Trump and the Rise of Asia

My interview with "Atlantico"

[The following is the slightly edited text of my interview for a French portal “Atlantico”. French translation of this conversation is available at

https://atlantico.fr/article/decryptage/branko-milanovic-les-elites-europeennes-se-sentent-piegees-face-a-trump-comme-celles-du-bloc-socialiste-letaient-face-a-la-deconstruction-de-leur-monde-par-gorbatchev-Branko-Milanovic]

1/ Donald Trump is preparing to return to the White House after defeating Kamala Harris. You mentioned, in the aftermath of the election, that Western elites were just as bewildered as the communist elites of Eastern Europe when Gorbachev started implementing the reforms that led to the dissolution of the Soviet Union. Why do you think they are comparable?

I meant, as indeed you said, that the elites in Eastern Europe felt with regard to Gorbachev similarly to the way the elites in Europe currently feel towards Trump. Both Gorbachev and Trump bring totally dissonant tones compared to what was common and acceptable within respectively East European satellite countries and Western allies during respectively half a century and eighty years. East European elites were used to the signals from Moscow which would emphasize the “indestructible” unity of the socialist bloc, the claim that the socialist bloc is the most politically developed part of the world, and that they are essentially going from one success to another. It does not mean that it was right or true. It simply means is that it was the message coming from Moscow. The Eastern elites have been used to that even if they knew how to adjust themselves to modifications depending on the type of leadership that the USSR had. But they certainly were not expecting that the Secretary General of the Communist Party would dissociate himself with what was done by his party within the Soviet Union and abroad and moreover would say that the existence of the socialist bloc is really up to the countries themselves. Gorbachev was quite famous for saying, very lightly, that the East European countries should go “their own way” quoting the lyrics from a Frank Sinatra song.

Similarly, (West) European elites since 1945 have been used to one type of message from Washington; this message might have slightly varied from one president to another but its basic line always was that the United States and Europe (before only Western Europe and in the past 30 years the entire Europe) are liberal democracies, that they are united by their political values, as well economically and militarily. With Trump at least two parts of this message get scrambled. First, his commitment to liberal democracy is very faint and it is not even clear that he cares whether countries that are part of the Western political alliance are liberal democracies or not. Secondly, he has in the first term, and might even do so in the 2^nd term, questioned the full meaning of NATO in the sense of being a mutual defense bloc. He rather saw it as a burden on the United States which has to pay the largest share of military expenses. These two things cannot but bring a feeling of ill ease among the western ruling circles. This is the similarity that I had in mind

2/ Regarding European elites, what aspects are a matter of blindness or fatalism? Should we believe that they don't see what's happening because they are willfully blind, or is it simply that they are incapable of transforming themselves?

I think they the attitude of the western elites in the first term of Trump (and so will be probably in the 2nd term), is to treat Trump as some kind of a natural disaster and just hope that it would end soon. They cannot oppose him because the power of the United States is overwhelming and especially not now when Europe desperately needs the United States as the wars in Ukraine and Palestine continue. So there is no doubt that they would have to go, at least verbally, along with Trump. As I said in the previous question, they probably have a feeling of extreme malaise with the situation as is. They feel with Trump as if they were imprisoned in a cage with a tiger and the objective is simply to wait long enough until the tiger has to leave the cage (and not to be eaten before).

I do not think that the elites in Europe are going to change simply because they don’t feel that they need to change. They see what has happened in the United States as a temporary anomaly, a very American anomaly, and they expect that in four years the situation will get normalized. However, it is true that more right-wing and populist leaders whose view of the world is much closer to Trump’s might feel emboldened and may hope, more realistically now, that they would be able to come to power and replace (in their view) the effete liberal elites.

3/ Your analysis equates Donald Trump to Gorbachev (although, according to you, this doesn't mean the United States is collapsing), and Europe corresponds to the satellite powers, which, dissatisfied with the change in the direction of the "mother" power, were nevertheless unable to oppose it. Would you say that the challenge is already lost for European elites, or is it still possible to see them react? Should we expect a final resurgence, or are they already condemned to the same grand erasure that befell the Soviet elites of Eastern European countries?

