That aspect of the modern crisis which is bemoaned as a “wave of materialism” is related to what is called the “crisis of authority”. If the ruling class has lost its consensus, i.e. is no longer “leading” but only “dominant”, exercising coercive force alone, this means precisely that the great masses have become detached from their traditional ideologies, and no longer believe what they used to believe previously, etc. The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear. –Antonio Gramsci, Selections from the Prison Notebooks
The deterioration of the market value of labor in richer parts of the world has been steady over the last forty years. Some poorer states, such as India and China, have enjoyed dramatic increases in the market value of labor during that same period. However, even those countries are beginning to experience a weakening of labor markets. Globalization has been the driving force of this trend, but the logic of globalization, and its more recent ancillary, robotization, will ultimately create a world, not of rich and poor nations, but of a unified rich elite and an undifferentiated mass of disenfranchised citizens. For self-protection, that elite will divert the anger and despair of those citizens away from policies designed to enhance the market value of labor into the destructive forces of nationalism, xenophobia, and authoritarianism.
That outcome was hardly predicted in 1991 when the last ideological competitor to the liberal world order, socialism, collapsed (an earlier competitor, fascism, had been vanquished by war in 1945). Economic activity conducted along classical liberal lines—market values determined by supply and demand, limited government intervention in that market, and reasonably stable currencies—was supposed to usher in an increasingly more comfortable and efficient world. Indeed, the idea of progress is central to the political attractiveness of market capitalism. There was, in the years following the collapse of the Berlin Wall in 1989, a sense that liberalism had “triumphed”. Indeed, Francis Fukuyama wrote that “liberal democracy may constitute the ‘end point of man’s ideological evolution’ and the ‘final form of human government,’ and as such constituted ‘the end of history.’”(Fukuyama 1992)
That outcome had also been predicted earlier. The world had witnessed a similar wave of globalization in the late 19th century. In both periods, globalization had been marked by dramatic changes in transportation and communications technologies which had the effect of creating global, and not local, supply chains. In both periods, a new economic power had arisen—the US in the 19th century and China in the 20th century—which upset previously well-established supply chains. And both periods experienced dramatic surges in income inequalities within certain socio-economic groups. The 19th century wave of globalization ended with World War I.
The 19th century collapse of globalization has been well documented and articulated by Kevin H. O’Rourke and Jeffrey G. Williamson in their book, Globalization and History: The Evolution of a Nineteenth Century Atlantic Economy. They argue:
The Impact of the railroad and the steamship was reinforced by political developments after 1860 as European economies moved rapidly toward free trade. The world was becoming a much smaller place, and to an observer in 1875, it must have seemed as if it was going to get a lot smaller. Yet nothing is inevitable. History shows that globalization can plant the seeds of its own destruction. Those seeds were planted in the 1870s, sprouted in the 1880s, grew vigorously around the turn of the century, and came to full flower in the dark years between the two world wars. (O’Rourke and Williamson 1993, 93)
This essay argues that in many respects, the current global economy mimics the O’Rourke and Williamson pattern.
The pattern, however, is just a heuristic device. As compelling as some of the similarities between the two periods may seem, there are some very important differences as well. The 19th century contended with 2 billion people; the 21st century, 9 billion. No one in the 19th century regarded human activity as a decisive element in the global climate; the 21st century must address the urgent perils of climate change. The blood and soil nationalism of the late 19th century ushered in a devastating world war, a calamity thus far avoided in the 21st century. Finally, in the earlier time, the human intellect was regarded as singular. Humans in the future must wrestle with artificial intelligences of considerable powers.
Moreover, the pattern places too much emphasis on the process or globalization as the motor force of the backlash implied by O’Rourke and Williamson. The backlash against the liberal system of market capitalism has existed since it emerged: the desire to resist the commodification of social life so brilliantly explained by Karl Polanyi in The Great Transformation and described by him as the “countermovement” to market capitalism. (Polanyi 1944) That resistance is a parallel structure to globalization and it exists not only as a response to global economic intrusions on social life, but also in response to purely domestic consequences of market forces. Market capitalism has always had winners and losers—that outcome is not unique to globalization. The critical difference between the earlier period and now is that globalization has accelerated the process of losing and deepened it to include the former winners.
Finally, the pattern reflects a fundamental contradiction in the modern world system. The liberal systems of market capitalism and representative democracy operate in completely different realms. Market capitalism is truly universal and for it to operate most efficiently, the factors of land, labor, and capital should have no national identities. Representative democracy requires an emotional identity which has evolved in a profoundly parochial manner in the agency of the nation-state. The contradiction between global and local interests exists for all systems which purport to be universal. Marx might have believed that the proletariat had no homeland, but World War I and Stalin belied that claim. The nation-state has a hold on the minds of people that in times of distress can easily override the clinical self-interest assumed by the market. Dani Rodrik accurately described these tensions in his analysis of what he called the “trilemma”: that democracy, sovereignty and globalization cannot interact simultaneously. (Rodrik 2011)
The Rise in Income and Wealth Inequality in the World
There are wide variations in liberal practices in the world. The social democracies of Europe are at one end of the spectrum. At the other end are societies that adhere to stricter market rules. The United States is an example of the latter. The differences are important, but they also are narrowing. This essay focuses on the practices of the United States since its policies better illuminate how a state can be managed to serve the self-interest of a small group of people. Since 1971 the market has worked to benefit an increasingly shrinking share of the population. According to the Pew Research Center:
….”middle-income” Americans are defined as adults whose annual household income is two-thirds to double the national median, about $42,000 to $126,000 annually in 2014 dollars for a household of three. Under this definition, the middle class made up 50% of the U.S. adult population in 2015, down from 61% in 1971. (Pew Research Center, December 2015)
Middle-class income has “trickled-up.” After the Great Recession of 2008-09, the shift of income to higher-income groups was astonishing: “For the United States overall, the top 1 percent captured 85.1 percent of total income growth between 2009 and 2013. In 2013 the top 1 percent of families nationally made 25.3 times as much as the bottom 99 percent.” (Sommeiller et al. 2016)
Inequality was not a contentious political issue in post-1945 America until the Great Recession exposed the political foundations of inequality. The bail-outs of institutions that had induced the crisis by their exorbitantly risky behavior highlighted inequality by linking it directly to a political process. Gradually, greater attention has been paid to the question of income inequality, and the scholarly commitment to addressing that question was significantly boosted by the publication of Thomas Piketty’s book, Capital in the Twenty-First Century.
