Policymakers in London should not worry too much about instability in Washington. The shift towards strategic trade that began under Donald Trump became a bipartisan consensus under Joe Biden. If Trump is re-elected, he will not pull the US out of Nato. And his proposed “global tariff” on all imports, if it went from rhetoric to reality, would be a bargaining chip, to be lowered in bilateral or multilateral negotiations with allies. Anglo-American strategic cooperation in security and intelligence will be maintained, if not deepened, no matter which party wins the White House.

In the areas of trade and investment, the new geopolitics will limit the options for the UK. Brexit and the earlier decision to stay out of the euro are unlikely to be reversed. And the idea of a buccaneering, free-trading Global Britain is irrelevant after the demise of globalism, even though the UK should seek to export goods as well as services to markets around the world.  

British industry needs the aid of economies of scale which can only be exploited if Britain is part of a larger economic bloc. Britain’s best option is an economic equivalent to Nato that includes both the US and EU. The second-best alternative would be British membership in an Anglosphere trading bloc that included the US.

During the first Cold War, America’s East Asian allies, Japan, South Korea and Taiwan, carried out policies of national economic development that combined the fostering of selected national industries and national champions with exports to the more open markets of the US and western Europe. Meanwhile Britain, like the US, allowed its industrial base to erode and become overly dependent on the “Fire” sector – finance, insurance and real estate. Today, the productivity of Britain is equivalent to that of Italy and Spain; well below that of the US, Germany and France. During the Brexit debate, some Remainers made the humiliating argument that the UK, once the workshop of the world, might lose its special status as a low-wage platform for Japanese multinationals exporting cars to the European market.

How can the UK reconcile the imperative of gaining access to a larger transnational market with the imperative of reducing its reliance on the financial services sector by rebuilding some, though not all, of the traded-sector industry that has been lost to offshoring? Defence production in the context of Nato and the Anglo-American global relationship is one possibility. British industrial policy might also build outward from British strengths in civilian industry such as aerospace and car-manufacturing supply chains, and pharmaceuticals. 

A policy of selective reindustrialisation would not necessarily create many new factory jobs, as manufacturing becomes more automated. But the “upstream” and “downstream” industries associated with manufacturing can enable new factories, indirectly, to catalyse growth in surrounding areas.

Revitalising industry in Britain would need to be supported by a highly efficient and flexible transportation and communications infrastructure, along with cheap and reliable energy. Constraints on the expansion of renewable energy mean that fossil fuels and nuclear energy should be part of the mix.

How should a neo-developmentalist Britain pay for long-term investment in industry, infrastructure and energy? Financing by specialised, sector-specific policy banks is preferable to the direct funding of projects. Subsidies and tax breaks are often scattershot and ineffective or easily gamed by special interests, as America’s flawed and wasteful Inflation Reduction Act has shown. 

A new British developmentalism should be complemented by a labour policy that gradually raises wages in order to incentivise the adoption of labour-saving technology, expand the home market for labour-saving household appliances, and reduce the need for welfare expenditure to top up poverty wages. In low-wage, low-productivity service sectors, restricting immigration can create tight labour markets that give workers bargaining power. In the same difficult-to-unionise, labour-intensive sectors, wages can be raised by wage boards, of the kind championed by Winston Churchill more than a century ago to end poverty among sweatshop workers.

In the aftermath of neoliberal globalism, the UK has an opportunity to return to its historic roots as a medium-sized great power capable of world-class achievements in production as well as invention – but only if British leaders are willing to seize the opportunity.

This article is part of the series “How to fix a nation”

In 2018, the streets of central Paris were barricaded by the gilets jaunes or yellow vests movement. This began, like many of the recent protests, as a demonstration against fuel price rises justified by environmental concerns and whose costs fell chiefly on the inhabitants and businesses of the non-metropolitan periphery. In the Netherlands in March last year, the Farmer-Citizen Movement (BBB), symbolised by tractor convoys, gained enough support from opponents of the Dutch establishment to become the biggest party in the upper house of its parliament. The movement was started in 2019 by critics of government plans to reduce nitrogen emissions by eliminating thousands of farms and reducing livestock numbers. Likewise, Welsh farmers are protesting against a proposed sustainable farming scheme that includes strict controls on fertilisers and which could cut both livestock and labour on Welsh farms by 11 per cent.

Some have dismissed such protests as far-right conspiracies against liberal democracy, and indeed right-wing extremists have sometimes sought to exploit them for political gain. Other critics dismiss the farmers as members of a pampered special interest group, whining about withdrawals of unjustified subsidies or objecting to reasonable regulations. But right-wing extremists and fuel and agriculture subsidies have existed  for generations. Only factors unique to the present conjuncture can explain these similar, near-simultaneous uprisings.

The grievances of European farmers vary, from competition with Ukrainian wheat imports to increases in the cost of fuel and other inputs in particular countries. But underlying the discontent is the willingness of metropolitan political establishments to sacrifice the short-term material interests of farmers and rural communities to the elite project of a green transition away from fossil fuels.

Whatever the merits of the EU’s Green Deal and British and American equivalents, the costs of a rapid transition to net-zero carbon emissions tend to fall more heavily on the employment and consumption of non-college-educated workers of all races, as well as on the manufacturing and agricultural industries in which they are over-represented. Manufacturing industries and their working-class employees have been driven out, by prices and regulations, from cities such as New York and London, which a college-credentialled overclass seeks to reconstruct as clean, walkable, resort-like settings for high-end consumption by business and finance professionals. Europe’s farmers, once idealised as strategic producers and symbols of national traditions, suffer from the new elite consensus that farmers are obstacles in the campaign to save the planet by decarbonisation.

In the Netherlands, the “greenlash”arose in response to government plans to reduce national nitrogen emissions by compelling the abandonment of 11,200 farms and the culling of livestock at 17,600 farms, as well as forced transitions from traditional farming to experimental green farming. But the Netherlands’ contribution to global greenhouse emissions is negligible; the policy is all but virtue signalling, with next to no global climate effect. The EU-27 nations emitted 6.4 per cent of global greenhouse gas emissions in 2021, below India (6.6 per cent), the US (11 per cent) and China, whose 27 per cent share exceeded those of all developed nations combined.

The EU’s minor contribution to global  emissions questions the assertion that draconian and costly changes, of the kind that have triggered protests, are needed in industry and agriculture. Yet along with stricter domestic regulations, the EU proposes more mandates to address the problem of “carbon leakage” –  the danger that industrial firms will respond to stricter EU environmental rules by relocating their dirty production elsewhere. Green mandates raising the cost of food production, processing and transportation could lead to the contraction of European agriculture and the replacement of its products by imports.

To minimise the possibility of such an acceleration in the offshoring of industry and agriculture, the EU last year enacted a carbon tariff, the Carbon Adjustment Border Mechanism (CABM). But the system will not come fully into effect until 2026, when importers (initially in the strategic industries of cement, iron and steel, aluminium, fertilisers, electricity and hydrogen) will be required each year to declare the greenhouse gas emissions embedded in finished goods produced abroad, and surrender a certain number of CABM certificates, bought from national governments.

The increased paperwork required for this complicated scheme will favour large firms that can hire extra staff to fill out the necessary forms. It could backfire by encouraging multinational agribusinesses to shift production and processing to multiple countries to minimise costs.

A case can be made that countries and blocs such as the EU have the right to reshore or preserve strategic industries such as iron, steel and fertilisers. But honest protectionism with sector-specific tariffs, import quotas or subsidies would be preferable to backdoor protectionism in the implausible aim of saving the world by lowering Europe’s 6 per cent share of global greenhouse emissions to net zero. And if the CABM fails or is watered down, Europe might achieve ambitious climate targets simply by deindustrialising and depending on food grown elsewhere.

At the same time they are asked to bear the brunt of largely symbolic climate change policies, beleaguered rural constituencies have lost their traditional voice in social-democratic parties, and have yet to be adequately represented by parties of the right in Europe and North America. It was not that long ago that industrial and farm workers and small farmers were championed by the radical as well as the moderate left. According to legend, Leon Trotsky, in exile in New York City before the Russian Revolution, began a speech with the words: “Workers and peasants of the Bronx!” Even if that is apocryphal, communists around the world claimed to represent the interests of both kinds of toilers.

Centrist social democracy, too, rested on farmer-labour alliances. The New Deal coalition that dominated US politics for half a century after the Great Depression focused on factory workers in the industrial north-east and farmers in the south and west. In Sweden, Social Democrats laid the foundation for their long dominance with the “Cow Deal” of 1933 between representatives of urban workers and agrarians.

But as the share of the workforce accounted for by farmers and industrial workers has declined, centre-left parties have dissolved old constituencies and elected new ones consisting of two kinds of service-sector workers: highly educated, well-paid professionals and managers concentrated in a small number of metropolitan areas, and disproportionately foreign-born service workers and servants (maids, nannies and gardeners). Meanwhile, working-class and rural citizens are becoming aligned, geographically and culturally.

Like the factory workers who were displaced when corporations offshored industries to cut costs, former farm families and workers may join the ranks of the domestic service proletariat and the low-wage “precariat” that makes up a substantial part of it.

In Europe as in the US, the old distinction between the urban working class and rural farming families has been blurred. The combination of high housing costs and low wages in European and American cities has forced most members of the working class into suburbs and “exurbs” or small towns, with big cities rescued from depopulation only by a constant influx of immigrants replacing the citizens and naturalised immigrants who move out.

Not only agriculture but also manufacturing tend to be located in low-density areas, a trend dating back a century to the dispersal of factories to greenfield sites that road transport and rural electrification made possible. Compared with US cities, non-metropolitan areas have a higher share of employment in both manufacturing and agriculture. The latter employs fewer people in rural America than the largest occupational categories –  in order: government, manufacturing, retail, healthcare and social assistance, with some farm families depending on part-time or full-time work by one member in these occupations.

