Trump and National Neoliberalism
Trump’s ascendance means the end of globalism—but not of neoliberalism.
This article is from Dollars & Sense: Real World Economics, available at http://www.dollarsandsense.org
This article is from the
January/February 2017 issue.
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The election of Donald Trump portends the completion of the U.S Government’s capture by wealthy corporate interests. Trump’s election is widely seen in terms of a dispossessed and disenfranchised white, male working class, unsatisfied with neoliberal globalization and the insecurity and hardship it has unleashed, particularly across regions of the United States that were formerly manufacturing powerhouses (like the Rust Belt states of Pennsylvania, Michigan, Ohio and Wisconsin, four states believed to have cost Hillary Clinton the election). While there is much truth to this perspective and substantial empirical evidence to support it, it would be a mistake to see Trump’s victory wholly in these terms.
This election appears to be a key stage in the ongoing process of American democratic disintegration, though in my opinion Trump’s election does not signal the beginning of a rapid descent into European-style fascism. Instead, the merger of state and corporate interests is proceeding along an already-established trajectory. American democracy has been under attack from large and wealthy corporate interests for a long time, with this process accelerating and gaining strength over the period of neoliberal globalization (roughly the early 1970s to the present). This time period is associated with the rise of powerful multinational corporations with economic and political might that rivals that of many national governments.
I am persuaded by the argument that the U.S. political system is not democratic at all, but rather an “inverted totalitarian” system. Political commentator Chris Hedges notes: “Inverted totalitarianism is different from classical forms of totalitarianism. It does not find its expression in a demagogue or charismatic leader but in the faceless anonymity of the corporate state.” Citing the American political theorist Sheldon Wolin, Hedges argues that our inverted totalitarian system is one that retains the trappings of a democratic system—e.g. it retains the appearance of loyalty to “the Constitution, civil liberties, freedom of the press, [and] the independence of the judiciary”—all the while undermining the capacity of citizens to substantively participate and exert power over the system.
In my view, what Trump’s election has accomplished is an unmasking of the corporate state. Trump gives inverted totalitarianism a persona and a face, and perhaps marks the beginning of a transformation from inverted totalitarianism to totalitarianism proper. By this I mean that I think we are entering a period in which our political system will come to look more obviously totalitarian, with ever fewer efforts made to conceal its true nature and with the demagoguery that we typically associate with this form of politics. In spite of this, it makes no sense to me to call the system toward which we are heading (that is, if we do not stand up and resist with all our might right this second) “fascism” or to make too close comparisons to the Nazis. The European fascists put their faith in the power of the state to remake society. I do not see this on the horizon for the liberal-capitalist US, where feelings of hatred and distrust towards an oversized federal government helped to elect Trump. Whatever totalitarian nightmare is on our horizon, it will be uniquely American: a kind of “corporate” or “market-based” totalitarianism that is unique in world history. With its orientation towards the needs of the marketplace and big business, it will resemble in many ways the system that we’ve been living under for decades. If the pre-Trump system of inverted totalitarianism solidified in the context of global neoliberalism, the period of corporate totalitarianism that we are entering now seems likely to be one characterized by what I call “national neoliberalism.”
Trump’s Election Doesn’t Mean the End of Neoliberalism
Trump’s election represents a triumph of neoliberal thinking and values. Perhaps most importantly, we should all keep in mind the fact that Americans just elected a businessman to the presidency. In spite of his Wall Street background and billionaire status, Trump successfully cast himself as the “anti-establishment” candidate. This configuration—in which a top-one-percenter real estate tycoon is accepted as a political “outsider”—is a hallmark of neoliberal thinking. The fundamental opposition between market and government is a central dichotomy in the neoliberal narrative. In electing Trump, American voters are reproducing this narrative, creating an ideological cover for the closer connections between business and the state that are in store moving forward. (Indeed, Trump is already using the apparatus of the U.S. federal government to promote his own business interests). As states and markets further fuse in coming years, this representation of Trump and his administration—as being anti-government—will help immunize his administration from accusations of too-cozy relationships with big business. Trump’s promises to “drain the swamp” by imposing Congressional term limits and constraints on lobbying activities by former political officials will also help to hide this relationship. (Has anyone else noticed that Trump only addresses half of the “revolving door,” i.e., he plans to limit the lobbying of former politicians, but not the political roles of businessmen?)
Trump’s Contract with the American Voter, his plan for the first 100 days in office, discusses policies and programs many of which are consistent with neoliberal thinking. (I interpret the term “neoliberalism” to emphasize at its core the importance of private property rights, market-based social organization, and the dangers of government intervention in the economy.) Trump’s plan redirects the activities of the U.S. government along the lines touted by neoliberal “market fundamentalists” like Milton Friedman, who advocate limiting government’s role to market-supportive functions like national defense (defense stocks are doing very well since the election) and domestic law and order (Trump’s proposals have a lot to do with altering immigration policy to “restore security”). Trump also plans to use government monies to revitalize physical infrastructure and create jobs. Other government functions, for example, health care provision and education as well as protecting the environment and public lands, are open for privatization and defunding in Trump’s agenda. Under Trump, the scope of federal government activities will narrow, likely to infrastructure, national defense, and domestic policing and surveillance, even if overall government spending increases (as bond markets are predicting).
