The Last Days of Exorbitance

The Weight of Privilege

Introduction - From Beast to Burden

For decades, the global financial system has rested upon a singular foundation: the US dollar. Its role as the world’s reserve currency was once seen as a kind of seigniorial advantage, the so-called exorbitant privilege. It allowed the United States to borrow at low cost, run persistent trade and fiscal deficits, and issue liabilities that the rest of the world treated as pristine collateral.

But lying beneath the shimmering surface of this arrangement has always been an unresolved tension: what appears as privilege may, in fact, be burden. What is framed as dominance may conceal obligation. A nation that must provide the world with safe assets, deep, liquid capital markets, and consistent net demand must also bear the structural costs of being the buyer, borrower, and insurer of last resort. To consume what others suppress. To issue what others hoard. To run deficits where others run surpluses.

The current US administration is the first to speak openly in these net cost terms. No longer viewing its fiscal deficits as the vainglorious indulgences of empire, it sees them instead as out-sized contributions to a global system addicted to American liquidity, a system where other countries refuse to reform, refuse to reciprocate, and refuse to carry their share of the financial load. A system that is loaded in favour of the other guy.

We are entering a new industrial epoch, one defined not by labour or wage arbitrage, but by machinery, automation, and the quiet force of productivity gains. In this world, global labour costs begin to fade. Few seem to acknowledge that, in a highly automated world, labour cost arbitrage may be less of a defining variable than usual, or that other factors, energy, data, time, flexibility, and control matter much more.

It doesn’t take a rocket scientist to understand the economic logic of re-shoring commoditized and energy-intensive production flows to the source of energy; and final assembly and customization shifts toward the consumer to maximize responsiveness.

But we don’t approach this moment from level ground. The system, as it stands, is not neutral. It favors the other side. In calmer times, that might have been a quiet concern. Today, it is a structural threat. Because once the leap into automated industry is made, once factories are planted, once capital is fixed and flows become habit, the imbalance will harden.

This is not a contest that can be joined late. It has already begun. And if the advantages now embedded in the trade system are left unchecked, the result may be decided before most of us are even aware there was a race. That is why the effort to tariff, to reshore, to rebalance, to reclaim control of production, has begun now. Not tomorrow. Not after the fact. Now. Before the petty politics of the mid-term congressional elections, before the factories of the future are poured in steel and concrete and planted elsewhere. Before the supply chains of tomorrow are locked beyond reach. The stakes are not just enormous. They’re final. The future isn’t waiting. Either we shape it, or we will live within one shaped for us.

Before the imminent rise of the machine, before tomorrow’s great manufacturing cathedrals are poured in silicon across Eurasia, funded perversely by the largesse of the American public, it must be understood: this is a contest that cannot be lost. For once the automated future is secured by a system that mocks democracy, the race is already run. This is not a fight about just trade. It is a contest over time itself, over the meaning of sovereignty, and over who holds the pen that scripts the rules of tomorrow. At stake is nothing less than the possibility of an industrial resurrection, perhaps the greatest in human history, yet that possibility risks slipping through our fingers as the Western world turns inward, paralyzed by division and intoxicated by the vapor of tribal conviction.

We are watching the future assemble itself in real time, yet our attention fractures. The moment demands unity, clarity, and vision, but receives instead noise, distraction, and hesitation. And so I write to you today, not out of certainty, but necessity. Because the decisions made in silence today will echo loudly in the lives of those who inherit what we choose to neglect. I offer you this essay as an attempt to trace the transformation, from economic privilege to public good, from exorbitance to exhaustion, and to explore what the future of global finance might look like if the dollar’s centrality is no longer taken for granted.