In Europe and North America, the dichotomy of rural farmers and urban proletarians has given way to a new “rurban” or “exurban” economy, in which less-educated people work in a variety of occupations. The rural workforce is less likely to have a college education than metropolitan residents; increasingly the class divide maps onto the urban/exurban geographic divide.

The new exurban service proletariat lacks the political clout of older trade unions and farmers’ lobbies. But uprisings by European farmers and concessions made by France and other nations have proven the effectiveness of motorised protest against political establishments that ignore legitimate grievances. Globalisation reduces the bargaining power of assembly-line employees by allowing companies to transfer supply chains to low-wage, non-unionised foreign workforces. But this can’t apply to domestic infrastructure, industries and agriculture; infrastructure, including public utilities and transport systems based on rail, road and air, cannot be offshored. Countries can, in theory, import all their food, but a combination of national security considerations and popular support for family farmers leads industrial nations to maintain and subsidise their national food supply.

Moreover, the Covid-19 pandemic revealed a striking divide between essential workers in industries such as food processing, manufacturing, transportation and healthcare (which are over-represented outside of dense urban areas), and service workers in amenity sectors, particularly luxury sectors that cater to urban professionals such as restaurants and hair salons. In December 2020, for example, pandemic-induced unemployment was 16.7 per cent for US leisure and hospitality workers, but only 4.3 per cent in manufacturing and 6.1 per cent in business and professional services.

Society’s greater dependence on the disproportionately rural and exurban service workers gives them leverage that hair stylists and waiters lack. Controlling choke points in food production and the distribution of goods gives workers and small producers in agriculture and logistical industries the leverage lost to factory workers – who can be replaced by foreign ones if they seek to unionise or improve union contracts. Instead of single establishments, producers can threaten to shut down the economy. And unlike traditional picket lines, flash mobs of lorries, cars or tractors can coalesce quickly at chosen targets.

The eclipse of manufacturing by infrastructure and family farming as flashpoints of social conflict resembles the earliest phase of the Industrial Revolution. Before factory employment became significant, “agrarianism”, meaning the break-up of large estates and their distribution to family farmers, was often a synonym for “socialism”. Decades before the rise of large manufacturing firms at the end of the 19th century, railroads were the dominant big businesses in the US. Some of the bloodiest labour violence involved railroad strikes, as did early victories for organised labour: the Railway Labor Act of 1926 legalised collective bargaining and created a national system of government arbitration nearly a decade before the same was done elsewhere (by the National Labor Relations Act or “Wagner Act” of 1935).

Eugene Debs, the socialist candidate for US president whom the government jailed during the First World War, began as a labour organiser in the railway industry. So too did A Philip Randolph, the founder of the Brotherhood of Sleeping Car Porters and, along with Martin Luther King Jr, one of the two greatest African-American civil rights leaders of the 20th century.

Motorised revolts by the exurban working class, small producers and the self-employed against unjust and ill-conceived economic and social mandates imposed by metropolitan elites could be a future form of class struggle in Europe, North America and other developed regions. Many rural and exurban residents might rally round protesters in occupations outside their own based on a shared resentment of the aggressive overreach of elite urbanites. While the picket lines of the past were accompanied by chanted slogans, class struggles of the future may be led by choruses of honking horns.

[See also: How to fight a class war]

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Beginning in 2018, the streets of central Paris were barricaded by the yellow-vest movement, which similarly began as a protest against increases in fuel prices justified by environmental concerns, the costs of which fell chiefly on the inhabitants and businesses of the non-metropolitan periphery. In the Netherlands in March 2023, the Farmer-Citizen Movement (begun in 2019 by critics of government plans to reduce nitrogen emissions by eliminating thousands of farms and reducing livestock numbers) gained enough support from opponents of the Dutch establishment to become the biggest party in the upper house of the Dutch parliament.

In 2022, what began as a movement opposing a Canadian government vaccine mandate on truckers who crossed the US-Canadian border expanded into the “Freedom Convoy” that shut down Ottawa and forced the Canadian prime minister Justin Trudeau to invoke a state of emergency to disperse the protesters in their vehicles.

Many critics of these protests in Western establishments have dismissed them as far-right conspiracies against liberal democracy because right-wing extremists have often sought to exploit them for political purposes. Other critics dismiss the truckers and farmers as pampered special interests, whining about the withdrawal of unjustified subsidies or objecting to perfectly reasonable regulations. When they are not neo-Nazis, much of the establishment would have us believe, the mutinous farmers and truckers are merely corrupt “crony capitalists”.

But there have been far-right extremists and fuel and agriculture subsidies for generations. Only factors unique to the present conjuncture can explain these similar and near-simultaneous uprisings. One factor is the commitment of Euro-American elites to impose a costly transition away from fossil fuels, regardless of the price. The other is the difficulty of achieving successful workplace strikes in an era of offshored manufacturing and decentralised, small-scale service firms compared with truck and car blockades that can shut down whole national economies. The truck or tractor convoy may replace the picket line as the symbol of class conflict in the deindustrialised nations of the West.

Manufacturing industries along with the working class have been driven out, by prices and regulations, from the cities, such as New York and London, that the college-credentialled overclass seeks to reconstruct as clean, walkable, resort-like settings for high-end consumption by professionals in business and finance. Whatever the merits of America’s Green New Deal, the EU’s Green Deal, and the British equivalent may be, the costs of a rapid transition to “net zero” carbon emissions fall much more heavily on the employment and consumption of non-college-educated workers of all races, as well as on the manufacturing and agricultural industries in which they are over-represented.

At the same time, these beleaguered constituencies have lost their traditional voice in social democratic parties and have yet to be adequately represented by parties of the right in Europe and North America. It was not that long ago that industrial workers and farm workers and small farmers were championed by the radical as well as the moderate left. According to legend, Leon Trotsky, in exile in New York City before the Russian Revolution, began a speech with the words: “Workers and peasants of the Bronx!”  Even if that incident is apocryphal, communists around the world claimed to represent the interests of both kinds of toilers.

Centrist social democracy, too, rested on farmer-labour alliances. The New Deal coalition that dominated US politics for half a century after the Great Depression was based on factory workers in the industrial north-east and farmers in the southern and western periphery. In Sweden the Social Democrats laid the foundation for their long dominance with the “cow deal” of 1933 between representatives of urban workers and Swedish agrarians. 

But as the shares of the electorate and workforce accounted for by farmers and industrial works have declined, parties of the centre left have dissolved their own constituency and elected a new one, consisting of two kinds of service-sector workers: highly-educated, highly-paid professionals and managers concentrated in a small number of metropolitan areas, and a supporting cast of disproportionately foreign-born service workers and personal servants such as maids, nannies and gardeners. Meanwhile, working-class and rural citizens are becoming aligned, geographically and culturally. The combination of high property costs and low wages in European and American cities have forced most members of the working class into suburbs and exurbs or small towns, with big cities rescued from depopulation only by a constant influx of immigrants to replace the citizens and naturalised immigrants who move out.

Like agriculture, manufacturing also tends to be located in low-density areas, a trend that dates back a century to the dispersal of factories to greenfield areas that trucking and rural electrification made possible. Compared to US cities, non-metropolitan areas have higher shares of employment in both manufacturing and agriculture. Agriculture itself, according to the US government, employs fewer people in rural America than the largest occupational categories, in order: government, manufacturing, retail and healthcare and social assistance, with some farm families depending on part-time work or full-time work by one member in these occupations. 

The rural workforce is less likely to have a college education than metropolitan residents. In Europe as well as North America, the old dichotomy of rural farmers and urban proletarians has given way to a new “rurban” or “exurban” economy in which less-educated people work in a variety of occupations.

While non-metropolitan areas are becoming more diverse in occupational structure and ethnicity, cultural divisions are hardening between their residents and the upscale inhabitants of downtowns and inner suburbs. Some on the centre left have hoped to win rural support with subsidised green manufacturing in “left-behind” areas. But so far the rural renaissance envisioned by proponents of building solar and wind facilities and battery factories in rural areas has not materialised in the US, where, according to the federal government in 2023, clean energy jobs as a share of employment ranged in non-metropolitan regions in different states from 0.5 per cent to a paltry 2.6 per cent.

Furthermore, attempts to use the reshoring of industry, green and otherwise, to rebuild something like the old farmer-labour coalition to the left of centre in Europe and America may be doomed by the abrupt tendency of the metropolitan elite to take up new causes such as transgender rights and Black Lives Matter-style “equity”, and immediately seek to impose their newly adopted values on the rest of the population by government policy and private economic coercion. Most of the members of the multiracial working class have moved out of dense urban neighbourhoods, only to find themselves subject in their new homes to ceaseless moralistic hectoring and coercive social engineering efforts by the affluent urbanites who dominate national government.

As green mandates and vaccine mandates have triggered protests from populations already aggrieved by top-down metropolitan moral crusades, workers and the self-employed in some industries have been able to respond more forcefully than those in other sectors. The recent victories of the United Auto Workers (UAW) union in the US prove that workers in manufacturing can still win occasional victories, even in a country as hostile to organised labour as the contemporary US. Even so, globalisation has reduced the bargaining power of assembly-line employees, by allowing companies seeking to minimise labour costs to transfer supply chains to low-wage, non-unionised workforces in foreign countries. But this tactic cannot be used in domestic infrastructure industries and agriculture. Infrastructure, including transportation systems based on rail, trucking and air and public utilities, cannot be offshored. In theory countries can import all their food from abroad, but in practice a combination of national security considerations and popular support for family farmers leads all industrial nations to maintain and subsidise national food systems. 

What is more, the Covid-19 pandemic revealed a striking divide between “essential workers” in industries such as food processing, manufacturing, transportation and healthcare, all of which are over-represented outside of dense downtowns, and service workers in amenity sectors, particularly luxury sectors catering to the urban professional class, like upscale restaurants and hair salons. In December 2020, for example, pandemic-induced unemployment in the US among workers in leisure and hospitality was 16.7 per cent but was only 4.3 per cent in manufacturing – lower even than 6.1 per cent in business and professional services.

