A Missed Opportunity in Munich

In his keynote speech at the sixty-third annual Munich Security Conference on February 14, American Secretary of State Marco Rubio missed an opportunity for the Trump administration to set the Western alliance on a new course that would recognize the desires of developing countries for access to capital and the freedom to trade, which is the driving force of the BRICS movement. A further appeal of the BRICS movement is the willingness of Eastern capital, mainly Chinese, to invest in developing countries without interfering politically and for trade settlement in honest money—gold—outside the failing and sanction-prone fiat dollar settlement system. Instead he harkened back to the Cold War, in which NATO—with the US as the primary military and economic power—stood firm against an aggressive Soviet Union.

Reviving the Cold War

Those days are over, and good riddance to them. Nevertheless, it now appears that the Trump administration would like to revive them by mischaracterizing the economic challenges facing the West. In his opening remarks, Rubio struck a nostalgic note and regrettably equated modern Russia with its Soviet past. Just think of the howls of protest that would emanate from the West if modern Russia equated modern Germany with its National Socialist past. This is not something that we should desire from someone who is supposed to be our nation’s chief diplomat. Rather he should present a positive vision for worldwide peace, freedom, and prosperity.

Free Trade as the Scapegoat

The trajectory of the speech was revealed early on when he stated that the West had “ignored the lessons of over 5,000 years of human history” because “we embraced a dogmatic vision of free and unfettered trade…” According to Rubio, this resulted in “shuttering our plants, resulting in large parts of our societies being deindustrialized, shipping millions of working and middle-class jobs overseas, and handing control of our critical supply chains to both adversaries and rivals.” Later, he called deindustrialization a “conscious policy choice” (really?) and decried “the loss of supply chain sovereignty” as “not a function of a prosperous and healthy system of global trade.”

All this is pure humbug. For one thing, there is no consensus among economists that the US and the West in general have deindustrialized. Professor Don Boudreaux of George Mason University, through his daily Café Hayek blog, has countered the deindustrialization argument for years with solid facts. Furthermore, any loss of heavy industry as a percentage of global heavy industry does not mean that other nations are stealing something that solely belongs to us by right or that the US government should take steps to guide capital away from more profitable high-tech and other enterprises and back to the black smokestack days of yore.

Linking Mass Migration to a New Industrial Policy

Curiously, Secretary Rubio claimed that mass migration justified the case for a new industrial policy. Mass migration may indeed be a problem, but Secretary Rubio failed to explain how the latter would cure the former. Taking it for granted that one was needed, he listed several goals of such a policy, which could have been “ripped from the headlines” of today’s mass media—encouraging commercial space travel, cutting-edge artificial intelligence, industrial automation, supplying our own critical minerals, and, of course, taking back control of our own supply chains.

Missing was a defense of economic freedom, the rule of law, and other pillars of laissez-faire capitalism such as sound money, minimal regulation, limited government, and low taxes that propelled the West to unprecedented levels of strength, security, and prosperity.

The Real Goal of Rubio’s Speech

The goal of Rubio’s speech had less to do with security and more to do with convincing its members to remain in the failing fiat dollar-centric world enforced through sanctions and suspension of access to trade settlement via the US run SWIFT messaging system. Meanwhile, China is leading the BRICS nations into the future via adherence to millennia-old truths (i.e., that gold is money and trade is win-win). Rubio’s speech may have anchored America’s failing foreign policy among its European allies, but the real challenge comes from our Pacific allies, primarily Japan and South Korea. India is straddling the fence for now, but the writing is on the wall that this rising economic powerhouse will find a home with the BRICS, to which it is already a member (the “I’ in BRICS).

Do not be surprised if the audience’s applause to Rubio’s speech turns out to be short lived. He offered nothing new and much that would result in less security for its members.