Trade Wars Are Class Wars, 32 Months Later (Part 1)
Reflecting on how the world has, and hasn't, changed since we finished the first edition of the book.
A subscriber recently asked me a great question: how would I update Trade Wars Are Class Wars in light of everything that’s happened over the past few years? Answering this properly will take a while, so I expect to spread out my thoughts over several notes in between the real-time coverage and topical deep dives you have come to expect. (These notes will also form the basis of the preface for the upcoming Spanish edition of the book.)
Michael Pettis and I have some practice doing this. We put the finishing touches on the manuscript for the first edition in January 2020, which was necessary to meet our May 9, 2020 release date. Much of the book was about the past, but to the extent that we were discussing relatively recent events we were mostly looking at the world as it stood at the end of 2018 or maybe the middle of 2019, depending on data availability.1
That meant that we made no mention of the coronavirus pandemic that emerged between the time we finished the manuscript and our publication date. The disease has since killed tens of millions of people worldwide, radically disrupted what we produce and consume, and prompted governments to embrace policies never used outside of wartime. While our publisher offered us the chance to postpone publication to make changes to the text, we decided that trying to rewrite the book would threaten the coherence of the finished product and lead to unwelcome delays. Better to get the book that we knew we liked out the door as soon as possible.
That turned out to be the right decision: despite coming out in the depths of the first wave of the pandemic, Trade Wars Are Class Wars got a fair amount of attention and several positive reviews.2 Moreover, people naturally wanted to know how the framework we laid out in the book could be used to interpret the chaos caused by the pandemic. Michael and I had many opportunities in 2020 to discuss the global ramifications of everything from the weakness of China’s unemployment insurance system to the creation of Europe’s common borrowing instrument to the underperformance of U.S. exports.
In early 2021 we were asked to write a new preface for the paperback edition, which we finished writing toward the end of February.3 So much has changed since then, but our thoughts at the time still hold up as an interpretation of the first year of the pandemic.
Below are a few excerpts from that preface, as well as some additional commentary and charts that will provided an updated narrative through roughly March 2021. The next note in this series will look at events from then until the most recent Russian invasion of Ukraine (when the global recovery became more secure at the same time that inflation exploded), while the last note will cover events since February 2022.