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Arab News
5 hours ago
- Arab News
Savage capitalism: Thriving economy or fractured society?
In an era of polarized debates, two influential recent Washington Post articles shed light on America's economic and social challenges. Fareed Zakaria's piece, 'Don't believe the MAGA doomers on trade,' staunchly defends free trade as a pillar of the US' success. He posits that America has flourished under open markets and warns against upending global systems with misinformation. Conversely, Shadi Hamid's 'Men are struggling to find love. Here's why' delves into the romantic hardships faced by men, citing factors such as educational disparities, the pitfalls of dating apps and deepening gender divides. While both authors provide compelling analyses, they arguably underemphasize a pervasive force: 'savage capitalism,' a hypercompetitive system that enriches a minority while fostering inequality, debt and social disconnection. That said, capitalism's dynamism has undeniably spurred innovation, growth and opportunity. A balanced perspective requires weighing these benefits against the systemic costs to chart a path toward equitable progress. Zakaria's argument for free trade is rooted in historical evidence and economic data. Post-Second World War, the US-led Bretton Woods system established the dollar as the global reserve currency, facilitating unprecedented trade expansion. Zakaria highlights how agreements like the North American Free Trade Agreement and World Trade Organization membership have elevated America's gross domestic product, with exports reaching $2.5 trillion annually. Manufacturing output also remains at an all-time high, in contrast to protectionist claims of decline. Booms driven by easy credit lead to asset bubbles, followed by busts that disproportionately harm the working class Dr. Turki Faisal Al-Rasheed He debunks 'exaggerations' by noting that job losses from offshoring are offset by gains in the services and tech sectors. Protectionism, as seen in President Donald Trump's tariffs on steel and aluminum, has led to retaliatory measures from China and Europe, inflating costs for American consumers by an average of $1,200 per household, according to studies from the Peterson Institute for International Economics. Globally, free trade has lifted more than a billion people out of poverty, stabilized alliances and reduced conflict risks in a multipolar world. However, this narrative overlooks how savage capitalism twists free trade into a tool for elite enrichment. Ray Dalio's framework in 'How Countries Go Bankrupt' illustrates the debt-credit cycle: booms driven by easy credit lead to asset bubbles, followed by busts that disproportionately harm the working class. In the US, income inequality has soared — the top 1 percent captures 20 percent of national income, per Federal Reserve data, while median wages have stagnated since the 1970s despite productivity gains. Free trade's 'winners' are multinational corporations that exploit cheap labor abroad, decimating communities in places like the Midwest. Consider the opioid crisis in deindustrialized towns linked to economic despair or rising homelessness amid corporate tax cuts. Geopolitically, American commitments exacerbate imbalances. Annual military aid to Israel exceeds $3 billion, defended as vital for Middle East security against threats like Hamas, yet criticized by groups like Amnesty International for enabling Tel Aviv's actions in Gaza and the West Bank that fuel humanitarian concerns. This spending diverts resources from domestic priorities, such as Arizona's school voucher programs, which expand choice but have shuttered public schools due to funding shortfalls, underscoring misaligned investments in education amid technological disruptions that automate jobs. A vivid personal story underscores these realities. At a lavish Napa Valley party attended by individuals earning over a million dollars annually, I posed a provocative hypothesis to my American friend, who made $100,000 working in Saudi Arabia: 'You are richer than everyone here.' The room erupted in heated debate. Once calm returned, I explained. Most 'wealthy' attendees owned less than 5 percent of their assets outright, the rest was leveraged through loans from financial institutions. Challenging them to produce $25,000 from savings in a year elicited silence; even $5,000 seemed unattainable for many, as they are trapped in cycles of high-interest debt. Vacation time? A month was impossible; a week was a stretch. This revealed savage capitalism's trap: a paradigm in which income barely covers interest payments, leaving even high earners in perpetual liability. My debt-free friend, with disposable income and flexibility, embodied true financial freedom. The group fell into thoughtful silence, confronting how the system prioritizes institutional profits over personal security. America's strength lies in free trade and individualism, which drive innovation. But unchecked savage capitalism risks collapse Dr. Turki Faisal Al-Rasheed Turning to social dimensions, Hamid's exploration of men's romantic struggles is timely and nuanced. He outlines a 'crisis of connection' — men face higher unemployment and lower college enrollment rates, with women outpacing them in degrees by between 10 percent and 15 percent. Dating apps amplify this, creating a winner-takes-all dynamic in which the top profiles receive disproportionate attention. Studies show 80 percent of women message the top 20 percent of men. Cultural shifts, like #MeToo's emphasis on consent, have made approaches riskier, while political polarization widens rifts: young men lean conservative, women liberal, shrinking compatibility pools. Hamid, drawing from his Muslim background, notes the erosion of traditional structures like arranged marriages or community matchmaking, leaving individuals adrift. However, Hamid glosses over savage capitalism's role in amplifying these woes. Corporate-driven inequality breeds precarious gig economy jobs that offer no stability, deterring family formation. Debt burdens — from student loans averaging $30,000 to housing costs — heighten anxiety, making