The earlier economic debates on inequality had centered on whether the traditional description of inequality—the Kuznets curve—was accurate. Named after the economist Simon Kuznets, the curve represented the rise of inequality as farmers moved into cities in the early period of industrialization, and its steady decline as industrialization matured and the forces of democratization created an economic safety net. Questions have arisen because the safety net has recently proven to be inadequate. (Acemoglu and Robinson 2002)
Why has the safety net failed to address inequality? Democracy has been derailed by rich elites who have used their economic power in the political process to further concentrate their wealth. The political response assumed by Kuznets is not self-executing. Over time, the accumulation of wealth creates the means to prevent the state from taxing it. The public good of a robust economy becomes the private good of a small number of people. Elites rarely, if ever, interact with the less fortunate in substantive ways. Rather, they develop rationalizations to explain the failures of the poor. Similarly, the poor have only a rough idea of how “rich” the rich have become over the last forty years. The scale of the discrepancy between the very rich and the not rich today defies imagination.
The ability of elites to redefine the public good in terms of their private interest is not historically unusual. It is very difficult to measure how this redefinition occurs but there are many studies that suggest that the influence of elites on legislative outcomes is decisive. Two Princeton scholars, Martin Gilens and Benjamin I. Page argue that:
When the preferences of economic elites and the stands of organized interest groups are controlled for, the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy. (Gilens and Page 2014, 575)
The historical record suggests that when wealth becomes highly concentrated, public policy is determined more by the interests of the elites than by the interests of the majority.
Even those who do not believe that income inequality is in and of itself a problem were flummoxed by the consequences of liberalizing the American economy since the 1970s. In October 2008, Alan Greenspan, the former chairman of the U.S. Federal Reserve, testified to the House Committee on Oversight and Government Reform. When asked to explain how the behavior of several financial institutions led to the financial collapse of 2008, Mr. Greenspan told the Committee: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief”. Self-interest is the bedrock of liberalism, but liberal theorists used the term in a social, not a personal, context. Self-interest is not selfishness. Self-interest includes a concern for the long-run, a regard for those with whom one will interact over time, and actions that will create a well-functioning economy that will be shared by all. In other words, the public good is the ultimate objective of liberalism; individual freedom is simply a means to that end.
Mr. Greenspan should not have been surprised that lending institutions involved in the subprime mortgage crisis did not care about the public good—they did not even care about the interests of their shareholders. The chief executives of those institutions had carefully insulated themselves from the consequences of their actions. Mr. Greenspan was remembering a time when investment banks were privately owned, and profits and losses were borne almost exclusively by the partners in the firm. That circumstance assured that the self-interest of the partners was closely identified with the viability of the firm over the long term. That world ended when the investment banks went public. Once the link between private and public loss was severed, the executives of those firms could assure themselves of generous compensation, even if the firm itself suffered a loss or went into bankruptcy. The loss was shifted to the shareholders, or, in the most extreme case, to a central bank or sovereign government. Selfishness no longer required self-interest, if compensation committees and shareholders were passive or co-opted. The executives had eliminated all personal risk to their behavior.
This circumstance was never envisioned by the classical liberal theorists: the public good was never something that should be privatized. For them, it was inextricably tied to the social universe in which capitalists and democrats were born, had children, lived out their lives, and died. Current day pseudo-liberals are fond of quoting Adam Smith’s Wealth of Nations. They would be better advised to read Smith’s Theory of Moral Sentiments which warns of the dangers of accumulating wealth without due regard for the society that collectively creates the condition for that wealth:
“This disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition….is…. the great and most universal cause of the corruption of our moral sentiments.” (Smith 1790. I.III.28)
The present age is one that has deliberately chosen to disregard his advice, and in so doing has compromised the economic progress once promised by the original liberal theorists.
The ideology of neoliberalism is not self-executing. The Kuznets Curve suggests an inherent internal dynamic in the political economy of the market which can correct the tendency toward greater inequality. That suggestion is misleading. Democratization can lead to greater measures to protect the poor, but it can also lead to measures that heighten inequality. The US passed through a similar period in the late 19th and early 20th centuries in which incomes and wealth were concentrated among a very few. The Great Depression was a consequence of that concentration and the US took several steps in the New Deal to avoid a repeat of the Great Depression. Those steps were not automatic nor were they part of an endogenous economic dynamic: they required concerted political effort. But the New Deal validated the link between inequality and political action predicted by Kuznets.
The path to the Great Recession of 2008-09 was also laid down by a series of political decisions, such as the repeal of the Glass-Steagall Act, to undo the protections of the Great Deal. In this process of de-regulation, democracy was not used to benefit the greater good. The impact of these decisions was significantly amplified by the accelerating process of globalization which opened even greater opportunities for capital while weakening the power of labor by essentially doubling the available workforce from about 1.5 billion to 3 billion.
This freeing up of capital was not restricted to the US. Relaxing government regulation, reducing taxation, fostering the free movement of capital, and emphasizing economic growth instead of economic development were the mainstays of the liberal economic order designed by the US in 1944 in the Bretton Woods institutions: the World Bank, the International Monetary Fund, and what we now call the World Trade Organization. The collapse of the Soviet Union and the decisions in the 1990s by both China and India to adhere to the rules of these organizations created, for the first time in human history, a truly universal market for capital.
These institutions have fostered the liberal ideology and have been marketed under different rubrics: structural adjustment programs, the Washington Consensus, austerity, and neoliberalism. This ideology is externally imposed at a moment of weakness in the economy of a nation-state, whether that weakness is a debt crisis, a sustained payments imbalance, or a sharp uptick in poverty. In most cases, those policies have been imposed on poor states. But neoliberalism can also be self-imposed. The deep unwillingness of the US to consider tax increases to support the less well off in the United States is a political choice. The objective of those choices is to disarm the power of the state to restrict the freedom of those who own capital.