As I said, I think that the European elites would treat Donald Trump as a natural disaster, as an earthquake, and just hope that they would be able to survive it. They certainly cannot oppose it directly. They will have to “dance” very carefully around the issues and through a combination of representation to Trump of mutual interests and personal flattery try to get him on their side. The problem for them is that other, alternative, elites are on the horizon and they are much more in sync with Donald Trump. I have in mind here the right-wing parties in Germany, Austria, Spain, France, Netherlands, Sweden. They share with Trump the dislike of migration and would not be averse to implementing policies of industrial protectionism. Of course, the latter may be a double-edged sword because European protectionism might affect American companies too. But they might argue their case in front of their electorates with less inhibition now because they have an ideological ally in Washington. (Like the anti-Communist elites suddenly had an ally in Moscow.)

4/ During the Cold War, the United States needed Europe and had to ensure that it would not align with Russia instead; this is why they implemented the Marshall Plan. In the face of a new Cold War, this time pitting American power against China, should we think that the United States still has an interest in keeping Europe stable and prosperous?

The problem with the Soviet Union was different from the problem with China. Not only was the Soviet Union much closer geographically to Europe and had an army that could potentially in 1950s or even 1960s conquer parts of Europe but on top of that the Soviet Union had political parties and trade unions in the West that were ideologically affiliated with it. None of that is true for China. China is far away and China certainly does not have the intention or possibility of militarily attacking Europe. Secondly, China does not have soft power or the ideological appeal that the Soviet Union had. So, the Chinese threat to Europe is in my opinion simply non-existent. However, the China challenge for the US is real, because the question, at that level, is who will be the world hegemon. Thus, the US has an incentive to have large and rich countries like countries of the European Union on its side. I do not think that the US is going to abandon Europe. It’s too important for the United States. Of course, what I’m saying here is not addressing directly the question of Trump’s leadership, but a broader question of strategic importance of Europe for the United States.

5/ You are an expert on the impact of globalization on inequalities and have gained global recognition for your work on this subject. This issue seems to have played a decisive role both in the United States and in the democratic malaise of Western democracies more broadly. Where do we stand on this issue today?

Yes, I agree with you that the issue has played a big role both geopolitically and in internal politics. In my forthcoming book I make this argument. It is not exactly new but I don’t think it has been presented in a single unified and coherent way. The rise of China, and more broadly of Asia, is moving the center of economic activity from the Atlantic to the Pacific. It is bringing Asian incomes relative to the West to the level where they were 300 years. The differences between Europe and China, and Asia in general, were then much smaller than afterwards when as the result of the Industrial Revolution Europe became much more prosperous and militarily stronger. With respect to the United States, China is emerging as a formidable competitor, economically and militarily. So this is the effect of China on geopolitics and in particular on the role of the US as the global hegemon.

There is then a second effect of China which is economic. It is the effect of Chinese and Asian growth on the relative positions of the Western middle classes. It is simply a fact that Western middle classes, while still much richer than the Chinese, have not grown at the rates comparable to China, and that some parts of the Western middle classes are going down in the global pecking order. That does not mean at first very much but gradually if people who are part of the French middle class and who used to be at the 70^th global percentile go down to the 50^th global percentile they will be unable to buy some goods and services that are internationally priced. So, the relative decline of Europe will be felt at a very personal level. I want to emphasize that while obviously the geopolitical challenge is coming from China and is directed towards the United States, the economic challenge is broader because other very populous Asian countries like India, Vietnam, Indonesia etc. are also growing fast. Just to give an example: only 40 years ago the UK and India had overall (total) GDP which was the same. Nowadays India’s GDP is four times as large. The same is true for Indonesia and the Netherlands: from having the same total GDPs 40 years ago to Indonesia’s being four times greater now. So this is one of these major changes in the relative economic power between Asia and Europe.