Geopolitics, Free Trade and Politicians

Today Donald Trump meets the Australian Prime Minister. His visitor has every reason to be angry with the US President, in the light of the way Trump has treated Australia - one of the US's closest and most assiduous allies - since he came into office. I have no doubt that for a few hours Trump will have a new 'best friend': just as he did yesterday with the beleaguered Palestinian president. Equally I am sure that after another few weeks the encounter with Mr Turnbull will be as remote in the Great Deal-maker's memory as the visit by Theresa May in the early days of his presidency has now become. However, today Trump will 'press the flesh' and be polite, and a superficial image of good will will promulgated. The best that can be hoped for thereafter is that Trump leaves his Secretary of State and other officials to re-set the seventy-year collaboration of the two countries, while he goes on with his frenetic contact-building.

Meanwhile, in the grimy real world of the economy a quite remarkable thing is happening. In recent days both US and foreign-domiciles companies have announced that they are setting up, or expanding, production, distribution and research facilities on US territory. Without the Trump Administration doing anything definitive, the Donald's campaign rhetoric has been taken as a genuine expression of his deeply-held conviction that a perverse Economists' dogma of Free Trade has sucked jobs out of the USA to the temporary advantage of countries who have paid for their early-stage industrialisation by exploiting low-cost labour to sell low-priced produce to more developed countries. The outcome from the recent announcements will not solve the rustbelt problem, but it will give extra momentum to the schemes for upgrading the economies of deprived areas in the United States that were enacted in the Obama years. Mr Trump has never bothered to conceal his contempt for the theories that underpinned the past policies that he has so angrily asserted to be the cause of much misery and deprivation across the mid-west and inland from the Atlantic seaboard. Firms are flocking to conform to the new reality of Presidential Mercantilism; and it is possible that the global distribution of capital and employment will be shifted measurably without any major legislation being required, and at the cost of little new expenditure by the US government.

Meanwhile, as was mentioned in my last blog, the latest effusions from the European Union on the Brexit situation are revealing just how profoundly perverse the financing of the Union has always been. Germany was blamed almost exclusively for the horrors that were visited on Europe in and after the Second World War; and nobody has ever tried seriously to deny the profundity of the evil that was unleashed. But the fact that millions of non-Germans collaborated, with various degrees of enthusiasm, with Hitler's economic exploitation and political tyranny has largely been suppressed. After the war, a few Quslings were executed: very many more collaborators were allowed quietly to continue with their lives, sometimes after death sentences had been commuted to prison terms which could then be shortened. The focusing of primary blame on Germany has been the basis on which that country has accepted the need to agree to the removal of about a third of its pre-war territory to compensate the Poles for Stalin's territorial aggression against them and to allow Benes and other unsavoury politicians to take the bitter 'fruits of victory' by expelling Germans from their homes of many centuries.

Equally, Germany accepted an obligation to pay heavy tribute to Israel as a surrogate for the millions of European citizens of Jewish origin who were killed and abused. And, for their European neighbours, Germany agreed to serve as the cash-cow to support the dubiously democratic regimes that followed Fascists into power in the parts of Europe where the USA and Britain [with the uncertain association of French forces whose recent history was, at best, equivocal] found themselves in occupation.Thereafter, France gleefully entered into European institutions that covered the cash flow from Germany to the other participants.

Britain made ultimately futile attempts to rebuild the Empire, and took little direct part in the evolution of western European institutions for the first decade after the war ended; by which time the Treaty of Rome was in formation. Under MacMillan's premiership, Britain's misguided, belated attempt to be allowed to join the EEC was at first snubbed by deGaulle's France. Then along came the ultimate mug, Edward Heath, who was determined to get Britain in to the new entity, regardless of the profundity and frequency of the lies he told to the British nation. There is no doubt that his concern to join in came from his experiences of the Second World War as a serving officer: which gave him a profound belief in the need for permanent peace on the continent by abolishing the nation states. But the UK need not have agreed to become a secondary paymaster, after Germany, for the whole fantastic scheme that was being constructed. He did agree to pay. More than ten years later Thatcher got the concessions that were mentioned in this blog yesterday, and the entire sad saga got under way. Under the pained premiership of Mrs May, Britain is most likely to make a major contribution to the new pattern of Geopolitics, involuntarily and with little understanding.

Watch this space!