The American experience was mirrored globally. Poorer countries had had austerity programs enforced on them by the International Monetary Fund and the World Bank for many years and their effects have been, at best, mixed. (Easterly 2005) More recently, richer countries have had austerity programs imposed on them as well as conditions for sovereign debt relief. For example, since 2008 Greece has received three rounds of assistance from international organizations. In return for this assistance, Greece cut its government budget, raised taxes, reduced pensions, and reduced services. The quality of life in Greece has deteriorated. Austerity programs in Greece were imposed so that wealth could be transferred from the ordinary Greek citizen to the banks that hold Greek debt. The programs are designed to protect the interests of the rich at the expense of the poor.
Overall, the global economy has grown prodigiously over the last 40 years. In many countries, such as China, economic growth has lifted millions out of poverty. Dieter Ernst has a more detailed analysis of China and the process of technological change in Chapter 9 of this volume. However, globalization has also punished labor by facilitating the use of the lowest-cost labor linked into a global supply chain which knows no boundaries of time and space. Those who rely on the market value of labor to survive are being economically disenfranchised, and robotization is likely to aggravate that trend.
From 1990 to 2009 the share of labor compensation in national income in 26 of the 30 OECD countries declined from 66.1 percent to 61.7 percent. (International Labour Organization 2013) This decline occurred despite rising productivity in most of these economies, a shift from traditional patterns where labor’s share increased as productivity increased. This shift has been noted by MIT professors Erik Brynjolfsson and Andrew McAfee in their book, Race Against the Machine, and they attribute this shift to increasing automation in the work place. (Brynjolfsson and McAfee 2012) Oxford researchers, Carl Benedikt Frey & Michael A. Osborne, estimate that 45 percent of US employment is susceptible to computerization. (Frey and Osborne 2013) More recent research suggests that the impact of robotization might be more even significant than expected. (Acemoglu and Restrepo 2017) The chapters by Martin Ford and Irmgard Nübler in this volume give more detail on the issue of how robotization will affect employment.
The current wave of technology is different from previous waves. Technology has often had the effect of reducing the need for human labor and, by and large, these reductions have allowed humans to pursue more productive and less dangerous activities. Usually there is a period of transition as the new technology displaces workers, but, over time, the increase in economic activity has created new opportunities for more creative work. Historically, more jobs have been created by technological innovation.
This time, however, the changes will be different.
First, the changes will affect more people. When the Luddites protested the introduction of technology, their numbers were quite small and the textile factories were not very large in contrast to today. For example, in 1980 the Parkdale Mills in South Carolina produced 2.5 million pounds of yarn every week with 2,000 workers; it now employs 140 workers. (Clifford 2013) Similar job displacements will occur in countries like China. Because robotization expands productivity as much as 20 times per worker, the phenomenon will have a dramatic effect on Chinese industry. (Middlehurst 2015) Even low wages cannot compete with no wages.
Second, the jobs created by this technological revolution will likely be for highly skilled workers. It is hard to imagine what kind of jobs for unskilled workers will be created by the robotization revolution, although that possibility cannot be discounted. It is harder to imagine societies comprised only of individuals with the aptitude or the inclination to develop higher skills. It is also difficult to imagine the sustained societal commitment necessary to raise skill levels for all. There are very few reasons to believe that the declining share of labor in national income will do anything but continue.
Finally, earlier periods of technological change occurred when there were existing social and economic alternatives for the technologically dispossessed. Think of the differences in the United States between the technological wave of the late 19th century and the current technological wave. Families were more tightly integrated and social groups were deeper and more willing to cushion the blow of unemployment. There were also more ways to keep oneself alive without an industrial job. Farming and other means of subsistence were still viable for many and housing was less expensive. At other times of technological change, unions were strong enough to cushion the impact of dislocation. Today, only the state and private charity offer shelter from hard times.
There is no need to answer the question of whether robotization will bring about the end of jobs. That question is impossible to answer and the wrong question to ask (The Economist 25 June 2016). As Mignon Duffy and Robert Pollin persuasively argue in this book, there are very large number of potential jobs serving infrastructure, the environment, and social needs. The correct question to ask is “how do we pay for these services?” The neoliberal response has always been that only jobs associated with private profit should command an income. That response has assured us all that we can have an unlimited supply of Pet Rocks, but does nothing to assure that we can all drink clean water. David Rueda and Stefan Thewissen address the issue of compensation in Chapter 7 of this volume.
It also matters little to the unemployed that the future might be brighter for employment. Robotization may in fact create more jobs in the long run, but future economic payoffs do nothing to diminish the political effects of lost jobs. Workers must pay a mortgage this month, or a tuition bill this semester, or a doctor’s bill this week. Only relatively few individuals can afford the luxury of a long-run perspective.
President Trump has changed many of the foreign policies of the United States, consistent with his desire to emphasize US national interests. This change is not one of kind since all states place a high priority on concrete interests. But the change away from trying to accommodate global interests has led to a sharp decline in American commitments to international actions and cooperation. What are the long-term consequences of this change in emphasis?
Overview
Donald Trump’s foreign policy centers on an “America First” approach, emphasizing tariffs, reduced multilateral commitments, assertive military actions, and recalibrated alliances, as seen in his Iran diplomacy, tariff regimes, NATO pressure, and interventions such as the Caracas raid.
Core Principles
America First Doctrine: Prioritizes U.S. sovereignty, economic security, and reduced foreign intervention.
Skepticism of Multilateralism: Hostility toward the EU, WTO, and multilateral treaties; preference for bilateral deals.
Economic Nationalism: Heavy use of tariffs to reshape global trade and pressure partners.
Key Areas of Action
1. Middle East & Iran
Trump’s meetings with Netanyahu focused on Iran’s nuclear program and regional influence.
Asserted Iran was taking negotiations more seriously amid heightened tensions.
