Dani Rodrik: Will America Inc and US academia protest Trump policies?

Trump’s behaviour is no surprise. His economic-policy ideas have always been wacky, and his apparent hatred for elite academic institutions, which he views as the home of ‘woke’ culture, is well known. What’s more shocking is that corporate and academic leaders have made barely a peep.

Also Read: Barry Eichengreen: Trump is taking aim at the IMF, World Bank and US Fed

After Trump’s election victory last November, there was cautious optimism within business circles. He seemed to them like a welcome change after Joe Biden, who had talked tough against the private sector and supported organized labour and regulation. Trump, by contrast, promised low taxes and less regulation. His tariff talk was a problem, but most assumed that it was largely for show. The stock market blessed Trump’s election by soaring to new highs. Tech billionaires donated to his transition and bent the knee at his inauguration.

The intervening weeks have shown such optimism was misguided. Trump has thrown one curveball after another at the economy, leading the US stock market to give up more than its gains since November. It’s hard to know which move has been worse: the steep tariffs imposed on America’s closest allies (Canada, Mexico and Europe), or the constant bluster, threats and whipsawing on trade policy, which have sent economic uncertainty indicators to levels higher than during the 2008 global financial crisis.

Making matters worse, Elon Musk’s Department of Government Efficiency has wreaked havoc with the federal government, violating basic legal tenets and sacking more than 100,000 government workers. While there may be some cold-hearted logic to the cutoff of foreign aid, the administration also has inexplicably taken an axe to basic research in fields ranging from health to education.

Also Read: Is privatizing US public services the ulterior motive of Elon Musk’s DOGE?

It ought to be obvious to American business leaders that Trump is a clear and present danger to the system from which they generated their fortunes. As damaging as his erratic trade policies are, they pale in comparison with the threat he poses to the basic institutions that a thriving market economy needs: the rule of law, separation of powers, government investment in science and innovation, public infrastructure and stable and friendly relationships with like-minded countries.

Musk owes much of his own success to these institutions. Without a critically timed government loan, Tesla would have gone bankrupt; and SpaceX has received tens of billions of dollars in government contracts. Yet, Trump has jettisoned all this in favour of an agenda that advances no coherent strategy, let alone solutions to problems.

Trump’s threat to US academia is even clearer. He has sharply reduced government support for basic medical research; and under the guise of fighting anti-semitism, he has arbitrarily starved some of the top US universities of funds. Columbia and Johns Hopkins were early targets, but others (including Harvard) are also on the chopping block.

When the basic institutions of a democracy come under attack, those leading major business and academic organizations have an outsize duty to say something. Yet, neither business executives nor university presidents have stepped up to the plate. Instead, their approach seems to be what Harvard political scientists Ryan D. Enos and Steven Levitsky call “quiet appeasement." By working behind the scenes and not drawing attention to themselves, they hope to avoid the worst.

But as Enos and Levitsky point out, this strategy does not work. Authoritarian populists always target universities and trample academic freedoms. Censorship, whether imposed by the government or self-imposed, is the price all academic institutions end up paying. Even when autocrats are initially market-friendly, they eventually undermine the institutional foundations of a competitive market economy.

Also Read: Anarchy or autocracy: What exactly is the Trump presidency aiming for?

Trump’s assault on America’s democratic institutions has been breathtaking in its speed and brazenness. It simply is no longer possible to say ‘This is just how he talks; he’ll never carry out these threats.’ No leader can continue to doubt the seriousness of the situation. Autocrats thrive when their opponents remain divided and fearful of speaking out. Such is the tragedy of collective action: we all lose when we refuse to stick our individual necks out. That is why leading universities and big corporations, those with both the most credibility and most to lose, now bear a disproportionate responsibility to do something.

Imagine that the chiefs of America’s top universities and richest corporations—along with labour unions, faith groups and other civil-society organizations—issued a public statement that spoke clearly and loudly about the dangers of undermining the rule of law, academic freedom and scientific research. It would not move Trump, but it would give heart to other democratic forces. Tens of millions of Americans are asking when someone will have the courage to speak out. Those who do will at least put themselves on the right side of history. ©2025/Project Syndicate

The author is a professor of international political economy at Harvard Kennedy School, and the author of ‘Straight Talk on Trade: Ideas for a Sane World Economy’.