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Well before his 2010 book The Globalisation Paradox came out, Dani Rodrik had blogged about his theory of the “inescapable trilemma" that countries face. Simply put, only two of three conditions—deep economic integration, sovereignty of the nation-state, and democratic politics—are possible for a country to meet at any given point of time, said his 2007 blog. I am going to replace “deep economic integration" with “elite interests", and then reduce it to a theory of “inescapable danger". Here is my theory: When elite interests are threatened, they sacrifice national sovereignty and democracy to protect themselves. America finds itself in such a situation now.

I have support for my theory from S. Jaishankar, India’s external affairs minister. Okay, I am exaggerating. In his brilliant book The India Way, in chapter 5, he creates his own trinity—of globalization, regime credibility and a return to history. He says that the link between the three is unmistakable. I will rephrase him a bit to enunciate my logic. Globalization makes democratic regimes eventually lose credibility with the public making a return to history inevitable. According to him, we should expect an uneasy co-existence and shifting equations between globalist and nationalist forces because neither can prevail and the world that it would produce would be very contentious. But, he also wrote that even socialism had acquired national characteristics and thus affirmed the enduring appeal of nationalism. Throw “democratic politics" into the mix, then one can suggest that globalization would lose out eventually. Whether he intended it or not, Jaishankar has laid out the battle lines in the upcoming American election.

At the political and popular level, America is alive to the threats it faces from China. It is a different ball game for the corporate, academic, media and sporting elites. For them, globalization was synonymous with profiting from the rise of China. What stands between them and their perpetual enrichment through their China connections is Donald Trump. In other words, they are resisting the rise of nationalism and hence a return to history. The stakes have only grown bigger over the years since they first failed to stop Trump back in 2016.

For example, Ivy League institutions received $113.4 million in donations from Hanbun, a propaganda arm of the Chinese government, between 2012 and 2018. The institutions reported about $15.4 million (US Department of Education, 12 February 2020). A report in Nikkei Asia Review on the reluctance of corporate America to relocate from China opens a small window to the corporate rationale. The article notes, “Of more than 200 respondents that own or outsource manufacturing operations in China, 70.6% said they do not intend to shift production out of the Asian country in a survey published this week by the American Chamber of Commerce in Shanghai. Just 3.7% are moving some production out of China to the U.S. or its territories as Trump had hoped his tariffs would make them. And of the companies that are moving some production out of China, just 18.2% intend to move more than 30% of it."

For Wall Street, the stakes are higher. Five big US banks had a combined $70.8 billion of exposure to China in 2019, with JP Morgan alone ploughing $19.2 billion into lending, trading and investing activity. That’s a 10% increase from 2018. As of 5 August, American bank fees from initial public offerings, follow-on share sales and convertible bonds issued by Chinese companies were up about 24% from a year ago, at $414 million. They accounted for 43% of the total fee pool of $958.9 million. Morgan Stanley alone saw a 50% increase in its fees earned from China listings this year over 2019. According to newspaper reports in February, the National Basketball Association stood to lose about $400 million on account of the American rift with China.

Acutely aware of the enduring appeal of nationalism and hence desperate to obfuscate what is at stake, America’s elites appear to have painted this November’s White House election as a battle between tyranny and democracy and between Caucasian supremacists and the rest. Claiming to want to heal America, they seem to have divided it. If they win, their next battle would be with American millennials who favour socialism because globalization has passed them by.

But, I would like to leave readers with the questions that only history can answer: What is in America’s long-term interest? Will it be good if the agenda of its elites fails now, or will it be good if they win now so that they eventually lose to millennials? Is there a big risk that in the meantime their agenda, together with China’s desperation and aggression, could cause colossal damage to the world and to America? Will Trump address America’s economic challenges in his second term? Or, is he likely to leave it more economically vulnerable to an assault by China? Or, will he have neutralized China effectively by then, giving America more time to set its own house in order?

A lot is at stake. This is not just another election to the White House, between two individuals or two parties; it is an election between two nations.

V. Anantha Nageswaran is a member of the Economic Advisory Council to the Prime Minister. These are the author’s personal views.

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