Hyper-globalization has generated enormous gains in global wealth and lowered consumer prices. The past generation has seen large reductions in global poverty, especially in China, which now has a middle class. Branko Milanovic, an economist at the Graduate Center at the City University of New York, and his colleagues have documented that, between 1988 and 2012, the earnings of the broad middle of the global economy (those with incomes between the bottom 10 percent and the top 30) have risen by between 40 percent and 66 percent—the fastest generation of growth for the global middle of any time in history.
Yet, as is widely known and discussed, millions of middle-class Americans were left behind as the world’s economy grew. Contrary to what economists’ models assumed would happen, communities that have bore the brunt of the costs of offshoring have not been made whole. The United States is not alone in this trend. Many developed economies have seen only those at the top benefit from economic growth. In the United States, as Thomas Piketty, Emmanuel Saez, and Gabriel Zucman have documented, between 1980 and 2014, pre-tax income per adult grew by 61 percent, but the bottom 50 percent experienced only 1-percent growth in their incomes. Those in the top 1 percent scored 205-percent income growth.
Trump and Clinton (and Sanders) all sought to address this rising economic inequality. Clinton focused on “Stronger Together”—a slogan that echoes those globalist ideas. Trump looked at the same situation and said, “America First.” To say nothing of the economic merits of this idea, it at the very least responds to the real sense that people have that they are being left behind.
There is a dark side to America First, of course, starting with its Nazi-sympathizer echoes. And as much as this approach may have certain economic appeal, its consequences for issues such as immigration and foreign aid will be inhumane. America First, it turns out, doesn’t mean “everybody else next,” but rather “everybody else not at all.”
In his first few weeks in office, Trump has shown how America First will look in practice, bullying a handful of manufacturers into at least saying that they will create jobs in the United States. One theory, shared by many of his supporters, is that Trump can do this because he is a businessman. He knows that business leaders have control. He knows that when they say, like Carrier did, that they “have no option” but to locate to Mexico, this is a lie. And when Carrier changed its plans, the company made the case that progressives have made for generations: Businesses have the wherewithal to make decisions and act; they are not merely subservient to the market.
This is a flat-out rejection of the foundations of supply-side, trickle-down economics. This is the opposite of claiming that government must get out of the way of business leaders’ decision-making process and firms’ profit-maximization efforts. Donald Trump understands business and so can pick up the phone and convince businesses that they need to act in the national interest—or else. He will make sure that acting in the national interest is in their economic interest.