Extract from Niall Ferguson’s The Ascent of Money: Populists reaped the

 The redundancies at Deutsche Bank show we’re still feeling the economic effects of 2008. In an extract from a new edition of his book The Ascent of Money, Niall Ferguson warns more turmoil is on the way


A man leaves the Deutsche Bank building in central London after the company announced the first of 18,000 job cuts globally LEON NEAL

Ten years ago, few people would have predicted that in the summer of 2019 Donald Trump would be campaigning for a second term as president of America. The idea that Boris Johnson would succeed Theresa May as Britain’s prime minister would have seemed deranged.

Yet it was not so hard to foresee that there would be a political backlash in the aftermath of the global financial crisis — a backlash as momentous and enduring as the economic repercussions, which continue to make themselves felt, not least on battered banks such as Deutsche Bank, which made the first of 18,000 planned job cuts last week.

“There will be blood,” I told an interviewer in February 2009, “in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilise some countries. It will cause civil wars to break out that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable.” I also hypothesised that some governments — notably the Russian — might resort to foreign aggression, though I reasoned wrongly that President Vladimir Putin would be deterred from invading Ukraine by the economic costs of doing so.

In 2011, as the crisis was spreading across the Atlantic to Europe, I added some more political predictions. The eurozone would not break up, I argued, but add new members. However, Britain would vote to leave the EU. And conflict in the Middle East would escalate.

The financial crisis did indeed have profound political consequences. In a number of Arab countries — notably Tunisia, Libya, Egypt, Yemen, Syria and Bahrain — there were revolutions, mistakenly dubbed an “Arab Spring” when they began at the end of 2010. In nearly all western democracies — Germany was a rare exception — incumbent politicians were displaced, often by younger figures less tainted by association with the financial elite and the policies it had favoured. In February 2014, following mass protests in Kiev and the flight of the country’s corrupt president, Viktor Yanukovych, Russian forces and pro-Russian separatists seized control of the Crimean peninsula and later the Donbass region.

In 2016, the unexpected results of Britain’s referendum on EU membership and America’s presidential election led many liberal journalists and academics to write fearfully about a general crisis of liberal democracy — a “democratic recession”, in the words of the Stanford political scientist Larry Diamond. A “deep gloom . . . arrived in September 2008”, wrote the New York Times columnist Frank Rich last August. “When the collapse of Lehman Brothers kicked off the Great Recession that proved to be a more lasting existential threat to America than the terrorist attack of seven Septembers earlier. The shadow it would cast is so dark that a decade later . . . one conviction . . . still unites all Americans: Everything in the country is broken. Unlike 9/11, which prompted an orgy of recriminations and investigations, the Great Recession never yielded a reckoning that might have helped restore that faith. The Wall Street bandits escaped punishment, as did most of the banking houses where they thrived. Everyone else was stuck with the bill.”

Left-wing politicians like Jeremy Corbyn called for bankers to be jailed for their role in the crisis

Left-wing politicians like Jeremy Corbyn called for bankers to be jailed for their role in the crisis PETER SUMMERS/GETTY

Yet the relationship between financial crisis and politics was not so straightforward. If it were, surely Bernie Sanders would now be president of America and Jeremy Corbyn prime minister of the UK. After all, they and left-wing politicians like them were the ones who called explicitly for bankers to be jailed for their role in causing the crisis. “It is an outrage that not one major Wall Street executive has gone to jail for causing the near collapse of the economy,” Sanders said in a statement published in October 2015.

This was a recurrent theme of his campaign for the Democratic Party’s presidential nomination the following year. Yet it was Hillary Clinton who won that contest — a candidate whose leaked speeches for Goldman Sachs and the fees she received came as no surprise to those familiar with the Clintons’ many years of sweet-talking Wall Street.

She in turn was defeated in the presidential race by Donald J Trump, a candidate who boasted in a May 2016 interview, “I am friends with all the major banks. They are dying to do business with me,” and proceeded to appoint Goldman Sachs alumni to key positions in his administration, including Treasury secretary, director of the National Economic Council and chief strategist. The self-proclaimed “king of debt” had not seemed self-evidently likely to be the beneficiary of a backlash against the financial system — which was one of the reasons so few professional pundits foresaw his victory.

History helps explain why the financial crisis was so much more beneficial to right-wing populists than to their left-wing counterparts. “Jail the bankers!” no doubt has its appeal as a slogan, but blaming economic hardships and disappointments on immigrants and foreigners would seem to be a more politically potent strategy.

