If the world's a mess, don't blame Donald Trump

Aaron Benanav, There’s a Reason the World Is a Mess, and It’s Not Trump, NYTimes, April 21, 2025.

The world is a mess.

As President Trump upends global trade through a punitive suite of tariffs and redraws America’s alliances, world leaders are scrambling to respond. They are badly placed to deal with such disruption: Across the world, governments have been losing elections — or barely holding on — in the face of rising discontent. From the United States to Uruguay, Britain to India, an anti-incumbent wave swept through democracies in 2024. But not only democracies are in crisis. China, too, is grappling with social unrest and economic instability. Strife, these days, is global.

There are many explanations for this sorry state of affairs. Some see rapid social change, especially around migration and gender identity, fueling a cultural backlash. Others argue that elites flubbed their pandemic responses or have grown detached from their populations, driving a surge in anti-establishment sentiment and support for strongmen. Another argument holds that algorithm-driven social media has made it easier for misinformation and conspiracy theories to spread, giving rise to greater volatility.

There’s something to each of these theories, to be sure. But there is a deeper force underlying today’s disarray: economic stagnation. The world is experiencing a long-term slowdown in growth rates that began in the 1970s, worsened after the 2008 global financial crisis and shows no sign of improving. Stuck with low growth, waning productivity and an aging work force, the world economy is in a rut. This shared economic predicament lies behind the political and social conflicts the world over.

I agree with this much, we can't blame the sorry state of the world on Donald Trump. He's just a power-mad grifter who's figured out how to exploit the mess for his own gain. And, yes, I believe that the economic stagnation is real. While I'm skeptical of the capitalist mantra of "growth, growth, growth, and more growth," I certainly don't think we've reached a point where a steady-state economy would be better (less strain on the environment). I've been following Tyler Cowen for well over a decade now, perhaps a decade and a half, and he called it in this 2011 book, The Great Stagnation. I note, however, that's he's recently come to believe that we're pulling out of it.

Let's go on with the article, which asks why growth has slowed:

One reason is the global shift from manufacturing to services. This has stalled the primary engine of economic expansion: productivity growth. Productivity — the output per hour worked — can rise quickly in manufacturing. A car factory that installs robotic assembly lines, for example, can double production without hiring more workers, perhaps even firing some. But in services, efficiency is much harder to improve. A restaurant that gets busier usually needs more servers. A hospital treating more patients will require more doctors and nurses. In service-based economies, productivity is always slower to rise.

This seismic shift, in the making for decades, has a name: deindustrialization. In America and Europe, we know what that looks like: lost manufacturing jobs, amid declining demand for industrial goods. But deindustrialization is not limited to wealthy economies. The move from manufacturing to services is happening across the G20, dragging down growth rates nearly everywhere. Today about 50 percent of the world’s work force is employed in the service sector.

There’s another reason for global stagnation: slowing population growth. Birthrates surged after World War II, creating strong demand for housing and infrastructure construction and spurring the postwar boom. Demographers once assumed birthrates would stabilize at replacement level, around two children per family. Instead, fertility rates have tended to fall below this threshold. [...]

This is a big problem for the economy.

Because everything shrinks. What to do? A.I. to "improve efficiency in labor-intensive service sectors like health care and education"? Hasn't worked so far. Reindustrialization, "under strict tariff protections"? That's Trump's gambit.

But here, too, there is cause for doubt. For one thing, the decline in manufacturing was not just about trade. Even manufacturing and export powerhouses like Germany and South Korea have seen industrial employment shrink. For another, the industries generally targeted for revival — semiconductors, electric vehicles and renewable energy — employ relatively few workers. The era when manufacturing could provide mass employment is over.

Benanav doubts that increasing the population is a way out, with which I'm sympathetic. He votes for more deficit spending (two paragraphs) and redistribution.

The second approach is redistribution. In the past, the primary rationale for policies that enriched wealthy households was to stimulate growth from the top down, but this strategy has evidently failed. Instead, governments could place much higher taxes on the rich and redistribute income to the rest of society. That would be an uphill battle in the United States and elsewhere, admittedly, but it would bring big benefits, improving consumer demand and strengthening markets both domestically and internationally.

The goal should be not just to raise income levels, which studies show are increasingly disconnected from happiness, but also to build more stable and equitable societies in a slower-growth world. That requires investing to improve people’s lives: repairing ecosystems, rebuilding infrastructure and expanding housing.

Color me sympathetic, deeply sympathetic. But still, I remain skeptical.

I keep thinking that the world is limping along on social, institutional, and political structures grounded in the 19th century, if not even earlier, and those structures are no longer adequate. Why not? That's a tricky one, and I'm not prepared to answer it. But my thinking is grounded in the cultural ranks theory that David Hays and I developed during the 1990s, and that tells me that we need another restructuring of, of, well, of everything. That's a hard case to argue.