For years together, I took a minimalist perspective concerning the differences between the Democratic Party and the Republican Party of the United States and regarded the two parties as Tweedledee and Tweedledum (the two literary characters with similar traits in Lewis Carroll’s book Through the Looking- Glass) in American politics. However, this year appears to be different.
Defying the predictions of many experts and pollsters, Donald Trump won the presidential election in 2016. The rise of Trump and Trumpism is unique in America because Trump introduced new ingredients of populism into the traditional divide between the Republican Party and the Democratic Party. The pillars of new populism are economic nationalism, anti-immigrant stances, pro-white, especially pro-white working-class rhetoric.In my opinion, the rise of Trumpism is a by-product of the inner crises of a myopic, hyper-capitalist, and the neo-liberal form of an increasingly globalised economy. Since the 1980s, the United States’ hyper-capitalist economy has generated massive increases in wealth and income inequality. According to the World Inequality Report 2018, produced by Thomas Piketty and others, the share of incomes of the bottom 50% in the USA declined from about 21% in 1980 to 13 % in 2015; in contrast, the share of the top 1% jumped from about 11% in 1980 to about 20% in 2015. A report of the Economic Policy Institute in Washington, D.C., indicates that the average compensation of a CEO, in 2019, was 320 times that of a typical worker. Furthermore, during 1978-2019, the average compensation of a CEO grew 1,167 % compared to only 13.7% for a typical worker.
As most economists have explored, polarisation in labour markets, is driven more by technological changes, government policies concerning taxes, labour markets, lack of social safety nets rather than cheap imports from developing countries such as China.
Rising inequality has led to falling equality of opportunity and intergenerational mobility in the United States. According to Raj Chetty of Harvard University, in the United States, absolute income mobility (the fraction of children who earn more than their parents) has dropped from 90% for children born in the 1940s to 50% for children born in the 1990s. Unlike the Nordic countries, the private education system has been a major driver of inequality in the United States.
Poverty in the United States, the land of opportunity, always existed but remained invisible to the ruling parties. In 1962, Michael Harrington, in his influential book The Other America: Poverty in the United States, exposed high poverty rates among blacks and Hispanics and in rust-belt States such as Pennsylvania - a state, not surprisingly, remained one of the battleground states. In the recent decade, what is new is the growing economic and social deprivation of the white working class. The median real wages of American men have remained stagnant for half a century. For white men without a college degree, real median wages have declined by 13% during 1979-2017. In the last four decades, the earnings gap between those with a bachelor’s degree and those with a high school degree doubled, creating a fragmented working class in the United States.
The hyper-capitalist system has widened the economic divide between the rich and the poor. The well-known social scientist Robert Putnam of Harvard University in his book Our Kids: The American Dream in Crisis notes that the opportunity gap between kids from “have” and “have-not” backgrounds has widened in recent decades. Putnam, in his latest book The Upswing, eloquently describes how the quality of progress, based on four matrices covering economics, politics, society, and culture, has deteriorated in America since the 1960s. This downward spiral would have disillusioned the French scholar Alexis de Tocqueville who, in the 1830s, was impressed by the democratic experiment in America, as narrated in his book Democracy in America.
High inequality has generated social and health crises such as family breakdowns, suicide, drugs and alcohol abuses, opioids, affecting not only minorities but also the poor, white group. Some telling examples, highlighted by the Nobel Laureate Angus Deaton and Anne Case, the recent authors of Deaths of Despair, can be highlighted as follows: a) the United States is the only advanced country where in recent years, life expectancy has fallen for white men; b) since early 2000, the mortality rate for whites without a college degree has been higher than for other demographic and educational groups including blacks; c) since 1999, more than 450,000 died from an opioid overdose in the United States; and d) according to the US Centre for Disease Control, the annual burden of the opioid crisis is more than 78 billion dollars.The fading of the American Dream for the poor and white working class has created a fertile ground for a populism of the left symbolised by the rise of Bernie Sanders and a populism of the right represented by the rise of Trump. However, the American people are not yet fully ready to embrace the vision of Bernie Sanders. By 2016, Trump managed to create an amalgam of neo-fascist ideology by exploiting the white working class’s grievances marinated in racism, xenophobia, and economic nationalism. This amalgam became attractive to the white, less-educated working class, to traditional conservatives who wanted low taxes on the rich and less support for health, education, and social programs, and to those who felt culturally threatened by the growing diversity in America.
The Covid-19 pandemic has laid bare the fault lines of America’s healthcare system and America’s economic and political systems. The richest country in the world, under the Trump administration, now has the highest Covid-19 cases and deaths in the world. The burden of Covid-19 has fallen disproportionately on blacks, Hispanics, low-income groups, and older people with pre-existing health conditions. The working class has also borne the economic burden of Covid-19 as millions lost not only jobs, but also health insurance benefits. Trump has failed to come out with a better health policy compared to Obama’s Affordable Care Act.
In recent decades, the balance of power in the United States has increasingly tilted toward business owners and corporations against workers. The fraction of unionised workers is now only around 11%. Under the Trump administration, new labour laws have made workers’ bargaining power weaker and the workplace less democratic than before.
Trump initiated tariff wars against China and several other trading partners to reduce American trade deficits and promote and protect American jobs in the manufacturing sector. Most economists, however, have argued that Trump’s trade wars have been self-destructive. Indeed, the US trade deficit with the world increased from $749.8 billion in 2016 to $864.3 billion in 2019. The US trade deficit with China barely improved from $346.8 billion in 2016 to $345.2billion in 2019. In 2016, Trump promised to achieve a “manufacturing miracle” for workers in the manufacturing sector. However, the evidence shows that manufacturing employment fell from 12.4 million in January 2017 to 12.2 million in September 2020.
Trump’s hostility toward multilateral institutions such as the WTO, WHO, and other international bodies, his affinity to foreign dictators, and indifference to traditional allies have eroded his support among traditional republicans. His policies toward climate change and the environment have energized anti-Trump environmentalists. His policy stances on women’s issues, especially on abortion, weakened his support among educated, white women.
More important than Trump’s failure to address the concerns of the working class, gender inequality, wealth and income inequality is Trump’s indifference to racial equity and diversity. Trump’s persistent rhetoric against democratic institutions such as free press, separation of power, the rule of law, his pathological impulses to denigrate scientists, his visceral propagation of lies and distortion of facts alienated many independent voters and mainstream Republican voters.
On November 3, Americans were at a crossroads. One road led to a divisive, iniquitous, and “jungle society” driven by rugged individualism and the other to a more inclusive economic and political system that can maintain a balance of freedom, democracy, and the public good. By choosing the second road, it is the Americans who have won the election. As emphasised by Daron Acemouglu and James Robinson in their magnum opus, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, sustained economic progress is impossible without an inclusive society. At least now, Americans have avoided the dystopian scenario, similar to the one depicted by the American Nobel Laureate writer Sinclair Lewis in his novel It Can’t Happen Here.
The path ahead for America toward a more humane and inclusive society is likely to be non-linear and tortuous. By the laws of political gravity, Trump has fallen from power. However, it doesn’t imply the end of “Trumpism.” Unless Americans remain vigilant and politically conscious and unless the Democratic Party addresses the economic and social anguishes of the middle and poor classes, another Trump or Berzelius Windrip (the anti-hero of It Can’t Happen Here) may emerge in the future.
The writer is a Professor & Chair of the Department of Economics, Laurentian University, Ontario, Canada