Proposed a 20% fee on cargo through the Strait of Hormuz, revealing impulsive decision-making and rapid policy reversals.
2. Trade Policy
Imposed sweeping tariffs (10–12.5%) on imports from 60 partners under Section 301, replacing earlier reciprocal tariffs struck down by the Supreme Court. India received a lower 10% rate after policy changes.
Tariffs strained relations with allies and triggered retaliatory measures from China, the EU, and Canada.
3. Alliances & Global Institutions
Criticized NATO as “obsolete,” demanding increased defense spending from allies.
Threatened withdrawal from agreements like NAFTA and the Trans-Pacific Partnership.
4. Military Interventions & Security Strategy
Despite isolationist rhetoric, Trump engaged in assertive military actions, including the Caracas raid removing Nicolás Maduro.
Mixed signals on intervention: withdrew troops from Syria and Afghanistan but also authorized strikes and escalated pressure on adversaries.
5. Ukraine & Russia
Meetings with Zelensky highlighted tensions over U.S. support and internal chaos in diplomatic engagements. Foreign policy under Trump 2.0 remained highly active despite expectations of isolationism.
Strategic Vision
Trump’s National Security Strategy (2025) rejects post–Cold War global hegemony, emphasizing realism, sovereignty, and hemispheric dominance while focusing on China containment.
Trump’s foreign policy consistently blends nationalism, unpredictability, and unilateralism, reshaping U.S. global engagement across trade, security, and diplomacy.
The wars in Ukraine and In the Middle East have demonstrated new military technologies such as drones which have changed power dynamics to favor weaker states. Their effectiveness calls into question the effectiveness of large, massed armies and navies. Do the new military technologies undermine great powers in their interactions with poorer and weaker adversaries? How might these new technologies change the nature of world politics?
The recent rise of nationalist parties in the world raises questions about how citizens of the world regard each other. Intense nationalism, emphasizing blood and soil, excludes many people and has roiled the arenas of immigration, culture, and citizenship. The most insidious form of this attitude is antisemitism, which has once again become more prominent in political discourse. Intense nationalism is also an underlying cause of many wars, most notably World War I. Are we headed in the same direction today?
The rise of antisemitism has reached alarming levels, with a documented increase of 107.7% in antisemitic incidents globally in 2024, driven by a mix of ideological extremism and geopolitical tensions.
Recent Statistics and Trends
In 2024, the Antisemitism Research Center reported 6,326 incidents of antisemitism, marking a staggering increase from previous years. This surge is attributed to a combination of far-left, far-right, and Islamist extremism, with 68.4% of incidents linked to far-left ideology. This represents a significant shift from 2023, where incidents from both far-left and far-right sources were roughly equal. The far-right incidents dropped by 54.8%, indicating a change in the landscape of antisemitic activity
Geopolitical Context
The rise in antisemitism is closely tied to the ongoing Israeli-Palestinian conflict, particularly following the events of October 7, 2023. The conflict has intensified existing tensions, leading to increased hostility towards Jewish communities worldwide. Reports of vandalism, threats, and violence against Jewish institutions have surged, particularly in countries like Australia, where incidents have included graffiti and arson targeting synagogues and Jewish schools
Historical and Ideological Factors
Antisemitism has deep historical roots, evolving from religious persecution to modern political scapegoating. The current rise is fueled by a mix of conspiracy theories, social media disinformation, and radicalized movements that exploit the Israeli-Palestinian conflict to justify antisemitic sentiments. The perception of Jews as responsible for various societal issues has been perpetuated by extremist ideologies, leading to a resurgence of hate onlineopinion.com.au.
Conclusion
The alarming rise of antisemitism in recent years underscores the urgent need for global awareness and action. As antisemitic incidents continue to escalate, it is crucial for communities, governments, and organizations to address the underlying causes and work towards fostering understanding and tolerance. Without decisive action, the world risks entering a new era where antisemitism is not only tolerated but institutionalized, threatening the safety and stability of Jewish life globally.
In the Shanghai Communique of 1972, the US agreed that Taiwan is part of China but nonetheless insisted that the eventual integration of Taiwan into the People’s Republic of China should not be a violent transition. Since that time, the US and China have been unable to agree on a strategy to implement that decision, and Chinese President Xi has announced that he wants the question resolved by 2027. Can the dispute over the status of Taiwan be settled peacefully or is a violent conflict on the question inevitable?
The swift rise of Artificial intelligence (AI) may prove to be as transformative as the Industrial revolution. As was the case with the Industrial Revolution there will be winners and losers in the transformation. The big fear of AI is that it will lead to a diminished power for labor and enhanced power to the owners of capital. Can the burgeoning economic inequality that accompanies AI be managed effectively so that the benefits of Ai can be enjoyed by all. Or will those benefits be concentrated among a small minority of rich people?
Vincent Ferraro, “The Crisis of the Liberal International Order: Technological Change and the Rise of the Right Wing,” (excerpts), in in Confronting Dystopia: The New Technological Revolution and the Future of Work, ed. Eva Paus (Ithaca: Cornell University Press, 2018), pp, 156-180
Climate change is unquestionably happening although its effects are not yet universal or as systemic as some fear. Nonetheless, some local effects, such as wildfires, flooding, and heat waves have impacted the lives of millions already. Climate change threatens to upend traditional notions of sovereignty since the more global manifestations of climate change, such as sea level increases and water shortages are becoming more pronounced and are issues that can only be settled by international cooperation. But progress at that level has been sporadic and ineffective. Can the world learn how to manage the process of climate change by cooperating in ways that threaten traditional notions of sovereignty?
Trump has made clear what issue he thinks the Republican Party should emphasize in the upcoming mid-term elections. With the election of Democratic Socialists in several local and national elections, Trump believes that a campaign against “communism” will protect Republican office-seekers. Unfortunately, Trump has no idea what the word communism actually means.
The Democratic Socialists elected, such as Mamdani in New York City, have argued that stronger redistributive measures should be pursued in order to protect the interests of non-wealthy people. For example, Mamdani argues for the state to provide child-care assistance, a necessity for working families but one which has become prohibitively expensive. There is little question that such a policy would require higher tax revenues, and that us the basis for charging the Democrats as being communists.