The greater dependence of society on disproportionately rural and exurban essential service workers gives them leverage that hair stylists and house-cleaners lack. Their ability to control choke points in food production and the distribution of goods of all kinds gives workers and small producers in agriculture and logistical industries leverage that has been lost to workers in factories, because of how the latter can be replaced by foreign factories if they seek to unionise or improve their union contracts. Instead of shutting down only a single establishment, these producers can threaten to shut down the entire economy. And unlike traditional picket lines, flash mobs of trucks or cars or tractors are flexible and can coalesce quickly at chosen targets.

The eclipse of manufacturing by infrastructure and family farming as flashpoints of social conflict marks a return to the earliest phase of the Industrial Revolution more than a century ago. Before factory employment became significant, “agrarianism” in the sense of the break-up of large estates and their distribution to family farmers was often a synonym for “socialism”. Decades before the rise of large manufacturing firms at the end of the 19th century, the railways in the US were the dominant big businesses. Some of the bloodiest labour violence in America involved rail strikes, as did early victories for organised labour, including the Railway Labor Act of 1926, which legalised collective bargaining and created a national system of government arbitration in the rail and transit industry nearly a decade before the same was done for other industries by the National Labor Relations Act or “Wagner Act” of 1935. Eugene Debs, the socialist candidate for president of the US whom the government jailed during the First World War, began as a labour organiser in the rail industry, as did A Philip Randolph, the founder of the Brotherhood of Sleeping Car Porters and the greatest African American civil rights leader of the 20th century, along with Martin Luther King Jr.

In the years ahead, it seems likely that this new pattern of revolts by the exurban working class and small producers and the self-employed against economic and social mandates imposed by metropolitan centres will be the major form that class struggle takes in Europe, North America and other developed regions. Many rural and exurban residents may rally around protesters in occupations other than their own, based on a shared resentment of the aggressive overreach of elite urbanites. While the picket lines of the past were accompanied by chanted slogans, the class struggles of the future may be punctuated by choruses of honking horns.

[See also: Searching for Frantz Fanon]

In 2022 the populations of the US, the EU and China were 338 million, 448 million and 1.4 billion, respectively. According to the European Central Bank, their shares of global GDP, measured using purchasing power parity (PPP), were 15.5 per cent (US), 12 per cent (EU), and 18.5 per cent (China). In 2017, PricewaterhouseCoopers estimated that by 2050 in terms of its global share of GDP (PPP), the US at 12 per cent would fall to number three below China at 20 per cent and India at 15 per cent, with the EU-27 in fourth place at 9 per cent.

All such projections are guesswork, of course. And for decades to come, if not longer, per capita GDP is likely to be higher in Europe and America than China and India. On the other hand, as the French economist Jacques Sapir has argued, conventional GDP calculations understate the actual strength of the Chinese and Russian economies, in which manufacturing and mining play a greater role than in the US and Europe.

In any event, the regimes of Xi Jinping and Narendra Modi and Vladimir Putin have discredited the naive delusion that the two most populous countries on Earth and geographically the largest would be unable to resist a supposed global trend towards democratisation and market liberalisation. And the proxy war in Ukraine – which is, among other things, a war of industrial attrition between the Nato powers and Russia and its enabler China – serves as a reminder that military power and diplomatic influence are inseparable from manufacturing capability.

Now that a de facto Sino-Russian bloc is engaged in the Second Cold War with the US and its Nato allies in Europe and elsewhere, and now that China has a “Made in China 2025” import substitution strategy (while India has a similar “Make in India” initiative), the realpolitik case for deeper transatlantic collaboration in the interest of pooled security and the defence of European and American market shares in a multipolar world must be taken seriously.

In 2009, the former French prime minister Édouard Balladur, in his book For a Union of the West between Europe and the United States, called for the US and EU to combine their economic and military resources so they could compete with rising giants like China and India. Balladur’s proposed design, centred on a US-EU council, found few supporters on either side of the Atlantic. And an “Atlantic Union” modelled on the EU with its own flag, parliament, court and currency would be as absurd as it would be unpopular. Nevertheless, a case can be made for a set of common transatlantic institutions and policies with the limited mission of promoting strategic sectors of combined military and commercial importance to the US and its European allies – in other words, a common Atlantic industrial policy.

Only a decade ago the term “industrial policy” was taboo for policymakers on both sides of the Atlantic. But the separation of trade and state has been the exception in history, not the rule. Most polities, from ancient Greek city-states to early modern European mercantilist empires to 19th-century Germany and the US and contemporary China, have sought to minimise the threat of dependence on potentially hostile foreign powers by using military, political or commercial methods to enlarge consumer markets, promote their own strategic manufacturing capabilities, and secure reliable sources of supply. Universal free trade tends to be espoused only by two kinds of states. One consists of small countries that fear being locked out of foreign markets. Free trade was also taken up as a cause by countries such as the UK in the 19th century, the US in the 20th century, and China in the 21st century, which hope that global free trade will permanently lock in their temporary leadership in manufacturing, by preventing other countries from using protectionism and industrial policy to catch up. 

[See also: The end of panda diplomacy]

In a world economy divided among rival great powers free-market globalisation is irrelevant, and it is imperative for great powers to become “independent on foreign nations for military and other essential supplies”, in the words of Alexander Hamilton in his Report on Manufactures (1791). Industrial policy today may need to be made at the level of the military-economic bloc rather than the individual nation. The American economist Robert D Atkinson, among others, has called for a “Nato for trade”.

Another analogy might be the European Coal and Steel Community (ECSC) that was founded in 1952, the precursor to the European Economic Community and its successor, the European Union. To be sure, the ECSC was viewed by its founders as a stepping stone to ever-greater European integration, culminating in the EU with its single market, common currency, European Parliament and European Court of Justice. In contrast, to discourage paranoid populist claims that a transatlantic industrial policy system would be the precursor to a tyrannical Atlantic superstate or “the new world order”, common policies should be limited to a small number of sectors of both military and commercial importance. To further minimise the power of transnational technocracy, the agencies that implement a shared Atlantic industrial policy should be limited in their discretion and subordinate to the supervision of democratically accountable national governments, directly or through the EU.

The purpose of an Atlantic industrial community would be geopolitical and geo-economic, not cultural. To avoid false accusations that a common industrial policy represents Euro-American neocolonialism or white supremacy, the geographic term “Atlantic” should be preferred to “Western”, which in some versions has religious and racial overtones.

The Biden administration, together with the European Commission and the European Council, has already established a US-EU Trade and Technology Council (TTC). But a similar Transatlantic Economic Council (TEC) has existed since 2007. Less talk and more action are needed. A limited but robust Atlantic industrial community might include some or all of the following institutions:

A customs union in strategic sectors. Most discussions of industrial policy are incomplete because they focus solely on supply-side objects such as subsidies, tariffs, procurement, research and development (R&D), and skills training, while ignoring demand-side policies. The most important demand-side industrial policy is the creation of the largest possible market for the products of firms and industries that a country or bloc wants to sell. But industrial performance is often correlated with market size. Manufacturing industries tend to enjoy increasing returns to scale, meaning that the costs of production go down as output goes up. In a virtuous circle, the larger the market becomes, the bigger and more productive successful manufacturing firms can be. As Mae West observed, “Too much of a good thing is wonderful.”

What economists call the “home market effect” refers to the phenomenon that countries with successful firms in industries for which there is a large local demand tend to dominate the same industries in global markets. This explains why lists of leading global corporations are dominated by American and Chinese firms, and why Japanese and German firms, from some of the most populous democratic-capitalist nations, also are over-represented among successful multinationals. In competing with countries like China and India perhaps later, which have billion-plus populations, in certain strategic sectors, the US and EU along with the countries of the Anglosphere could benefit from the scale economies possible in a shared home market of nearly a billion consumers.

An Atlantic industrial community should take the form of a customs union – not a free-trade area alone, but a free-trade area with common external tariffs, like the contemporary EU and its predecessor, the European Economic Community, beginning in 1968. A free-trade area without common tariffs is too vulnerable to commercial arbitrage, with components or products made outside of the area making their way inside.

As an alternative to cross-border trade, firms based in countries outside of the customs union would have an incentive to jump over tariffs by creating “transplant” factories inside the economic bloc, hiring local workers, relying on suppliers within the customs union, and obeying national security, labour and environmental laws. In a future great-power détente, Chinese and Indian transplants might be as welcome in North America and Europe as the facilities of German, Japanese and Korean carmakers are welcome in the US today, with reciprocal arrangements for American and European transplants.

[See also: JFK and the myth of the great martyr-saviour]

In the case of the proposed Atlantic industrial community, the common external tariffs shared by the US, the EU and perhaps the Anglosphere nations should be few in number and limited to strategic sectors – steel and aerospace and cars and drones and robots and batteries, among others. When possible, strategic import-substitution policies should also encourage the local sourcing and processing of critical raw materials needed for a high degree of strategic self-sufficiency, including chemical drug precursors, rare earth elements, and oil and gas.

Members of the new Atlantic bloc would be free to liberalise or protect non-strategic sectors – such as cheese and wine-makers, local retailers – as national governments and the EU already see fit. Immigration policies, too, should be national. An Atlantic customs union should be an end point, not the path to a single market with free labour mobility, much less a currency union.

A common investment oversight and sanctions policy. The Atlantic industrial community might also benefit from a transatlantic institution that coordinates the review by national security agencies of both inward and outward investment, such as the Committee on Foreign Investment in the United States, as well as to oversee export controls and sanctions. The agency would complement, not replace, existing national and EU institutions.

Specialised public development banks. Public development banks, like the European Investment Bank and the US Export-Import Bank can support national or bloc industrial policy by means of targeted lending, as an alternative to the promotion of strategic industries through controversial direct appropriations or scattershot tax breaks.

