What the GOP's Turn Away from Free Market Economics Actually Is About

Politico, the gossip sheet of the chattering class, has detected a new policy debate percolating within the Washington Beltway. It's an argument within the Republican Party, and, the article's headline tells us, the dispute is not (for once) all about Donald Trump--although it turns out it mostly is.

The essence of the debate is whether the party will maintain its traditional economic policy position of fervent support for free market fundamentalism or shift to a more active government role in shaping the economy.

(This is not the place to discuss the abstract merits and demerits of capitalism. Like any ideology or policy, it is heavily conditioned by the cultural context in which it's applied and by the actors who apply it, just as socialism means different things in Denmark and North Korea. This is purely an examination of capitalism as imagined by American conservatives).

"All populism as practiced by the right is a lie and a con."

Politico cites several man-bites-dog items, such as Mitt Romney and Tom Cotton proposing a national minimum wage hike, Marco Rubio declaring support for unionization at Amazon, Josh Hawley suggesting antitrust legislation, and hillbilly elegist (and now Ohio Senate hopeful) J.D. Vance mooting a tax increase on U.S. companies that ship jobs overseas.

It further states that while these ideas seem like evidence of the Trumpification of the party, it's far more complicated than that. It alleges that except for tariff policy, Trump governed far more like Ronald Reagan.

The tariffs, mentioned only in passing, merit further discussion for the light they throw on the GOP base. Protective tariffs can be effective against below-cost export dumping by other countries, or for nurturing critical infant industries. But they must be applied carefully, or they risk boomeranging.

This was precisely the case with Trump's steel tariffs: they cost more manufacturing jobs that use steel than they saved in the steel industry (which shed jobs anyway). The reason is that downstream manufacturing either had to pay more for specialty steels not domestically available (thus raising consumer prices for cars, appliances, etc.) or substitute other materials where possible. In any case, the manufacturers became less competitive, and as a result, some laid off workers or shut down.

A massive boomerang effect came from the retaliatory tariffs China placed on U.S. farm commodities like pork and soybeans. This resulted in a huge decline in farm income and led to a spike in bankruptcies--and suicides. The market may never come back, as China merely substituted commodities from such countries as Brazil and Argentina.

Did the tariffs change the perceptions of those most affected? The results are mixed. There was a small drop-off in the percentage of white working class votes going to Trump and the GOP in 2020--or put another way, their long-term trend of increasingly voting Republican stalled. But Trump's loss was mainly due to white suburban women and the college-educated fleeing from the GOP in substantial numbers, so it's hard to ascribe any significant electoral effect from the manufacturing impacts.

In the case of farmers, there was zero erosion of support: they clung to Trump like barnacles on the hull of the sunken Titanic. Some of this was the result of massive farm subsidies paid for by you and me, but they did not last forever, and those subsidies cannot redress future income losses if the Chinese market does not return.

All the talk about the GOP being populist, the new party of the working class, and abandoning free market dogma seems to me more a matter of product branding by some Republicans now that they are losing the middle class, and viral repetition by a credulous media. Politico extensively quotes from think-tanker Oren Cass, who advocates that the GOP adopt so-called populist economics. But Cass is a relatively minor figure in the Republicans' intellectual menagerie; any radio talk show demagogue attacking vaccines has more traction with Republican politicians, because that's what the base listens to.

This alleged debate about GOP economic policy appears to be kabuki theater designed to camouflage the real intent. Unlike tariffs--the debate over which goes back to the founding of the country--so-called "common-good capitalism," as interpreted by Republican politicians--is not a policy in the traditional sense--and it is thoroughly Trumpian. I suspect it is about bringing the donor class firmly under the thumb of Republican grandees.

The idea derives from Trump's habit of berating any company that did not obey whatever party line Trump happened to be espousing. He excoriated Mary Barra, the CEO of GM, for closing down the Lordstown assembly plant (never mind that Trump's steel tariffs may have contributed to the closure), and for not magically producing the ventilators needed to keep COVID patients alive amid the pandemic that Trump exacerbated by always doing the wrong thing.

Trump's feud with Amazon CEO Jeff Bezos is well known. His ownership of The Washington Post infuriated Trump, and the president pressured the postmaster general to double the postal rates on package deliveries to punish Amazon. Later, Bezos was hacked, and personal details were by sheer coincidence published by a close Trump World ally, the National Enquirer. Evidence of responsibility points to Saudi Arabia, a country criticized by the Post for almost certainly murdering one of its journalists, Jamal Khashoggi.

Trump urged a boycott of Harley-Davidson if the company moved some of its production to Europe: again, it was the result of retaliatory European tariffs in response to Trump's tariffs. The boycott apparently had some effect, although it is difficult to picture 250 pound MAGA fans astride a Kawasaki Ninja at the annual Rolling Thunder mass hallucination or the Sturgis, South Dakota, superspreader event.