That is a ridiculous accusation. The state provides a great deal of economic assistance to private enterprises, such as subsidies for farmers or tax incentives for fossil fuel companies. All those policies require higher taxes, but few Republicans in Iowa or Texas cry “communism” when they get the money. Market capitalism can handle such deviations in times of stress, as Keynes argued in the early part of the 20th century. The difference between paying for day care or paying farmers not to grow food is merely one of selecting which parts of the economy one wishes to support–not that the subsidies themselves are evidence of communism.
The key distinction between capitalism and communism is whether the decisions to invest in various economic enterprises is private or public. In capitalism, private individuals or corporations make investment decisions; in communism, the state, usually under the rubric of a Central Planning Committee, make investment decisions.
By this measure, Trump himself has become a communist. He has inserted the US government into investment decisions by securing shares in various corporations or by setting policies that directly affect those decisions. The list of state investments in private corporations is stunning:
Critical minerals & rare earths
MP Materials — rare earth mining in California
USA Rare Earth — critical minerals
Lithium Americas — lithium mining
Trilogy Metals — Arctic-region mining
Vulcan Elements — critical minerals
ReElement Technologies — rare earth processing
Semiconductors & advanced tech
Intel — semiconductor manufacturing
Nvidia — AI chips (structured deal, not necessarily a direct stake yet)
xLight — semiconductor/tech sector
Industrial & energy
U.S. Steel — domestic steel production
Westinghouse — nuclear energy
Moreover, Trump has become heavily involved in decisions being made by Artificial Intelligence companies. The New York Times reports:
“On A.I., the White House has effectively created and put into effect its own mini-regulatory administration. The Trump administration’s directions to Anthropic and OpenAI follow its release last month of an executive order creating, by fiat, a regulatory framework for identifying “covered frontier models” and steering their release. The order contains some good ideas for Congress to consider, but it does not execute a law passed by Congress; it creates its own.”
Now that the US Government has made these types of decisions for specific corporation, one should assess how those decisions affect competitors in each field. The playing field for competition has been altered, and who knows if the government’s decisions are consistent or not with the supply and demand dynamics of the market. But the possibility of government largesse is difficult to resist.
Finally, Trump is making all sorts of economic decisions with tariffs with no input whatsoever from the Congress (although the courts have retained their voice). All those tariffs have a significant effect on investment decisions, but it is not at all clear that the tariffs have any economic logic or whether they are solely based upon political concerns. Government intervention in the second Trump Administration has been incredibly heavy-handed. Trump has become the sole repository of such decisions in much the same way a Central Planning Committee would make decisions.
It would be foolish to infer that this warning signals the beginning of active violence against Iran by the US and Israel. But it is also impossible to dismiss that possibility. Despite all the ridiculous drivel that has been published about “broad agreement” on a variety of issues, the most substantive issue, control over the Strait of Hormuz, has not yet even been discussed by the opposed parties. The US has been unable to restrain Israel over the conflict in Lebanon and the question of what to do with the enriched uranium seems to be at an impasse.
The rational response to these conditions would be to find a face-saving exit which would roughly correspond to the JCPOA fashioned by President Obama in 2015 and cancelled by President Trump in 2018. However, that option does not seem to be on the table right now. Equally unlikely would be a continuation of this deadlock. The US is drawing down its reserves (and continues to export petroleum products to the rest of the world) which will lead to an abrupt collapse of the US oil economy if the blockade extends into July.
So, it is not weird to think that this message presages an all-out attack on Iran and seizure of some parts of the Persian Gulf–either the islands (Greater Tunb, Lesser Tunb, and Abu Musa) right near the Strait or some parts of Oman on the other side of the Gulf. Today marks the end of the haj which the Saudis wanted to protect for religious, economic, and political reasons. The Gulf states (except for the United Arab Emirates) are probably strongly opposed to an attack, but I am not at all certain that Trump really cares about their concerns (after all, if they ditch the US, then Israel emerges as the dominant regional power and the populations of those states would find that alliance uncomfortable.
So, I think we should be prepared for a higher level of meaningless violence. There is no reason whatsoever that Iran would ever bend if it felt that its civilization was at risk. The lessons of World War II, the Korean conflict, Vietnam War, and the Afghan war all testify to the impotence of aerial bombardment in changing political calculations.
Generally, after a summit meeting of two great powers, a joint communique is issued, outlining areas of agreement. No such communique was issued after the May meeting between Presidents Xi and Trump. Instead, two separate summaries (called readouts) were published.
It appears as if Xi and Trump were at different meetings. The US said that China and the US had agreed that the Strait of Hormuz must remain open with no tolls, that China would reduce its dependence of Iranian oil, and that Iran must not be allowed to have a nuclear weapon. The Chinese readout simply said that “the two sides discussed the Middle East conflict” without offering any further details — no mention of the Strait, no mention of tolls, no mention of Iran’s nuclear program, and no acknowledgment of any agreed position on any of those issues.
The US readout noted an agreement on fentanyl whereas the Chinese readout made no mention of fentanyl; the US said the Chinese had agreed to increase purchases of US agriculture, whereas the Chinese readout simply mentioned that trade was “mutually beneficial”; finally, the White House readout did not mention Taiwan at all, while China centered its entire readout on Xi’s Taiwan warning.
The Chinese also made sure that Trump’s seat was lower than Trump’s and ensured that Trump would be forced to stop and catch his breath while the two leaders walked up the steps to the Great Hall of the People.
Real
Screenshot
Needless to say, the Taiwanese, the Japanese, and the South Koreans were completely dismayed by Trump’s unwillingness to discuss Taiwan. Not a good step in terms of buttressing alliance cohesion.
The New York Times recently assessed Trump’s response to the most recent Iranian proposal to end the war.
“In the post on Truth Social, Mr. Trump cast doubt that the latest proposal would satisfy him, asserting that Iran has ‘not yet paid a big enough price for what they have done to Humanity, and the World, over the last 47 years.’”
