When the rock band Scorpions performed its iconic hit song Wind of change live in Berlin in 1990, singing the words “Did you ever think that we could be so close, like brothers?”, the wall had just come down, and Europe was being swept in a tide of openness, fraternity and a melting of an icy wall of oppression through division. The song’s video has been watched by 350 million people.
Berlin and Germany will soon celebrate their 30 years of unification. Yet ironically across the pond we have seen the rise of another wall, having also commenced in the 1990s, which could end up being half the length of the Great Wall of China. It would effectively divide North America from the south, if it stretches 3,000km from coast to coast, as President Donald Trump has promised.
To be sure the wall is not something that has just sprung out of some election campaign hat. Its construction has been under way ever since the first President Bush, and continued relentlessly under the next three presidents, with a whopping 1,000km metal wall built in just the last two years at a staggering cost of $6 billion, on the watch of the smooth talking, all promising Obama.
The US is caught in the grips of a fatal economic flaw. Its powerhouse has risen from its consumption rather than its production
To complete it could cost up to another $23 billion. The wall has been 30 years in the making, but has only just hit the public consciousness, which may oddly enough finally lead to its downfall, or to that of the economic ties between two great American nations.
“Mr Gorbachev, tear down this wall!” were the famous words uttered by President Ronald Reagan. Yet once Gorbachev complied, virtually all of Reagan’s own successors promptly embarked upon their own wall building, south of their border.
Despite the latest White House rhetoric, many titanic battles lie ahead. The parts of the country that have not yet been walled up lie along the Rio Grande, the natural border between Texas and Mexico, and there is a 1970 treaty that forbids any disruption of the flow of the river. Then there is vast mountain terrain which is considered impossible to wall, with some peaks reaching almost 3,000 metres. There is the issue of private and State property that would lead to inevitable and interminable legal wrangling.
The wall would cross the third largest reservation in the US, where the indigenous Americans, separated by what they have always seen as an artificial border, have been crossing at will for generations, as they roam across their common ancestral lands.
Then there are the three national wildlife refuges in the Rio Grande Valley, which bring almost half a billion dollars annually to the US in wildlife watching tourism, which would be under serious threat by a wall running right through.
The ultimate walls are however made neither of metal nor of stone. They are those that divide people rather than nations. Neo-colonialist policies in the past 30 years have already isolated the US from most of the world, as so many nations struggle to free themselves from the yokes of poverty, internal strife, foreign interference, military bases and the rape of their natural resources.
As any good entrepreneur will tell us, success depends upon keeping one’s customers satisfied. Trump seems to want more customers as he seeks to develop his country’s manufacturing base. But he is not going to achieve this by building walls and tariffs.
He complains about trade deficits, like the $60 billion one with Mexico. But how could such deficits be otherwise when his country guzzles up over quarter of all products consumed globally, and has far more spending power? Levies imposed upon Latin American products would only increase hardship for the average citizen in the US, who would probably be hit twice over if the Mexicans decide to retaliate by introducing some eco tax for tourists coming from north of the border.
In a typical stroke of neo-colonial fortune, for the first time the US has, in 2016, just become a net exporter of oil to Mexico, having exported more refined oil back south than it imported crude oil. This is certainly going to be a bitter pill for the Mexicans to swallow, buying back their own oil.
Completing a wall across mountains, reservations and rivers will only serve to widen the growing gap between the US and its neighbours. My guess is that this will backfire, and we will see Mexico and others join the BRICS nations, the new alliance between Brazil, Russia, India, China and South Africa, that seeks to shed its dependence upon an economic bloc of developed nations, which have continued to call the shots throughout the post-colonial period of the last century.
The US is caught in the grips of a fatal economic flaw. Its powerhouse has risen from its consumption rather than its production, paid for by ever- increasing debt and in a fiat currency artificially propped up by its status as the world reserve currency, courtesy of the monetary and financial conference at Bretton Woods, in 1944.
Treaties following major wars always consolidate more power in the victors’ hands. Trump has identified the symptoms of the American economy’s malaise, but not its disease. At the time of Bretton Woods, the US held two-thirds of the world’s gold and had used its newly acquired muscle to insist that the world monetary system be tied to both gold and the US dollar, which in turn was pegged to gold.
Today the dollar is pegged only to the printing press. Off the charts and out of control American consumerism and military spending have been paid for by money that effectively does not exist, in a currency that remains artificially strong on the backs of developing economies.
Therein lies the nation’s inevitable economic downfall, and building up walls, military bases, mistrust, adversaries and economic sanctions, will not change this. These can only exacerbate and accelerate the fall.
But in the long-run these might also just save other nations from going down with a sinking ship, caught in the enormous suction and turbulence that this causes, as circumstances force them to diversify and thus distance their own economies from the overheating one that is Uncle Sam’s.
Rodolfo Ragonesi is a lawyer and researcher in international affairs.