Like long-term investments in infrastructure, investment in long-lasting assets such as factories in strategic industries should be financed by borrowing money that is repaid to creditors over many years, rather than funded up front out of existing taxation. In addition to issuing bonds for infrastructure development and school construction, state and local governments in the US can issue industrial revenue bonds to help private-sector businesses like manufacturing firms as part of economic development programmes. Specialised public development banks that can issue debt instruments, and are explicitly or implicitly backed by governments, can “crowd in” large amounts of money for local purposes from global investors in search of safe financial assets.

China’s Belt and Road Initiative is financed in part by the China Development Bank, the Export-Import Bank of China, and the Silk Road Fund. A new Atlantic industrial community might create an Atlantic industrial investment bank, an Atlantic infrastructure investment bank, and even an Atlantic R&D bank. Any transatlantic public development banks should be overseen by transnational boards that are answerable to democratic member governments.

Research consortiums. With renewed great-power rivalries, the members of the Atlantic alliance should lead the global competition in science and technological innovation. Consortiums among Atlantic governments, universities and businesses to promote both science and R&D might be established to that end. Technological innovations could be spread to small and big businesses alike through organisations including Germany’s Fraunhofer institutes and the National Network for Manufacturing Innovation in the US.

Anti-trust realism. Anti-trust laws, which stop companies from working together to undermine markets, can be useful, but those that hinder national and bloc-level industrial policies need to be revised. The “small is beautiful” ideology that underpins US anti-trust law and European competition law seeks to create an economy based on high levels of competition among many small producers. But in a modern industrial economy, as the economists Joseph Schumpeter and William Baumol once pointed out, the most important manufacturing and infrastructure markets are imperfect, competition in increasing-returns industries tends to produce market-dominating winners, and dynamic oligopolies that use their market power to fund R&D to create new product lines or to scale up innovations are essential to technological progress.

To compete in the rest of the world for consumers and procurement by businesses and governments with giant, state-backed Chinese corporations, “Atlantic champions” on a scale larger than American and European “national champions” may be needed. State-owned steel industries and the like had a bad record in postwar Europe, so a merger of Airbus and Boeing would probably be a bad idea. Instead, the emphasis of a common Atlantic industrial policy should be on cultivating several firms of sufficient scale that compete with one another in the transatlantic home market and abroad. In strategic industries, Atlantic governments and transnational agencies might even encourage the merger of small, less efficient firms into bigger entities that can reap the benefits of increasing returns to scale or network effects. In the 1920s, John Maynard Keynes argued on these grounds for the rationalisation and consolidation of Britain’s inefficient Lancashire cotton textile industry, which had too many small businesses, not too few.

Managed European and American exchange rates. The replacement of the dollar and the euro and the pound by an “Atlanto” currency is not necessary for transatlantic collaboration in a limited number of strategic industrial sectors. But some degree of coordination among the currencies of an Atlantic bloc’s members would be desirable, to prevent currency fluctuations from wrecking transatlantic supply chains. 

Strategic commodity reserves. Support for buffer stocks for commodities, like America’s Strategic Petroleum Reserve, fell out of favour in the era of neoliberal globalisation. The just-in-time strategy in business discouraged the build-up of large private inventories. Neoclassical economic theory held that shortages of essential raw materials could be prevented by futures markets and by diverse sources of supply in a globalised economy. This complacent conviction ignored the fact that the winner-take-all dynamic of industrial markets characterised by increasing returns to scale tends to concentrate supply chains in fewer and fewer companies and countries. 

Jointly-managed stocks deserve a second look. During military or economic crises, transatlantic strategic commodity reserves could prevent the kind of selfish scramble to hoard scarce resources and products that the Covid-19 pandemic set off among allied nations of Europe and North America.

[See also: Lapland: a prisoner of geography]

Policies in the areas of taxes, labour, the environment and education should remain the responsibility of national governments, or in some cases EU authorities.

Genuine democracy can exist only in nation-states, so the power to use the tax code to shape the economy should not be delegated to supranational institutions. A transnational industrial policy should be promoted by methods including common external tariffs and targeted lending, not by wasteful, indiscriminate and exploitable tax breaks showered on companies and investors of the kind relied upon by the US in its Chips and Science Act and the Inflation Reduction Act.

Any attempt to include common labour provisions in the charters of organisations serving a new Atlantic industrial community would be fatal to its political prospects. However, reshoring essential supply chains from low-wage and anti-union regimes to the US and Europe indirectly would strengthen the bargaining power of organised labour, by reducing opportunities for companies to offshore workers.

While there could be an Atlantic industrial policy overlap between the European Green Deal and the American progressive Green New Deal, these are two distinct enterprises with distinct rationales. The goal of an Atlantic industrial policy is shared military security and global commercial competitiveness, not long-term decarbonisation. The range of strategic industries that need to be reshored or friend-shored is much larger than the narrow set of conventional “green” technologies such as batteries and solar panels and windmill components. Moreover, the importance of North American oil and gas in freeing Europe from dependence on Russia and reducing the dependence of both the US and Europe on the Middle East, along with the importance of cheap electricity in transatlantic manufacturing, mean that a common Atlantic industrial policy must reject the elimination of fossil fuels and nuclear energy as a goal in the near and medium term, whatever the distant future may hold.

Arguments that the climate change “emergency” requires the West to appease both Chinese mercantilism and geopolitical revisionism and import green technology from Chinese factories must be rejected. A gun-metal-coloured Grey New Deal should take priority over a Green New Deal.

Multinational corporations for the most part are lying when they claim that they have transferred industrial production to China because of its skilled labour, rather than to exploit low wages, unfree workers and government aid. Even if that is true in some cases, if Western companies, together with the Chinese government, can train workers in China for jobs in strategic industries that did not even exist a decade or two ago, they can do the same with government aid in Europe and North America as well.

Subsidies for vocational training should go to businesses and trade associations for on-the-job training and apprenticeships, perhaps in partnership with local education institutions. Funding for skills training should not go to students who rely on guesswork about the future job market, or rent-seeking colleges and universities that have an interest in perpetual institutional expansion by turning out more graduates whether their diplomas are useful or not.

In whatever form it may take, a common Atlantic industrial policy should be explicitly limited from the beginning, not only in its scope but also in its membership. 

By law the US Congress has already included Canada, Britain and Australia (though not New Zealand) in America’s National Technology Industrial Base, so the incorporation of these “Anglosphere” countries into an Atlantic industrial community would be logical.

Mexico, however, should be excluded for now. While it has great long-term potential, at present Mexico is a failed state, weakened by corruption and criminal violence fuelled in part by the endless appetite of American consumers for contraband drugs and the demand of American employers for inexpensive and powerless illegal immigrant workers. The corporate transfer of many US car supply chains to this roiling Lebanon on America’s southern border, encouraged by the US government, was as great a folly as the offshoring of other American manufacturing to mercantilist, authoritarian China, America’s major rival.

Why not include Japan, South Korea and Taiwan, turning the Atlantic industrial community into a trilateral industrial community? The accession of America’s East Asian protectorates might be considered in time. But in the short run, the national industrial policies that have enabled Japan and the Little Tigers to succeed may be impediments to their cooperation in a transnational industrial policy. Moreover, these economies are relatively small compared with the US and EU, and the future of Taiwan’s effective independence from China is in doubt. Furthermore, the project of a common industrial policy might die from dilution, if membership came to be seen as the equivalent of the free-trade agreements that the US has handed out as rewards to countries like Panama, Oman or Honduras in the service of various diplomatic goals.

The benefits of an Atlantic industrial community for the US are evident. The economies of the US, Britain and the EU are already deeply integrated. In return for sharing decision-making power in a limited number of strategic industrial sectors, the US could enhance its security through greater “friend-shoring”, even as American firms and suppliers take advantage of increasing returns to scale in a much larger home market.

What of Germany and France? The plates that Germany was juggling as it sought to avoid alienating either the US, China or Russia, by benefiting from America’s military protection, selling goods to China, and relying on Russian natural gas, have fallen and shattered as a result of the Ukraine war and Washington’s pressure on Berlin to pick a side in the Second Cold War. Today, as in the Konrad Adenauer years in the 1950s, Atlanticism is a better option for Germany than neutrality between the blocs.

In the past, French opposition has contributed to the failure of proposals for greater Euro-American economic integration, such as the failed Transatlantic Trade and Investment Partnership and earlier proposals for a transatlantic free-trade area. On a recent trip to China, the French president Emmanuel Macron called for Europe to become a “third pole” in world politics to avoid being “vassals”. But from a French perspective, transatlantic institutions in which Europeans had a voice would surely be less demeaning than the present pattern, in which, under Donald Trump or Joe Biden, the US unilaterally enacts America-only industrial policies and European leaders complain after the fact. Even among French Gaullists there have been Atlanticists, including Balladur and his protégé Nicolas Sarkozy.

Finland, Sweden and the newest members of the EU in central and eastern Europe, like Poland, tend to be pro-Nato and see the US as a defender of their sovereignty rather than a threat to it. Most, if not all, would welcome the chance to join a new Atlantic industrial union.

Post-Brexit Britain might benefit the most from membership in a common Atlantic industrial community. Participation in transatlantic industrial policy institutions would give London a voice in decision-making, and perhaps greater access to strategic markets and technology and investment in the US, the Anglosphere and the EU.

In 1904 the British statesman Leo Amery predicted correctly that “the successful powers will be those who have the greatest industrial base. It will not matter whether they are in the centre of a continent or on an island; those people who have the industrial power and the power of invention and of science will be able to defeat all others.” No one will ever speak of an “Atlantic dream” as inspiring as the American Dream or the dream of European unification. But in a deglobalising world of great-power rivalries, an Atlantic industrial community only needs to inspire pragmatic collaboration to promote “the industrial power and the power of invention and science” to succeed.