This is a statement from a person who knows he has lost. It is a revealing and terrifying statement because it suggests that Trump wants Iran to pay the highest price possible for its ability to outlast the US and Israel. For reasons that are inexplicable, Trump seemed to be unaware that the Strait of Hormuz was completely under Iranian control. That control, however, is not based on military power, but rather by geography and that transit through the Strait is dictated more by economic considerations, and not military ones. As long as Iran controls its coastline, very few commercial vessels will take the risk of being blown up by a drone. And the only way to take away this power from Iran would be to forcibly occupy the coast which is between 840-870 miles–an impossible task for the US and Israeli militaries.
Trump keeps repeating the mantra that the US and Israel have destroyed Iran’s Air Force and Navy. That may be true, but it is also irrelevant. North Vietnam had neither and still won the war. The Taliban had neither but still won the war. Trump and the civilians in the Department of Defense are wedded to an archaic definition of war; I suspect that the intelligence agencies and most of the military in the Department of Defense are well aware of the perils of an asymmetric war.
Furthermore, the US has lost its credibility as a protector of the Gulf States–Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, and Oman. It had placed military bases in these states as a guaranty of security, backed up by US missile interceptors. But it is clear that these bases are not defensible from drone and missile attacks.
Iran inflicted extensive, multi‑billion‑dollar damage on U.S. military bases across the Persian Gulf, primarily through large‑scale missile and drone strikes that hit radar systems, hangars, warehouses, command centers, and key naval infrastructure.
Across Bahrain, Qatar, the UAE, and other Gulf host nations, Iran’s retaliation after U.S.–Israeli strikes produced the most severe damage to U.S. regional basing in decades.
1. Bahrain – U.S. Fifth Fleet Headquarters (Most Heavily Hit)
Thousands of Iranian drones and missiles targeted the base over six weeks.
Radar systems, aircraft hangars, warehouses, and command centers were struck.
Satellite imagery showed large fires, structural destruction, and cratered areas.
The attacks triggered one of the largest evacuations of U.S. military families in recent history.
2. UAE – Al Dhafra Air Base
Iranian‑released satellite images (still debated) show crater impacts and burn scars on U.S. aviation and logistics infrastructure.
Analysts note these images may reflect real damage or information warfare, but they were widely circulated as evidence of successful strikes.
3. Qatar – U.S. Air and Logistics Facilities
Iranian state‑linked media circulated imagery claiming missile damage to U.S. installations in Qatar.
Independent verification remains mixed, but the images contributed to global perception of broad U.S. vulnerability.
4. Iraq – U.S. Munitions Facility
NBC‑confirmed reporting states Iran’s precision strikes severely damaged a U.S. munitions site, part of a wider pattern of coordinated attacks.
Scale of Damage
U.S. investigations estimate over $5 billion in infrastructure losses, excluding destroyed radar and weapons systems.
All 13 U.S. Gulf bases experienced at least partial closure or evacuation.
Iran used Chinese satellite intelligence to refine targeting, increasing strike accuracy.
US protection is no longer credible, and the Gulf states now need to figure out a workable relationship with Iran. They also need to redefine their relationship to Israel and the US. In truth, Iran and the Gulf states share similar objectives: to allow the flow of petroleum and natural gas out of the Persian Gulf. There are many issues that divide them, but they all share an overriding dependence on the sale of oil to the outside world.
They will find willing supporters to reduce their dependence on the US. China has made clear that it will not submit to US sanctions on deals with Iran. For the first time, China has invoked its 2021 Anti-Foreign Sanctions Law and issued a statement ordering all Chinese firms and individuals not to comply with U.S. sanctions targeting five independent Chinese oil refineries accused of purchasing Iranian crude. This decision will force Trump to decide whether he wishes to challenge China despite the US dependence on Chinese rare earth minerals that are indispensable to rebuilding the weaponry expended by the US and Israel since the 28 February attack. Again, I suspect that economic interests will win out over the nationalist impulses of the US, but perhaps not Israel.
The US needs to accept the fact that Iran will ultimately prevail in this war. But I sincerely doubt that Trump will ever accept that outcome. His ridiculous assertion that Iran must “pay a price” for its victory is petulant and signals Trump’s intent to blow up as much of Iranian infrastructure as possible even though there is no possibility for a military victory.
The “Hormuz Strait situation is over” and Iran has agreed to never close the Strait of Hormuz again. He described it as “completely open and ready for business and full passage.”
Iran (with US help) is removing the mines it laid in the strait last month.
Iran has agreed to nearly all (or “virtually all”) of his demands, including ending its nuclear program “forever.”
The war is “very close to over” / “close to being over,” and a final deal should be completed “very quickly” (possibly with talks this weekend). He said most points have already been negotiated.
He agreed to a two-week double-sided ceasefire (suspended bombing/attacks) after requests from Pakistani leaders, conditional on Iran fully opening the strait. Despite Iran’s announcement that the strait is open, the US naval blockade of Iranian ports will remain in full force until the overall transaction/deal with Iran is “100% complete.”
China’s President Xi Jinping is “very happy” that the strait is open/rapidly opening. Trump claimed he is doing this “for them, also — and the World,” and that this situation “will never happen again.”
China has agreed not to send weapons to Iran. Trump predicted his upcoming trip to China will be “special” and “potentially Historic,” and that President Xi will give him a “big, fat, hug.”
He dismissed NATO as a “Paper Tiger” that was “useless when needed.” After the strait reopened, NATO reportedly offered help, but Trump told them to stay away unless they just wanted to “load up their ships with oil.”
He emphasized that the US has already met and exceeded its military objectives. He claimed Iran now has a “new regime” that is “much less radicalized and far more intelligent” than before, making a long-term peace agreement possible. He reiterated that the U.S. will work with Iran “at a leisurely pace” on finalizing the deal.
Not one of these claims is true and the scale of the dishonesty of Trump is breathtaking. Iran has adhered to the terms of the ceasefire and insists that its blockade of the Strait of Hormuz will continue as long as the US maintains its own blockade of Iranian oil tankers transiting the Strait. Iran has not agreed to turn over its enriched uranium, insisting that
“Iran’s enriched uranium is not going to be transferred anywhere. Transferring uranium to the United States has not been an option for us,” Esmaeil Baghaei, Iran’s foreign ministry spokesperson, told state television.
