The Economic Consequences of the Trump

Notes from London, February 2025

Photo by Benjamin Davies on Unsplash

The hard-working staff here at Drezner’s World spent some time in London last weekend. It was enjoyable. I saw a show! I fulfilled some intellectually stimulating work obligations! I recorded a podcast with the Financial Times’ Gideon Rachman!¹ And I kept up with the news when I could. That last task fed my sense of impending doom and despair.

The combination of where I was and what was going on kept evoking John Maynard Keynes’ The Economic Consequences of the Peace, a book that I have referenced time and again in my public writings. Keynes wrote his polemic in 1919 mostly to bash the architects of the Versailles Peace Treaty and the onerous conditions placed on Germany. There is one paragraph in particular, however, that has haunted me ever since Donald Trump was elected back in 2016. Keynes described the state of the world in August 1914 for affluent residents of London:

Life offered, at a low cost and with the least trouble, conveniences, comforts, and amenities beyond the compass of the richest and most powerful monarchs of other ages. The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could despatch his servant to the neighboring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference. But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper, and appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalization of which was nearly complete in practice.

Walking around London last weekend, it certainly fit Keynes’ description from a century earlier. I was surrounded by people conversing in myriad languages, consuming food and culture from every part of the globe, happy to be out for a weekend. It was a delightful experience.

I wonder, however, whether I was experiencing a 21st century reprise of how Keynes felt about August 1914 — a Golden Age that is about to end.

Now it is worth noting that I have had this concern about history repeating itself — or at least rhyming — for quite some time without the absolute worst happening.² I mean, sure, we have had to endure a costly war on the European continent, a global pandemic, and a variety of trade disputes — and yet much of the neoliberal era persists. For all the talk of deglobalization and decoupling and America First, the reality is that the world remains a hyper-globalized place.

So I could be wrong — I could easily be wrong. It’s worth remembering that even as the Trump administration raises barriers to the rest of the world, other parts of the globe continue to embrace globalization. As the New York Times’ Patricia Cohen observed earlier this month, “a growing number of countries, including America’s closest allies, are forging their own economic partnerships without the United States. If Washington is putting up a higher fence around its trade, other nations are lowering theirs.”

That said, I could also be right. The Trump administration seems not only determined to wreck the current global order, but to derive some psychic glee from the process of doing so. The Washington Post’s Natalie Allison and Dan Diamond capture the Trump team’s utter disregard for the turmoil they have unleashed upon the world:

Trump remains undeterred, his advisers say, by hand-wringing in Washington and critical news coverage of the initiatives, including the gutting of the U.S. Agency for International Development, a top target of an Elon Musk-led cost cutting commission, the U.S. DOGE Service. A White House official dismissed concerns about the cuts as a “media narrative.”

“We knew they were going to do this,” said the White House official, speaking on the condition of anonymity to disclose internal discussions. “They get the one starving kid in Sudan that isn’t going to have a USAID bottle, and they make everything DOGE has done about the starving kid in Sudan.”….

U.S. government aid workers were refused customary financial support late last month as they fled violence in the Democratic Republic of Congo, while their colleagues back in Washington were shut out of computer systems. Ongoing medical research across multiple agencies has been hampered by new hiring and funding freezes. Nearly $500 million worth of food intended for relief efforts is at risk of spoiling, given the freeze on shipping food assistance, according to a government report released Monday. And a 40-year-old democracy nonprofit backed by Republicans has placed staff on furlough as a result of its federal funding being slashed.

“You cannot ‘pause’ a plane and fire the crew in mid-flight and pretend no damage is done,” said Atul Gawande, who served as the top global health official at the U.S. Agency for International Development, an early target of the new administration. “But that is exactly what Musk and Trump are doing, with total disregard to the harm.”

When you dismiss children dying as a direct result of your actions as a “media narrative,” that is a good sign that you are an undiagnosed sociopath.

So what will happen? The array of recent non-fiction releases on display at Hatchard’s seemed to perfectly capture the current schizophrenic age: