The Republicans ( GOP), traditionally the US’s anti-tax party, now promise to use tariffs to wage trade wars, to massively deport immigrants and to stop drug trafficking. However, taxes are just the name of a specific type of tax ( on imported goods and services ): So the GOP becomes both anti-tax and pro-tax.
Similar to the old-fashioned party of little government, the GOP of today favors massive subsidies for small-scale businesses and economic sanctions and restrictions on small-scale businesses. Beyond the right-wing philosophy and economic self-serving, Donald Trump reflects deeper conflicts in the GOP’s development.
The GOP, which has traditionally been a laissez-faire type of private enterprise, now supports increased government control over what private businesses can and can’t sell in the worlds of regenerative medicine, devices, vaccines, and drugs. The GOP, which has traditionally supported “freedom,” then insists on preventing people from moving across borders and privileges protectionist economic policies over a determination to “free trade.”
Some Trump’s cabinet nominees adopt standard GOP stances, while people adopt new anti-traditional ones. Some contenders do both. Trump’s failure to address the GOP’s fundamental conflicts confounds both its supporters and the general public.
In the moment, those conflicts give Trump some energy. Amid the uncertainty, he decides. However, soon conflicts between US policies may reveal the inanity of Trump’s project and sap his influence.
The Democratic group was, at least since the Great Depression of the 1930s, the “progressive” group of working individuals, organizations, and oppressed immigrants. But the rise of the “centrists” across subsequent years shifted the Democrats upward.
As they became delighted recipients of business and billionaires ‘ donations, the Democrats extremely supported the donor course by fielding “moderate” candidates, moderating their policies and programs, and formally marginalizing the party’s remaining liberal wing.
Personally, the Democrats ‘ moderate leaders pleaded and maneuvered to preserve the traditional assistance of labor unions, oppressed minority and educated experts. The Democrats ‘ efforts to gain more from their traditional supporters were actually made less efficient by restraint.
Liberals ‘ ties to those districts ‘ political commitments and interests also dissipate. Success with sponsors contradicted deepening problems with citizens, most strongly exposed in the 2024 election.
Multiple, severe and prolonged contradictions within both parties suggest that some actual, historical shifts may be live. The US empire’s peak and subsequent decline, in my opinion, are the first of those shifts, followed by the G7’s (especially the G7 )’s ). This change is a result of the International South, China, and the BRICS’s simultaneous fall.
A second change is the formation of US mankind’s domestic financial problems and difficulties. These are poorly acknowledged, let only solved. The long-term worsening of wealth and income disparities and the continual boom-bust or recession-inflation processes, for which no solution has been found, are two examples of the issues.
In brief, both the GOP and the Democrats have denied both swings. In fact, the parties ‘ collective response to the interconnected drops of global empire and local capitalism has so far been deniered. Denial often solves issues. They typically get worse before they erupt because of it.
Political parties ‘ main contradictions and their economic policies have a horizontal effect on professional economists. Unsettled, sour debates among economists react again upon policies, politicians, and open discourse to render them painfully powerless to fix what the public sees significantly as a damaged system.
Starting with Adam Smith, David Ricardo, and the theory of laissez-faire and, especially since John Maynard Keynes, a big part of the career has centered its function around an continued, apparently infinite debate. The question is whether our capitalist system’s operation is best served by fewer than many small, ongoing government interventions.
Should we privilege pro-laissez-faire economics ( the so-called neoclassical tradition ) or governmental interventionist economics ( the so-called Keynesian tradition ) or some” synthesis” of both?
In economics classes at US universities in the 20s, 40s, and 60s, this debate was a significant topic as it is today. The themes of that discussion were frequently expressed in contemporary politics. Occasionally, a few politicians recognized that the overdrawn oppositions, in theory, did not correspond all that well with actual practical politics.
Richard Nixon once said,” We are all Keynesian now”. Bill Clinton bragged about “ending welfare as we know it” in a statement. Trump regularly excoriates Democrats as “radical left lunatics” and includes “fascists” among them. All three presidents were proved wrong, albeit quite self-assured, in making such confused and confusing statements.
Yet the centrality of the private-versus-government dispute in both economic theory and policy continues. Its social value lies more in what it excludes than in what it includes that is positive. Making economics ‘ debate the center of attention has prevented the development of alternative cores that would challenge both Neoclassical and Keynesian economics.
One such alternative core would be the question whether top-down hierarchical production models ( the employer-employee model ) serve more effectively societies than horizontally egalitarian, democratic organizations ( the worker coop model ) do.
Then, debates might turn to which production organization preserves the environment, lessens income and wealth inequality, combats cyclical economic instability, or improves people’s physical and mental health.
The contradictions that agitate discourses and practices these days may be the result of the waning of traditional economic and political practices despite the lacked of new ones still a ways to go. On the one hand, the US and UK are now indicating that they are no longer free trade and instead of a government-run protectionism.
On the other, state-supervised China and India, among others, support free trade. The USSR’s and China’s economic growth records in the 20th century undermine preferences for private capitalism over state-regulated ones.
The old debate sheds no new light on such central economic issues as the rise of the BRICS bloc in the world economy in today’s world economy in comparison to the declines of an already smaller G7 bloc and the US dollar in world trade.
Of course, economists and politicians who have established themselves as leading opponents of neoclassical economics and privatization continue to try to maintain the same old debates that were important.
If they do succeed, it will be because a still-existing system prefers to rehash the outdated rather than welcome and examine what is emerging. In any case, however, unwavering change will continue to affect a fading US empire and its capitalist system.
Richard D. Wolff is visiting professor in the graduate program in international affairs at New School University in New York and professor of economics emeritus at the University of Massachusetts, Amherst.
Wolff’s weekly show, “Economic Update”, is syndicated by more than 100 radio stations and goes to millions via several TV networks and YouTube. His most recent book with Democracy at Work is” Understanding Capitalism” ( 2024 ), which responds to requests from readers of his earlier books” Understanding Socialism” and” Understanding Marxism”.
The Independent Media Institute’s Economy for All project produced this article. It is reproduced here with permission.