The word “booty” entered the English language from Hindi in the late 18th century, as the rapacious East India Company fought its way across the subcontinent.
It was a trading company, not a state – but it had the imprimatur of the English crown and its own large private army, blending commerce with military force and paving the way for British imperial rule over India.
Donald Trump’s nighttime raid in Venezuela last week was the act of a government, not a corporation. But it harkens back to a more brazen time, when pillaging a continent for its resources at gunpoint was considered a legitimate activity for an English gentleman.
The US president has made no secret of the fact that the main motivation for the kidnapping of Nicolas Maduro was the takeover of Venezuelan oil reserves on behalf of the fossil fuel companies that helped finance Trump’s re-election.
He highlighted Maduro’s illegitimacy – it was widely believed that the deposed president had lost Venezuela’s 2024 presidential election. But giving power to Maduro’s vice president, without a timetable for a democratic transition, makes any pretense of meeting the aspirations of the Venezuelan people absurd.
Trump had already exercised American economic power particularly blatantly in trade negotiations during the first 12 months of his second term, using the threat of tariffs to intimidate and cajole rivals and so-called allies – including the United Kingdom.
The events of this past weekend made it clear that he was also prepared to seize resources using military force, apparently with the intention of allowing his favored business allies (the oligarchs, as we would call them in the Russian context) to exploit them.
This sets a deeply alarming precedent for what Trump himself might feel emboldened to do, with a range of other targets seemingly in his sights, and what rival powers even less concerned with international law might now undertake, in their quest for economic dominance.
Just as Trump’s musical tastes are rooted in his youth – he still enjoys boogieing at the YMCA – his view of the factors that contribute to America’s economic success seems hopelessly outdated.
The global oil market is already well supplied, and the United States has become a significant net exporter since the shale boom anyway, shielding its economy from the global rise in energy prices that hit Europe hard after Russia’s full-scale invasion of Ukraine.
However, there are some concerns about the profitability of hard-to-extract US shale oil at the current relatively low oil price of less than $60 (£44) a barrel for the US benchmark West Texas Intermediate. However, Trump seems to want to lower this price.
Either way, it’s unlikely to succeed in the near future: Venezuelan oil is heavy, making it expensive to produce and refine; and analysts estimate it will take many years, and billions of dollars, to significantly increase production.
As the Washington-based Institute of International Finance said last week: “While there is medium-to-long-term upside potential for Venezuelan supply, the balance of risks points to a gradual, conditional recovery rather than a rapid normalization, with the possibility of further setbacks if political or policy frictions intensify.” »
Instead of oil, the resource bottlenecks that today’s businesses are most concerned about are the raw materials needed for the massive electrification of energy as the world moves toward net zero (which Trump rejects, of course) — copper, aluminum, and lithium — not to mention staple foods like cocoa and coffee, whose prices have risen because of global warming.
Likewise, while Trump hoped his muscular trade policies would lead to a wave of reshoring, restoring U.S. dominance in industries such as auto manufacturing and steel, manufacturing employment continued to decline, with the sector shedding more than 200,000 jobs in two years.
Cutting government subsidies for scientific research and attacking America’s major universities on culture war grounds seems unlikely to fuel the innovation widely seen as key to American economic success.
And rival countries hit hard by U.S. tariffs are moving closer together, with the EU last week finally giving a provisional deal on the tortuously negotiated trade deal with Mercosur, the South American bloc that includes Brazil and Argentina.
While Trump fantasizes about the return of metal bashing, China, the United States’ great economic rival, continues to innovate in the fields of electric cars and solar panels at knockdown prices, at the forefront of the transition away from fossil fuels.
Between January and May of last year alone, China added enough wind and solar capacity to power a country as large as Turkey or Indonesia.
Chinese AI company DeepSeek is reportedly preparing to release the next iteration of its big language model next month — a move that could set off alarms in Silicon Valley if, like its predecessor, it appears to outperform its U.S. equivalents at a fraction of the cost.
Trump’s attempt to plunder Venezuela’s resources is a brutal exercise of military power, and there may be more – perhaps worse – to come. But by unleashing anarchy abroad and trashing the rule of law at home, he risks undermining American economic power more than strengthening it.
