From its founding through the 19th century, the United States was protected externally – and more or less unprotected internally. A pair of oceans distanced the nation from the bloody intrigue of the Old World, while high tariffs shielded its nascent manufacturing economy from British encroachment. On the inside, however, it was the literal and figurative wild west: a society shockingly vulnerable to the turbulence and injustices of a rapidly expanding market.
As the second Trump administration takes shape, it seems Americans might be headed back to that 19th-century order, with all the dynamism – and risk and human tragedy – it would entail. “External protectionism, domestic libertarianism” is the Trump II vision in its purest form, as articulated by Donald Trump himself and, especially, the tech barons led by Elon Musk who bankrolled his campaign.
Why might this vision be attractive to the non-college majority that handed Trump a decisive victory? Because it tackles two of the chief means by which large employers have undermined wage-earners’ security and bargaining power: namely, offshoring and the mass importation of unskilled workers from abroad. This appeals to workers, even as Trump II’s tycoon-driven libertarianism is likely to exacerbate the internal disparities generated by the unrestrained market.
“A band of small-government revolutionaries will save our nation,” said the entrepreneur and Trump ally Vivek Ramaswamy on 11 November. Picking up the phrase, Musk enthused about “ensuring that maniacally dedicated small-government revolutionaries join this administration!” (Yes, the same Musk who owes much of his success to billions in government subsidies and contracts.)
Trump himself tapped into the spirit of the 19th century with his suggestion that revenue from tariffs might replace income tax. That was indeed how things worked from the founding until 1913 (except during the Civil War, when Congress instituted a temporary income tax). Replacing tax revenue with tariffs today isn’t workable, given the hugely expanded size and scope of the government. And jacking up tariffs high enough to cover the cost would discourage most nations from trading with the US in the first place, thus creating a drastic revenue shortfall.
These ideas will meet fierce resistance from various entrenched interests and the administrative apparatus built up since the 19th century. And, if we’re lucky, the worst of the libertarian model’s ramifications for labour and consumers will be mitigated by Trump himself – who retains populist impulses, especially on social-insurance programmes – and by his vice-president, JD Vance, whose worldview is inspired by Catholic social teaching, even as he also has a foot in the ultra-libertarian tech right.
Still, it’s clear that the American working class, including nearly half of Hispanic men and a quarter of black men, are prepared to trade withered internal safety nets for external protection from migration and offshoring.
As I write, Trump has yet to fill out his full cabinet, but the the external-protectionism dynamic is already apparent in his early choices: Stephen Miller, a hard-line immigration adviser from his first term, has been tapped as deputy chief of staff overseeing a large portfolio that will no doubt include sealing off the homeland to unlawful crossings.
Trump has tapped Tom Homan, another hard-liner who served as acting director of Immigration and Customs Enforcement in his first term, as border tsar to oversee what has been touted as “the largest deportation operation in American history”. This was predictable, given the centrality of the restrictionist case to the Trump-Vance campaign. It speaks to the mounting frustration of not just border states, but even Democratic cities and states confronting millions of immigrants.
In places like New York and Boston, low-income residents, many of them people of colour, raged against the impact of the border surge on their community services, only to be ignored by national Democrats. And no wonder why: the party’s “high-income base”, as the Democratic senator Chris Murphy of Connecticut characterised it in a post-election autopsy, mostly experienced the migration surge as a surfeit of delivery men for the DoorDash delivery economy.
Homan’s methods are sure to horrify that affluent base. But they will vindicate those who long warned that unless mainstream parties respond to popular sentiment on mass migration, others will – with uglier solutions.
Up for grabs, meanwhile, are numerous appointments up and down the executive branch. The balance of power between the Trumpian factions, not to mention Trump’s own personal patronage, will decide who clinches the most important roles. On the policy and ideological front, the smart money is that the Heritage Foundation has been edged by the America First Policy Institute (AFPI), the think tank founded in 2021 by Brooke Rollins and Larry Kudlow, free-marketeers who oversaw domestic and economic policy, respectively, under Trump I.
As the much older institution associated with the Reagan revolution, Heritage should by right get a big slice. But the think tank is reportedly on Trump’s black list owing to the backlash over its Project 2025. The project – a policy and staffing plan for the second administration led by Heritage and created with input from the full spectrum of right-wing wonks – was hung around Trump’s neck by the Harris campaign and its media allies as Exhibit A for Trumpian “fascism”.
These claims were overwrought. As I wrote in these pages at the time, Project 2025 was a typical Conservative, Inc wish list, the sort of thing right-wing think tanks roll out every four years, when it seems possible that a Republican might take the White House. More irritating to Trump himself was the presumptuous way the project was marketed, edging out the campaign’s own messaging and giving the impression that others were setting Trump’s agenda; the AFPI, by contrast, kept a shrewdly low profile.
