Winner of the New Statesman SPERI Prize in Political Economy 2016

Monday 23 July 2018

Trump and Corporatism

For many years some have seen the US as a form of corporatism* - as a country run in the interests of the corporations and those who lead them. There is considerable evidence that in many senses they are correct. However to see Trump as the epitome of this ‘rule by corporations’ I think misses something important. Trump is different from what went before in important respects.

The way business influenced politicians in the past was straightforward. Campaigns cost a lot of money (unlike the UK there are no tight limits on how much can be spent), and business can provide that money, but of course corporate political donations are not pure altruism. The strings attached helped influence both Republican and Democratic politicians. It was influence that followed the money, and that meant to an extent it was representative of the corporate sector as a whole. The same point can be made about political lobbying. 

The government of Donald Trump is different. It is a selective plutocracy, and with one important exception that plutocracy is selected by Trump. In that way it can also be seen as a democratic dictatorship, where the complexity of government requires some delegation of power to other individuals. Like many dictatorships, some of those individuals are the dictator’s family members.

A dictatorship of this form would not be possible if Congress had strongly opposed it. That it has not is partly because the Republican party chooses not to oppose, but also because Trump wields a power over Congress that can override the influence of corporate money. That power comes from an alliance between Trump and the media that has a big influence on how Republican voters view the world: Fox News in particular but others as well. The irony is that under these conditions democracy in the form of primaries gives Trump and the media considerable power over Congress.

The distinction between traditional corporate power ‘from below’ and the current Trumpian plutocracy can be seen most clearly in Trump’s trade policy. It would be a mistake to see past US trade policy as an uninterrupted promotion of liberalisation, but I think it is fair to say that trade restrictions have never been imposed in such a haphazard way, based on such an obviously false pretext (US surpluses good, deficits bad). Trump’s policy is a threat to the international trading system that has in the past been lead by the US, and therefore it is a threat to most of corporate USA. Yet up till now Congress has done very little to stop Trump’s ruinous policy.

The photo above is taken from an extraordinary recent event (watch here) where Trump walks down a line of senior executives, who in turn stand up and say what they are doing for the US and pledge to do more. Each statement is applauded with a positive statement by Trump, as his daughter trails behind. These are top companies: IBM, Microsoft, General Motors etc. It is all a show, of course, but of a kind the US has never seen before. It seems indicative that this is not just a continuation of past corporatism but something quite different. These are corporate executives doing the President’s bidding for fear or favour.

All this matters because it creates a tension that could at some stage drive events. So far the Republican party has been prepared to allow Trump to do what he wishes as long as didn’t require their explicit approval (i.e their votes in Congress), but it has not as yet bent its collective agenda to his. (Arguments that it already has tend to look at past Republican rhetoric rather than actions.) This uneasy peace may no longer become tenable because of developments on trade, or Russia, or the mid-term election results. If enough Republicans think their future is safer by opposing Trump rather than indulging him, they still have the power to bring Trump to heel. But the longer the peace lasts, Trump’s influence on the Republican party will only grow.

* Readers outside the US may be confused by my use of the term corporatism: it is one of those terms with many meanings. I'm using it in the fourth and final sense described here.


  1. 'Trump’s sensibility is less monumental than ornamental. That sensibility is not simply personal or psychological. It’s a rococo aesthetic that dominated New York fashion and museum culture in the 1980s — when The Art of the Deal appeared — and that cultural historian Debora Silverman, in Selling Culture: Bloomingdale’s, Diana Vreeland, and the New Aristocracy of Taste in Reagan’s America, identifies as the true cultural front of the Reagan Administration. This faux-aristocratic ethos was opulent and ostentatious, loud and luxurious, vicious and vulgar. It was a world made for Donald Trump, the world that made Donald Trump. As Trump says: “What I’m doing is about as close as you’re going to get, in the twentieth century, to the quality of Versailles.”'

    (COREY ROBIN, Triumph of the Shill, The political theory of Trumpism, Published in Issue 29: Bottoms Up, Publication date Fall 2017).

  2. I suspect that it's unlikely we'll get enough Republican defectors in the House to start impeachment proceedings before an election, regardless of what happens.