Likewise, while “Regulate Wall Street more tightly again” resonates with some voters, “Make America great again” resonates with more.

There have been many financial crises in the western world since the first era of globalisation in the late 19th century. In most cases, right-wing populists have been the political beneficiaries. The best explanation would appear to be the greater psychological power of their arguments. The main losers of a financial crisis are a heterogeneous group, after all: they are not the welfare-dependent underclass, who had relatively little to lose, but the financially exposed or precarious middle class. People who have lost homes they owned or white-collar jobs that conferred status and income are not especially receptive to a classical socialist message of increased government control and fiscal redistribution. They are more likely to respond to the right-wing populists’ arguments for immigration restriction, trade protectionism or a departure from monetary orthodoxy.

On closer inspection, the populist backlash that produced not only Brexit and Trump but also six different populist or partly populist governments in Europe and twice as many successful populist parties was the result as much of increased immigration and increased inequality (or the perception of increased inequality) as it was of the financial crisis per se. In the case of America, the rise in the share of foreign-born workers in the population, the increase in the proportion of income going to the top 1% of households, the stagnation of the average household’s inflation-adjusted income, and the decline of prime-age male participation in the labour force were all trends — like the shocking increase in mortality rates for middle-aged non-Hispanic whites — that dated back to the turn of the millennium.

The financial crisis may have acted as a catalyst for popular revulsion against the political establishment, but it was by no means the sole cause of the “great revolt”. This helps explain the apparent paradox that the principal political beneficiaries of this revolt — the Brexiteers and the Trump economics team — were proponents of financial deregulation.

History loves irony. The financial crisis was predicted by few economists. Even fewer political commentators foresaw its consequences. But financial history is a better guide than economics or political science. A decade ago, the horses to bet on were the wild ones: the right-wing populists whose slogans were “America first” and “Take back control”. Today, I’ll place another bet: that these wild horses, with their shaggy blond manes and galloping deficits, are pulling us all towards the next financial crisis.

© Niall Ferguson 2019. Extracted from The Ascent of Money: A Financial History, an updated edition published by Penguin at £10.99

Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford

Wodehousian Boris Johnson is the past, not the future

 Like fears of a European superstate, party hierarchies are passé

Ours is a time of paradoxes. For example, even as information technology has empowered enormous and open-access social networks, politics in Britain continues to be run by the tiny and exclusive old-boy network. The contest for the Conservative Party leadership will decide who is Britain’s next prime minister. Seven of the original candidates were Oxford men. The two remaining candidates, Boris Johnson and Jeremy Hunt, are respectively the former president of the Oxford Union and the former president of the Oxford University Conservative Association. Johnson went to Eton; Hunt was head boy at Charterhouse.

Of Britain’s 54 prime ministers since Sir Robert Walpole, 27 were educated at Oxford and 19 at Eton. If Hunt defies the bookies by winning, he will be the second Old Carthusian to occupy No 10. (The first was Lord Liverpool.)

Johnson is believed by some to be the British Donald Trump. Aside from big hair and body mass, however, they have nothing in common. Although born into a wealthy family, Trump was and remains a social outsider, sneered at by Manhattan’s Upper East Side. When he announced his bid for the presidency four years ago, Arianna Huffington said she would cover his campaign in her Huffington Post website’s entertainment section. Johnson was already a member of Britain’s social and political elite before he even got to Oxford.

Trump was early to see the huge political potential of social media, joining Twitter in 2009. He has 61.5m followers. Johnson was late to the game, joining in 2015. He has 614,000-plus followers, 1% of Trump’s total — and fewer than a third as many as the Labour leader, Jeremy Corbyn.

Trump notoriously communicates at the level of a 10-year-old. Johnson speaks the archaic jolly-good-egg English of PG Wodehouse. Last week, apropos of the Irish backstop, he told the BBC’s Laura Kuenssberg: “We were the authors of our own incarceration.” Trump would simply have said: “We locked ourselves up.”

“People are yearning . . . for this great incubus to be pitchforked off the back of British politics,” Johnson declared. If MPs failed to deliver Brexit, they would face “mortal retribution”. Boris isn’t Trump. He’s Wodehouse’s spoof demagogue, Roderick Spode, the 7th Earl of Sidcup.

