Trumpism and crony capitalism

by John Quiggin on December 11, 2020

Some tentative thoughts, for a chapter I’m writing about the decline of neoliberalism, and the crony capitalism I see as replacing it. (unless we can achieve a leftwing alternative)

An important difference between Trumpism[1] and neoliberalism (in both hard and soft variants) is that Trumpism is associated with crony capitalism, rather than global corporations and finance. This is obscured to some extent by shared interest in corporate tax cuts and deregulation. But it’s a clear pattern,exemplified by Erdogan, Modi, Orban and Putin (search “X + crony” for illustration). Why is this? The core appeal of US Trumpism is a negative kind of identity politics, reaffirming the rightful dominance of the “unmarked category”, or default identity, that is assumed when a term like “real Americans” is used. Unmarked categories in the US context include white, male, employed, English-speaking, Christian and cis-het.

Trump’s global counterparts have the same kind of politics, but their unmarked categories are different, most obviously with respect to language, race and religion. These differences are problematic for global corporations, who want to operate in different national markets and employ the best talent they can find anywhere.

As long as neoliberalism was dominant, Trumpist voters could be bought off with gestures, while policy was run in the interests of global business. But now that the Trumpists are in charge, they are demanding measures that harm global businesses both economically (restrictions on trade and investment) and culturally (by making ascribed characteristics, rather than market outcomes the measure of esteem). By contrast, local capitalists (like Trump himself and the billionaires who now back him) mostly benefit from these measures as well as from pro-rich policies in general. Even under neoliberalism, many operated largely on the basis of connections. Provided they can stay in the good graces of the strongman (not guaranteed, as various Russian oligarchs have discovered), they are well placed in the new environment. And, unlike global corporations, crony capitalists can operate with a short time horizon. Even if Trumpist policies are ultimately disastrous in economic terms, they have time to make their pile and cash out.

fn1. In 2016, I used the unsatisfactory term “tribalism”, for want of a better alternative, but Trumpism fits the bill perfectly.