I recently started a new job and moved into a small apartment in Connecticut, about 200 kilometers from New York. I found the place the way I usually find places: by staring at a map and guessing. Only after arriving did I realize that, while it is technically part of a city, it feels like a place where even the birds are on strike. The nearest store takes more than ten minutes on foot. There is a lumber yard not too far away. Outside my window is a wide-open golf course, and my building seems to sit at the foot of a hill.
After a week here, I decided this is probably the best place for contemplation. Without a car, there is not much else to do. I have left New York and, in a very literal sense, arrived in America. Looking back through my notes, I found a lot of scattered thoughts. It seemed like time to put them in order.
The pandemic has been going on for more than two years now. At this point it is hard to say whether it will get worse, but almost everyone is already tired of hearing about COVID. The news no longer feels dramatic. Still, the pandemic is not really the cause of many of today’s social problems. It has mostly intensified the ones that were already there. That is why so many people, myself included, feel as though the pandemic bent the course of their lives. But even without it, many things were already reaching the point where they had to happen.
When I first came to the United States in 2018, I attended an event where a financial adviser said the U.S. economy was heading for trouble. His reasoning was that the economic cycle is roughly ten years long: Black Monday in 1987, the dot-com bubble around 2000, the financial crisis in 2008, and by 2018 people were already talking mostly about debt. The Federal Reserve had been shrinking its balance sheet and preparing to release some of the pressure. But after several historic circuit breakers in 2020, the Fed went straight into unlimited QE, flooding the market with liquidity to keep the economy from sliding into recession.
That was an emergency measure. Once you inject too much, inflation becomes visible by the end of 2021. At that point, if rates do not go up, confidence in the dollar starts to wobble. But once rates do rise, the cost of capital increases, investment weakens, and the economy quickly heads toward recession. My guess is that this round of tightening will eventually just bring things back to roughly where they were before the pandemic.
The dollar is still the world’s currency even after all that money printing. As long as people assume the United States will not default, they will continue to accept it in trade. The result is that America can print money and exchange it for industrial goods and raw materials from around the world. It is a kind of empty-handed bargain. Countries with trade surpluses receive dollars and then recycle them into U.S. Treasuries because those bonds still carry high credibility. On paper, America is the one taking on debt. In practice, net-exporting countries are handing over industrial goods and raw materials in exchange for piles of U.S. government bonds. As long as America can keep paying the interest, no one really minds that the debt keeps growing.
In this global trade framework, everyone is tied together by the same assumption: the U.S. will always be able to pay, and dollar dominance will remain intact. But ever since the dollar was severed from gold, it has been nothing more than a credit currency. Credit has value only if people believe in it, and belief is always shaped by emotion. If the old move away from gold was necessary because gold could no longer measure human labor, then today our faith in nation-states and exchange systems also seems unable to measure labor in any meaningful way. States rise and fall. They are not eternal.
A lot of people have made this argument before. It is usually framed through personified nations: America does this, China does that. But in the real world there is no country with a single personality. What we call a nation often sounds more like a government wearing a face. I think there is another way to look at the problem: through wealth levels, rather than countries. If you strip away national differences, the debt problem looks very different.
The rich across the world are becoming more and more alike, while poverty remains wildly different from place to place. Rich people can own assets in many countries and price them in any currency. They can have Swiss bank accounts, trusts set up to avoid inheritance tax, offshore companies to dodge business taxes, and friendships with wealthy people from other countries. Their capital can be handed over to the smartest managers available. A ten percent annual return may even feel low to them, and in many cases they can ignore the economic crisis altogether and buy up cheap, fast-growing assets around the world.
Poverty, on the other hand, looks different in every country. In developed countries, poor people may earn about the same as middle-income people in some developing countries. And the poor in different developing countries live under very different conditions. Some may resemble Yemenis chewing khat all day and not working. Some may work hard but still not earn enough to pay rent. Some place their hopes in the afterlife and turn to religion. Others have no idea that any other way of living exists and remain trapped inside inefficient systems of production and daily life.
So where does the government fit in? Can it hear everyone’s demands? If not, who exactly is it speaking for? Once you remove the national filter, governments large and small are really dealing with the same contradiction: the conflict between the interests of a small number of people who control resources and power, and the interests of the majority who control votes.
This contradiction exists regardless of ideology. Any government that handles it badly has no basis for lasting prosperity. The rise of populism, religion, or conservatism is often just the outcome of that contradiction being left unresolved. Even North Korea, if it stopped repeatedly brainwashing people with Juche propaganda, could see its regime collapse overnight. In the end, every government is dealing with the tension between politics and economics.
If politicians represent the wishes of capital owners who concentrate economic resources, then the people left behind by globalization will elect an outsider. If politicians try to cater to the feelings of everyone else, then they will introduce more tools of ideological control. If they cannot solve the basic problem of feeding the majority, then they will probably try to rally the country through war. When things are unstable at home, it becomes necessary to create an external enemy. Without that, political legitimacy is hard to sustain.
