RECENT convulsions in the global economy mark another curtain call for the long 20th century. The worldwide economic system put in place during the 1970s appears to be unwinding.

The system was built on the back of American political-economic hegemony. It featured an increasingly liberalised global trade regime facilitated by the US dollar, especially through an exclusive trade in oil, and free(er) movement of capital across national borders, especially towards financial assets such as bonds and equities.

Clubbed under the larger rubric of neoliberalism, the systemproduced severallong-term shifts.

It shifted manufacturing from the West to East/ Southeast Asia, creating value chain booms in the latter and cheap consumer goods for the former. It created new and increasingly risky avenues in globalfinancialmarkets,which offered astronomical returns to a small segment of the population.

And, most of all, it helped subsidise consumption through debt for the American population far beyond any actual growth in wages.

Critical voices spent many years pointing out the crisis-inducing impact that such unhindered liberalisation posed to economies, especially of the developing world. It led to premature deindustrialisation for many countries in Asia and Africa, including Pakistan, made the world prone to financial crises, and heightened inequality across a variety of metrics. Such critiques were labelled as archaic, anti-development, anti-freedom and summarily dismissed.

Progressives in Europe and the US too spent much of the 1990s and early 2000s warning about the corrosive impact that neoliberalism was having on their own domestic economies. Between 1979 and 2022, real (ie, inflation adjusted) wages for middle and low-income workers in the US, showed paltry growth of a mere 12 per cent, even when overall productivity has increased by almost 80pc.

So who benefited from this gain in productivity if the average worker is still where they were 40 years ago? Unsurprisingly, wealth and incomes for the top earners and incomes from capital (profits, rents, and returns from stocks and bonds), increased significantly, widening overall inequality.Four decades of a widening gap between the haves and the have-nots mean the proverbial chickens have finally come home to roost. For the last decade and a half, inequality has staged a comeback as a political issue in Western politics.

Unfortunately for everyone else, the issue is finding its expression through a variety of regressive political forces, especially in the US and UK.

In a recent note, Stephen Miran, one of the architects of Trump`s tariff policy, cited a decline of stable manufacturing jobs across the Midwest and the South as a key justification for the US president`s tariff antics of the past few weeks. As free trade became the norm, he argued, good jobs went offshore in search of cheaper labour costs, leaving behind increased dependence on precarious, service sector employment for American workers.In rhetoric at least, the Trump administration wants to `reshore` industrial production so that white male workers in Ohio can relive a mid-20th-century golden era, ie, the fantasy of an archetypical breadwinner who could buy a house, car, and provide for his stay-at-home wife and three kids.

There is nothing intrinsically wrong with giving workers better jobs. But as many have pointed out, there is no going back to this golden past. Most manufacturing jobs rely on cheap labour, which Asia and Latin America have plenty of and the US simply cannot provide. As per some reports, an iPhone if made entirely in the US, would cost $25,000. No company in their right mind could sell a mass consumer product at that price tag.

This is one reason why the Trumpian diagnosis, even if one takes it at face value, is seriously flawed. In rhetoric, it seeks to go back to a longdistant past, without giving up the debt-based consumption privileges that the US has attained through its dominant political and military position in the world.

On the other hand, if the precarious material conditions of blue-collar workers in places like Ohio is of actual concern, then one should be considering an entirely different set of solutions. For example, there are jobs that cannot be sent offshore (such as in personal services and care work), which remain remunerated very poorly.

Why not think of ways to raise incomes for those actual working-class people doing such jobs, and ensure they have a better standard of living? If the average worker is struggling to afford housing and other basic needs, why can`t the state redistribute a greater share of the profits accrued by big companies and wealthy individuals? This is not some alien concept. It formed the basis of social democracy in the mid-20th century, a period that saw some of the greatest gains towards equality and improvements in overall standards of living. As one economist put it wryly, if inequality in the US is your concern, how does taking jobs away from Vietnamese workers act as the solution? The simple fact is that the rhetoric of bringing back good jobs for American workers is eyewash.

The real goal, as it so often is for governments of this ilk, is to secure returns for some section of the capitalist class. In this case, raising some revenue through performative tariffs may act as a convenient and stealthy way of providing further tax cuts for high-income earners. The end result will be more inequality and more immiseration for workers.

The political and economic costs of America`s domestic dysfunction are borne by everyone else.

The erratic display of decision-making witnessed in the last month is reflective of a hegemon confronted with internal contradictions and faced with external decline. Unfortunately, we mere mortals located elsewhere have to put up with these symptoms of morbidity, which will only distort and escalate till something else is ready to take its place. • The wnter teaches politics and sociology at Lums.

X: @umairjav