“Iran is thought to possess more than 900 pounds of uranium enriched up to 60 percent purity.
“Trump has repeatedly stated that one of the war aims is to prevent Iran from getting a nuclear weapon.
“Iran says its enrichment of uranium is strictly for peaceful civilian use.”
There are a number of possible reasons for Trump making these outrageous claims. The first is that he is simply delusional. I must admit that after seeing him portray himself as Jesus, this explanation has a great deal of power. I am not qualified to make a clinical judgment, but I strongly suspect that if someone told us that they were Jesus, we would be greatly alarmed.
The second explanation is that Trump is simply saying these things, knowing that Iran will have to deny them. He can them falsely claim that Iran reneged on the deal. Such a claim would then be used to restart the war because Iran’s word “cannot be trusted”.
Third, it is possible that the whole episode of the purported “ceasefire” was designed to give the US time to prepare ground troops for an invasion of Iran. The US just added another 10,000 troops to the already 50,000 in the Middle East. This position is held by Russia, and it is highly likely that the Iranian leadership believes this as well:
“Russia’s Security Council cautioned Monday that ongoing diplomatic negotiations between Washington and Tehran could be serving as cover for preparations for a ground military operation against Iran, citing a significant buildup of American forces across the Middle East.
“‘The United States and Israel can use the peace talks to prepare for a ground operation against Iran,’ the Security Council said in a statement, as the Pentagon continues to expand its military presence in the region.”
This last possibility is the most frightening, since every bit of evidence from every conflict since the end of World War II suggests that invasions rarely succeed if the invasion takes more than a month to accomplish. And the limited successes were purchased at very high costs (I only have one success in mind–the UN action against Iraq in 1991). A ground war would also involve many other states almost by necessity–the region is incredibly interdependent given the imperatives of pumping, refining, and transporting petroleum-based products. Every state requires pretty much the same set-up.
Unfortunately, I think that the third possibility is also the most likely. Trump almost always chickens out, but this time he has boxed himself in by initiating the war, and because of the pressures of the upcoming midterm elections. I desperately hope that I am wrong.
The US and Iran (and, implicitly, Israel) have agreed upon a two-week cease-fire in the current war. The agreement was sponsored by Pakistan and had a variety of conditions that are typical for a cease-fire. But there is one very important concession that was made by the Trump Administration–it implicitly recognizes the right of Iran to control the Strait of Hormuz. The New York Times reports:
“Iran’s foreign minister, Abbas Araghchi, a veteran of past nuclear negotiations with the United States, said in a statement that if Israel and the United States halt their attacks, Iran will also suspend its ‘defensive operation’ for two weeks. But he said ‘Iran’s Armed Forces’ would retain control of the waterway. That would leave Iran in fundamental control of the passageway, and over the pace at which a huge backup of tankers would be allowed to deliver oil to Europe and Asia, helium to semiconductor plants around the world and fertilizer to farmers from Africa to Asia.”
This is a significant concession by the US and most likely one that will not sit well with the Gulf Arab states who now will have to accept Iranian control of the Strait. Additionally, Israel’s objective of disarming the Iranian nuclear program seems to be a very remote possibility, short of a ground invasion into Iran.
Trump finally had to concede the geopolitical advantage of Iran in holding a lever over the global economy. Despite spending almost $60 billion in five weeks, the US and Israel had to submit to the political ambitions of Trump. Trump revealed that the price of oil is the most important consideration in his decision-making: more important than keeping nuclear weapons out of Iranian hands; more important than stopping a state-sponsor of terrorism; more important than protecting the rights of Iranians to protest; and more important than getting revenge for a purported assassination attempt against Trump.
Trump should have accepted that geopolitical reality before he launched the war. If he had, then he would not have started the war because none of the alleged crimes of the Iranian regime really matter to him. Trump’s capitulation is truly pitiful because it was based on deep ignorance and fantasy. And his capitulation will haunt American foreign policy for years to come. What state could possibly take US assurances seriously after this fiasco?
Commit permanently to never pursue nuclear weapons.
Stop all uranium enrichment on Iranian territory.
Transfer all enriched uranium to the International Atomic Energy Agency (IAEA) under a defined timeline.
Decommission three major nuclear facilities: Natanz, Isfahan, and Fordow.
Allow extensive international monitoring and inspections. (Reported as part of “international monitoring” and “civilian nuclear cooperation.”)
Restrict Iran’s ballistic missile program to narrow “self‑defense” purposes.
Impose limits on missile development and testing. (Implied in multiple reports.)
End support, financing, and arming of regional proxy groups (e.g., Hezbollah, Houthis, Iraqi militias).
Dismantle Iran’s proxy network and halt all cross‑border operations.
11. Reopen the Strait of Hormuz immediately and guarantee freedom of navigation.
Commit to keeping the Strait open permanently under international norms. (Implied in multiple reports.)13.
Agree to a one‑month ceasefire between the U.S. and Iran to negotiate a longer‑term deal.
Suspend Iranian missile and drone attacks across the region during the ceasefire. (Implied by the ceasefire framework.)
Sanctions relief in exchange for compliance, including economic normalization and possible civilian nuclear cooperation
Here is Iran’s counteroffer:
These demands are not ships passing in the night; they are ships passing in different universes. There is literally no common ground in these gambits which suggests that any resolution to the war is very far away.
The US, however, is making incredible threats against Iran. According to CNBC:
“U.S. President Donald Trump said Monday that the U.S. will ‘completely’ obliterate Iran’s electric generating plants, oil wells and Kharg Island if the strategically vital Strait of Hormuz is not ‘immediately’ reopened and a peace deal is not reached ‘shortly.’
“’The United States of America is in serious discussions with A NEW, AND MORE REASONABLE, REGIME to end our Military Operations in Iran,’ Trump said in a post on Truth Social.
“’Great progress has been made but, if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately ‘Open for Business,’ we will conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet ‘touched.’”
