The oligarchs in Europe and the United States created this situation in the first place. In 1975, the G7 countries met at Chateau Rambouillet in France and they created what Helmut Schmidt called "New Geographies of Production". In other words, they were going to outsource all of their manufacturing, or most of their manufacturing, or a good part of their manufacturing to China - for one reason, and that was cheap labor. They wanted to exploit the cheap labor of China, okay? And that's what they've been doing now for over 40 years.
Now over this period of time we have a situation that's very similar to the whole situation of, let's say, proxy warriors, that the United States has been involved in. The United States created proxy warriors in Afghanistan to get rid of the Soviet Union and these people took on a life of their own and now they're known as ISIS and so on and so forth. Same thing happened here! The United States created a Frankenstein here by creating a huge manufacturing base in China at the expense of its own country.
The leveraged buyouts of the 1980's were the implementation of this idea of Chateau Rambouillet in 1975. Basically they decided to buy these companies and load them down with debt; they go belly-up, they go out of business. Doesn't matter, the financiers of Wall Street make a ton of money and the manufacturing is going to go to China anyway. So as a result, the country of the United States of America was more and more impoverished over this period of time. There's no question. And finally the American people woke up when Donald Trump addressed this situation.
There was an element of economic injustice here. The American worker paid for this transfer of power to China and now Trump is going to undo 40 years of carefully interacted negotiations with one Twitter burst. This is the problem here. What he's doing, it's fundamentally wrong! You can't undo 40 years of work with one stroke of the pen. You're gonna have chaos as a result of it.
I was recently in St. Louis. Across the river they've opened a steel plant. So there's 1800 people now working at that steel plant that weren't working before. The automobile industry is a huge industry in the United States and they will profit from this type of thing. Agriculture will not profit, okay? They're going to suffer because the tariffs are gonna hurt them, with the export of food. So it's going to depend on who we're talking to, which part of the base are you talking about. I'd say in general, just judging from the reaction here, I think that the people who supported him still support him. That's the sense I get.
My English colleague here is defending the English system of Free Trade, which was always mendacious. It was never an honest system, and whether it was or wasn't, the United States was created as the opposite of that system. Our system was protected manufacturers. When you say "tariffs are bad", this is preposterous! You're not talking to Americans. You're talking to the English, who ran that Free Trade racket. They were the ones who came up with the idea that "tariffs are bad". If you talk to the Germans of the 19th century or you talk to the Americans of the 19th century they understood that tariffs were absolutely necessary to protect the nascent manufacturers in those countries from predatory English Free Trade, which basically would flood your country with cheap manufacturers and turn you into a Third Word colony - which is what America didn't want to be anymore.
First of all, let's get some economic facts straight here. The lowest price is not the best price, okay? Simply because you can get something cheaper from China doesn't mean that that's a good idea. Because if you have to put the people here out of work in order to buy the cheap junk from China you're not better off, and I don't know where this professor lives but he doesn't live in Indiana. And people are suffering here in Indiana; that's why they voted for Donald Trump. There are certain segments of the population that make out like bandits with this Free Trade charade and there are other people who suffer. Well, the people who suffer are in the majority now, okay? That's not a good sign and that's why Donald Trump is in office.
This has been the case in America ever since its inception. We are a country that is based on protected manufacturers. That's the American system! That's what made America a great manufacturing country. That's what made Germany a great manufacturing country. Now when the English saw that Germany had surpassed its economy, that they couldn't compete, it was no longer competition, it was war! Lord Grey and Winston Churchill lured Germany into a war because they knew that Free Trade was a failed idea and that Germany had surpassed them with protected manufacturers. And that is the story of the entire 20th century: England fighting wars for this Free Trade racket.
Americans are making minimum wage at Walmart instead of making industrial wages by manufacturing their own TV sets.
First of all, as Friedrich List would say, "What's more important, the apple or the apple tree?" If I can get you cheap apples from China, and then you cut down your apple tree because you don't need your apple tree anymore, that sounds like a good deal in the short term but what happens when the price of apples goes up? And you don't have an apple tree anymore! This is the argument for protected manufacturers.
This [Free Trade] is not economics, this is English ideology. This is the English ideology for dominating the rest of the world. We know that now. Americans used to know it and they lost this idea when they inherited the British Empire but now that's over. We're in a new era now.
First of all, China has enough productive capacity to basically service its own market now. It's got over a billion people. That's a big enough market for anything. In addition to that, China now has a rail connection between Shanghai and Rotterdam. This is the end of the influence of the American Navy, which is the successor to the British Navy. Leviathan can't blockade these ports anymore. And so therefore the "MacKinder Thesis" is fulfilled. It's over. We have to come to grips with this new situation instead of constantly rehashing the cliches of the failed English Free Trade system. It's over. It failed. The people don't want it anymore.