Trump, national-capitalism at bay

by
Thomas Piketty
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For anyone in doubt, Donald Trump has at least made things clear: the right exists and it speaks loudly. As has often been the case in the past, it takes the form of a mixture of violent nationalism, social conservatism and unbridled economic liberalism. We could call Trumpism national-liberalism, or more accurately, national-capitalism. Trump’s remarks on Greenland and Panama show his attachment to the most aggressive, authoritarian and extractivist form of capitalism, which is basically the real and concrete form that economic liberalism has often taken throughout history, as Arnaud Orain has just reminded us in « Le Monde confisqué. Essai sur le capitalisme de la finitude, XVIe-XXIe siècle » (Flammarion, 2025) (« The confiscated world. Essay on the capitalism of finitude, 16th-21th century »).

Let’s be clear: Trump’s national capitalism likes to flaunt its strength, but it is actually fragile and at bay. Europe has the means to confront it, provided it regains confidence in itself, forges new alliances and calmly analyzes the strengths and limitations of this ideological framework.

Europe is well placed to do so. It has long based its development on a similar military-extractivist pattern, for better or for worse. After forcibly seizing control of sea routes, raw materials and the global textile market, European powers imposed colonial tribute on all resistant nations throughout the 19th century, from Haiti to China and Morocco. By 1914, they were engaged in a fierce struggle for control of territories, resources and global capitalism. They even imposed increasingly exorbitant tributes on one another – Prussia demanded tribute from France in 1871, then France from Germany in 1919: 132 billion gold marks, more than three years of German GDP at the time. A ratio comparable to the tribute imposed on Haiti in 1825, except that this time Germany had the means to defend itself. Endless escalation led to the collapse of the system and of Europe’s hubris.

This is the first weakness of national capitalism: when powers reach a boiling point, they end up devouring each other. The second is that the dream of prosperity promised by national capitalism always ends up disappointing public expectations because it is, in reality, built on exacerbated social hierarchies and an ever-growing concentration of wealth. If the Republican Party has become so nationalistic and virulent toward the outside world, it is first and foremost due to the failure of Reagan-era policies, which were supposed to boost growth, but only slowed it and led to stagnating incomes for most. In the mid-20th century, American productivity, measured as GDP per hour worked, was double that of Europe, thanks to the country’s educational advantage. Since the 1990s, it has been at the same level as that of the most advanced European countries (Germany, France, Sweden or Denmark), with differences so small they are statistically indistinguishable.

Impressed by market capitalizations and billion-dollar figures, some observers are amazed by the US’s economic power. They forget that these valuations stem from the monopoly dominance of a few major groups, and, more broadly, that the astronomical dollar amounts reflect the very high prices imposed on American consumers. It’s akin to analyzing wage trends without taking inflation into account. When measured in terms of purchasing power parity, the reality is very different: the productivity gap with Europe disappears entirely.

Using this measurement, China’s GDP surpassed that of the US in 2016. It is currently more than 30% higher and will reach double the US GDP by 2035. This has very real consequences in terms of its capacity to influence and finance investment in the Global South, especially if the US locks itself into its arrogant, neo-colonial posture. The reality is that the US is on the verge of losing control of the world, and Trump’s rhetoric won’t change that.

Let’s summarize: the strength of national capitalism lies in glorifying power and national identity while denouncing the illusions of carefree rhetoric about universal harmony and class equality. Its weakness is that it clashes with power struggles and forgets that sustainable prosperity requires an educational, social and environmental investment that benefits all.

In the face of Trumpism, Europe must, first and foremost, remain true to itself. No one on the continent, not even the nationalist right, wants to return to the military postures of the past. Rather than devoting its resources to an endless arms race – Trump is now demanding military budgets of up to 5% of GDP – Europe must base its influence on law and justice. Targeted financial sanctions, effectively applied to a few thousand leaders, can make a stronger impact than stockpiling tanks. Above all, Europe must heed the calls from the Global South for economic, fiscal and climate justice. It must renew its commitment to social investment and definitively overtake the US in terms of training and productivity, just as it has already done in terms of health and life expectancy. After 1945, Europe rebuilt itself through the welfare state and the social-democratic revolution. This project remains unfinished: on the contrary, it must be seen as the beginning of a model of democratic and ecological socialism that must now be thought through on a global scale.