In a country often called the home of “cowboy capitalism” (if only it were so!) it’s jarring to see the rapidly changing political landscape in the United States and realize there is no longer a major free-market political party competing for votes. The Democratic party has been shifting towards an open embrace of socialism, but even the historically market-oriented (or maybe more accurately pro-business) GOP has become a populist party with a soft spot for protectionism and the welfare state. Cowboys practising capitalism in the U.S. have few friends in government.
At a press conference in 1986, then President Ronald Reagan famously quipped, “The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.”
Reagan’s remarks captured the tone of the Republican Party at the time, in intent if not always by its actions (during that conference, Reagan announced government support for struggling farmers, while looking forward to “economic independence for agriculture.”) The GOP then was a political party that, in the economic sphere at least, saw government action as causing more problems than it solved. Opportunity was to be found in free markets which offered individuals a path to prosperity.
Quite a lot has changed since then.
In the party’s 2024 platform, “Republicans offer a robust plan to protect American Workers, Farmers, and Industries from unfair Foreign Competition” (they also have peculiar rules for capitalization). The plan includes tariffs on foreign goods, preventing some imports entirely, strengthened “buy American” and “hire American” policies, and bans on federal contracts for companies that move jobs overseas. It’s a protectionist stew alongside schemes for mass deportation of immigrants, with the awfulness that implies.
“The fact that trade protection hurts the economy of the country that imposes it is one of the oldest but still most startling insights economics has to offer,” Jagdish Bhagwati, a Columbia University-based international trade economist, pointed out in 2018.
In place of Reagan’s dream of economic independence is Donald Trump’s vow “that he will not cut one penny from Medicare or Social Security.” The new breed of Republicans “will protect these vital programs and ensure Economic Stability.” And never mind that the two entitlement programs (a fancy term for buying votes by putting everybody on the dole) are desperately broke with the day of reckoning roughly a decade out, and important drivers of the federal government’s exploding debt.
Vice-presidential candidate J.D. Vance, an explicit opponent of economic activity free of government control, openly desires to “seize the administrative state for our own purposes.” Those purposes include punishing people and organizations with different political ideas.
On the plus side, the platform does promise to slash regulations and cut taxes, and that’s almost always a good thing. But there’s no acknowledgement that federal spending will also have to be reduced (hello, entitlements!) when revenues decrease. And it’s all in the context of a government-led economy.
Interestingly, the GOP isn’t the only “right-wing” party that has embraced statist economics.
France’s National Rally, which briefly seemed on the cusp of forming a government after President Emmanuel Macron called snap elections, was instead pushed to third place when centrists and leftists formed an alliance of convenience in the second-round vote to deny as many victories as possible to the party. But the National Rally has some odd positions for a political party often decried as “far-right.”
Like the current U.S. Republican Party, the National Rally is hostile to immigration and tough on crime. On economics, the French party’s platform proposes restricting “unfair” foreign competition, renationalizing highways, subsidizing families and young workers, lowering the retirement age to 60, imposing a wealth tax, and increased funding for public healthcare.
The National Rally also favors some tax cuts, but the overall program envisions a lot of state intervention. That led the BBC to ponder in 2014 whether the party is “far right or hard left?”
The Sweden Democrats, who came in second in that country’s 2022 election and support the current coalition government without formally participating, offer a similar grab-bag of welfare-statism, tax cuts, and nativism. Poland’s Law and Justice Party, which governed from 2015 until last year, combined socialist-leaning economics with nationalism — and a mean authoritarian streak.
“In an age when ‘right’ has come to mean, less state and more markets and corporations, the economic policies offered by the (nativist-populist) parties are often further to the ‘left’ than many of those offered by centrist social democrats,” Queensland University of Technology’s Haydn Rippon wrote in 2012 about the then still-early rise of such parties across Europe.
For all its chest-beating about American exceptionalism, the U.S. Republican Party under Donald Trump looks more like an extremely European entity. In wandering away from the free-market individualist tradition, the GOP became something that could very comfortably fit into the European Parliament, its lawmakers sitting alongside like-minded legislators from France, Sweden, Poland, and elsewhere.
Given that the U.S. is a large country with remarkably few effective political parties, that leaves us with the Democrats. Unfortunately, there’s nothing encouraging to be found there for fans of free markets.
Gallup pollsters first found more members of the Democratic Party viewing socialism (57 per cent) positively than capitalism (47 per cent) in 2018. Those opinions have held in more-recent surveys (Republicans continue to voice overwhelming support for capitalism, whatever their party itself favours).
No wonder that the party has embraced rent control, student-loan forgiveness, massive subsidies for favoured business, and sky-high government spending.
In the same years, Democrats have also turned away from supporting free speech. Polling finds surprisingly high support among them for government regulation of expression — often justified by labeling dissent as “misinformation” or “disinformation.” Or maybe it’s not surprising that approval of authoritarianism in some areas leads to favoring it in others, too.
The lack of a clear free-market party in the United States is unfortunate, since it was “liberalism, in the free-market European sense,” as economist Deirdre McCloskey noted in 2016, that lifted billions out of poverty. Worse for us if the abandonment of faith in capitalism leads to even more loss of liberty.
National Post