    If the House flips Democratic, then we should definitely see impeachment proceedings start next year. The real question is whether there will be enough of a public outcry to force the nearly 20 Republicans in the Senate required to actually impeach Trump. That would take something truly monumental, as the Republicans in the Senate have proven, time and again, that they care far more about party loyalty than they care about the country. I think it's possible, but it won't be an easy road. And it will probably take outcry by the rich (e.g. those negatively impacted by Trump's trade war).

  3. Not sure I totally buy the argument. Yes, Trump is the President, but he isn't the complete government. A few weeks back you wrote about neoliberal overreach in the context of the UK and Brexit.

    Reading that piece at the time, I was thinking of the Trump Administration as a kind of conservative/corporate "overreach" in terms of the economic and corporate elite seizing the chance to shift regulations and laws to favor corporate interests, figuring they aren't going to have the same opportunity again given the demographic changes in the population.

    The way the conservatives are packing the courts, the tax bill with its especially punitive treatment of "Democratic Party" controlled states concerning relatively higher local and state taxes, eliminating financial regulations, ensuring that consumer protections are reduced, limiting the power of unions (actually a Supreme Court case), the FAA telling consumers that they won't intervene in various airline-consumer matters, that it's the consumer's responsibility to stand up to the airlines, the various rollbacks in environmental protections, rollbacks in federal lands (interestingly, Sec. Zinke seems to be willing to re-wild a water reservoir used by San Francisco, a bastion of liberal politics), Trump pardons of anti-government types, cuts at non-Defense government agencies, reduction of civil service protections of federal workers, the sanction of a general bias against government, etc.

    in short, this agenda wasn't constructed by Trump or Jared or Ivanka. I am a local politics person and an afficcionado of sociology's Growth Machine theory and the political science theory of the Urban Regime. UR explains best why local growth coalitions do what they do, while GM is best at the why. These theories are applicable on a different scale to national politics.

    Anyway, as a leading UR theoretician, Clarence Stone, wrote:

    Because governance is about sustained efforts, it is important to think in agenda terms rather than about stand-alone issues. By agenda I mean the set of challenges which policy makers accord priority. A concern with agendas takes us away from focusing on short-term controversies and instead directs attention to continuing efforts and the level of weight they carry in the political life of a community. Rather than treating issues as if they are disconnected, a governance perspective calls for considering how any given issue fits into a flow of decisions and actions. This approach enlarges the scope of what is being analyzed, looking at the forest not a particular tree here or there...

    It's not like this agenda was all of a sudden developed between election day in 2016 and 1/20/2017,

  4. I don't think the alliance you mention is between Trump and the media: it's between Trump and the voters.

    Trump ignored the Republicans and the media during his campaign and spoke directly to the people; he is more of a follower than a leader and derives his power from the people directly and not merely in the formal sense of needing their votes.

    In fact of course you are right; he is authoritarian and plutocratic by inclination, an archetypal con man.

  5. I think you're missing the marketing message behind trump's little stage show with CEOs. The point isn't to show the CEOs who's boss - they already know they are and know that trump's easily offended ego needs to be continuously stroked in order to maintain a position of prestige. The point is to appear to his butt-scratching base that he's 'putting the screws to the CEOs' and getting them to commit to helping the US economy.

    The "base" is all about punishment. For example, poor people get food stamps, paid for by taxes, and that, to the base, is the same exact thing as stealing from the base. So punishing/hating poor people is standard fare for the Republican party - all day, all night.

    But the base still feels like big business hasn't done enough to help them, so something needs to be done to get them motivated and ready to vote in the midterms. These superficial, petty, and truly meaningless displays do literally nothing for the base economically.... but facts and data verification are not things that the base does.... ever. They feel better seeing someone in power appearing to hold their [pedicured] feet to the [non-existent] fire. And that's what's going on there.

  6. Dear Prof. Wren Lewis,
    that account of the Trump love-fest is chilling, in part because it is eerily reminiscent of another such meeting, between the newly elected Nazis and the Sahne von der Sahne of German industry (Krupp, Bayer, Opel, Allianz et al.). Masterfully described in the Order of the Day by Eric Vuillard, which won the Prix Goncourt in 2017. Highly recommended. Yet another echo of 1930s Germany.


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