Moreover, this quintessential product of the old elite is three weeks away from being anointed prime minister by another old elite. At the last general election, 46.8m people were registered to vote, of whom 69% turned out. But Britain’s next leader will be chosen by one-third of 1% of the electorate: the 160,000 people who pay the £25 annual subscription that is required to become a member of the Conservative Party.

For most of the 20th century, mass-membership political parties were the organisations that ran democracies. In 1953, the Conservatives could claim to have nearly 3m members. The number of individual members of the Labour Party peaked in 1952 at 1,015,000; there were more than 5m corporate (mainly trade union) members.

Today, as in most European countries, the parties have withered away so that Social Democrats and Christian Democrats alike resemble enthusiasts for an anachronistic hobby such as stamp collecting.

The Tory party looks like a classic case of an obsolescent hierarchy: 97% white, 86% middle class (ABC1), 71% male, 54% from southern England and 44% over 65. Fully 84% oppose a second referendum on EU membership and two-thirds of Tory members favour a no-deal Brexit. Why not just ask the Oxford Union to choose the new prime minister?

Here is a further paradox: the British political landscape, under the strain of Brexit, increasingly resembles a continental European system. The age of two-party dominance, despite a fleeting resurgence in 2017, looks to be over. According to the Britain Elects poll aggregator, four parties now have the support of more than 15% of the electorate. YouGov places the Brexit Party — registered by the true British Trump, Nigel Farage, less than six months ago — level with the Tories on 22%. There are similar stories of fragmentation in most EU countries. Ironically, as Britons seek to leave the EU, they are becoming more politically European than they have ever been.

The final paradox has to do with the logic of Brexit itself. Since the 1980s, British Euroscepticism has rested on the belief that the European Economic Community that we joined in 1973 was inexorably morphing into a federal superstate. Here was Margaret Thatcher in her seminal Bruges speech from September 1988: “Working more closely together does not require power to be centralised in Brussels or decisions to be taken by an appointed bureaucracy . . . We have not successfully rolled back the frontiers of the state in Britain only to see them reimposed at a European level, with a European superstate exercising a new dominance from Brussels.”

For a time, especially as the continental leaders forced through their ill-conceived monetary union, this seemed a legitimate fear. Tory journalists, not least the young Johnson, covered every step in the direction of Bundesrepublik Europa with febrile excitement. True, some of the quotes were made up, but the central thrust of Euroscepticism was correct: with its distinctive history, Britain could not possibly tolerate the loss of sovereignty inherent in the federalist project.

The rise of the internet dooms the European federalist project as surely as it does the old political parties. A hierarchical structure of recognisably 1950s provenance, the EU has proved unequal to the challenges of three network-propelled crises: the US-originated bank panic, the Arab revolutions and the trans-Mediterranean migration surge. The political backlash against these failures, of which Brexit is just a part, has been a death sentence for the project of “ever-closer union”.

A new generation of right-wing populists — of whom the most talented is Matteo Salvini of Italy’s League party — has worked out that it’s easier to remain inside the European tent but constantly to bitch about it, than to exit. Soon there will be enough populist governments to erect a permanent barrier to further integration inside the council of ministers. In any case, almost no north European leader takes seriously the proposals for European reform of Emmanuel Macron, the French president. He is the last federalist standing.

So an Old Etonian is about to become prime minister because he looks “to the manner born” in the eyes of a tiny, self-selected electorate and is willing to promise them the magical Brexit they still believe in. In reality, Brexit is an impossibly expensive and complicated divorce from a spouse who is terminally ill. It’s like seceding from the Holy Roman Empire.

One day we shall realise what a colossal waste of time and energy all this has been. Speaking of modern networks, we would be vastly better off if we had spent the past three years mining bitcoin.

The revised and updated second edition of Niall Ferguson’s The Ascent of Money will be published by Penguin on Thursday

Norman Stone served up wise words to Thatcher, and Guinness and Nietzsche to me

 A mercurial genius, the Oxford historian who died last week at 78 won the ear of power and the hearts of students, including this Sunday Times columnist

Norman Stone at Oxford in 1994


My first German lesson with Norman Stone was — like so much about Norman — unorthodox. “Meet me at 11am in the Worcester College bar,” he had said. It was 1986, I think, and I had embarked on a doctoral degree at Oxford, mainly because my three years as an undergraduate hadn’t seemed quite enough. Norman had just arrived from Cambridge to take up the Oxford chair in modern history. Someone at the history faculty had recognised kindred spirits, so I had been assigned to him. The technical term was “advisee” — not a word commonly associated with the Worcester bar.