That's just a sample of the companies that Trump targeted for his vituperation, something Ronald Reagan assuredly never did. What it accomplished was to give "permission" to an increasingly authoritarian and gangsterish GOP to shake down and control the business sector. When Tom Cotton or Josh Hawley criticize business, you can make book on the fact that they are not going to bat for workers or consumers.

What we are seeing is the GOP at large beginning to adopt Trump's methods. When GOP politicians fulminate against tech companies as they are now doing, it's not about size or market concentration or data protection per se. Their ulterior motive is that the companies, even as private entities, are somehow under an obligation to be a megaphone for GOP talking points regardless of the lies, slander, or threats they might contain.

Trump's lawsuit against Facebook, et al., is a masterpiece of juvenile legal theorizing about this imaginary obligation. But because when authoritarian movements gain power, they always move to take over or muzzle the mass media, this may be the first Republican step on that journey.

Republican attacks on companies' mask mandates, when the GOP hitherto believed they had a sacred right to run their businesses as they saw fit, are a further example of this trend. Ron DeSantis's lunatic executive order against the cruise ship industry's demanding proof of vaccination is definitely anti-business, but it is hardly pro-consumer, as most passengers would prefer not to sicken and die. What's more, companies that lobbied against passage of legalized vote suppression in Georgia are also facing political retaliation from Republicans, as in the case of Delta airlines and Coca-Cola.

As the GOP careens further and further towards the scientific Dark Ages, nihilism, and death cultism, it probably has lost traction with at least some segments of corporate America, if for no other reason than that those who die of COVID cannot buy their products. And this creates an action-reaction cycle whereby the GOP seeks to punish them in the same vindictive manner by which they deal with heretics in their own ranks like Liz Cheney.

Thus the legislative spitballing by Republican politicians about antitrust and so forth does not represent policies that they seriously intend to enact in order to ease the lot of John Q. Public. More plausibly, these are implicit threatening messages to boardrooms that the days of making nice to the Business Roundtable are over, especially if they're going to do damn fool things like lobby against voting restrictions or withhold PAC checks just because of a little attempted government overthrow.

All fascists claim to rule in the name of the people, but invariably adopt starkly plutocratic economic measures that favor the rich--provided the rich play ball with the regime. We see this dynamic play out in Hungary, whose businesses are coddled but George Soros is demonized. Russia is a playground for the oligarchs, but should anyone step out of line--like Mikhail Khodorkovsky--he is imprisoned and his company confiscated: not for the benefit of the people, but for the regime-friendly oligarchs.

It is an historical pattern. Plutocrats all over the world--from Henry Ford to the family that now controls Coty and Calvin Klein to Brown Brothers Harriman, assisted by a certain Prescott Bush--helped finance Hitler's rise to power. So did steel baron Fritz Thyssen, but his falling out with Hitler eventually landed him in Dachau.

"If Republican policy on COVID is literally killing Republican voters and creates no discernible backlash among the base... then why do they need to be offered affordable health care or better working conditions?"

The Republican rhetoric of "freedom" and "making America great again," are deliberately vague but suggest some kind of impossible time travel back to a weird amalgam of Davey Crockett's frontier and a fantasized, middle-class 1950s utopia. But this impossible vision of an All-American Neverland ultimately is camouflage for a more bedrock Republican vision, one that won't sell to the public at large, although it has strong traction among Republicans in the know.

All populism as practiced by the right is a lie and a con. The tender regard of GOP leaders and theorists for the white working class is, aside from the fact that they are an increasing percentage of GOP votes, similar to that of the aristocratic landowner towards his tenants: a sort of faux-benign paternalism that allows for a little charity here, or the leavings from his lordship's dinner party there. But the notion that the peasantry deserves things by natural right is out of the question.

Since the French Revolution, a fundamental tenet of the right in all Western countries is a "natural" hierarchy among human beings. It was best expressed in 1981 by Paul Weyrich, who, unlike Cass, was very influential in GOP circles:

I don't want everybody to vote... As a matter of fact, our leverage in the elections quite candidly goes up as the voting populace goes down.

In the United States, those of the wrong color are generally at the bottom of the pecking order, and that is what has perpetually bedeviled the country. But even "white privilege" doesn't convey dispensation in all things.

Republican grandees certainly appreciate the white working class' votes, but that doesn't mean they will grant them affordable health care. And why should they? There is no political penalty for failing to do so. If Republican policy on COVID is literally killing Republican voters and creates no discernible backlash among the base--Ron DeSantis is fundraising off killing his own constituents--then why do they need to be offered affordable health care or better working conditions?

Some political observers may conclude that a squabble between Republican politicians and corporate billionaires is like two scorpions in a bottle. But be assured: the GOP isn't doing it to help the little guy.