Behind Trump’s Rhetoric of Economic Nationalism

by Peter Evans, University of California, Berkeley, USA and member of ISA Research Committees on Economy and Society (RC02), Futures Research (RC07), Labour Movements (RC44), Social Classes and Social Movements (RC47) and Historical Sociology (RC56)

“Economic nationalism” has a venerable history. From Alexander Hamilton to Friedrich List, to their twentieth-century successors in Latin America, Africa and Asia, economic nationalism has been an intellectual and ideological tool for poor countries trying to “catch up” with rich ones. Does Trump’s “America First” rhetoric and the Brexit rejection of Britain’s global economic ties indicate a new “rise of economic nationalism”? A closer look suggests this formulation is seriously misleading.

Donald Trump’s version of “economic nationalism” combines ineffectual bullying with ribbon-cutting rhetoric. “America First” is Donald Trump’s favorite slogan, but while his version of “economic nationalism” owes its popularity to the failures of global neoliberal capitalism, it offers no threat to global capitalism. An extra shovelful of dirt on the grave of the defunct Trans-Pacific Partnership (TPP) may have provided a gleeful moment, but substantive changes in existing trade agreements seem a quixotic project. Exhortations urging American corporations not to move jobs abroad are excellent theatrics, but there is no evidence that these pleas will actually disrupt global production networks.

So why did Steve Bannon – who was, unfortunately, the closest thing to a “big picture” strategist in Trump’s coterie – claim that “economic nationalism” is the second of the administration’s three key pillars? Like Trump, Bannon understands that “economic nationalism” is a meme that can be deployed to exploit accumulated resentment, complementing and expanding on racist and xenophobic appeals while simultaneously undercutting the existing political establishment.

Since the post-World War II “golden age of capitalism” ended over four decades ago, life under neoliberal capitalism has not been kind to most Americans. Stagnant wages have combined with a distressing and demeaning reality, as income and privilege have shifted ever more brutally to the top 0.001% (most recently chronicled by Piketty, Saez and Zucman). By the turn of the millennium, distress had translated into a new epidemic of addiction, and a historically unprecedented fall in life expectancies for less-educated white men.

The conventional American political establishment found itself in a box. Unwilling to risk popular mobilization to confront the power of capital, but unable to change the trajectory of declining well-being and rising popular anger, establishment politicians had already been through decades of failed bipartisan efforts to convince ordinary Americans that only a global regime based on “free trade” could improve their lives.

Trump’s aggressive rhetorical embrace of “economic nationalism” separated him from the vulnerable globalist legacy of this timid establishment. Reducing the structurally-driven negative effects of capitalism to weakness in bargaining with foreign leaders – weakness which could be reversed by a belligerent nationalist negotiator – economic nationalism distracted attention from the actual hallmarks of his economic policy: allowing capital to claim even more of the collective surplus, and removing regulations that offer some protection from predatory economic behavior.

Enabling this political sleight of hand makes economic nationalism the “second pillar” of Trump’s agenda. Trump remains one of the least popular US presidents in modern political history, but economic nationalism remains one of his most effective ideological tools. Without it, appeals to racism and xenophobia would be his only ideological weapons.

Brexit provides a complementary perspective on the political bankruptcy of the argument that “global free markets bring prosperity to all” mantra. David Cameron may have assumed that ordinary Britons would share his enthusiasm for the City of London’s bankers, whose profits are based on a privileged position in global financial markets, but his hubris gave the British people a chance to vote directly on a specific feature of economic globalization – something that no American politician, from Clinton to Obama, has dared allow. The British establishment is still shocked at the rejection of globalism.

Trump and Brexit do not threaten global capital’s ability to extract profit, but they may signal (or perhaps ratify) an upheaval of global neoliberalism’s political infrastructure. In the global North, political elites can no longer take for granted Lenin’s dictum that “a democratic republic is the best possible political shell for capitalism.” For elites, allowing ordinary citizens to vote on issues relating to global capitalism suddenly seems risky. Electorates reciprocate elite distrust, doubtful that selecting political leadership from the normally available rosters will lead to better lives. Elite and mass both question whether liberal democratic processes will serve their interest, raising the possibility, as Wolfgang Streeck puts it, that “capitalism’s shotgun marriage with democracy is breaking up.”