[See also: Cheap weapons, new wars]

Only a decade or two ago, the reversal of globalisation was treated as unthinkable by elites on both sides of the Atlantic. In 2000, President Bill Clinton declared that “globalisation is not something we can hold off or turn off. It is the economic equivalent of a force of nature – like wind or water”. In 2019, the former British prime minister and willing helpmeet of American power, Tony Blair, agreed that “globalisation is a force of nature, not a policy: it is a fact”.

But globalisation has always been a policy, not a force of nature. While the movements of wind and water do not need to be authorised by law and diplomacy, liberalising international trade and investment and harmonising national regulations requires the ratification of treaties numbering hundreds or thousands of pages. Acknowledging that globalisation is artificial, some defenders of the crumbling post-Cold War order have defined it as “the rule-based international order”, which is dated to the attempt to transcend war and protectionism by the victors of the Second World War after 1945. But this, too, is mystification. In essence, the thwarted project of globalisation was an attempt to expand America’s bloc of first-world nations in the Cold War to incorporate the formerly communist second-world and the postcolonial third world.

The US labelled its alliance system between the 1940s and the 1980s “the Free World”, a misleading name, because most of its allies outside of western Europe in East Asia, Latin America and the Middle East were anti-communist authoritarian regimes. Pax Americana is a more neutral term that captures the quasi-imperial aspects of the system, which was looser than a traditional empire but much more integrated and managed than a simple alliance or free-trade area.

The Pax Americana during the Cold War was a hierarchy, whose members specialised in different functions. As the bloc’s hegemonic power, the US unilaterally provided military protection and economic services to its allies and client-states with little or no expectation of reciprocity on their part. Extended deterrence meant that the US would treat an attack on the territory of its protectorates as an attack on itself. At the same time, the US military would protect the interests of its allies in open sea lanes and access to resources – for example, Middle Eastern oil, most of which went to American allies in East Asia and Europe, not the American homeland.

In the economic realm, the US provided its trading partners with the dollar as the global reserve currency. The dollar was initially linked to gold, but the dollar remained the de facto global currency even after President Richard Nixon ended the convertibility of dollars into gold in 1971. 

The US also provided unreciprocated access to its consumer market, the largest in the world. This was especially important for the second- and third-largest capitalist countries, Japan and the Federal Republic of Germany. Japan had lost the China market when Mao’s Soviet-backed communists took power in 1949, and the Iron Curtain similarly deprived West Germany of traditional German export markets. American producers complained about Japanese and German import competition, particularly after those countries had fully recovered by the 1970s and 1980s. But presidential administrations from Eisenhower onward sided with the defence department and the State Department in tolerating the blatant domestic protectionism and export-boosting mercantilism of Japan and the industrial policy of West Germany, in the interest of Cold War alliance unity. In doing so they sacrificed American industrial firms to gain or maintain foreign military bases and allied support for American foreign policy. In the postwar division of labour within the Pax Americana, the US made wars and Japan and Germany made cars.

Before 1945, the US had been one of the most protectionist countries on Earth, following an import-substitution policy of inviting foreign capital investment but keeping out foreign products. American protectionism was first justified by the need to catch up with industrial Britain and later by the need to protect American workers from low-wage foreign competition. In the 1840s, Britain had abandoned its own successful import-substitution protectionism once its global lead in manufacturing had made access to foreign markets more important than protection of its domestic industries. In the 1940s, with the US temporarily dominant in global manufacturing because of the wartime devastation of its industrial rivals, it similarly abandoned protectionism for free trade with the zeal of a repentant sinner.

[See also: Believing in scarcity leaves us poorer]

In practice, however, the US economy remained largely autarkic, from the 1940s to the 1970s. The offshoring of industry by corporations was not possible in a world in which communist regimes ruled a third of humanity. Many countries in Latin America and other developing nations also pursued protectionist import-substitution strategies of their own. Immigration was also low for a generation after 1945 in the US and western Europe. These conditions permitted organised labour, backed by governments interested in labour peace, to extort high wages and benefits from national industrial corporations, particularly in the automobile and steel sectors that were central to Western economies at the time. The result, flawed by racism and misogyny, was a “Fordist” system in which well-paid male industrial workers and their families were able to join the first mass middle classes in history.

With the end of the Cold War came a great debate about the future of American strategy. In the National Interest magazine in 1990, President Reagan’s former ambassador to the United Nations Jeane Kirkpatrick wrote an essay entitled “A Normal Country in a Normal Time”, calling on the US “to give up the dubious benefits of superpower status and become again an unusually successful, open American republic”. Others called for an American industrial policy, in response to import competition from Japan, South Korea and newly unified Germany.

Instead of dissolving the Cold War Pax Americana, the bipartisan establishment under Bill Clinton and George W Bush sought to expand the bloc from its heartlands to the rest of the world. The attempt to globalise the Pax Americana was motivated as much by fear in Washington of the re-emergence of Japan and united Germany as independent great powers. For its part, Japan was content to remain an American ally specialising in manufacturing for exports. In addition to forestalling Russian revanchism, the expansion of Nato into eastern Europe and the Balkans was justified in some quarters as preventing Germany from creating a new Mitteleuropa sphere of influence including the former Warsaw Pact nations. In hindsight this was a turnip ghost, but Germany’s allies were alarmed when Berlin unilaterally recognised the independence of Croatia in 1991. Around the time of the Nato intervention in the War of the Yugoslav Succession, a former head of the National Security Agency told me, “We need a hundred thousand troops in the Balkans to keep an eye on the Germans.” Meanwhile, the French government sought to increase the subordination of a united Germany to the European Union by pushing Eurofederalism and the adoption of the euro. Under Chancellor Helmut Kohl and his successors, Germany accepted being bound by Nato and the EU so there would be “a European Germany, not a German Europe”.

In the 1990s, Russia was viewed as too weak to resist the expansion of Nato, while most American officials and business elites saw China not as a potential military threat, but as a giant market and, even more important, as a source of low-wage, non-union, unfree labour for Western-based multinationals and their suppliers. In 1934, the American progressive historian Charles A Beard had warned: “Under world free trade there would be a movement of manufacturing industries from the regions in which wages are high, social legislation is strict and trade unions are powerful, to the backward regions where wages are low, social legislation is negligible if not absent, and labour unorganised.” His prophecy was fulfilled, as communist countries and former protectionist developing nations sought foreign investment in return for access to their cheap labour.

In 2007 in a speech to the US Chamber of Commerce, the Peruvian president Alan García declared: “Come and open your factories in my country so we can sell your own products back to the US.” That and similar offers were taken up by firms in America, Europe and advanced East Asia. Offshoring allowed Western business to escape the constraints of postwar “new deals” with organised labour in their home countries. As the Citicorp CEO Walter Wriston explained in 1992, “When steel mills can move to more hospitable climates, they no longer present a stationary target for government or union control.”

[See also: The lessons of Chile’s struggle against Big Tech]

Instead of moving jobs to low-wage workers abroad, low-wage workers could be imported to do jobs at home. In both the US and Europe after the Cold War, similar coalitions of employers, urban administrations and humanitarian non-profits lobbied governments to constantly expand immigration of all kinds – legal immigrants under various categories, refugees, guest workers, tolerated illegal immigrants, while neoliberal economists and libertarian ideologues claimed implausibly that neither offshoring-induced deindustrialisation nor importing a new menial service proletariat had any significant effects on wages and living standards.

Champions of globalisation after the Cold War had promised former unionised factory workers and their children new and better jobs in the “knowledge economy”, once they “learned to code”. But on both sides of the Atlantic far more jobs were created in low-wage, often non-unionised service sectors. Instead of technology-driven productivity growth, the elites of the post-Cold War West relied on strategies for economic growth that did not improve long-run productivity: asset inflation and immigration-driven population growth. With wealthy taxpayers and bond-holders vetoing the use of fiscal policy most of the time, central banks resorted to low interest rates in the hope of creating more trickle-down spending by the rich (the “wealth effect”). The toxic upshot of this was the enrichment of stockholders and property owners and speculators, and property bubbles that priced young people out of home ownership through much of the West.

Immigration provided more employers for some firms, more customers for others, more renters for landlords, more taxpayers for national and local governments, and more clients for social-service non-profits. Economic elites welcomed high levels of immigration for keeping inflation low (by the unstated mechanism of suppressing wage growth in many occupations). But offshoring factories and importing poor workers did nothing for long-term productivity growth. Indeed, the growth of low-wage workforces as a result of low-end service sector expansion, declining union coverage and unskilled immigration in the West reduced incentives to substitute technology for labour – for example, in New York and London, where it was sometimes cheaper to hire workers to wash cars by hand than to invest in automated car washes. 

Inevitably the abandonment of the post-1945 compromise between business and the working class in Western democracies that exchanged high wages for high consumption of goods from domestic factories created populist backlashes on the right and left. Right-wing populists such as Donald Trump and Nigel Farage focused on immigration; those on the left like Jeremy Corbyn and Bernie Sanders were more likely to denounce trade liberalisation. And in the aftermath of the Covid lockdowns, the US has experienced the greatest wave of grassroots labour militancy in decades.

But the odds are stacked against the possibility that populist movements of the right or left will capture national governments, or, if they do, will be capable of governing. Since the end of the Cold War, transatlantic elites have transferred much decision-making authority from elected legislatures accountable to voters to technocratic bodies insulated from majority values and interests – international treaties, international organisations such as the World Trade Organisation and the European Court of Human Rights, the more centralised EU. And in a particularly ominous development, private banks and corporations have adopted the mission of punishing populist critics of the globalist neoliberal establishment. Twitter banned President Trump, and the British populist firebrand Nigel Farage claimed that multiple banks have turned him down, in addition to NatWest, which appeared to shut down his account because of his political views. As Sohrab Ahmari, among others, warns in his new book Tyranny, Inc, the creation of a technocratic firewall against populist influence on public policy, including private banks, corporations and media, could create a privatised version of China’s oppressive social credit system in which dissidents are locked out of participation in the market economy.