At some point in my final year, I had decided my doctoral thesis must be on some aspect of German history, if only so that I would have to learn the language. In those days there seemed to be three options when it came to foreign expertise. The Cold Warriors and fellow travellers learnt Russian and went to Moscow. I already loathed the Soviet Union enough not to want to do that. The aesthetes (“weeds” in Norman-ese) learnt Italian and went to Florence. I knew there was no future in the Renaissance. So I chose German and went to Hamburg, which had worked as launchpad for the Beatles.

It seemed a safe bet that, however docile the West Germans might seem from a distance, they and their long-standing “German question” would at some point be back. In any case, the most interesting historians of the previous generation had tended to write about Germany, including the arch-rivals Hugh Trevor-Roper and AJP Taylor.

Norman’s reputation preceded him — and not just the fact that he knew all three of the above languages, and several more besides. In those pre-internet days, communications between Oxford and Cambridge were comparable to communications today between rural Vermont and Vladivostok. Clearly, the Oxford committee that appointed him had not done much due diligence beyond reading Sir Geoffrey Elton’s effusive letter of reference. But I had friends who had been undergraduates at Cambridge and so possessed first-hand knowledge of Norman’s Byronic style. I knew roughly what to expect. I was nevertheless unprepared for the combination of Guinness and Nietzsche.

It turned out that Norman’s method of initiation into the language of Goethe, Schiller, Dichter und Denker was to consume two preprandial pints of Ireland’s beloved stout and then, having repaired to his rather chilly set of rooms, to attack Also Sprach Zarathustra.

And so the Stone Age of my life began. At times, it was downright madness. True, the British historical profession in those days was bibulous by almost any standards, except perhaps those of the Russian army, and Norman was by no means the worst drinker I worked with in my youth. Whereas others would descend into incoherence or unpleasantness, Norman under the influence was nearly always delightful (provided he could also chain-smoke). Indeed, drunk, Norman could be so dazzlingly brilliant that I came to dread the rather morose interludes when his wife, Christine, or his doctor or his liver would insist on a period of abstinence.

A year or two after I had finished my DPhil — by which time I had landed my first teaching job at Cambridge — I invited Norman to come back to his old stamping ground to address the Peterhouse History Society. He agreed, but I knew him well enough by then to know how contingent such a commitment was. At lunchtime on the day he was due to speak, I rang to remind him. He had, of course, forgotten. However, there was just time for him to jump in a taxi (he loved shouting, “Charge!” at taxi drivers, and I am sure they did indeed charge him a fortune in the course of his life), and he arrived in time for dinner.

What I had not bargained for was the bottle of whisky he insisted on having — most of it consumed before the meeting had begun. I recall little of what he said — it was the early phase of the break-up of Yugoslavia, so it probably had to do with Bosnia, about which he had agreed to write a piece for this newspaper. The most memorable part of the occasion was the after-party in my rooms on Trumpington Street, which culminated in Norman’s (rather good) performance of Don Giovanni, sung while he was lying on my floor. He went to bed at 3am.

The next morning, just after dawn, my phone rang. It was Norman. Could I get him a pack of cigarettes as a matter of urgency? And could I bring it to Maurice Cowling’s rooms across the road? Head pounding, I obliged. Never shall I forget the sound that greeted me as I climbed the stairs to Cowling’s: blaring out of his old stereo was the opening of Act III of Wagner’s Siegfried, almost but not quite drowning out the hammering of typewriter keys. Norman was up and hard at work on his Bosnia piece. Cowling greeted me with a facial expression that combined irony, geniality and malice.

Later, I was entrusted with five pages of manuscript and a fax number. On my way to the college secretary, who possessed Peterhouse’s only such device, I looked at what he had written, and recoiled in horror. So numerous were the typographical errors, mostly a result of missed keys, that it might have been written in Serbo-Croat. But what could be done? The deadline was imminent. So the pages were sent. The next morning a perfectly cogent article appeared under Norman’s byline — a reminder that, more often than is commonly admitted, mercurial men like Norman are saved by unsung sub-editors.

Guinness and Nietzsche, scotch and Wagner, and I hazily recall a similar night of bordeaux and Céline — this was Norman’s way. At a time when academic culture was already beginning its shift from Regency to Victorian morals, he personified all that the hatchet-faced exponents of gender history and “the cultural turn” detested. As a reader of draft chapters and writer of letters of reference, he was as unreliable as any professor I have known; I required a parallel, more dependable Doktorvater (Hartmut Pogge von Strandmann) to survive.

