Biden's Opportunity to Flip the Script on U.S. Decline | Opinion

What do George Soros and Donald Trump have in common? Although the two men are often framed as nemeses, both clearly believe in the power of "reflexivity," first coined by Soros in 1987. President Joe Biden would be wise to become a believer as well.

Way before the internet and reality TV, Soros theorized that we live between two realities: objective and subjective. Objective realities are true regardless of what people think or say. For example: Every human will die. Or, you have $3,457 in your bank account.

Subjective realities, however, are shaped by what people think. What is important is that these beliefs shape objective reality. Financial markets fall into this category because participants can never know all relevant objective facts driving an interconnected global economy. Investors use their best judgments to assess what assets are worth and buy or sell accordingly; these collective judgments move markets and thus become objective reality. In turn, that objective reality affects our subjective reality once again, and so on in an endless feedback loop. This is reflexivity.

Reflexivity explains how Amazon went from an unprofitable online bookseller to one of the world's most valuable companies. With its stock price propelled for years by investors who believed Amazon would disrupt not only bookselling but also traditional retailing, Amazon bought itself time and talent to fulfill the dream. The electric automaker Tesla is currently riding high on such a subjective reality loop.

Reflexivity also works in politics—and ironically, the most prominent practitioner of Soros' theory has been Donald Trump. To win the presidency in 2016, Trump exploited a growing gap between the subjective and objective views of America.

Subjectively, most Americans believed the U.S. to be the leader of the free world and home of the "American Dream." Objectively, however, the country was sliding.

U.S. economic dominance had ebbed steadily since 1960 as more countries educated their citizens, boosted productivity and competed in global markets after decades of isolation—with China emerging as America's strongest rival. At the same time, a domestic policy mix of regressive taxation and expensive military activities led to neglected infrastructure and growing inequality at home.

America's demographics, too, objectively shifted: white Christians were no longer a majority, while millennials were reshaping American views on gender, race, religion and marriage. Americans voted for a Black president not once but twice, crystallizing these changes.

Exploiting the social and economic anxieties of many Americans, Trump won in 2016 by depicting U.S. decline in new, subjective terms: the result of dangerous immigrants, unfair multilateral agreements and a "deep state" conspiring against ordinary citizens. To "Make America Great Again" he'd build a wall with Mexico (and make them pay for it), withdraw from those unfair arrangements and "drain the swamp." Objectively, however, Trump himself was a repeatedly bankrupt global businessman, married to an immigrant and famous for paying little or no taxes. No matter, enough people believed his narrative to make him a real life U.S. president.

Once in power, Trump actually worsened America's objective decline by increasing inequality, diminishing America's global stature and exacerbating social polarization, even as the U.S moved closer to full employment. Trump and his allies also spun a stream of subjective lies to counter unfavorable objective truths ranging from the size of his inauguration crowd to the reality of and response to COVID-19. As a result, 74.2 million Americans voted to re-elect him. For many voters, Trump's subjective realities had clearly become their own.

Joe Biden Sworn In As 46th President
President Joe Biden points after taking the oath of office during the 59th Presidential Inauguration on January 20, 2021, in Washington, D.C. Greg Nash - Pool/Getty Images

While Joe Biden won by a landslide, that objective reality did not stop Trump from trumpeting a new subjective reality of a "stolen election." This led to one of the most reflexive political events in recent history—the storming of the U.S. Capitol by a pro-Trump mob to forcibly overturn Biden's victory. Amid Trump's hardcore base, his subjective view became their objective reality.

Fortunately, this effort failed as the 46th president has been inaugurated. But the objective realities Joe Biden inherits are quite different even than when he left Washington four years ago, including a more polarized country with a further fragmented view on national identity (subjective or otherwise), a worsening pandemic which has aggravated economic inequalities and declining global influence.

Despite the international humiliation of the Capitol riot, it's not too late for Joe Biden to re-assert American leadership and flip the script on American decline. Joe Biden has a unique opportunity to reshape America's subjective and objective direction.

Domestically, he can galvanize the country behind "Rebuilding America" with a massive, long-overdue infrastructure initiative, a post-COVID economic boost that would be supported by both Democrats and Republicans. This can include environmentally friendly new deals to create jobs and build a more sustainable economy. He can create a pandemic G.I. Bill to reintegrate millions of Americans into the workforce. He can reshape and modernize the military around cyber defense and civil preparedness, while spending billions less on traditional combat hardware. On the international front, a revitalized (and still financially and militarily dominant) America could re-start a subjective narrative of global leadership and help propel an "America is back" feedback loop to counter its recent decay.

When history is written, the Trump years will not be known as those that made America great again, but rather worse. That is the objective reality. Joe Biden has the opportunity to narrate and create a new subjective reality that can reflexively become objective truth: American government can be effective and responsive to its citizens, as well as a trusted global partner.

As COVID-19 reminded us, robust government is what is needed to combat existential threats like pandemics and climate change. Biden can improve American's objective reality—make it a more inclusive greener economy, a fair multilateral player in global economics and politics, a promoter of democratic ideals and human rights. This would go a long way toward making America great again.

Mark Rosenberg is the CEO of Geoquant and an adjunct professor at Columbia University's School of International and Public Affairs.

Peter Marber teaches at Harvard University and is a senior portfolio manager at Aperture Investors.

The views expressed in this article are the writers' own.