Opening 2023 on a Wile E. Coyote Note
I could never see the point of the cartoon showing Wile E. Coyote running off a cliff and remaining suspended in air — until he looks down and then plummets into the unknown. It never clicked with me as something all that funny or meaningful, much less profound. Until now. Looking back over 2022 and into 2023, Wile E.’s absurd suspension seems the perfect metaphor for this moment.
It’s as if vital social and economic support systems are no longer planted firmly under our feet. They may exist back there someplace, but we are no longer there. Technological fixes have failed, much as Wile E.’s machine-assisted efforts to catch Road Runner failed.
At a more profound level, you could say that the interlocking concepts of economy and Earth that have defined so much of human existence for the last 40 years — or is it 250? — no longer operate and relate to each other and to humanity in the same clearly delineated way.
Yet things seem to go on more or less as they have. We haven’t splattered on the rocks, but neither have we glimpsed a new direction where the world may be headed. We fear this state of groundless suspension can’t last long, though.
It’s hard to imagine that, as in the cartoon, everything will be back to “normal” for the next episode of our lives, if we indeed plummet into a void in the meantime. It seems as if there’s no going back. After repeated bouts in 2020 and 2021 with disease, destructive weather, invasion and inflation, 2022 was a year in which normalcy seemed to slip away altogether.
Why do I say that? What changed so much in 2022? And if we find the answer, will that cause us to fall all the faster?
Cold War II
One change was the outbreak of Cold War II. You probably noticed, even if you didn’t call it that. The main protagonists are the US (as before) and China (in place of the Soviet Union in CWI).
What we read or hear about in the news is not Beijing and Washington merely engaging in a temporary trade spat, that has, if anything, calmed down since Donald Trump left the White House. CWII hasn’t received the amount or urgency of coverage it should from either a liberal media obsessed with avoiding Round 2 of Donald Trump more than pointing out the approaching cliff, or its right-wing counterparts, obsessed with avoiding an admission that Joe Biden might be bashing China more effectively than Trump did.
But the slow-motion break with China is hugely important. More so than the abrupt split with Russia. And each amplifies the other.
The big, big Biden move towards CWII was to ban all sales of the latest and greatest American microchips to China, along with the machines that make those chips. Washington seems to be ordering not just US companies, but also Taiwan, South Korea and others to stop trading AI-competent and other chips and chip-laden products with the world’s largest manufacturing country (China) if those products contain any US components, which most do.
The fact that Taiwan, seen by China as part of its national territory, is the largest maker of such chips adds to the awkwardness, to put it mildly.
This comes on top of tariff moves against Chinese solar equipment by the Biden administration that are much more effective than those implemented under Trump. More importantly, these trade moves are now being underpinned by massive federal spending and other industrial planning measures aimed at getting companies to build factories inside the US to make chips, solar panels, batteries, EVs and other things we are accustomed to buying from China or other Asian countries.
Globalization in Reverse
Taken together, these moves are likely to have a huge impact. In effect, they legislate an end to globalization and the fundamental neoliberal tenets that trade restrictions and state planning are both inherently bad.
Earlier in 2022, it felt radical to pronounce globalization dead. Now even investment bank J.P. Morgan has come out with “a eulogy for never-ending globalization, which ended up having dire consequences for US manufacturing workers’ incomes, prosperity and health.” You can read all about it in “The lifeboat economy: Implications of a fracturing world order,” by J.P. Morgan Asset Management.
Manufacturing for US consumers will be coming back to the long-ago deindustrialized US itself and to free-trade allies Mexico and Canada. Before long, Americans may find that practically everything they buy in Walmart or from Amazon is no longer from China. For a while, some things will still be “Made in China.” But the world is splintering into economic camps and, however they break out over time, it’s clear that the “Chinamerica” model no longer exists.
That means prices will remain higher virtually across the board for manufactured goods — from iPhones and EVs to clothes and plastic toys — because they will no longer automatically come from wherever is the cheapest place to make them.
The Biden administration and, to a much lesser degree the EU through its carbon taxing and anti-Russian policies, is upending the “division of labor” principal of capitalism that reached its apex in the neoliberal days of the so called Washington Consensus. Those days of peak specialization began with Ronald Reagan and Margaret Thatcher and, a decade later, entered full flower with the collapse of the Soviet Union. Now they are ending.
The unchallenged supremacy of the dollar — both as the currency of cross-border trade and as the world’s most heavily favored reserve currency — is another likely victim of global splintering. Russia and Iran already export oil, natural gas and other things outside the dollar pricing system, and the Chinese signaled to Saudi Arabia and the other Arab Gulf states during a recent visit to the kingdom by President Xi Jinping that they want to move to paying for oil and gas in yuan.
None of this means the world will split neatly into two blocks the way it is remembered as doing in the First Cold War. Russia, Iran, Venezuela, Cuba and some of the other former Soviet Republics to Russia’s south seem to align with China on many fronts, but not all. And several countries, notably including India, Turkey, Indonesia, other South and Southeast Asian states and much of Latin America and Africa are trying to avoid being pushed into either camp, at least when it comes to trade.
The breakout when it comes to military and so-called “security” issues is, if anything, even more jumbled. Much of the world wants to be “non-aligned.”
Beyond Economics
Huge as all that change was on the economic front, it was far from being the only notable upheaval of 2022. There was the discovery that lots of people are sick of working all the time and are willing to somehow accommodate in their spending habits or elsewhere for any resulting drop in income. This goes for early-retiring elders and quiet-quitting younger people alike.
Climate-change denial largely disappeared, even in the previously climate-oblivious US, apparently succumbing to the obvious weirdness of the weather. Arguments continue over why climate change is happening and what to do about it, but the simple fact that the climate is changing is finally accepted as a fact by almost everyone.
Simultaneously, the energy transition has become widely accepted as a happening thing. With solar and wind energy now cheaper than fossil fuel-generated electricity almost everywhere — thanks in part to the oil-, natural gas- and coal-price runup linked to the Ukraine War — the remaining questions are how quickly manufacturing and installation capacity for renewable electricity can be geared up and whether the West, India and other parts of the world can catch up to China in ability to make that equipment.
Similarly, this year’s annual UN climate combat session, known as COP27, barely bothered to discuss the whys and wherefores of renewable electricity. Rather, the topic was who will pay for the conversion in the Global South.
Electric cars passed a mental milestone, too. Everyone now knows EVs are coming. The questions are who will build them, where they will be built, how quickly the manufacturing process can be geared up, and how EVs can be gotten to lower-income people outside the Tesla class. It’s one of the great ironies of 2022 that Tesla should have lost roughly two-thirds of its value on the stock market in the same year that saw advances for the EVs it pioneered.
Degrowth Gets a Hearing
Even economic growth, that most hallowed concept in all capitalism, is being openly questioned in circles far from leftist university sociology departments. Back in March, 2022, the UN’s Intergovernmental Panel on Climate Change (IPCC) suggested governments consider “degrowth” policies. By July, Bloomberg columnist Lionel Laurent had written an entire article that supposedly criticized degrowth but, in the process, conceded “Degrowthers are right to attack unsustainable consumption habits.”
By December, ecological economists were delving into the weeds of degrowth implementation strategies, and the notably mainstream Sierra Club’s Sierra magazine was explaining the concept to its readers in positive tones. Release of an English translation of an unlikely Japanese bestseller advocating degrowth and laboring under the title Capital in the Anthropocene, by Kohei Saito, promises to keep the issue in the public eye in 2023 — and perhaps even in some aspects of public policy.
But who knows? For the moment we’re all still holding our breaths, waiting for something to somehow end the waiting.