Great-power rivalry rather than domestic populism has forced the retrenchment of the post-Cold War American bloc. At the global level, the attempt to universalise the Pax Americana failed by 2008, when it became clear that both Russia and an increasingly developed and powerful China rejected America’s offer to specialise in commerce, as Japan and Germany did, while leaving the policing of the world and their regions to Washington. 

The result of today’s Cold War II is something like the three-bloc world of the Cold War, consisting of the American-led bloc in North America, Europe and East Asia, a loose revisionist bloc of China and Russia, and countries outside of the North Atlantic such as India and Brazil which see Sino-American rivalries as a way to gain leverage by playing both sides against each other. The strategies of Barack Obama, Trump and Biden have sought to strengthen, not dismantle, the Pax Americana system. By means of two failed trade treaties, the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (Ttip), the Obama administration endeavoured to create a free-trade zone that more closely integrated the US and its East Asian and European allies while at least temporarily excluding China. Trump did not seek to dissolve the Pax Americana, but to decouple it from China while pressing for more burden-sharing with free-riding allies. He also rejected the traditional use of American industries as bargaining chips to be sacrificed to win the assent of US allies and client-states.  Biden’s approach combines Obama’s solicitude towards US allies with a large dollop of Trumpian protectionism and industrial policy.

Cold War II will not be a rerun of the first Cold War. China alone has far more industrial power and latent military strength than the USSR possessed at its height. And as the French economist Jacques Sapir has argued, measures of GDP that count stock-market and real-estate bubble wealth and unproductive transactions underestimate the strength of China and Russia in the manufacturing and resource industries that are the basis for military power.

At the same time, the US-led alliance system has benefited from the strategic blunders of its opponents. Russia’s brutal assault on Ukraine has frightened Sweden and Finland into Nato and united European capitals and Washington. The clumsy territorial grabs along its borders by China under Xi Jinping and China’s arrogant “wolf warrior” diplomacy have driven Japan and India into a closer security relationship with the US.

In the first Cold War, Moscow and Beijing competed to lead the global secular religion of Marxism-Leninism, which had followers in the West and throughout the world. Today’s rump Russia and post-Maoist China are conventional authoritarian dictatorships, representing no model that can be exported and no secular faith, even if other countries view them as markets or sources of investment or counterbalances to overweening Western power.

The hierarchical American bloc that was improvised by the US and its allies after the Second World War has proved remarkably resilient, defying repeated predictions that it would collapse from bankruptcy or overextension. The Pax Americana survived the Cold War and the post-Cold War era and – at least for now – today’s Second Cold War has strengthened rather than weakened America’s informal empire. Globalisation has outlived its usefulness as an instrument of American hegemony, leaving long-term problems of deindustrialisation and inequality in its wake, but in Europe and littoral East Asia, if not in the world, the Pax Americana in its eighth decade is alive, if not exactly well.

[See also: The end of globalisation]

It may not be international socialism, but the concept has been embraced by many on the centre-left, including the C40 Cities Climate Leadership Group, comprised of nearly a hundred city governments around the world: “In a ‘15-minute city’, everyone is able to meet most, if not all, of their needs within a short walk or bike ride from their home.”

Although the name is new, the concept is not. A recurrent goal of urban reformers, from proponents of the “garden city” in the 1900s to advocates of “transit-oriented development” in the late 20th century, has been the creation of car-free, village-like environments in which most places could be accessed on foot or on bicycles, with mass transit for longer journeys.

The idea of the 15-minute city sounds appealing. Who wouldn’t want to have everything they need – work, healthcare, education, shops, leisure – within a short walk of their front door? But only brief reflection is needed to demonstrate how impractical the idea is. Consider work. The majority of Americans in the private sector work for companies with more than 500 employees. Some of these firms, such as coffeehouse and drugstore chains, may have establishments in many neighbourhoods, but other jobs require employees to commute to a central office or warehouse or store. Even if more firms adopt a hybrid model, allowing employees to often work from home and sometimes requiring them to join colleagues in a physical office, that hybrid office is unlikely to be within walking or bicycle distance of most workers.  

Mere access to public transport is not enough. A Brookings Institution study found that only around 30 per cent of potential jobs were accessible to American urban residents using mass transit – even with 90-minute commutes each way. Experimental voucher programmes by the US Department of Housing and Urban Development showed that low-income workers with access to cars were twice as likely to get jobs and four times as likely to remain employed. Except in a few of the world’s densest cities, such as New York, Tokyo and Paris, public transport is no substitute for the speed and convenience of point-to-point travel in an individual vehicle.

Then there is retail. There is a reason why, in the US and other countries, big box stores with bargain prices are located on cheap suburban or exurban land. You may be able to walk to a grocery or chemist in your city, but thanks to high land prices and property taxes, the local corner store is likely to have limited space and fewer, more expensive goods. Housing space, too, will be limited in a 15-minute city. No matter how much urban journalists glamorise micro-apartments and minimalism, most people in Western democracies prefer commuting to their workplaces and shopping centres and having bigger homes with more room to accommodate children, relatives, pets and possessions.

As it happens, we know how much time most people are willing to spend on an average one-way commute: 30 minutes. This is known as “Marchetti’s constant” after the Italian polymath Cesare Marchetti. According to Marchetti, the time allotted to commuting is more or less invariant, but the distance depends on modes of transportation and their speeds. A 15-minute city by car, with everything in driving distance in half an hour, would be much larger than a 15-minute pedestrian city.  Marchetti’s generalisation is remarkably robust. In Britain the average commute in 2021 was 27 minutes, with 68 per cent commuting to work by car.

[See also: Is Mick Lynch working class?]

Many of those who condemn automobiles for ruining cities appear to forget that in most cities and villages, cars and trucks replaced not pedestrians but horses and horse-drawn carts, carriages and wagons. Traffic congestion and noise are nothing new.  

If cars and trucks are banished from the pedestrian village, how are medics in ambulances to get to victims of heart attacks? How are the infirm elderly to be taken by relatives and friends to medical appointments? Groceries might be taken home from corner stores in small quantities every day, if you think daily shopping is one of the pleasures of life. But how are beds, sofas, tables and book-cases to be moved in and out of houses or apartments, if rented or hired trucks and vans cannot get close?

One solution is to limit the vehicles allowed into a neighbourhood to those who live and work there – and to necessary service vehicles. But such neighbourhoods already exist. They are called gated communities, and most of them are enclaves for the affluent and the rich.

The term “mixed-use” is frequently found in the literature of urban utopianism. What about “mixed-class”? Class-mixing through urban design is another idea that seems appealing, until it is remembered that in pre-modern societies aristocrats and patricians, servants and tradespeople often lived under the same roof without physical proximity reducing social distance. In modern societies the wealthy spend considerable amounts to be surrounded by wealthy neighbours, apart from the occasional live-in servant and visiting service providers.

In 2010 New York City reformed zoning laws to encourage luxury apartment complexes that included affordable housing for low-income residents. Thus originated the “poor door” – an entrance for the poor residents separate from the main entrance for the affluent apartment-dwellers, the 21st-century version of the tradesman’s entrance in an old-fashioned country house. A complex named One Riverside Park on Manhattan’s Upper West Side has 24/7 doormen, two gyms, a swimming pool, a movie theatre, a basketball court and a bowling alley, with river views and an exclusive courtyard for rich residents – while the affordable section lacks amenities, including doormen. Such discrimination may be the price of having any of the Eloi of Manhattan share an address with local Morlocks.

The point may be moot, because most working-class people in Europe and North America live in the suburbs and exurbs. The use of “urban” as a synonym for “racial minority” and the assumption that suburbs are homogeneous and white is half a century out of date. In the US suburbanites outnumber urbanites in every racial group, including African-American and Hispanic. Indeed, the gentrification of cities tends to be a process of whitening, as well-to-do white people drive up urban property values in fashionable areas, pricing out people of other ethnicities with lower incomes, who find new homes and jobs in increasingly diverse metro peripheries. In the UK over 80 per cent of the population is suburban.

The car has become a symbol of the low-intensity class war between the metropolitan overclass and the mostly suburban, multi-racial working class in western democracies. Elite professionals and managers can live without cars of their own in major cities, relying on walking, biking, public transport, or taxis, including Uber and Lyft. I was one; for three decades I did not own a car when I lived in upscale neighbourhoods such as Chelsea and the Upper East Side in New York and Adams Morgan in Washington DC.

But my car-free lifestyle was possible only because my profession and my income permitted it. Many working-class people, from repair technicians to delivery drivers, must have the use of their own vehicle or a company vehicle during business hours. In Britain “White Van Man” has become a symbol of a segment of the working class.

In the 20th century the factory was the site of the most intense class conflict. In the 21st century it is the automobile. In France the longest-running protests since the Second World War, those of the gilets jaunes, began in 2019 with a nationwide protest against a fuel tax hike – itself a symbolic gesture that would do little to alter climate change but imposed real costs on suburban workers and businesses. Canada’s Covid-19 regulations triggered the trucker protests last year that prompted Justin Trudeau, the prime minister, to declare a state of national emergency. In March the Farmer-Citizen Movement became the largest party in the Netherlands by appealing to many working-class suburbanites as well as farmers upset by government efforts to shrink Dutch farming in the name of combating climate change. 

Many metropolitan progressives have sought to claim that these protesters were, if not sinister far-rightists, “petit-bourgeois”, not genuinely working class. But the reclassification of many workers who would have been employees in the past as contractors, by businesses seeking to minimise labour costs, has created a growing precariat of people who are nominally self-employed but part of the working class by any sensible definition.

In deindustrialised countries in which factories have been shut down by offshoring or foreign competition and in which strikes by decentralised service sector workers are difficult, the traffic blockade using cars or trucks shows signs of becoming the equivalent of the sit-down strike at the assembly line in past decades.

