As promised, here is a review of some of the ideas covered in the fairly weighty tome Trumponomics – Causes and Consequences, recently published by the World Economics Association.
The book consists of 30 chapters, each one written by a different author. They are wide-ranging, but all come from a left perspective on economics and politics.
I am not going to review it chapter by chapter, but thought I would discuss some of the main ideas. As there is plenty to get through, I have divided it into three posts to be published this week: part 1 – causes, part 2 – consequences, and part 3 – alternatives.
Part 1 – Causes
A number of the chapters discuss the reasons for the electoral success of Donald Trump. The book is written by economists, so inevitably many of them have an economic basis. However, since their sympathies are with left wing heterodox thinking, much of it could be classed as political economy, which often incorporates political, historical and sociological ideas to an interdisciplinary analysis.
Broadly speaking, the rise of Trump can be explained by patterns of socio-economic change in recent decades which have left many behind; by the perception that particular elites, including the Democrats, have become disconnected from the concerns of ordinary people and have been captured by Wall Street and the ideology of neoliberalism; and by a campaign whose rhetoric successfully appealed to raw emotion rather than to rationality alone.
Since the 1970s the US has experienced major rises in inequality and poverty and a shrinking middle class. Median wages have grown slowly if at all since then, and a huge proportion of the wealth and income generated by a growing economy have gone to those at the very top of the distribution. Although many Americans seem unaware of the scale of the inequality, those in work have seen the level of their pay stagnate or fall and a rise in job insecurity, which has contributed to a growing sense of injustice.
These structural changes are in part the result of three decades and more of neoliberal policies which have redistributed power and wealth to those at the top via regressive tax changes, promoted the financialization of the economy and weakened the social safety net and trade union influence.
In addition, the share of overall employment in the manufacturing sector has declined steadily so that it now stands at about 8%. This trend has been mirrored in almost all advanced economies, but it goes some of the way to explaining the shrinking middle-class, as many of the lost jobs have been in the middle of the income distribution, while those that replaced them have either been in higher-wage finance or in lower-wage services.
As a result of these changes, many communities across the country have experienced dislocation and disintegration.
To add to the woes of many, the financial and economic crisis of 2008 and after produced sharply rising unemployment. Although the weak recovery that followed saw it falling once more, labour force participation fell significantly. The standard measure of unemployment is now relatively low, but alternative measures which include involuntary part-time work and other forms of labour underutilization remain much higher. This gives a more accurate picture of the state of the labour market and a further potential reason for widespread disaffection.
On the political front, mainstream Republicans and Democrats alike have been captured by the lobbyists of Wall Street and big business. The success of Trump and, to a lesser extent, Bernie Sanders, was remarkable in that neither relied on traditional sources of campaign funding. Trump funded himself, and Sanders relied on a multitude of small donors. This made the two of them seem different from the political norm, and apparently well-placed to shake up the system to the benefit of their supporters.
On the campaign trail, rhetoric which generated strong emotions won the day, which did for Hilary Clinton’s appeal to rationality and her association with the status quo.
Regarding the emotion factor, it would be surprising if this was not the case. Humans are emotional beings after all, not simply rational. Those who can associate strong positive feelings with themselves and negative ones with their opponents have a big advantage in the arts of persuasion. Many intellectuals from the liberal left seem to find such outcomes disagreeable, as it goes against much of their professional way of being. But if they wish to ‘make the left great again’ and regain political power and influence, they must heed these kinds of lessons and come up with a platform that appeals to both the heads and hearts of the masses.
In Part 2 tomorrow I move on to the potential consequences of Trumponomics. Part 3 will discuss some of the alternatives covered in the book.