Wolff Responds: "The Dilemmas Of Europe" Dated February 19, 2025
What this covers
Today's Wolff Responds, Professor Wolff discusses the obstacles Europe faces as its economy declines as well as the decline of the American Empire forces it to pull away from Europe.
Professor Wolff's latest book "Understanding Capitalism" is available now for purchase: https://linktr.ee/understandingcapitalism
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Trump's aggressive foreign policy moves (annexing Canada/Greenland, seizing Panama Canal, withdrawing from Europe) represent a crude 18th-century colonial response to managing American imperial decline, which may provide short-term fiscal relief but will worsen long-term strategic problems by destroying allied relationships and undermining American soft power.
- The US Empire peaked around 2010-2015 and is now in irreversible decline relative to China and the BRICS bloc
- Trump's military and economic coercion of allies is a short-term fix (like burning house clapboards for heat) that destroys the structural foundations of American power
- Previous administrations failed to develop a coherent strategy for managing decline, forcing Trump into reactive ideological responses
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The United States inherited the declining British Empire and spent the 19th century becoming one of two major challengers to British dominance, with Germany being the other challenger until both destroyed each other in World War I, leaving the field entirely to the United States.
“The United States inherited actively the declining Empire of Britain... across the 19th century the British Empire had a harder and harder time holding on and the United States as an independent country came more and more to represent one of the two major challenges to the British Empire the other one was Germany in World War I the Germans and the British destroyed each other and that left the field entirely to the United States”
The US debt level is out of control with the government running trillion-dollar deficits as its debts outgrow its GDP on a scale that has worried equivalent policy makers around the world for a long time, making 'business as usual' economically unsustainable.
“The debt level in this country out of control the government running trillion doll deficits as its debts outgrow its GDP on a scale that has worried equivalent policy makers around the world for a long time no you can't go on as usual”
Trump is drawing inward to save money to avoid the extra borrowing of deficits he inherited from Biden while simultaneously wanting to continue the 2017 tax cuts for business and the rich, creating an internal contradiction in how he plans to fund both obligations without increased borrowing.
“he needs to take care of our business at home and you either give us the equivalent of what we give you or all the rest is over and indeed he wants to say that to the whole world he's drawing in to save money to avoid the extra borrowing of the deficits he inherited from Mr Biden he wants to continue the tax cuts of course that he gave to the business and the rich in 2017 and how's he going to do that without borrowing”
China and the BRICS are now a formidable alternative economic, political, and soon-to-be military adversary of comparable size to the United States, unlike the Soviet Union which was never an economic competitor because it was too poor and industrially underdeveloped.
“the United States we have now to face that China and its allies the bricks are a formidable alternative economic and therefore political and very soon to be military adversary of a comparable size the Soviet Union was never an economic adversary it was always much too poor and much too less developed industrially China has neither of those problems because of its spectacular outgrowing of the United States economy over the last 30 to 40 years”
China and its BRICS allies represent a formidable economic, political, and emerging military adversary of comparable size to the United States, fundamentally different from the Soviet Union because China has neither poverty nor industrial underdevelopment and has experienced spectacular economic outgrowth of the US over 30-40 years.
“the United States we have now to face that China and its allies the bricks are a formidable alternative economic and therefore political and very soon to be military adversary of a comparable size the Soviet Union was never an economic adversary it was always much too poor and much too less developed industrially China has neither of those problems because of its spectacular outgrowing of the United States economy over the last 30 to 40 years”
The United States inherited and actively took over the declining British Empire after World War I, organizing and consolidating its own empire which it grew for almost a century until around 2010-2015 when the American Empire peaked and began its decline.
“The United States inherited actively the declining Empire of Britain...the United States as an independent country came more and more to represent one of the two major challenges to the British Empire...that left the field entirely to the United States which starting with the end of World War I organized and Consolidated its own Empire which it used and grew for almost a century till around 2010 2015 at that point the American Empire peaked and began its decline”
The decline of the American Empire will continue regardless of Trump's interventions; the real responsibility lies with Trump's predecessors and Trump himself for not seeing the situation correctly and reacting too bluntly, too quickly, too exaggeratedly, and too trapped within old ideologies to provide a genuine solution.