vulnerability in relationships unappealing. Individualism, a capitalist hallmark, celebrates autonomy but dismantles communal ties: family sizes shrink, religious affiliation drops (Pew research shows 29 percent of Americans to be unaffiliated) and social isolation rises, with one in three men reporting no close friends. Women, empowered by career advances, seek partners who match their ambitions, but systemic barriers leave many men economically sidelined. On the flip side, capitalism's opportunities foster personal growth; women's progress enhances societal equity and tech such as apps have facilitated millions of marriages. Globally, not all cultures succumb — parts of Asia or Europe with stronger social safety nets report higher relationship satisfaction. America's strength lies in free trade and individualism, which drive innovation in artificial intelligence, biotech and renewable energy, positioning it as a global leader. But unchecked savage capitalism risks collapse: debt-fueled volatility, as Dalio warns, could trigger inflation or austerity, while social fragmentation breeds extremism, evident in rising populism. Balanced solutions are imperative: reform trade deals with labor and environmental safeguards, redirect foreign aid toward diplomacy over militarism, and bolster domestic investments in universal healthcare, affordable education and infrastructure via bills like the Infrastructure Investment and Jobs Act. Culturally, promote policies that rebuild communities, such as paid family leave, mental health support and incentives for civic engagement. Embracing multipolarity, with partners like the EU and emerging economies, can distribute burdens. As Zakaria and Hamid illustrate, dismissing critiques as 'lies' or surface issues ignores root causes; addressing them fosters resilience. True greatness demands equity for wallets and hearts, ensuring prosperity benefits all, not just the elite. • Dr. Turki Faisal Al-Rasheed is an adjunct professor at the University of Arizona's College of Agriculture, Life and Environmental Sciences, in the Department of Biosystems Engineering. He is the author of 'Agricultural Development Strategies: The Saudi Experience.' X: @TurkiFRasheed
Arab News
5 hours ago
- Arab News
The great corridor conundrum
It is a truth universally acknowledged — or at least universally marketed — that the Middle East is once again poised to be the beating heart of global commerce. Enter the India-Middle East-Europe Economic Corridor, known as IMEC, a vision unveiled in September 2023 with the flourish of a G20 communique and the optimism of a startup pitch deck. India, Saudi Arabia, the UAE, the EU, France, Italy, Germany and the US all signed on, proclaiming IMEC not just as a trade route but as proof that geography in the 21st century can still be redrawn. The idea is seductive: a twin corridor network, one stretching from India to the Arabian Gulf, the other from the Gulf to Europe, sewn together by ports, railways and digital cables. In theory, the scheme could shave eight to 10 days off shipping times compared to the Suez route, reduce freight costs and serve as a 'values-based' counterweight to China's Belt and Road Initiative. In practice, however, bold lines on a map are the easy part; turning them into steel, concrete and functional customs regimes is where so many grand visions are lost. Early cost estimates place IMEC's price tag between $20 billion and $30 billion, a figure almost certain to rise once engineering, land acquisition and security needs are taken into account. The project began as an Indian initiative, later embraced by the EU and Saudi Arabia. Yet, unlike the Belt and Road Initiative or the International North-South Transport Corridor, India has not set up a dedicated implementing body, nor has it committed actual funding. That omission is more than a bureaucratic footnote: without clear governance and committed capital, the India-Middle East-Europe Economic Corridor risks becoming a PowerPoint concept rather than a functioning trade artery. Financing will almost certainly rely on India-EU partnerships, with Saudi Arabia and the US playing indispensable roles. Washington's stance is broadly positive, though it views IMEC through the lens of a larger strategic agenda tied to the Abraham Accords. For India, the calculus is more complex. A faster, more reliable route to Europe could boost exports, yet New Delhi's domestic infrastructure ambitions — from high-speed rail to renewable power grids — already stretch fiscal resources. Adding to the equation, President Donald Trump's recently announced 50 percent tariffs on certain Indian exports has introduced a strategic wrinkle: can a corridor partly championed by Washington truly offset the economic sting of US protectionism? The new corridor's backers frame it as a cleaner, more transparent alternative, but politics and geography are not easily tamed Dr. John Sfakianakis The IMEC plan enters a crowded field. The Belt and Road Initiative, since its launch in 2013, has channeled an estimated $1 trillion into more than 150 countries, financing everything from deep-water ports in Pakistan to railways in East Africa. The International North-South Transport Corridor is already moving goods across Eurasia and the Suez Canal — IMEC's implicit rival — still handles more than 12 percent of global trade and is investing heavily in capacity upgrades. The new corridor's backers frame it as a cleaner, more transparent alternative, but politics and geography are not easily tamed. European shippers may think twice if tensions with Iran escalate. India's commitment could waver if EU carbon tariffs trigger a deeper trade rift. For Greece, IMEC presents a more parochial contest: who gets to be the European gateway? The port of Piraeus is the obvious candidate, but it is majority-owned by a Chinese company, an awkward fact for a project marketed as a hedge against Beijing's influence. Thessaloniki might offer an alternative, yet both ports face the same structural flaw — an underdeveloped railway network with poor links to the Balkans and beyond. In the hard reality of freight logistics, ports are only as useful as the railways that