The global economy is shifting again, signaling the end of an era that began in the 1970s with neoliberal policies driven by American influence. These policies were supposed to bring prosperity through free trade and the strong presence of the dollar. Instead, they led to problems. Factories moved to Asia, financial markets became places for the rich to play, and the wages of regular American workers stayed flat even though work output increased. For years, warnings about inequality and instability were ignored. Now, the effects are clear, showing up in both finance hubs like Wall Street and in many western political changes.
At the heart of the issue is a widening gap: Over 40 years, U.S. productivity went up 80%, but most workers’ wages increased only 12%. The benefits of growth mostly went to owners, whose profits and bonuses grew while factories closed and pensions disappeared. The empty factories in the Midwest and the gig economy’s unstable jobs show this betrayal. Leaders like Donald Trump talk about “bringing back” past industrial success, but things like tariffs and trade wars are not realistic solutions.
Think about what would happen if iPhones were made in the U.S.; the cost would skyrocket to about $25,000 per phone. This idea ignores the reality that global supply chains are focused on cutting costs, and tariffs won’t revive a system reliant on cheap labor. The real agenda isn’t creating blue-collar jobs but increasing wealth for the rich. Tariffs distract from tax cuts for the wealthy, while workers in states like Ohio are sold false dreams. If the aim truly was to lift up the working class, focus would be on sectors like healthcare, education, and caregiving, where jobs are needed but not well paid. Why not tax large profits and invest in affordable housing, better pay, or universal services? These approaches were common in mid-20th-century social democracy and led to significant equality. Yet today, they are seen as extreme, even as inequality continues to grow.
It’s unfortunate that America’s internal struggles impact the entire world. Unpredictable tariffs and financial instability affect economies from Vietnam to Pakistan. Developing countries, already struggling with early factory closures and debt, face more challenges as America falters. Meanwhile, in the West, the backlash against neoliberal policies leads to fear of outsiders and isolation instead of togetherness.
There’s irony in blaming Mexican migrants or Chinese factories for problems created by a system designed to benefit a few. The real crisis is a lack of new ideas: sticking to a broken system while ignoring better alternatives. Moving forward should involve creativity, redistributing wealth, controlling corporate power, and looking beyond GDP to measure growth. Until we achieve this, the world will be impacted by the decline of a once-dominant power, reminding us that without fairness, there can be no true stability.