While supplying ample grist for Washington rumour mills, these factional fissures can distract from the broad consensus around the restoration of something not unlike 19th-century Republicanism, with its blend of trade protectionism and internal laissez-faire (and foreign-policy restraint).
The AFPI is typical. While it advocates passionately for Trump’s high tariff and immigration walls – a clear departure from the pre-Trump GOP orthodoxy – the think tank’s health guru also attacks the Affordable Care Act and calls for putting “patients and doctors back in charge”. That’s libertarian code for permitting insurance plans with higher deductibles and shoddier coverage, and putting the onus on consumers to “shop around” for health, as though the market for emergency transplants were no different from the one for lawnmowers. Low-income Americans are in trouble if this is what Trump had in mind with his “concept of a plan” for replacing Obamacare.
Musk likewise has warmed up to tariffs – an unquestionably populist position favoured by the industrial working class – even as he vows to slash at least $2trn from the $6.75trn federal budget once he is appointed as Trump’s “efficiency” tsar. That’s a drastic transformation that is bound to squeeze, if not eliminate, numerous systems used to regulate America’s complex economy and society and a host of services relied upon by ordinary Americans.
But the threat of a libertarian domestic agenda – amplified insistently by media progressives – proved insufficient to prevent the exodus of the non-college majority from the Democratic Party. This dynamic, too, has a Gilded Age precedent. As Michael Lind has noted, organised labour in that era would support the GOP, notwithstanding its union-busting approach to industrial relations, because Republicans were the party of the protective tariff.
Industrial work tends to offer higher wages and is more stable and dignified than the current crop of precarious gigified service jobs. If the Trump tariff regime succeeds in boosting manufacturing to, say, a fifth of GDP from a dismal 10 per cent today, the economy as a whole can absorb higher costs elsewhere – including unskilled service workers earning more thanks to employers not being able to import cheaper competition.
Then again, pre-New Deal, 19th-century American capitalism was also prone to brutal, firm-destroying price competition, wild business cycles, and frequent banking crises. Then, too, even 19th-century laissez-faire wasn’t as laissez-faire as popularly thought. A manufacturing-first economy requires a competent industrial workforce, huge state-led R&D, and public infrastructure. Contrary to free-market historical revisionists, these were core elements of Alexander Hamilton’s political-economic vision, the foundation 19th-century model. Will a Trumpian movement bent on slashing and burning through the state be able to invest and plan and train on the necessary scale?
Relatedly, will Trump uphold his promise not to “reform” entitlements (read: raising the retirement age and turning over management of Social Security to Wall Street fee-skimmers)? That was a core pledge of his during the 2016 campaign and again this year that set him apart from the conventional, pre-Trump GOP. If Musk enjoys supremacy on questions of political economy and the welfare state, I would worry about entitlements.
It is here that JD Vance must step up. The vice-president-elect’s worldview, as he described it to me in an interview for this magazine, contains two seemingly contradictory impulses: an appreciation for organised labour and social solidarity, inherited from his “Mamaw” (his grandmother who raised him in Appalachia), and a scepticism for existing welfare state structures and indolence, also inherited from Mamaw. Likewise, he clearly (and not inaccurately) sees the Democratic-aligned mainstream of the labour movement led by the American Federation of Labor as a political enemy – even as he has also gone on the record in favour of European-style sectoral bargaining, including in discussions with me.
While he is close to elements of the techno-libertarian right, his legislative record in the Senate was decidedly un-libertarian, and often drafted alongside progressives such as Elizabeth Warren: regulation to reduce insulin prices; to weaken the credit-card oligopoly; and to claw back executive compensation from banks that required bailout from taxpayers. It’s to be hoped that the moral instincts that guided him to these positions in the Senate will also compel him to serve as a serious countervailing force in the new administration’s internal debates over political economy.
The corrosion of the New Deal order under the hammer blows of US elites, Republican and Democratic, has led American workers to make a drastic choice: an economy that is protected from offshoring and a reserve army of labour at the border, even as it offers fewer internal safeguards against the market power of the asset-rich.
It is hard to overstate the seismic nature, and potential dangers, of this shift. Those who believe in the dialectic might harbour a strange hope: it’s possible that the internal pressures – the labour crucible – of the 19th-century model will generate the kind of class consciousness and militancy that forced elites into striking the New Deal in the 1930s. The likes of Musk, in this reading, are the inventive but brutal robber barons whom the labour movement has to “go through” to bring about another, and doubtless very different, FDR.
[See also: Postliberalism redux]
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