
Trump represents something similar. He will use economic or military warfare to get his way and is explicitly using state power to enrich the biggest corporations in history, boosting state subsidies and public protection to unprecedented levels.
But Trump is not controlled by business leaders; rather, he wants to change the way they function. Trump often clashes with the “woke” corporate bureaucrats, bullying them into integrating with his political project, just as fascist leaders did a hundred years ago.
Hence, Trump’s interest in intervening in countries in ways that many in the business world find perplexing. Trump said that his invasion of Venezuela was about oil. And yet, many oil companies seem reluctant to invest. Trump’s United Nations ambassador said his interest in Greenland is about controlling the critical minerals required to make military and other high-tech products. But digging them up seems too difficult for many in the business world to contemplate.
Some argue that Trump is simply interested in enriching the speculators who surround him. And there is surely some of that – just look at the hedge funds that reportedly made a killing as Trump threatened intervention in Venezuela. But there is something deeper, too. Trump sees the world as one of great power rivalry, in which China is America’s chief competition, but Europe also needs to know its place. To maintain US dominance, control of resources is vital, even those buried deep beneath the ground, not least because someone else might grab them.
Trump’s plan – albeit one open to change, and applied in a deeply erratic, sometimes contradictory fashion – is for a world where international law is replaced entirely with the rule of the bully. In turn, this is a reaction to unsustainable dynamics in the global economy. As such, it will likely outlive Trump. So we cannot wait for an election to save us. If we want to defeat Trump’s politics, we need to stand up to him.
Carney suggested as much in Davos, proposing a new coalition of “middle powers” to replace dependence on the US. This is undoubtedly important, but it is only part of the answer. Carney’s vision of this alternative coalition is centred on signing yet more deregulatory, free-market trade deals, replacing one form of globalisation with another.
It is time for Western leaders to learn that you cannot beat fascist economics with neoliberalism. We need a genuinely democratic form of economics. This means building systems where public investment, democratic accountability and economic sovereignty take precedence over corporate concentration and speculative finance. And that is possible, because in retaliating against Trump and breaking with US dependence, countries can begin rewriting the rules of the economy.
Retaliation against Trump should not be viewed simply through the lens of escalating tariffs. Limiting access of US corporations to procurement contracts, refusing to cooperate on intellectual property rules, and regulating finance and technology will all hurt Trump’s friends while also helping our countries develop sovereign economic policies that can centre the needs of ordinary citizens. Remarkably, such policies have been explicitly put on the table in discussions over the European Union’s so-called “trade bazooka”, threatened over Greenland.
This would represent the beginning of something genuinely different. Trump’s rise is frightening, yet it presents an opportunity, which should have been seized long ago, to move towards a more democratic economy, to halt and reverse inequality, to restore our environment. Trump’s politics are not an anomaly but a symptom of deep failures within the global economic system. And that path is the only way to prevent fascism, because economic systems that concentrate power and wealth inevitably create fertile ground for authoritarian rule.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.