How Donald Trump is testing democracy
US President Donald Trump needs to improve the management of globalization, rather than attempting to roll it back
World leaders seem to be at a loss about how to approach US President Donald Trump, given his worrying positions and often-bizarre behaviour towards politicians and the media, allies and enemies alike. Trump is not just challenging political convention to “shake things up”; he is testing the foundations of US democracy. That test has the potential to transform existing assumptions about the US and its global role.
Trump was elected largely for one reason: A substantial share of US voters were fed up with the state of the economy and the politicians who had overseen it. Globalization—the proliferation of flows of labour, goods, services, money, information, and technology worldwide—seemed to be benefiting everyone except them.
These voters had a point. While globalization, and the trade openness that underpins it, has the potential to enrich the entire global economy, so far the richest have captured a hugely disproportionate share of the gains. In the US, wages for the top 1% of earners increased by 138% from 1980 to 2013, while wages for the bottom 90% grew by just 15%. There is a stark divide between the struggling workers of the Rust Belt and the billionaires of Silicon Valley and Wall Street. The only people who emerged unscathed from the economic crisis of 2008, it seemed, were those who caused it.
Trump seized on this cleavage during his campaign. He tapped the fears and frustrations of this particular group of working-class households, ensuring that they directed their rage not just at the wealthy (like Trump himself) but at the “establishment”—the mainstream politicians who were supposedly in cahoots with Wall Street. For a political outsider challenging the quintessential establishment politician (the Democrats’ Hillary Clinton), it was an effective tactic.
But the election is now over, and it is time for Trump to help the people who elected him. It is not yet clear how—or even if—he plans to do that. In fact, if Trump follows through on his campaign rhetoric, he could end up hurting this group—and many others—even more.
During the campaign, Trump often used scapegoats—especially immigrants and major developing-world exporters, such as China and Mexico—to attract support. The problem is that it is primarily automation, not offshoring or immigration, that is displacing traditional manufacturing workers in the US.
This means that if Trump fulfils his campaign promises—say, to impose severe immigration limits and high import tariffs—he won’t actually solve the problem. What he would do is trigger retaliation from major trading partners, such as China, causing serious harm to the entire global economy—beginning with the US.
A better approach would be to focus on improving the management of globalization, rather than attempting to roll it back. For starters, the Trump administration could offer stronger incentives for foreign investment in major sectors like automobiles and infrastructure.
ALSO READ | Business leaders must learn to listen
Effective management of the forces of globalization is how Japan protected its vulnerable sectors. Opening up trade in agriculture significantly improved living standards for ordinary Japanese, but it could easily have hurt the country’s farmers. Fortunately, Japanese Prime Minister Shinzō Abe’s government recognized this risk, and took steps to protect local farmers, including in negotiating the Trans-Pacific Partnership trade agreement (which Trump has now rejected).
Against this background, Trump’s meetings with Abe provide some reason for hope that the US authorities will pursue such an approach. The hitch is that even if Trump does see the value in it, he may well want to pursue the management task in his own way. He has, after all, shown a clear preference for personal, bilateral deals, like those he makes with his businesses, rather than engaging in formal, much less multilateral, diplomacy.
In a democracy, such personal deals don’t necessarily work. To resolve the complex and controversial issues that arise, broad agreement is needed, and securing it requires clear ground rules. The US constitution is well suited to provide such rules.
In Western democracies, the constitution is the supreme law of the land, taking precedence over all other legislation. The same is true in the US. But, as Michael K. Young, president of Texas A&M University, has explained, because the US constitution was fashioned when various states, which already had their own laws, agreed to create a political union, it functions like a set of ground rules for negotiations among states, as well as among the legislative, executive and judicial branches of government.
ALSO READ | India’s Buy American challenge
By focusing on checks and balances, the US constitution’s framers created a kind of safety valve for the political system, meant to protect it from unexpected shocks arising from any of its many moving parts. With Trump himself essentially amounting to an unexpected shock, this safety valve is being tested.
So far, the system has held. The constitutional rights to free expression and peaceful assembly continue to be upheld—and exercised on a massive scale. The courts have not bowed to Trump, most notably by striking down his executive order banning entry to the US by people from seven Muslim-majority countries. But the test is not over. The people and their leaders must continue to defend democracy, and the courts must guard their independence. The entire world is counting on it. ©2017/Project Syndicate
Comments are welcome at firstname.lastname@example.org.
Editor's Picks »
- Fund managers slashing allocations to equities in emerging markets, shows BAML survey
- ICICI Lombard tightens grip on profitability in a lean growth quarter
- TCNS Clothing IPO: Valuations capture the upsides adequately
- Nightmare of Indian Accounting Standard 115 comes to haunt firms in the real estate sector
- What is driving the optimism in stocks of paint companies?