But missing all deadlines was the least of it. The #MeToo movement lay in the future, which was just as well. For Norman in his prime, one would have needed a #MeThree movement.

For all his flaws, Norman was a genius: history’s Flann O’Brien. As his obituarists noted last week, he was a truly exceptional linguist and was never happier than when sharing the quirkiest feature of the latest language he was learning. Very drunk, he veered from one tongue to another, often to baffling effect. But it was what he said, more than the languages he knew, that set him apart from nearly all his contemporaries. Although The Eastern Front 1914-1917 was his best as well as his first book, Europe Transformed 1878-1919 was a masterpiece of synthesis and has proved an invaluable guide to our own times. Ever wondered why tariffs have made a comeback, or why Italian politics is so hard to predict? It’s all there, and the fun Norman had with the Italian word trasformismo has come in handy time and again.

In addition, Norman could justly claim to have come up with the best examination question ever set in the Cambridge history tripos: “Romanticism: masculine, feminine or neuter?”

He was also, despite or perhaps because of his unorthodox methods, a wonderful adviser. The hardest part of a doctoral dissertation is not the writing of it but the original conception. Norman’s genius was quite destructive: he was pitiless in shooting down mediocre ideas, of which I had many, with the lethal question “So what?” and a gesture he had learnt in Prague (or was it Bratislava?) that involved rolling his eyes, sticking out his tongue and shrugging his shoulders, all at the same time.

My original plan had been to write a thesis about satirical magazines in late 19th-century Vienna. Norman skewered that: “You’ll never be able to translate the jokes.” He steered me instead towards economic history, urging me to do “number-crunching”, as it would teach me economics. This was life-saving advice. My bet on Germany came up trumps when the Berlin Wall fell just two days before my DPhil viva voce examination. But I wouldn’t have been able to make much of the opportunity, had I not grasped the economic difficulties it would create for the West Germans.

Norman was brilliantly right on this issue when Margaret Thatcher sought his advice, at a time when she and other European leaders were worried reunification would make Germany a superpower. He sought to reassure Thatcher that, in taking over East Germany, West Germany was only getting “six Liverpools”. That was vintage Norman: funny, and penetrating to the heart of the matter. Even better was his answer as to why he had moved from Oxford to Ankara, Turkey, in 1997: “You have to understand that, in the depth of my being, I’m a Scotsman and feel entirely at home in an enlightenment that has failed.”

Of all the “media dons” who flourished in the 1980s, Norman was the most wickedly clever, and the academic left hated him as much for the cleverness as for the wickedness. But Norman exulted in its disapproval. He once told me: “I wear my enemies like medals.” And that is how I shall always remember him: Guinness in one hand, Nietzsche in the other, cigarette balanced on lower lip — and the heads of Oxford’s dullest dons dangling from ribbons on his barrel chest.

Niall Ferguson is the Milbank Family Senior Fellow at the Hoover Institution, Stanford

Trump rediscovers the missing linkage

 The president has unwittingly embraced a Kissinger-era foreign policy

“Linkage” was a term introduced to American diplomacy by Henry Kissinger at the outset of the Nixon administration. Linkage could be an explicit gambit — for example, making “progress in settling the Vietnam War . . . a condition for advance in areas of interest to the Soviets, such as the Middle East, trade, or arms limitation”. But it was also an implicit reality in an increasingly interdependent world.

Few commentators on international relations would credit Donald Trump with such sophistication. When we think of the current president, the word “links” tends to conjure up images of golf courses rather than grand strategy. And yet his administration’s foreign policy is too frequently underestimated. Linkage is central to it.

The context is different, of course, because the Soviet Union has dwindled into Vladimir Putin’s Russia, while China under Xi Jinping is now the rival superpower. And today there is no foreign policy mess like the Vietnam War, sapping American strength and tearing the country apart. Yet the world is even more interdependent in 2019 than it was 50 years ago. Linkage is all around.

Consider the following linked issues. First, there is the Trump administration’s use of tariffs to force China to change its behaviour with respect to trade. Second, there is the tech war, which is being waged not only against the Chinese firm Huawei but more generally in the area of artificial intelligence. Third, there is Washington’s effort to alter the Middle East balance of power to the disadvantage of Iran — an effort that nearly led to a retaliatory airstrike on Thursday after the Iranians shot down a US drone.