feed them. Without a robust and interconnected backbone, the dream of containers rolling smoothly from Mumbai to Munich will remain stubbornly out of reach. Security risks loom just as large. The corridor skirts maritime zones where Iran has flexed its naval muscles more than once, while the overland legs could be vulnerable to cyberattacks, drone strikes and political unrest. The recent military conflicts in the Middle East have already slowed planning for the corridor, effectively 'freezing' parts of its development. The Red Sea's recent spate of security incidents has shown how quickly global supply chains can be thrown off course by a single attack. The Belt and Road Initiative has learned to build redundancy into its networks — alternative ports, backup lines, diversified shipping lanes — and IMEC will need to do the same if it hopes to withstand inevitable shocks. The economic logic is also not as clear-cut as its boosters suggest. Rail freight from India to Europe might be faster than sea, but it is more expensive — often 30 percent to 50 percent higher per container — and speed alone may not convince shippers to absorb the cost premium. Digital and energy links, another selling point of IMEC, may produce returns sooner, but they lack the visual and political symbolism of a freight train gliding across the desert. Clear governance structures, dependable funding and disciplined execution are what will make or break this project Dr. John Sfakianakis And yet, even in its current state, the corridor is a modest diplomatic success. It has brought India and the Gulf states closer, signaled Europe's willingness to invest in non-Chinese infrastructure and given Washington a convening role in a grouping that is neither a formal trade bloc nor a military alliance. But diplomacy alone cannot move freight. Clear governance structures, dependable funding and disciplined execution are what will make or break this project. The real challenge will be execution. Coordinating engineering standards, securing rights of way, harmonizing customs rules and aligning digital protocols will require a level of bureaucratic choreography that even Brussels might find daunting. The oft-cited 'phased implementation' risks becoming a euphemism for indefinite delay and, unless each segment of the corridor can operate viably on its own, the entire chain could stall. The Belt and Road Initiative's history offers no shortage of cautionary tales: gleaming ports that sit empty, railway lines mired in debt and high-profile launches followed by quiet decay. IMEC's planners would do well to study these examples — and place less emphasis on ribbon-cutting ceremonies and more on the unglamorous business of making infrastructure work in practice. So, can IMEC deliver? Possibly — but only if it exchanges vision statements for procurement schedules, diplomatic handshakes for binding contracts and high-level endorsements for on-the-ground problem solving. The world has no shortage of trade corridors. What it lacks are corridors that deliver on their promises. IMEC has the map, the mandate and the moment. Whether it has the machinery — and the mettle — remains the billion-dollar question. • Dr. John Sfakianakis is chief economist at the Gulf Research Center.
Arab News
5 hours ago
- Arab News
Trump wants to evict homeless from Washington and send them ‘far from the capital'
WASHINGTON: President Donald Trump pledged on Sunday to evict homeless people from the nation's capital and jail criminals, despite Washington's mayor arguing there is no current spike in crime. 'The Homeless have to move out, IMMEDIATELY. We will give you places to stay, but FAR from the Capital. The Criminals, you don't have to move out. We're going to put you in jail where you belong,' Trump posted on the Truth Social platform. The White House declined to explain what legal authority Trump would use to evict people from Washington. The Republican president controls only federal land and buildings in the city. Trump is planning to hold a press conference on Monday to 'stop violent crime in Washington, D.C.' It was not clear whether he would announce more details about his eviction plan then. Trump's Truth Social post included pictures of tents and D.C. streets with some garbage on them. 'I'm going to make our Capital safer and more beautiful than it ever was before,' he said. According to the Community Partnership, an organization working to reduce homelessness in D.C., on any given night there are 3,782 single persons experiencing homelessness in the city of about 700,000 people. Most of the homeless individuals are in emergency shelters or transitional housing. About 800 are considered unsheltered or 'on the street,' the organization says. A White House official said on Friday that more federal law enforcement officers were being deployed in the city following a violent attack on a young Trump administration staffer that angered the president. The Democratic mayor of Washington, D.C., Muriel Bowser, said on Sunday the capital was 'not experiencing a crime spike.' 'It is true that we had a terrible spike in crime in 2023, but this is not 2023,' Bowser said on MSNBC's The Weekend. 'We have spent over the last two years driving down violent crime in this city, driving it down to a 30-year low.' The city's police department reports that violent crime in the first seven months of 2025 was down by 26 percent in D.C. compared with last year while overall crime was down about 7 percent. Bowser said Trump is 'very aware' of the city's work with federal law enforcement after meeting with Trump several weeks ago in the Oval Office. The US Congress has control of D.C.'s budget after the district was established in 1790 with land from neighboring Virginia and Maryland, but resident voters elect a mayor and city council. For Trump to take over the city, Congress likely would have to pass a law revoking the law that established local elected leadership, which Trump would have to sign. Bowser on Sunday noted the president's ability to call up the National Guard if he wanted, a tactic the administration used recently in Los Angeles after immigration protests over the objections of local officials.