Trump also seems content to take neoliberal advice in regard to business regulation (less is best) and the role of the private sector in regulating itself (industry insiders understand regulatory needs better than public officials). Trump’s plan for the first 100 days specifies “a requirement that for every new federal regulation, two existing regulations must be eliminated.” As of the time of this writing, his selection of cabinet appointees illustrate a broad willingness to appoint businesspeople to government posts. As of mid-December 2016, a Goldman Sachs veteran, Steven Mnuchin, has been appointed Secretary of the Treasury; billionaire investor Wilbur Ross, Secretary of Commerce; fossil-fuel-industry supporter and Oklahoma Attorney General Scott Pruitt, EPA administrator; fast-food mogul Andrew Puzder, Secretary of Labor; Exxon-Mobil CEO Rex Tillerson, Secretary of State. Trump’s business council is staffed by the CEOs of major U.S. corporations including JP Morgan Chase, IBM, and General Motors. To be fair, the “revolving door” between government and industry has been perpetuated by many of Trump’s predecessors, with Trump poised to continue the tradition. But this is not to say that neoliberalism will continue going in a “business as usual” fashion. The world is about to get much more dangerous, and this has serious implications for patterns of global trade and investment.
Trump’s Election Does Mean the End of Globalism
The nationalism, xenophobia, isolationism, and paranoia of Donald Trump are about to replace the significantly more cosmopolitan outlook of his post-WWII predecessors. While Trump is decidedly pro-business and pro-market, he most certainly does not see himself as a global citizen. Nor does he intend to maintain the United States’ extensive global footprint or its relatively open trading network. In other words, while neoliberalism is not dead, it is being transformed into a geographically more fragmented and localized system (this is not only about the U.S. election, but also about rising levels of global protectionism and Brexit, among other anti-globalization trends around the world). I expect that the geographic extent of the U.S. economy in the coming years will coincide with the new landscape of U.S. allies and enemies, as defined by Donald Trump and his administration.
Trump’s Contract with the American Voter outlines several policies that will make it more expensive and riskier to do business abroad. All of these need not occur; I think that even one or two of these changes will be sufficient to alter expectations in business communities about the benefits of certain cross-border economic relationships. Pulling the United States out of the TPP, along with threats to pull out of the Paris Climate Agreement and attempts to renegotiate NAFTA, is already signaling to other countries that the new administration will not be interested in international cooperation. A crackdown on foreign trading abuses will prompt retaliation. Labelling China a currency manipulator will sour relations between the two countries and prompt retaliation by China. As Trump goes forward with his anti-immigration and anti-Muslim rhetoric and policies, he will alienate the United States’ traditional allies in Europe (at least until Europe elects its own nationalist and xenophobic leaders) and communities across the Global South. The U.S. election has already undermined performance in emerging markets, and bigoted rhetoric and policy will only increase anti-American sentiment in struggling economies populated largely by people of color. Add to this the risk of conflict posed by any number of the following: his antagonizing China, allying with Russia, deploying ground troops to stop ISIS, and pulling out of the Korean DMZ, among other initiatives that seem likely to contribute to a more confrontational and violent international arena. All of this is to say that Trump will not have to intervene directly in the affairs of business in order to make it less international and more national. The new global landscape of conflict and risk, combined with elevated domestic spending on infrastructure and security, will bring U.S. business and investment back home nonetheless.
National Neoliberalism and State-Market Relations
Fascist states are corporatist in nature, a state of affairs marked by a fusion of state and business functions and interests. In the fascist states on the European continent in the 1930s and 1940s—systems that fall under the umbrella of “national socialism”—the overwhelming power of the state characterized this relationship. Political theorist Sheldon Wolin writes in Democracy, Inc., in regard to Nazi Germany and Fascist Italy (as well as Stalinist Russia), “The state was conceived as the main center of power, providing the leverage necessary for the mobilization and reconstruction of society.”
By contrast, in Trump’s America—where an emergent “national neoliberalism” may be gradually guiding us to a more overt and obvious corporate totalitarian politics—we can expect a similar fusion of state and market interests, but one in which the marketplace and big business have almost total power and freedom of movement. State and market in the U.S. will fuse further together in the coming years, leading some to make close parallels with European fascism. But it will do so not because of heavy handed government dictates and interventions, but rather because domestic privatization initiatives, appointments of businessmen to government posts, fiscal stimulus, and the business community’s need for protection abroad will bring them closer. Corporate interests will merge with state interests not because corporations are commanded to, but rather because the landscape of risk and reward will shift and redirect investment patterns to a similar effect. This may be where a budding U.S. totalitarianism differs most starkly from its European cousins.
Of course, it helps that much of the fusion of state and market in the United States is already complete, what with decades of revolving doors and privatization initiatives spanning the military, police, prison, healthcare and educational sectors, among others. It will not take much to further cement the relationship.
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