“that's where we are and if that's a grim situation then thank the predecessors of Mr Trump and now Mr Trump for not seeing the situation in the way it ought to be but reacting too bluntly too quickly too exaggerated ly and too trapped within the old ideologies to get us out of this one the decline of the American Empire will continue”
Deep Seek has demonstrated that even in the most advanced levels of high-tech innovation, the United States faces serious economic competition from China, showing that American technological dominance is no longer assured.
“the Chinese are out competing in you in one industry after another with that shock recently of the deep seek showing that even in the most advanced levels of Hightech the United States has a very serious economic competitor”
Trump's coercive approach to Europe is threatening to withdraw US protection and military financing of European defense, saying 'we're out' unless Europeans pay the equivalent of what the US currently provides or accept the dissolution of the alliance.
“now the one in Europe we're going to say to the Europeans bye-bye we're not protecting you anymore we're not going to finance your Wars anymore we we're out we need to take care of our business at home and you either give us the equivalent of what we give you or all the rest is over”
The American Empire peaked around 2010-2015 and has been in decline since that point, a process that can be observed in specific defeats such as Vietnam (1975), Afghanistan (beginning of century), Iraq, and the ongoing loss of Ukraine, as well as in the rise of China as a real economic competitor.
“around 2010 2015 at that point the American Empire peaked and began its decline... you might have seen the American Empire's decline in its defeat in the war in Vietnam that was way back in 1975 or its defeat in the Afghan war at the beginning of this Century or in the Iraq Adventure in years after that or in the loss of Ukraine which is going on as we speak”
Germany and Britain destroyed each other in World War I, leaving the field entirely to the United States to organize and consolidate its own empire, showing how great power conflicts create power vacuums filled by rising powers.
“the Germans and the British destroyed each other and that left the field entirely to the United States which starting with the end of World War I organized and Consolidated its own Empire”
The American Empire's decline can be evidenced in multiple defeats: the Vietnam War (1975), the Afghan War defeat at the beginning of this century, the Iraq Adventure, and the ongoing loss of Ukraine, showing a pattern of military failure across decades.
“you might have seen the American Empire's decline in its defeat in the war in Vietnam that was way back in 1975 or its defeat in the Afghan war at the beginning of this Century or in the Iraq Adventure in years after that or in the loss of Ukraine which is going on as we speak”
The United States inherited the role of global hegemon actively from Britain, showing a historical pattern where declining empires pass their dominance to rising powers—Britain to the US and now potentially the US to China and its allies.
“The United States inherited actively the declining Empire of Britain...there's a certain historical irony here because the United States of course was a part of the British Empire before in a violent revolution it separated itself from the British in two Wars the war of independence and then the war again in 1812 to reaffirm that Independence and so there's a certain irony that across the 19th century the British Empire had a harder and harder time holding on and the United States as an independent country came more and more to represent one of the two major challenges to the British Empire”
US government debt levels are out of control, with the government running trillion-dollar annual deficits while total debt is outgrowing GDP on a scale that has long worried equivalent policymakers around the world.
“The debt level in this country out of control the government running trillion doll deficits as its debts outgrow its GDP on a scale that has worried equivalent policy makers around the world for a long time”
Trump cannot continue existing US policy because the signs of unsustainable imperial decline are everywhere, including trillion-dollar deficits, uncontrolled debt, and the shock of DeepSeek demonstrating that the United States has serious economic competition even in the most advanced levels of high-tech.
“you can't continue the signs are everywhere the debt level in this country out of control the government running trillion doll deficits as its debts outgrow its GDP on a scale that has worried equivalent policy makers around the world for a long time no you can't go on as usual... the Chinese are out competing in you in one industry after another with that shock recently of the deep seek showing that even in the most advanced levels of Hightech the United States has a very serious economic competitor”
Trump's approach is like burning the wooden clapboards from the side of a house to fuel a fireplace: it will provide heat and comfort in the short run, but following Grandma's wisdom, burning your own house makes your problems worse in the long run and ultimately destroys what it was meant to preserve.
“what he is doing is like the people who have no longer in the wintertime a reliable source of heat so one of the folks in the family gets the clever idea rip the clapboards off the side of the house and throw them into the fireplace the resulting fire will make heat in the house it will it'll be more comfortable the winter will be less troubling but Grandma's words will show the wisdom if you burn the clabbers of your own house the comfort and the Heat will be in the short run in the long run you make your problems worse”
Trump's approach to imperial decline is analogous to a family with no reliable winter heat source ripping clapboards off the side of their house and burning them in the fireplace: it produces short-run comfort and warmth, but if you burn the clapboards of your own house you make your long-term problems worse.
