Publications: Notes at the Margin

Uncertainty and the Collectivization of the World Economy (February 3, 2025)

 

Economic forecasters rely on historical statistical relationships and trends to project forward. The events occurring in the United States—specifically, Team Trump/Musk’s decisions to seize the US funding system, remove up to two million undocumented immigrants, offer millions of federal employees early retirement, and instigate a potentially severe trade war—make using traditional techniques irrelevant. One historical analogy may offer a view of the future: Joseph Stalin’s collectivization of agriculture in the Soviet Union between 1928 and 1940.[i] By the end of the first five-year period, Russia’s agricultural output had declined twenty-three percent.[ii] The Trump/Musk program could have similar impacts on production as tariffs and other interventions within the United States disrupt the US and global economies. Among other effects, it has negated the projections for global oil and gas use published as late as last week.

 

This is the time of year for conferences. Argus Media convenes its “Crude Summit Americas” next week. S&P Global will hold its CERAWeek in early March. Later this year, the EIG will conduct its annual Energy Intelligence Forum. Under today’s circumstances, such gatherings will likely be a waste of time because the uncertainty created by the new Trump administration could destabilize the world economy.

 

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