“Common good capitalism” vs. the free market kind

Earlier today, I wrote about an alleged ideological division in the Democratic party between the far left and the establishment. Now, I want to consider an ideological split in the Republican party about which Eliana Johnson filed this report.

That gap is related to, but not the same as, the division between hardcore Trump supporters and Republicans who would like to see the Party move on from the ex-president. It’s the divide between traditional free-market Reagan Republicans and Republicans who, in Eliana’s words, want the government “to get more, rather than less, involved in national economic policy in order to help advance a certain set of social and cultural goals.” Apparently, the emerging label for the latter group is “common good capitalism.”

Eliana counts Nikki Haley as a leading defender of traditional free market capitalism. Marco Rubio is among those she places in the common good capitalism camp. Five years ago Haley endorsed Rubio for president. (Given Rubio’s past shifts on immigration policy, perhaps we shouldn’t be surprised if now he shifts his position on capitalism.)

Since 2016, I think it’s been understood that Trump’s successful campaigns that year might produce a synthesis of traditional Reaganite economic views and Trumpism. Trade policy, in particular, was the obvious candidate for some revised thinking — not a return to raw protectionism, but greater scrutiny of trade deals and a tougher approach to China.

In the five years since the 2016 election, Republicans have continued to become more of a working-class party. Thus, some sort of synthesis arguably makes political sense.

Ironically, Trump’s presidency showed the way to such a synthesis. Eliana says, “Trump. . .talked like a populist but governed — with the exception of trade policy — more like a Reaganite.”

However, trade is such a huge exception that what Eliana describes is a synthesis — and a mostly happy one. The economy thrived under it until the pandemic threw us into recession. Notably, Trump remained popular with the white working class notwithstanding that recession.

Trump’s synthesis as president is also largely consistent with the essence of his 2016 campaign. Richard Hanania, cited in Eliana’s article, says that Trump’s political success had more to do with culture than economics. He may be right.

Economics played a part too, but Trump’s economic critique of traditional Republican thinking focused on trade. The question of raising the minimum wage, as to which Trump took both sides, wasn’t a feature of his campaign.

Nor did Trump call for an industrial policy whereby the government picks winners and losers to achieve the common good. He didn’t advocate more government as a candidate. Nor, when one allows for the pandemic, should he be viewed as appreciably expanding government’s role during his regulation-slashing presidency.

In many ways, as Eliana says, Trump governed like a Reaganite.

To me that’s a good thing. I agree with Pat Toomey who says:

This whole notion of common-good capitalism betrays the flawed premise on which it’s based, which is that capitalism somehow does not serve the common good.

At a minimum, I believe that largely free markets serve the common good better than state planners from either political party. That’s a lesson learned the hard way, yet easy to forget — even for Republicans.

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