By Kumar David –
It is pretty certain Hilary Clinton will be the Democrat’s candidate and Donald Trump has clinched the GOP (Grand Old Party or Republican) nomination. GOP high ups loathe Trump; House Speaker Paul Ryan, Bush-41, Bush-43, David Petraeus and former candidates John McCain and Mitt Romney have declined to endorse him. Eventually most will climb down but internal GOP schisms will debilitate his campaign and the scenario in the party is still murky. This piece explores Trump’s appeal and why nevertheless he is likely to be rejected by the electorate.
The odious contours of Trump’s campaign appeal to America’s economic losers and the Tea Party gadflies that the GOP recklessly encouraged as a whip against Obama. But he is resonating far beyond and has attracted the blue-collar white working class and it is not true that his appeal is only to a minority in the party. In recent weeks a majority of Republicans, frustrated by the debility of the economy, seem to have thrown in their lot with ‘outsider’ Trump. It is the economy/jobs/government spending not his outlandish pronouncements and whacky bluster that keeps Trump’s image alive.
Donald Duck economics
Trump’s table thumping on the economy has little connection with reality, but it is blunt. The US economy is in trouble; but not because it is being ripped-off (“raped” is his latest ejaculation) by China, Mexico, presumably Vietnam and other low labour cost (high productivity) countries. “We are a great nation but shackled by foreigners; there is nothing wrong with America per se (except of course Obama and the Democrats) it’s the fault of trade, currency manipulation, immigrants stealing our resources and the dirty doings of crafty Chinese and dumb Mexicans”; that’s his message. It speaks to falling living standards of working and lower middle classes and the fears of middle-middle class conservatives. What I am driving at is this: It’s not new that Trump’s fans are daft, but the point is that economic insecurity in many population pockets resonates with his rant.
That people are in a funk does not make Trumponomics (Donald Duck economics) coherent though the forces driving it are real. The contentious issue is the near collapse of US manufacturing in the face of global competition. In simple terms: If it costs $10 to make and market a commodity in the US, then it can be made in China or Vietnam, shipped to the US and sold for $7. The US cannot meet this challenge, notwithstanding its higher productivity, because wages (and therefore living standards) are disproportionately higher. Production of that commodity may take one man-hour in the US and a wage of $10 (ignore profit, materials and energy costs) and one and a half hours of $4 per hour labour in Asia. Then the Asian labour contained in exactly the same commodity is $6. Add $1 for shipping and still the American housewife makes a gain of $3 (30%). To put it another way there is a transfer of $3 of surplus-value from Asian labour to American consumer. Since labour is cheap in China or wherever (cheaper than necessitated by lower productivity) there is a transfer of surplus-value to the US commodity market; that is lower prices benefit the buyer as well. This is the crux of the matter in the simplest possible terms, not cheating, “raping” or unfair trade practices.
This is not America’s problem alone but global; 90% of the world’s energy saving lamps, 70% of spectacles, 60% of shoes, brassieres, bags and suitcases and 30% of toys are made in China. The list goes on, and it is no conspiracy that global companies invest in profitable (after adjustment for risk) foreign locations. Capital goes where cost is low; that’s its law of gravity.
This is not to say that there are no unfair or discriminatory trade practices in China; there are, but that explains only a small part of the huge US trade deficit. The overriding reason is the American consumer’s insatiable thirst for cheap commodities egged on by a potent drive in exporting countries to ship as much as possible. This, nobody, neither Trump nor Saunders or Clinton can tell the people as it amounts to saying: “Cut your wage, lower your living standards, you are living beyond your means, you are uncompetitive”. It’s the same elsewhere; can we tell doctors and workers in Lanka in the context of ETCA that their salaries are high compared to equally competent Indian counterparts? Populist opposition to ETCA is Lanka’s version of America’s Donald-Bernie trade protectionism. The truth is the US economy has declined for historical and structural reasons; this is reality, conspiracy theories are myth. Nevertheless, the American economy is powerful and Sanders is absolutely right that the top 1% of society is harvesting all fruits and the lowest 80% is left out to corrode with nothing of the gains in wealth and income.
