Capitalists Kill Capitalism (Who Knew That Trump's Superpower Would Be Destroying Wealth? Part 3)
Why are Trump and the Republicans doing so many things that harm the US and global economies? More accurately, given that the economy has always lagged under Republican presidents, why are they doing so many more such destructive things than they used to? The answer is simply that people who have become powerful will not protect the things that made them powerful because they are keenly aware that those things could soon make other people powerful. It is simply another example of the "pull up the ladder behind me" phenomenon, but in an especially perverse way.
But let us back up a bit. Last month, I initiated an occasional series of columns under the umbrella title: "Who Knew That Trump's Superpower Would Be Destroying Wealth?" Part 1 explained that Donald Trump and the Republicans claim to be economic geniuses but mostly are at best lucky (and at worst grifters and frauds). At one point, I quoted a New York Times op-ed by Binyamin Appelbaum: "It’s often said that presidents have limited power over the economy, but it’s more accurate to say that they have limited power to increase growth. They have a lot more power to break things." Part 2 then explained that Trump's erratic decision-making on its own can harm the economy (even if the decisions themselves were sensible, which they are not).
In those columns, I tried to separate the idea of destroying wealth in the narrow sense from its broader sense. The narrow sense is when a person destroys wealth (usually, though not always inherited) by making terrible decisions, with the destruction of that wealth leaving a small number of people worse off. The broader sense is when a person (who need not be personally wealthy) makes large numbers of people worse off by making terrible decisions. Trump happens to be a great example of both types of wealth destruction, with the latter being more current and much more important.
So how do we get from there to my assertion in the first paragraph above that the people who today are wielding power that derives from their personal wealth are not only willing to make decisions that harm everyone else but will do so on purpose? The wonks among Dorf on Law readers might be excited to know that this essay is in part about late-stage capitalism, but other readers need not worry that things will go (too far) into those weeds.
A few years ago, I wrote a column in which I included this disclaimer:
I start with an acknowledgement: [O]ne of my main arguments [here] channels a conversation that I had with a friend at a top law school ... . This friend prefers to remain out of the public fray, so I am being a conscientious academic by acknowledging that one of my major arguments was not original to me, but I am also being a good friend by not revealing who first brought it to my attention.
Today's column is based on another conversation with that same colleague. That is to say that if today's column were an academic article or book, we would both have our names listed as co-authors. Indeed, I will say that although I contributed to the dynamic of the conversation, most of the true insights sprang from the mind of my anonymous colleague. I thus readily concede that I am not the innovator here, but it is fun to be able to turn the conversation into this column.
In that conversation, we initially were discussing college football (of all things). Although I have been a purist over the years and have therefore been in favor of stopping or slowing the move away from amateurism in US college sports, even I finally gave up the ghost because of the accelerating money-fueled chaos of the last few seasons. In the conversation last week, I was observing that the new world of college football capitalism -- which became inevitable when the old model became an unsustainable joke -- is a bit of a hellscape. The players are not protected by a union (unlike other pro sports -- and note that I do mean "other"), which means that a few players will become very wealthy even before leaving their college teams while others will be cheated and exploited. Traditions that fans treasure are also being dumped every day. And so on.
None of that is remotely controversial or new, but the point that emerged from our conversation was that this is what late-stage capitalism does to everything. The wonderfully evocative -- and accurate -- insight known as enshittification (coined by Cory Doctorow, which actually became the "word of the year" in various respectable sources in 2023 and 2024) describes one aspect of the problem, which is that market forces lead tech companies to ruin their own products for fun and profit. More broadly, the problem is that capitalist competition all but guarantees a result that is shitty.
In big-money college sports in the US, the result is that the universities that used to try to balance academics and sports, most prominently those in the Big Ten (now numbering 18 teams), are busily trying to increase the number of games and thus to cheapen each game -- while even more severely damaging more young boys' and men's bodies and brains. There did not need to be a 12-team playoff, but then there was one. And now it seems nearly impossible to open a source of sports news without hearing that the idea is to go to 16, 24, or 32 teams. The NFL still makes loads of money, even with so many games being essentially meaningless (teams with losing records even making the playoffs in many years), so why not?
Is that better for the players? Better than what? Being exploited and tossed aside after getting some cash is better than being exploited and tossed aside after getting what could have been very valuable non-cash compensation -- a free college education -- when it is no longer possible to be a real student. But players are now able to move from place to place with even more "freedom" than NFL players, making one wonder whether we will reach the point that "the portal" (which allows players to switch teams between seasons) will become a game-by-game option (how about between plays?), all in the name of personal liberty.
"Woo hoo! We're now being treated like employees." And how does that go for most employees? A few years ago, the apologists for late-stage capitalism made a big push to publicly shame something that they called "quiet quitting." One of the millennials I know (one of the few who is willing to talk to me, but I digress) pointed out that the response from younger quipsters boiled down to variations on the idea that quiet quitting was just another name for "doing the job that you were hired to do." That is because the bosses who were complaining about the phenomenon were saying, in essence, that "kids today won't go above and beyond for the benefit of the company, the way kids used to."
But why would anyone do that at this point? More and more people are truly alienated from their jobs and hate their lives, so why should they do anything other than try to do as little as possible for whatever scraps they are allowed to keep, until they are pushed aside?
Over the course of the 1970's through 1990's, a major development in the theory of contract law was known as "efficient breach," which expounded the idea that contracts are entirely contingent on the simple dollars-and-sense involved, which meant that there was no reason to honor contracts out of a sense that contracts should be honored. It was every man (sic) for himself, and that was as it should be. Certainly, no one would do anything for free, just to be a mensch.
All of this has the flavor of process that everyone regrets but no one can stop. Indeed, no one has reason to try to stop it, because they would be a chump to try to do so. It is, in other words, the flip side of Adam Smith's famous (oft-misunderstood, but still powerful) metaphor of the Invisible Hand, by which "[i]t is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." In modern econ-speak, everyone is a "price taker," which simply means that everyone is powerless to change the choices available to them.
Not quite everyone, though. This was where the conversation with my colleague turned toward the conclusion that those with real power want to destroy wealth, but only as a means to an end. In the early decades of the last century, the famous right-wing economic hero Joseph Schumpeter aggressively promoted a concept that he called "creative destruction," which is the idea that capitalism constantly generates wealth even as it destroys the wealth that went before. The companies that delivered ice from trucks are no more, for example, and more generally the people who keep their money in old technologies lose out.
But even though the people who are the winners measure their status in dollars of net worth, what they truly crave is the power that those dollars confers upon them. They care nothing for the capitalist system, and they are more than willing to undermine it when it suits them. There used to be people (I was one of them) who would point out that the wealthiest people in the US were better off than the wealthiest people in a poor kleptocracy because they could live in a place where they did not need to be driven around in bulletproof limousines. Keeping their wealthy countries generally wealthy was valuable to them personally. That is quite obviously no longer operative.
All of which means that the people who fell in with the Trumpist agenda have every reason to understand that Schumpeter's creative destruction is a threat to them. They want to lock things into place as they are now, because they like having power and understand that if they were able to amass what they amassed under an existing set of rules, then someone else could creatively destroy today's wealthy people unless those rules are changed. And if that destroys wealth but keeps the powerful in power, then that is what will happen.
- Neil H. Buchanan