Even paranoids have real enemies. There is no Davos conspiracy to confine everyone in 15-minute concentration camps. But the majority of working-class people of all races whose suburban lifestyles depend on cars to get them to work, shops and homes can be forgiven for being resentful of environmental regulations whose cost falls on them in the periphery, rather than on upscale professionals in pleasant urban enclaves. Every utopian urban plan has a social address. The 15-minute city is an overclass dream and a working-class nightmare.

This article was originally published on 19 June 2023.

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The problems begin early – the second page, in fact. Norberg, a senior fellow at the libertarian Cato Institute in Washington DC, considers The Communist Manifesto. “Marx and Engels were right,” he says, “when they observed in that other manifesto, the communist one of 1848, that free markets had in a short time created greater prosperity and more technological innovation than all previous generations combined and, with infinitely improved communications and accessible goods, free markets had torn down feudal structures and national narrow-mindedness… Marx and Engels realised much better than socialists today that the free market is a formidable progressive force.”

This is a lazy misreading of Marx and Engels. True, they hailed the role of the then new and mostly British industrial capitalism in promoting technological innovation and economic growth. But as Engels commented 40 years later, “It was under the fostering wing of Protection that the system of modern industry – production by steam-moved machinery – was hatched and developed in England during the last third of the 18th century. And, as if tariff protection was not sufficient, the wars against the French Revolution helped to secure to England the monopoly of the new industrial methods.” As Engels noted, “well into the 19th century” protection “was then held to be the normal policy of every civilised state in western Europe” – including Britain, which was only beginning to pursue free trade when The Communist Manifesto was published.

Nor did Marx and Engels believe “that the free market is a formidable progressive force” in the way Norberg believes they did. In his 1848 speech “On the Question of Free Trade”, Marx declared that “the protective system of our day is conservative, while the free-trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free-trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favour of free trade.”

As a historian of capitalism, Norberg is just as unreliable as he is as a historian of socialist thought. Laggard economies, he argues, “can use technologies and solutions that have already been developed at great cost in the leading countries. But this convergence did not take place before the 1990s, since global markets were not very open until then and protected companies had not been pressured to upgrade methods and technologies by the competition.”

Tell the Americans and Germans of 1900, or the Japanese, South Koreans and Taiwanese of 1980, that technological and economic convergence didn’t take place before globalisation in the 1990s. Once it seemed to have achieved an insurmountable global lead in manufacturing, Britain switched from its earlier policy of mercantilism and preached a doctrine of universal free trade, hoping that its superior exports would kill infant manufacturing industries abroad, even as the rest of the world competed to provide British factory owners and workers with cheap materials and cheap food. The Americans and Germans, however, rejected free trade and built up their domestic manufacturing industries to compete with Britain and other countries with the aid of tariffs and various government industrial policies. By the early 20th century, protectionist America and protectionist Germany had caught up with, and in some areas surpassed, free-trade Britain as manufacturing powers.

The subsequent industrial convergence of Japan, South Korea and Taiwan with the US and Europe in the last 50 years has not been the result of unfettered free markets, either. It was the work of successful “developmental states”, authoritarian and democratic alike, which have used means such as non-tariff barriers and targeted loans to protect their domestic manufacturers, while encouraging them to export to the more open markets of the US and Europe. China has followed its own variant of the East Asian developmental state model, using export-processing zones and foreign corporate investment to transfer technology and skills to its own firms and workers. 

Nowhere in The Capitalist Manifesto does Norberg address the fatal flaw of a trading system in which mercantilist countries such as Japan, South Korea, Taiwan and China take unfair advantage of the openness and liberalism of their trading partners to gain market share in export industries supported by the state. “I know I’m sticking my neck out when I predict that China’s authoritarian model will not survive,” Norberg writes, recalling his 2003 book In Defense of Global Capitalism. “I got it wrong last time. But I think the reason I got it wrong was that the Communist Party identified exactly the dilemma I pointed to: continued economic liberalisation will lead to openness and diversity that will eventually undermine the dictatorship… What I don’t believe is possible is that a totalitarian superpower will be able to replace the leading role of the United States and Europe.” 

But in numerous economic sectors China has already supplanted the US and Europe. China surpassed the US in global manufacturing in 2010: it now accounts for 28.4 per cent, compared with only 16.6 per cent for the US, 7.2 per cent for Japan, and 5.8 per cent for Germany. 

With the help of subsidies and other forms of state support, China in 2022 captured 48 per cent of global output in shipbuilding, an advanced manufacturing industry, according to the maritime services Lloyd’s Registry. This compared with South Korea’s 25 per cent and Japan on 15 per cent. Civilian shipbuilding is nearly extinct in the US, while in the UK and Germany it is entirely dependent on Chinese supply chains. 

China is trying to gain market share from Western multinationals for its state-owned aerospace corporation, Comac, as well as its state-backed automobile manufacturers. One state-funded Chinese company, DJI, controls more than half of the global market for civilian drones.

Norberg claims that the reliance of the US and European countries on imports of critical medicines and medical supplies – from China, among other places – during the Covid epidemic “exposes the danger of the popular idea of ‘friend-shoring’ – trading more with close geopolitical partners while avoiding rivals”. Apparently, there is nothing imprudent about allowing your country to become dependent for essential medicines and protective equipment or other goods on a nation that is a military and strategic adversary. 

[See also: Making democracy safe from capitalism]

Norberg cannot deny that information technology and the internet were largely the result of US defence department procurement. Instead, he quibbles with the economist Mariana Mazzucato’s definition of mission-oriented innovation: “The government was involved in many ways, through ARPA [the department’s Advanced Research Projects Agency], with procurement and research money, but”– a significant but! – “the result was a happy, unintended side effect of public funding and something completely different from the notion of mission-oriented innovation where charismatic leaders get people involved in large-scale projects.” That may be so, but it was still publicly-funded state capitalist industrial policy in the broad context of the Cold War military contest.

In the absence of government support, would information technology have developed at the same rate – or developed at all? Norberg says yes, just look at the porn industry:

“You could actually write a Mazzucato book like that about active industrial policy, but replace the government with the porn industry. Think about it: it is well established that pornography has played a crucial role in several technological developments. The printing press, photo, film, video streaming, online payment system, chat features, peer-to-peer sharing and virtual reality have in many cases been developed and disseminated to satisfy carnal desires… If I were one of the new cheerleaders for active industrial policy, I would conclude from this that we should pour tax money over the porn industry to stimulate technological innovation.”

The obvious difference is that, in the absence of legal repression, there has always been mass private demand for pornography, produced by various technologies. But there was no consumer or corporate demand that would have justified private investment in the 1930s, 1940s and 1950s in jet engines, rockets, computer technology, the polio vaccine or nuclear energy, all of which were developed initially by government contractors or government employees. And there still is no adequate civilian demand to sustain many of these technologies. The rockets of Elon Musk and Jeff Bezos depend on US government subsidies; nuclear, solar and wind power need government subsidies and market-rigging regulations to compete with hydrocarbons; and Covid vaccines require huge government investment.

There is an indispensable role for creative entrepreneurs, but, as in the case of information technology, their contribution is usually to develop innovative commercial applications of breakthrough technologies that had to be developed first by some combination of government funding and non-profit academic research.

In discussing workers and workplace conditions, Norberg recycles the stale libertarian talking point that any increases in wages may cause lasting or permanent unemployment for a substantial part of the workforce. In reality, this has never happened in any industrial country. Mass unemployment has always been caused by financial crises or external supply shocks, not by decent wages and benefits. Defending the gig economy, Norberg writes: 

“When it comes to food deliveries, permanent employment means that workers must be very productive. They must, for example, cycle fast uphill in the rain, and the company must monitor them so that they know they are doing so. If you get the same salary no matter how fast you pedal, the slow cyclists will be thrown out.”

What would low-wage workers do without fellows at donor-funded libertarian think tanks like Norberg looking out for their interests?

Weirdly, Norberg sometimes attributes the beneficial results of government regulation or union contract agreements to free markets: “Workplaces have also become much safer. In the 1950s and 1960s [in America], there were around twenty to twenty-five workplace fatalities per 100,000 workers, and that figure has declined continuously – it is now around 3.4 per 100,000 workers according to the [US] Occupational Safety and Health Administration.” Surely the existence of something called the “Occupational Safety and Health Administration”, established by Richard Nixon’s administration in 1971 as part of the US Department of Labour, had something to do with the progress he celebrates. 

Norberg dedicates his free-market manifesto “to classical liberals of all parties”. But the major classical liberals of the 18th and 19th centuries were worldly and sensible pragmatists who acknowledged the legitimate role of the state in a market economy. Adam Smith favoured Britain’s protectionist Navigation Acts, which sustained the empire’s merchant marine, as essential for national security, while John Stuart Mill and Alfred Marshall believed that trade unions were necessary to make capitalism work for all. Norberg’s real audience is found among doctrinaire libertarians, in the various denominations that follow Ludwig von Mises and Friedrich Hayek, Ayn Rand or Milton Friedman. The choir to whom he is preaching will nod in assent to his sermon. But those looking for a thoughtful defence of neoliberal capitalism against its critics will have to look elsewhere.

The Capitalist Manifesto: Why the Global Free Market Will Save the World
Johan Norberg
Atlantic Books, 352pp, £20

[See also: Keir Starmer must dare to reimagine capitalism, not just beat the Tories]

Liberal internationalism entranced many elites and citizens in the West and the world three times, following three global conflicts – the two world wars and the Cold War. The promise of liberal internationalism was that zero-sum struggles among countries over power, wealth, and values, in which one country’s gain means losses for others, could be replaced by non-zero-sum collaboration to promote mutual security, mutual prosperity, and common values.

One way to eliminate interstate competition, of course, would be the unification of humanity under a single state, by force or by federation. But liberal internationalists have been committed to a world of national self-determination by many sovereign states, including new ones that emerge by secession or the partition of former multinational empires. Liberal internationalists have sought to reconcile their two goals of national independence with global harmony by replacing competition among states for relative power and relative wealth with global governance rather than with global government.

