Order from Chaos

Henry Kissinger, an experienced statesman and diplomat, may have put it best: that “Trump may be one of those figures in history who appears from time to time to mark the end of an era and to force it to give up its old pretences”.

Did you know the U.S. national debt amounts to over USD 100 000 per American? And that when unfunded liabilities are included, this sum increases sevenfold? That more Americans now die annually from drug overdoses than perished during the entire 20-year Vietnam War? This while a single Chinese company - America’s primary geopolitical rival - last year constructed more ships than all U.S. shipyards combined have produced since 1945. According to ASPI, an Australian think tank, China also leads the world in critical technology research across 37 of 44 key fields.

The manufacturing sector’s share of U.S. output has plummeted from 30% in the 1950s to just 10% today. This decline has paralleled a weakened middle class, stagnant real wages for many, and a growing wealth gap.

“If something cannot go on forever, it will stop” economist Herbert Stein famously observed.

While media often focuses on isolated details, U.S. Treasury Secretary Scott Bessent adopts a more comprehensive view. “the international trading system consist of a web of relationships, military, economic, political. One cannot take a single aspect in isoation he stated during a New York speech, emphasizing that these “inter-linkages that can be reordered to advance the interest of the American people.”

The President’s chief economic advisor Stephen Miran last year published a playbook for reshaping the global system. He’s argued tariffs “got the Chinese to the negotiating table” during Trump’s first term, suggesting currency policy changes might follow once tariffs create sufficient bargaining leverage. Bessent has similarly acknowledged Trump’s use of tariffs as negotiating tools.

Numerous publications decry “Trump’s chaos.” Yet more chaos can create bargaining space - a concept Nobel laureate Thomas Schelling detailed in The Strategy of Conflict (1960). A student of his, Jonathan Schell, explained it nicely:

[Schelling argued that] if you visibly arranged to make yourself a little bit out of control, the foe would no longer be able to imagine that you might desist from nuclear war in a last-minute fit of sanity. They’d think that you might plunge into the abyss in spite of yourself. And so they would fear you, as hoped.

Schelling called this policy the “rationality of irrationality.” In this policy, the foe would believe in your self-destructive threats not because it thought you might slip on a banana peel, so to speak, at the brink but because it believed you just might be lunatic enough to go over the edge deliberately.

In WWII’s final stages, the Bretton Woods Agreement emerged from its New Hampshire namesake city, establishing a new international framework. Roughly 40 years later, the Plaza Accord was signed at New York’s Plaza Hotel in 1985 to devalue the dollar against other currencies, particularly the Japanese yen. Now, another 40 years later, might history repeat?

Examining sources close to Trump - Bessent, Miran, and others - their apparent objective is systemic global realignment. Whether this will manifest as the Trump administration hopes, as doomsayers predict, or through entirely unexpected means remains to be seen.