These threats violate the laws of war. The purpose of war is to disarm one’s enemy, not to destroy it. Total destruction of an enemy is not a legitimate objective, although many states have gone that route. We have witnessed two contemporary wars which have violated this maxim: the Russian assault on Ukraine and the Israeli assault on the Gaza Strip. It seems as if states have become intoxicated with the destructiveness of their weaponry. Wars against the civilian populations is easy, but abhorrent–non-combatants have no defenses and pose no threat to a state’s military.
The reason why international law forbids wars against civilians is because such brutal actions often lead to conflicts that cannot be resolved by diplomacy. When the civilian populations feel aggrieved, restraints on war are difficult to achieve. War is not slaughter–we can slaughter people in all sorts of ways, and nature does a pretty good job of attacking civilians through hurricanes, wildfires, and earthquakes. But slaughter is not a political objective. It is the objective only for those who feel hatred and a need to shed blood vindictively. These attitudes do not lend themselves to an honest resolution of disputes.
“When it was over, Scipio began to weep and publicly lament the misfortune of the enemy. Polybius asked him why he was weeping and he compared the fate of Carthage to that of Troy. He spoke the words of Homer:
“The day shall come in which our sacred Troy and Priam and the people whom spear-bearing Priam rules, shall perish all.”
“Polybius asked him what he meant by this and he said ‘When I consider the mutability of human affairs, I fear that someday this may also be the fate of Rome.’”
Scipio understood well the dynamics of hate and how it should have no place in the conduct of war. All wars should be fought with an eye toward attaining the conditions that will re-establish peace.
The Trump Administration is asking for an extra $200 billion for its operations in Iran. That number is in addition to the $1 trillion defense department budget already authorized. The request also comes as the evidence seems to indicate that the Administration is seriously thinking about sending ground troops into the battle.
Regardless of how one defines the threats to US national security, it seems clear that the US already spends an incredible amount of money on the ability to wage war. It is hard to assess how realistic this sum is given that the US and its allies already spend significantly more than their primary opponents.
More importantly, Trump is asking for 20% more to prosecute a war that has not been approved by Congress, despite the Constitution’s clear delegation of the power to declare war to the Congress.
The Congress should refuse to authorize the money.
Trump claims that he the power to wage war because his authority as Commander in Chief gives him the right to do so in the face of an “imminent” threat, which assumes that the Congress might not have the necessary time to declare war.
That claim is nonsense. Israel and the US had been panning this war for months before the first bomb was dropped. The plans to attack Iran were not created suddenly in 2026. They were built on years of contingency planning, sharpened by the June 2025 war, and finalized in the months leading up to February 2026 as diplomacy collapsed. Moreover, the “imminence” the asserted Iranian attack was based upon Trump’s assertion that Iran was “weeks” away from developing a bomb. According to FactCheck:
“A week before the recent military operation, on Feb. 21, Trump’s special envoy to the Middle East, Steve Witkoff, was more definitive in describing a time frame for Iran’s nuclear ambitions. Witkoff said in a Fox News interview that while Iran says that its nuclear capability is “about their civil program … they’ve been enriching well beyond the number that you need for civil nuclear. It’s up to 60%. They are probably a week away from having industrial-grade bomb-making material, and that’s really dangerous.” But experts told us it would likely take months for Iran to enrich uranium to that level and then much longer before the “bomb-making material” could be made into a weapon.
“Daryl G. Kimball, executive director of the Arms Control Association, a nonpartisan organization that provides analysis on arms control and national security issues, told us that “it is clear that it would take Iran years to fully rebuild its enrichment plants” that were bombed in June 2025. ‘It is possible that Iran may have a very small number of operational centrifuges somewhere undisclosed,’ Kimball said. ‘But it would still take months for a smaller number of centrifuges to accomplish what thousands of centrifuges at these major facilities could’ve done,’ which would be to enrich small amounts of uranium to weapons-grade level and then turn it into metal to be used for a weapon. ‘It would take longer to fashion a nuclear explosive device.’”
Trump has no authority to wage war under these circumstances, and Congress should assert its Constitutional role. It runs the risk of implicitly declaring war by passing this supplemental budget which is targeted toward military operations against Iran. In the same way, President Lyndon Johnson used the Gulf of Tonkin Resolution to justify the war in Vietnam, even in the absence of a Declaration of War.
If the supplemental budget is not approved, the Republicans will argue that the action will jeopardize the safety of American troops. That argument is ridiculous. We can put the budget request in context with other states:
First, the Department of Defense has a budget of over a trillion dollars.
Current forecasts put the US Defence Spending for 2024-25 somewhere between $895 billion and $1.04 trillion.
The likely range dwarfs anything else by a margin most people still find surprising. Take the figures below, which come from the same set of Congressional projections.
China: $224 billion.
Russia: $109 billion.
India: $73 billion.
United Kingdom: $71 billion.
When one averages these numbers, US outlays alone account for roughly 40 per cent of all defence money spent around the planet.
It is hard to believe that the Defense Department is bankrupt, particularly since it is notorious for never passing an audit of its expenditures in its entire history. If one wants to see how the DoD spends money foolishly, one should check out this information provided by the Center for Arms Control and Non-Proliferation.
Second, the Congress should demand greater clarity on the purposes of the invasion and the conditions for ending the war. We have been treated to a variety of explanations for the war. Additionally, the Congress should outline what cuts it is willing to make in the current budget so that the American people will know how their money is being spent. Specifically, the supplemental request should be framed in the context of domestic programs that have been cut. For example, the recent cuts to the Affordable Care Act (Obamacare) totaled approximately $92 billion in ACA subsidies–half of the supplemental budget request. Plenty of money to kill people; limited money to heal them.
Third, opponents of the war should advance a simple peace plan: revive the Joint Comprehensive Plan of Action (JCPOA) which all analysts regarded as an effective check to Iranian nuclear ambitions. If Iran agrees to rejoin the plan, then the US should lift all sanctions on Iran. Plenty of problems remain in the US-Iran relationship, but at least the “imminent” threat will be defanged.
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