“what he is doing is like the people who have no longer in the wintertime a reliable source of heat so one of the folks in the family gets the clever idea rip the clapboards off the side of the house and throw them into the fireplace the resulting fire will make heat in the house it will it'll be more comfortable the winter will be less troubling but Grandma's words will show the wisdom if you burn the clabbers of your own house the comfort and the Heat will be in the short run in the long run you make your problems worse”
Trump is 'savaging' US allies and friends (Canadians, Mexicans, Danes, Panamanians, Europeans) through coercive demands and implicit military threats in his foreign policy approach to resolving American imperial decline.
“one of the things he's doing is savaging our us allies and friends the Canadians the Mexicans the Danes the panamanians wow now the Europeans wow”
Trump and his team are deeply lost in ideology despite seeing that something must change about America's trajectory; they remain trapped in old ideologies even while attempting to address the decline.
“are they seeing clearly no they are lost in ideology as deeply as anyone but they do see that something has to change because the trajectory of the United States is downward compared to the position it had in the world and on that Trump's quite right and so he's doing what his ideology dictates plus a little more because he sees that things have to change but he still stuck in the old ideology”
The Trump Administration represents a delayed political response to changed global reality, specifically the declining US Empire that can no longer be mistaken by honest observers looking at real problems.
“what we see in the Trump Administration is as is typical the delayed political response to the changed Global reality and by that I mean the declining us Empire which can no longer be mistaken if you're honest and if you look at real problems which always at least a portion of American leaders do”
Trump's policy response to American imperial decline, while different from Democratic approaches, represents a delayed political response to changed global reality and is ideologically constrained, not strategically clear-eyed, even though Trump sees that something must change.
“what we see in the Trump Administration is as is typical the delayed political response to the changed Global reality and by that I mean the declining us Empire...the trumps and those he gathers around him are they seeing clearly no they are lost in ideology as deeply as anyone but they do see that something has to change”
Trump and his political outsiders can see the need for change more clearly and sooner than establishment Republicans (the Bushes) because they are not as deeply invested in the old political patterns that went with the United States being on top of the world.
“the Democrats are more stuck in the old political patterns that went with the United States being on top we might have expected the Republicans to stick in the mud that way and many of them did the bushes and all of those folks but there were the newcomers The Outsiders and they were able to see it a little clearer a little sooner the trumps and those he gathers around him”
Trump wants to withdraw from global security and economic commitments worldwide while continuing tax cuts for business and the rich from 2017, and plans to reduce borrowing to avoid increasing deficits, creating a fiscal contradiction he must resolve through alliance extraction.
“he wants to say that to the whole world he's drawing in to save money to avoid the extra borrowing of the deficits he inherited from Mr Biden he wants to continue the tax cuts of course that he gave to the business and the rich in 2017 and how's he going to do that without borrowing and therefore violating his promise not to do that how is he going to cope with all the foreign and domestic difficulties of a declining Empire”
The ongoing decline of the American Empire will continue despite Trump's interventions, and this grim situation results from Trump's predecessors and Trump himself not seeing the situation clearly and reacting too bluntly, too quickly, too exaggerated, and too trapped in old ideologies.
“that's where we are and if that's a grim situation then thank the predecessors of Mr Trump and now Mr Trump for not seeing the situation in the way it ought to be but reacting too bluntly too quickly too exaggerated ly and too trapped within the old ideologies to get us out of this one the decline of the American Empire will continue”
Trump wants to extend his 2017 tax cuts for business and the wealthy but refuses to increase borrowing to pay for them, creating a fiscal constraint.
“he wants to continue the tax cuts of course that he gave to the business and the rich in 2017 and how's he going to do that without borrowing and therefore violating his promise not to do that”
Democrats remain stuck in old political patterns that went with the United States being on top, while Republicans and newcomers like Trump and those around him are able to see the need for change more clearly and sooner than establishment figures like the Bushes.
