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In today’s newsletter:
Donald Trump goes full Third World
Count Binface’s collectivism
Wealth tax takedown
America at 250 has never been wealthier or more powerful. It has grown two thirds faster than Western Europe over the past 20 years. Rival ideologies – Chinese authoritarianism, Islamism – are hideously unappealing.
Yet, at the same time, the US is starting to behave like a tinpot autocracy. The best way I can describe it is as Third Worldery. The attempt to browbeat the Nobel Peace Prize Committee; the obsession with building big arches; the tariffs; the annexation threats against Canada, Denmark, and Panama; the renaming of public institutions after a living leader; the successful attempt to bully FIFA over a red card. Such things are the hallmark of insecure dictatorships, not of confident democracies.
Opting for strongman government seems to have opened the way to Third Worldery across the board. Once you build your head of state into a Father of the Nation type, once dissent from his latest whims is portrayed as a form of treachery, other things follow.
It is the same pattern everywhere. When Recep Tayyip Erdoğan insists that the rest of us refer to his country in English as “Türkiye”, he invites us to treat Turkey as a post-colonial failed state rather than as the Western democracy it was before his time. I mean, we use English exonyms for serious places. No one demands that we say Deutschland or Nippon or Magyarország. But touchy third worldists demand Côte d’Ivoire, Timor-Leste and Cabo Verde – and, now, Gulf of America, the classic needy country move.
The ultimate defining feature of the Third World is corruption. In the classic distinction drawn by Daron Acemoglu and James A. Robinson, rich people in inclusive states are entrepreneurs, whereas rich people in extractive states are politicians. President Donald Trump has more than doubled his personal wealth since he took office, mainly through his family crypto ventures. It might not be illegal, but it would have been regarded by previous generations of Americans as disgusting.
Imagine if, say, Bill Clinton had set up family crypto businesses. Imagine if an Arab dictatorship had poured hundreds of millions of dollars into it. Imagine if, a few weeks later, the Arab dictatorship had suddenly been cleared to buy advanced AI chips that had, until then, been denied export permits on grounds of national security. What would have been the media response?
I think we all know the answer. Yet, in this case, the coverage has been bizarrely muted. Rightist media have largely ignored the story, and Leftist media have assumed a tone of exasperated resignation. Is the story too complicated? No. It is at least as easy to grasp what Trump is supposed to have done wrong as to understand, say, the Monica Lewinsky affair. And even if people really do struggle to understand the details of the chips deal, surely everyone can grasp that there something wrong with an American president accepting a $400 million private plane from a different Arab state as, to all intents and purposes, a personal gift.
Is the explanation, then, sheer chutzpah? Does Trump get a pass because he never pretends to be a saint? In a world where all politicians are assumed to be shysters, is he excused because he at least lacks hypocrisy? Has he intuited that, for most voters, corruption is defined as “holds views with which I disagree”, meaning that half the country will think of you as a crook regardless of how you behave. Has he clocked that this polarization paradoxically enables much worse behaviour?
Perhaps. I think, though, that there is a much simpler explanation. Americans are simply unused to this kind of behaviour from their leaders, and lack the vocabulary to respond. For all that people moan about their politicians, the US has always been a country where sleaze, even when it stops short of outright rule-breaking, carries an electoral penalty. Until now. The sight of foreign governments piling into private Trump-owned companies so as to win his favour, or the sight of his extended family becoming implausibly rich with overseas deals – these things go under-reported because no one really knows how to react. The idea that the US might actually be adopting a more Latin American approach to standards in public life seems too outlandish to contemplate.
Then again, as Lady Macbeth says, “What’s done cannot be undone”. Those who have downplayed, excused or ignored Trump’s venality will struggle to find grounds on which to oppose equally sleazy stuff from a successor in either party. Standards have been permanently lowered. We will look back wistfully on what was lost.
Daniel Hannan is the Director General of the Institute of Economic Affairs. This an edited version of a column that first appeared in the Washington Examiner.
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IEA Podcast: Director of Communications Callum Price is joined by Editorial Director Kristian Niemietz and Director General Lord Hannan to discuss Farage vs Binface, the case for GDP, and the future of public service broadcasting, IEA YouTube
This week on Economic Affairs
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News and Views from the IEA
Wealth taxes are not a remotely new idea, Kristian Niemietz debates Gary Stevenson on Piers Morgan Uncensored
Vape crackdown will keep people smoking, responding to proposals to regulate the packaging and display of e-cigarettes, Chris Snowdon, said:
“Most people wrongly believe that vaping is at least as dangerous as smoking. This ignorance has led to vapers switching back to cigarettes and to smokers not switching to vapes. The government should be hammering home the message that vaping is a much safer alternative.
“Instead, it is sending the message that vapes are as bad as cigarettes by treating the two products the same. The forthcoming vape tax combined with a display ban and plain packaging will keep people smoking.”
Hack the thicket, Daniel Hannan on what needs to be done to unleash Britain, BBC Politics Live
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“A wealth tax wouldn’t even work on his own terms.”, Chris Snowdon picks apart the numbers behind a wealth tax, The Critic
Was New Zealand’s lockdown worth it? Daniel Hannan speaks with Katherine Rich, Chief Executive of BusinessNZ and a former MP in New Zealand, IEA YouTube
Education, Events and Opportunities
This week the IEA welcomed a new cohort of sixth form students to our Future Thought Leaders programme. Over four days at our London office, participants were introduced to the foundational ideas of classical liberalism and free market economics through a series of seminars, discussions, and public speaking exercises. The week concluded with our ever-popular elevator pitch competition, giving students the chance to make the case for the free market think tanks and campaigns that inspired them most.
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