Existential preferences replace ideological divisions
All over the world, left-versus-right hard divides have turned hazy and existential preferences are taking the place of ideological divisions. A striking example is globalisation and free trade. The most vociferous opponent of the European Union is the rising ultra-right in France (Le Penn), UK (UKIP), Denmark (Peoples Party) and Austria (Freedom Party). And now US GOP presidential candidate Trump trashes trade pacts past (NAFTA), and future (TPA and TTIP) and supports Brexit. Conversely, the left and social democrats are accommodative of internationalism (read globalisation), global trade and dealing with China despite protectionist pressure from below. An intriguing case of ideological haze is that though Labour suffered setbacks in UK local government elections, in London Labour’s anti-Corbyn right-leaning Sidiq Khan (a Muslim son of a bus driver), polled 1.3 million votes, the largest individual mandate in the country’s electoral history. This of course must be read in the context that about 40% of London’s population is non-white
One reason for such complications is that alterations shaped by modern capitalism have changed monolithic class blocks into amorphous fluid forms. The factory working class has declined and been replaced by a modern working class (mistakenly called middle-class), more educated and adaptive than its predecessor. Being more educated this class has a broad societal view of wealth and inequality conflicts and of corporate and finance capital, than factory-gate modes of struggle. It is youth from this class that is flocking to Bernie Sanders radicalism. Its long term impact on America will be profound and less conspicuous but similar resurgences are visible in Europe.
Immigration is another issue on which the left-right divide has blurred. Angela Merkel, Germany’s Christen Democratic Chancellor, not the left, is the champion of enlightenment values re the Syrian refugees. Modi is more populist on class matters than his predecessor Manmohan of Nehru’s Congress. In the political contest between the Ranil-Sirisena and the Mahinda-Weerawansa power blocks, pray who is right and who is left? Existential, that is issue-based divisions crisscross and erase old ideological divides. Even the JVP is pro-government, at least more anti-Mahinda than the other way. Existential concerns are supplementing if not displacing inherited categories.
Across the world issue-based concerns supplant fixed ideological allegiances. Bernie Sanders and Donald Trump are both opposed to the US joining international trade agreements since they are both deluded that it is not the intrinsic decline of the domestic economy, but the stealing of jobs by foreign countries that lies at the root of America’s woes. So a progressive social democrat and a near-fascist demagogue are within spitting distance on a key issue of the election! However an unchanging Sanders’ refrain is inequality; “the richest 1% has more wealth than the lowest 90%; the Walton family of Walmart fame, the nation’s richest, has more wealth than the lowest 40% of the population, etc.” Trump shuns these themes because the GOP is the political zeitgeist of Wall Street.
Insular-nativism versus leftish-liberalism
Trump’s and Sanders’ populism seem to complement each other, but are worlds apart. The paradox must give us pause. It is indeed residual un-erased ideological schism that divides them into what the old Soviet era jargon called ‘different camps’. Trump leads an insular-nativist upsurge in the GOP and America, while Hilary Clinton (after the Democrats unify with the inclusion of Sanders) will represent a leftish-liberalism. I use leftish not the more usual leftist because it is more amorphous. The term liberalism is chosen to describe Hilary’s political provenance, her proven democratic activism and the Clinton dynasty’s ties to Wall Street.
The insular-nativist political revanchism that Trump embodies is primitive. His xenophobia is populism to stir America’s angry-about-the-economy classes; a whacky bombastic persona pairs with primitivism. In style, stable and substance there is a deep difference in what the candidates put on the table. Trump’s candidature will stir up heat; Sanders’ will drive policies on income, health, education and taxation and force the Democratic Convention to commit a putative Clinton presidency on these issues. America is likely see off Trump as dangerous both at home and abroad and if I am right, we are on course to a Hilary Clinton presidency. Could I be wrong? Maybe, but it’s too early to say.
President Trump on the world stage
The plain truth is that Trump as president will make only a small difference in matters of war and peace. All his bombast about wiping out ISIS real fast will achieve no more than Bush’s venture into Iraq. Roll into one place; get rolled out of two others. America has learnt the costly lesson of the limits of military power in the Twenty-first Century; under Trump it will unlearn some of it before relearning at a higher cost. Obama’s achievements were in foreign policy; the centre pieces are the Iran Nuclear Agreement, the new understanding with India, repaired relations with Cuba and Latin America and the far improved image of America all around the world.
I doubt Trump will be able to damage official settlements but he will squander Obama’s image building legacy, tear it to tatters. If he carries on as now a visit by a President Trump to Asia, the Middle East or South America will invite jeers – and not only in China and Mexico.
However the worst consequence for the US of a Trump presidency, in the unlikely event he does implement the xenophobic economic agenda he spouts, is that it will open an era of trade wars leading to US economic isolation. I say unlikely because the bureaucracy, Wall Street, a Republican or Democrat controlled Congress and public outcry will stop him in his tracks. But one can’t be sure, the chap is such a loose cannon.