“the Democrats are more stuck in the old political patterns that went with the United States being on top we might have expected the Republicans to stick in the mud that way and many of them did the bushes and all of those folks but there were the newcomers The Outsiders and they were able to see it a little clearer a little sooner”
In the short term, Trump's coercive policies will help him accomplish some of the difficult things that need to be done in response to American decline, whereas the alternative (doing nothing and hoping) has not solved problems in the past and would not in the future.
“in the short run it'll help him do at least some of what he knows needs to be done and the alternative that he inherited was to do nothing and hope somehow that would solve the problem which it hasn't in the past and it wouldn't have in the future either”
Trump's foreign policy approach of annexing Canada, seizing the Panama Canal, and taking Greenland represents a reversion to crude 18th-century colonialism rather than a coherent strategy for addressing American decline.
“in order to become stronger and thereby push against the weakening of the American global position he reverts to a kind of 18th century crude colonialism he's gonna take Canada and make it a 51st state he's going to take the Panama Canal he's going to snatch Greenland these are extraordinary acts directly hurting and confronting allies Panama Canada Denmark no conversation no meetings implicit threats of military but simply we're going to take it”
Trump's approach to becoming stronger and pushing against American decline reverts to 18th-century crude colonialism, exemplified by his stated intentions to take Canada as a 51st state, take the Panama Canal, and seize Greenland, all without conversation or meetings with these countries and with implicit military threats.
“in order to become stronger and thereby push against the weakening of the American global position he reverts to a kind of 18th century crude colonialism he's gonna take Canada and make it a 51st state he's going to take the Panama Canal he's going to snatch Greenland these are extraordinary acts directly hurting and confronting allies Panama Canada Denmark no conversation no meetings implicit threats of military”
Trump's strategy of savaging US allies and friends (Canadians, Mexicans, Danes, Panamanians, Europeans) will help him accomplish in the short run what needs to be done, whereas the alternative of doing nothing and hoping would not solve the problem.
“well one of the things he's doing is savaging our us allies and friends the Canadians the Mexicans the Danes the panamanians wow now the Europeans wow in the short run it'll help him do at least some of what he knows needs to be done and the alternative that he inherited was to do nothing and hope somehow that would solve the problem which it hasn't in the past and it wouldn't have in the future either”
There was historical irony in the fact that the United States was originally part of the British Empire before violently separating through the Revolutionary War and the War of 1812, and then across the 19th century the US came to challenge the same British Empire it had separated from.
“there's a certain historical irony here because the United States of course was a part of the British Empire before in a violent revolution it separated itself from the British in two Wars the war of independence and then the war again in 1812 to reaffirm that Independence and so there's a certain irony that across the 19th century the British Empire had a harder and harder time holding on and the United States as an independent country came more and more to represent one of the two major challenges to the British Empire”
Trump is withdrawing US protection from Europe and ending US financing of European wars, telling Europeans that either they pay the equivalent of what the US provides or all existing arrangements end.
“now the one in Europe we're going to say to the Europeans bye-bye we're not protecting you anymore we're not going to finance your Wars anymore we we're out we need to take care of our business at home and you either give us the equivalent of what we give you or all the rest is over”
The colonial approach of taking territorial assets (Canada, Greenland, Panama) is being pursued without diplomatic engagement, simply with the implicit threat of military force.
“these are extraordinary acts directly hurting and confronting allies Panama Canada Denmark no conversation no meetings implicit threats of military but simply we're going to take it”
The US inherited and actively took over the declining British Empire's role in global affairs starting after World War I.
“starting with the end of World War I organized and Consolidated its own Empire which it used and grew for almost a century”
The dates given for empire decline (2010-2015, Vietnam 1975, etc.) are only signposts and should not be treated rigidly, as these are processes lasting for years rather than discrete events.
“yes these numbers of dates are just signposts they're not the exact time these are processes that last for years and they're just signposts these dates I give you not to be looked at it in any rigid sort of way”
The US grew and used its empire for almost a century until approximately 2010-2015 when it peaked and began to decline.
“which it used and grew for almost a century till around 2010 2015 at that point the American Empire peaked and began its decline”
The dates given for American imperial peak (2010-2015) are not meant to be interpreted rigidly, but rather as signposts within a longer process lasting years, since processes of imperial rise and decline are gradual rather than discrete events.
“yes these numbers of dates are just signposts they're not the exact time these are processes that last for years and they're just signposts these dates I give you not to be looked at it in any rigid sort of way”