In the global South, the issue presents itself even more starkly. Politicians in the global South understand that they must maneuver within the political space afforded by power of global capital and the rules it has imposed. Xi Jinping is careful not to sound like an economic nationalist when he speaks at Davos. Even the surprising victories of Brazil, China and India in the WTO (World Trade Organization) were fought on the discursive turf of neoliberal trade rules. Instead of proclaiming the legitimacy of nationalist ends, the strategy was to club the North with its hypocritical refusal to abide by its own “free trade” rules. Yet, this is no longer the world that David Harvey described a decade ago in which the ideological ascendance of neoliberalism might be taken for granted. The glorious putative effects of markets may have entranced Deng Xiaoping, but Xi Jinping is not a true believer. Chile’s Pinochet is dead and loyalty to neoliberalism comparable to South Africa’s Thabo Mbeki’s at the turn of the millennium is now hard to find.

Even with evaporating faith in neoliberal formulas, leaders in the global South are still vulnerable to the power of global capitalism, and rarely have the option of posturing as economic nationalists à la Trump. Lacking the economic nationalism card, the uglier tools of racism, xenophobia and repression are too often what leaders turn to when neoliberal strategies fail.

The evolution of Erdoğan’s Turkey, described by Cihan Tuğal in Global Dialogue 6.3 (September 2016), is a cautionary case in point. Starting with a nation that had been “the most secular and democratic country in the Middle East,” Erdoğan’s Justice and Development Party first embraced neoliberal capitalism. Then, discovering that neoliberal capitalism could not provide a material basis for political hegemony within conventional democratic rules, the regime moved toward what Tuğal considers “hard totalitarianism” relying on “mass mobilization and fanaticism.”

Narendra Modi’s regime in India is a variation on the same theme. The most extreme forms of religious bigotry have been unleashed in a polity where secular electoral democracy (albeit highly imperfect) had survived against all odds for 70 years. At the turn of the millennium, India’s embrace of neoliberal capitalism left most of the country’s populace behind, but Modi’s BJP (Bharatiya Janata Party) distracted attention from its tight connection to big capital by moving to an openly Hindu chauvinist strategy, terrorizing Muslims, along with other “outsiders” and “disloyal” Hindus.

Whether the focus is on Trump or the global South, whatever benefits might accrue from global trade and production networks are not threatened by the “rise of economic nationalism.” The real threat to the well-being of ordinary people and communities is the rise of reactionary political strategies aimed at maintaining the power of elites who lack the political will and capacity to challenge the punishing effects of global neoliberal capitalism.

Donald Trump is a global threat, not because he is an economic nationalist, but because he is commander in chief of the world’s most dangerous military apparatus. Judged by actual policies enacted so far, he is not so much an economic nationalist as a politician who has discovered that economic nationalist tropes are useful in distracting his constituents from his devotion to the most retrograde features of capitalist domination. Other leaders, who must live with capitalism’s failures but are prevented by global capital’s power over their national economies from playing the economic nationalism card, are prone to using even more vicious strategies to maintain power.

No “inexorable” logic forces us to accept either the current failure of capitalism to deliver improved well-being, or the abhorrent strategies used by political leaders to preserve their power. Unless they are jarred by the shock of progressive mobilization from below, political establishments will always assume that economic constraints preclude transformation; but the politically unexpected can create unanticipated possibilities as well as discouraging reversals.

While Trump’s efforts to disguise a return to a more reactionary version of capitalism by invoking pseudo economic nationalism have not allowed him to escape record levels of disapproval from the American people, the US politician currently enjoying the highest approval ratings is Bernie Sanders, who made a credible attempt at doing something unprecedented in the history of the United States – becoming the presidential candidate of one of the two major parties while running as a socialist.

Direct all correspondence to Peter Evans <pevans@berkeley.edu>

United States, Volume 7, Issue 4

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