In the liberal internationalist vision, security would no longer be provided on a self-help basis by individual states or alliances. Instead, a system of collective security would make all states, big and small, powerful and weak, safe from the aggression of others. Interstate aggression would be outlawed by treaties, and outlaw states would be punished by national or global military forces deployed to enforce global law by a global organisation – the League of Nations or the United Nations.

Following the Cold War, many liberal internationalists in the West, including neoconservatives and “humanitarian hawks”, were committed to the dream of a world without interstate conflicts, but realised that the United Nations would never effectively function as global police officer. Many found a substitute in the idea of a “league of democracies” which would oversee the post-Cold War world. Others hoped that a single country, the United States of America, could reduce incentives for interstate competition and provide security for all countries – or at least all deserving countries – by policing the world as the global hegemon. If post-Soviet Russia and post-Maoist China consented willingly to membership of a liberal internationalist order or “rule-based system” policed by the US and regional allies, then great-power politics would vanish. Only small and recalcitrant “rogue states” such as Saddam Hussein’s Iraq and North Korea would threaten the American-led liberal international order.

The strategy of collective security has implications for trade policy. If the League of Nations, the United Nations, or Team America kept the peace, then individual countries would no longer need to try to maximise their control of industries, markets, and natural resources vital to national defence, just as individuals under a common national government are liberated from the need to stockpile arms and supplies as a precaution against attack by their neighbours. Free of the need to provide for national militaries, except perhaps for forces that states would contribute to global collective security campaigns, countries could abandon economic nationalism and join a borderless, rule-governed global market in which individuals and firms were the only participants.

What about conflicting values? Liberal internationalists from the aftermath of the First World War to the aftermath of the Cold War hoped that conflicts of values among countries would simply disappear as the result of the inevitable conversion of all of humanity to liberal democracy, founded on ideas of individual human rights derived from the American and French revolutions during the 18th-century Enlightenment. In place of older distinctions between Christians and pagans and civilised and barbaric countries, mostly-Western liberal internationalists distinguished liberal from illiberal states and democracies from autocracies. In a secular version of post-Christian theodicy, liberal internationalists assumed that the conversion of the heathens to Western liberalism was unavoidable and could be sped up by evangelisation and the occasional coup or war of regime change.

In his war message to Congress on 2 April 1917, the US president Woodrow Wilson declared: “The world must be made safe for democracy. Its peace must be planted upon the tested foundations of political liberty.” Echoing Wilson, in his second inaugural address 0 January 2005, George W Bush asserted: “The best hope for peace in our world is the expansion of freedom in all the world… So it is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world.”

The millennial hopes of liberal internationalists after the First World War were frustrated by the resumption of great-power rivalries that led to the Second World War. After 1945, the conflicts of the US and its allies with the Soviet Union, China and other members of the communist bloc disappointed and disillusioned those who had high hopes for the United Nations system. Now, the replacement of the US’s fleeting post-Cold War global hegemony with great-power struggles pitting the US and its allies against China and Russia, along with the return of non-alignment as a strategy among many other nations, marks the defeat in our time of the liberal internationalist project.

In the emerging multipolar world, as throughout most of history, states will have to look after their own security, alone or with the help of military allies. This makes it imperative to adopt strategies of self-sufficiency in militarily essential manufacturing, raw materials, energy supplies, workforces, and consumer markets, at the level of blocs or alliances if not of individual countries.

In the realm of values, the project of liberalising the world has failed as decisively as earlier Western attempts to Christianise or “civilise” humanity. Saudi Arabia and Iran and many other Muslim countries, including Afghanistan under the Taliban, have non-liberal religious regimes of a kind liberals hoped would give way to secularism and individualism. In different ways Xi Jinping in China, Vladimir Putin in Russia, and Recep Tayyip Erdogan in Turkey have consolidated postmodern autocracies that can function effectively in the age of computers and rockets.

Nor is liberal democracy healthy in its Western heartlands. In the last generation, real power in the US and European countries has drained from legislatures to increasingly powerful executives, judiciaries, transnational agencies and corporations. The result has been the replacement of the old politics of left and right by conflict between elite technocratic insiders and alienated citizens represented by colourful and often ineffectual and corrupt populist tribunes such as Silvio Berlusconi and Donald Trump. As the multiple prosecutions of Berlusconi and Trump show, “lawfare” – the weaponisation of the judicial system for partisan purposes as a substitute for elections – is being normalised in North Atlantic democracies, having long weakened democratic institutions in the oligarchic societies of Latin America. Liberal democracy cannot flourish if political factions routinely seek to jail or censor rival politicians.

Military and economic competition, together with ineradicable conflicts of religious and secular values, cannot be eliminated as utopian liberal internationalists have hoped. But inevitable interstate conflicts can be moderated and prevented from escalating into all-out war. Age-old diplomatic expedients such as spheres of influence and neutral zones, along with newer methods such as arms control treaties, summit meetings and hotlines, can limit great-power rivalries and proxy conflicts. Instead of treating free trade as the norm and justifying sanctions and embargos only as punishments of global outlaws, we can acknowledge the legitimacy of selective protectionism and industrial policy by nations and blocs, while engaging in the trade-war equivalents of arms control negotiations. And conflicts among incommensurable values can be managed by what John Gray has called a modus vivendi , or co-existence, in a permanently pluralistic world.

“What audiences want is a tragedy with a happy ending,” an American movie mogul once declared. What the realist thinker John Mearsheimer calls the tragedy of great power politics is a permanent feature of a world without a world government, but that tragedy need not end in universal ruin.

Michael Lind is a professor at the Lyndon B Johnson School of Public Affairs at the University of Texas and author of “The New Class War: Saving Democracy from the Managerial Elite” (Atlantic Books)

Moreover, my book Made in Texas: George W Bush and the Southern takeover of American politics (Basic Books) was a bestseller in the US and has been translated into several foreign languages. I have written for the New Statesman and Prospect and hundreds of people paid “cash money” (as we say in Texas) to hear me discuss it at the Hay-on-Wye literary festival last summer.

So you would have thought I was a natural this year for the annual Texas Book Festival – particularly since the organisers sought me out when I published a narrative poem about the Texas revolution, The Alamo (1997), and a book in which I defended the goals (though not the methods) of America’s tragic effort in Indo-China, Vietnam (1999). But no. Made in Texas has been excluded from the Texas Book Festival. I won’t be present with the other authors at the ceremonies in Austin next month.

Why? Perhaps it’s a clue that the Lone Star State’s major literary festival was founded by Laura Bush in the 1990s, when her husband was governor of Texas. Laura’s mother-in-law, the mother of the incumbent president, is featured at her book festival, while I, the author of the critique of George W Bush that has gained the most attention worldwide, have not been invited. Is there a pattern here?

I’ve asked the organisers of the festival to explain. They have refused to respond. They have also excluded my other 2003 publication, Bluebonnet Girl, a children’s book in verse about a Texas Indian legend, illustrated by the renowned children’s artist Kate Kiesler.

Last year, even though I had published no book, the organisers overcame my initial resistance and persuaded me to take part in two panels discussing the subjects of my earlier works. Laura Bush herself came to listen to me read from The Alamo in 1997. Yet now that I have published a book about how the pathologies of Texan conservatism have shaped the Bush presidency, they seem to have lost my number.

Instead, those who attend the festival, from Texas and around the world, will be treated to such literary powerhouses as the former first lady Barbara Bush, Cheryl Rogers-Barnett, author of Cowboy Prin- cess: life with my parents, Roy Rogers and Dale Evans, and Terry Conlan, author of Fresh: healthy cooking and living from Lake Austin Spa Resort.

True, the liberal columnists Molly Ivins and Lou DuBose, who have published several witty and well-informed anti-Bush polemics, have been included. But this is hardly proof that I haven’t been excluded for political reasons. It merely means that Laura Bush’s book festival feels obliged to include a few token critics of her husband.

Although her smiling face greets visitors to the Texas Book Festival website (yes, she is presiding over it from Washington, even though Texas has a new first lady in the Governor’s Mansion), I don’t think Laura Bush personally made the decision to freeze me out. I assume the selection committee decided on her behalf.

That’s how these people operate – in Washington, as well as Austin. Earlier this year, Laura Bush arranged a White House poetry conference. It was cancelled at the last moment, when the White House discovered some of the poets were planning to make statements in opposition to the imminent war in Iraq. It’s kind of hard to be a patron of writing when you ostracise the writers on political grounds.

Perhaps, by making the president’s mother the star of the book festival this year, the Bush family has found a solu- tion to its problem with the literati: keep it in the family.

Hell, it could have been worse. I’m merely banned from the major book festival in my home town in my native state, for the sin of having offended a dynasty of rich Connecticut carpet-baggers who gained office by opposing civil rights for blacks (the older Bush ran for Congress denouncing the Civil Rights Act 1964) and for gay men and lesbians (the younger Bush supported the Texas state sodomy law which the Republican-majority US Supreme Court recently overturned as barbaric).

A few decades ago, the Texas State Police would have kept a secret file on me as a suspected integrationist and communist, and I would have received phoned and mailed death threats from some of my patriotic, God-fearing fellow Texans.

The Southern right is as vicious and demented as it always was, but it’s less dangerous than it used to be. Made in Texas is dedicated to the memory of the late Decherd Turner, the greatest librarian in Texas and a lifelong, passionate liberal. He was a friend of John Howard Griffin, who in the 1950s used chemicals to darken his skin and described how he was treated in Texas and the rest of the South in Black Like Me, a book admired by W H Auden, among others. After it was published, Griffin, fearing for his life, moved in for a time with the Turner family in Dallas.

I grew up hearing stories like this about the bad old days in Texas. But things become real only when they happen to you – like the censorship of authors too critical of the president, in what the Bush dynasty seems intent on turning into the world’s greatest banana republic.

Michael Lind is Whitehead Senior Fellow at the New America Foundation in Washington, DC