In fact, governments around the world have already been moving in that direction. Last year, several developed countries came together to set a global minimum tax rate. That was a way of splitting up the land of the rich on a global scale and making tax havens harder to survive. At the same time, countries have been cracking down on the monopolies of tech giants, because tech companies are also a kind of privileged class and could one day challenge government power. That is why the pressure against them has spread worldwide.
But when developed countries band together, they also become a kind of club for the rich. They can grant one another tariff exemptions. Poor countries, by contrast, cannot develop without trade surpluses. If pushed too far, everyone turns inward and closes the door. Living costs can rise instantly for everyone. Once the majority in rich countries starts feeling the pain, they will eventually push for change from within.
The problem now is that governments are unable to truly unite on a global scale to deal with the trend toward rich people becoming more alike and poor people becoming more different. Instead, they are being captured by interest groups and dragged backward into protectionism, religious politics, and the stirring up of ethnic, regional, racial, and national hostility. These divisions cannot really survive under economic equality. If two people have enough to eat and drink, it does not matter whether their skin color, race, nationality, or hometown is different. They may joke with each other, but they will not start a fight over it. Winning would not bring much extra happiness, and losing would not take much away. They are more likely to become friends. Friendship happens between classmates and colleagues. It is much harder between superiors and subordinates. Where economic status is unequal, social exchange is never truly open.
The answer to breaking this trend is hidden in the trend itself: if the rich are becoming more alike, then the poor should become more alike too. The simplest way is to remove restrictions on population movement. The rich have already lost those restrictions anyway. The poor in rich countries can move to poorer countries to lower their cost of living. The poor in poor countries can move to richer countries to earn money. A unified minimum tax should apply worldwide, and wherever people go they should only need to pay local taxes to the local government. That would also make it less attractive for capital to chase every last pocket of cheap value. Taxes would be roughly the same no matter where money goes.
Another step would be to convert all debt into equity and abolish bonds as a financing method that pushes risk into the future and turns it into the next crisis. Let all risk be shared by everyone and released immediately. If a company collapses, its equity goes to zero and there is no debt burden left behind. Borrowing would become a form of taking a stake. Fixed-interest financing should disappear, since at this point fixed returns are mostly unable to beat inflation anyway and are already losing value.
People should be responsible for their own lives and their own choices. Any kind of investment should require passing a single exam. Once you pass it, you take full responsibility.
The same logic applies to becoming a parent. If you want to be a social person, there should be some form of assessment. If someone cannot pass that test, then chances are they will not raise a child well either. A civilized society has to be sustainable. It should cultivate mature adults who can withstand the risks of life, not oversized children who lose control at the slightest irritation and immediately look for someone else to blame. To do that, there must be some threshold. It can be low, but it cannot be absent. Otherwise, what you end up raising are parasitic failures, and civilization is finished.
Human beings are, after all, social creatures. If we want rights, we also need responsibilities. We should respect one another instead of hating one another. We should pursue freedom while also taking fairness into account. These are things governments are supposed to guide, not inflame.
A government should mediate conflicts among people, not just between countries. Conflicts between states can always be translated into conflicts between individuals. The task is to find them, reveal them, and solve them.
Years ago, when the con artist Rasputin? no, not Rasputin — the famous swindler Ludwig? In any case, when one of those great fraud artists was locked up in prison, he came up with ten rules for scammers. I think everyone should learn them. Not because we need to cheat people, but because they are genuinely useful for spotting cheats or exposing hidden conflict.
- Be a patient listener. Don’t talk too fast; that is how you succeed.
- Never look bored.
- Wait for others to reveal their political views, then agree with them.
- Wait for others to reveal their religious leanings, then say you are the same.
- Casually drop a slightly dirty joke, but do not follow up unless the other person shows strong interest.
- Never talk about illness unless you need to show exceptional care or concern.
- Never ask about someone’s private life or their circle of friends. They will tell you eventually.
- Never brag. Let your importance emerge slowly.
- Never look sloppy.
- Never get drunk.
The internet these days is full of hostility. So many people speak from the position of the perfect victim, describing the injustice done to them while refusing to see their own faults. Their arguments are presented with great confidence, yet the holes in them are obvious. They rush to label every problem and then launch into attack mode, without noticing the internal contradictions that actually produce many of these problems. They are obsessed with great-power rivalry and ignore the ordinary people in every country who are just trying to make a living.
Really, how much hatred can there be between human beings?
If one day you also end up living alone in a foreign country, in an apartment at the foot of a hill, trying to scrape by remotely, surrounded by people speaking a language you understand but are too tired to listen to, with traffic moving outside your window while the trees stand still — and if inside your main room there is only a table, a chair, a lamp, a wireless router, and a computer on the table, while the bedroom has only a bed — what would you think about, and what would you write?
I do not know. So I put myself in that setting. And now, looking at it honestly, I still do not know. My thoughts are still messy, but something vague seems to be taking shape.