Finally, there is the president’s desire to keep the American economy growing, which explains his renewed pressure on the Federal Reserve and especially its chairman, Jerome Powell. Investors probably ought to be more worried than they are about the US-China trade war, as well as the danger of conflict with Iran. But as long as the Fed looks like giving Trump the rate cuts he wants, markets remain exuberant, consumers stay confident and the 2020 re-election campaign is on track.

A recent visit to Washington taught me two things about the new linkage that I had not fully grasped. First, the administration wants to ramp up the pressure on Xi. Tomorrow, the vice-president, Mike Pence, was due to deliver another key speech on China. The one he gave at the Hudson Institute in October focused on the geopolitical rationale for a tougher American stance. This new speech was going to come at Beijing from a different angle.

Pence’s speech was originally scheduled to be delivered on the 30th anniversary of the Tiananmen Square massacre, but Trump himself responded to Chinese pleas to avoid that most sensitive of dates. (This is the kind of linkage the president loves. Giving Xi a low-cost break such as this ensures he has the upper hand at the G20 in Osaka.) Pence’s speech was to focus on the Chinese government’s mistreatment of political dissidents and religious minorities, both Muslim and Christian.

This would have upped the ante at a time when Beijing is reeling from the vast show of people power in Hong Kong that forced the suspension of a law to facilitate extradition to the mainland. The great vulnerability of Xi’s regime is not its lack of democracy; few Chinese expect to see free elections in their lifetimes. It is the lack of the rule of law that people resent — which is why so many yearn to invest their money in America.

As he loves to do, the US president has teased both Beijing and Wall Street by promising “an extended meeting” with Xi in Osaka. On Friday he postponed Pence’s speech. I suppose Trump might, on a whim, agree a trade deal over dinner. But that would run counter to all the other moves his administration has been making. It seems more likely that, unless there are big concessions on the Chinese side, Trump will slap yet more tariffs on Chinese imports. With the Fed poised to cut rates next month and the stock market at new highs, Trump has no incentive to let Xi off the hook. Better to save the trade deal for election year.

The other thing I now understand better is the administration’s Middle East strategy. As Trump revealed when he cancelled the planned airstrikes, he is not itching for war. Temperamentally, Trump is just not a war president. His goal is to maintain the pressure on — and the isolation of — Tehran for diplomatic reasons. No journalist I know takes seriously Jared Kushner’s Middle East peace initiative, the first part of which will be unveiled at a conference in Bahrain this week. “Dead before arrival” is the conventional wisdom. But I take the contrarian view that the timing is propitious and the design of the plan ingenious.

When you reflect on the changes there have been in the region since his father-in-law’s inauguration, two things leap out at you. The first is that Israel is no longer beleaguered, surrounded by foes. It has become part of an American-led Arab-Israeli coalition against Iran. The second is that the Palestinians, whose status as victims was once so useful to both Arab nationalists and Islamists, have been marginalised.

Previous peace initiatives put the big constitutional and territorial questions first. Big, but insoluble. Kushner’s goal is to begin with the small matter of money, which in reality is not so small. Large-scale investment in the West Bank and Gaza, funded in part by the oil-rich Gulf states, stands a chance of weaning at least some Palestinians away from Hamas. The lesson of the Arab revolutions was that there is a constituency of small businessmen who are as sick of the rackets run by terrorists as they are of the extortions of venal governments.

The unforeseen hitch has been the failure of the Israeli prime minister, Binyamin Netanyahu, to form a new coalition, which is sending his country back to the polls in distant September. That is bound to weaken the linkage between economic opportunities and political concessions.

“Linkage . . . is not a natural concept for Americans,” Kissinger once admitted. “Our bureaucratic organisations . . . compound the tendency to compartmentalise. American pragmatism produces a penchant for examining issues separately: to solve problems on their merits.” That’s what they teach you to do at law school. But Trump’s contempt for the bureaucratic mindset means linkage comes quite naturally to him.

Still, let’s not get carried away. Linkage can backfire if a single failure causes a chain reaction. Linkage also needs allies to play their part — whereas the Europeans would prefer to be non-aligned in the tech war, neutral in the trade war and signed up to the old Iran nuclear deal.

No matter how ingenious, linkage may not compensate for the effect of Trump’s wrecking-ball style on American influence around the world, which can best be summed up in a single world: shrinkage.

Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford

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Trump exemplifies the Ugly American. Davos will accept him anyway.