Trumponomics and the Future of Israel
Since the 18th century, theories of capitalism and pluralism have been recognized as two faces of the same coin. Whether we call it “democratic capitalism” or “capitalist democracy,” there is an intimate relationship between democracy and the free market. Without democracy there is no capitalism; without capitalism there is no democracy. Freedom is a non-fungible commodity.
Freedom is also a delicate and precious commodity that must be guarded. And history has taught us that the democratic nation-state is the only institution that can reliably deliver the care and protection that free societies and free economies require. For this reason, all democratic nation-states limit their political franchise to those individuals who are citizens of the state. Non-citizens are never granted the right to vote, no matter how dedicated they may be to the ideals and principles of political democracy.
Free economies also require protection. Therefore, democratic states carefully monitor their territorial boundary lines, categorizing, inspecting and levying taxes on imported goods. These controls are neither exclusionary nor punitive. Rather, they are calculated to maximize market efficiency for the benefit of the citizens of the polity. The economic controls that states exercise over their territorial boundary lines parallel the political controls they exercise over their citizenship rules.
But for ideological and historical reasons, ranging from Marxism’s criminalization of bourgeois capitalism to the criminal consequences of economic protectionism known as the beggar-thy-neighbor policies of the inter-war period, the gradual development of a global economy has been used as a cudgel against the right of the sovereign state to protect its national economy. And nobody has deployed this cudgel more cynically than the captains of industry and masters of finance in the most developed capitalist nations.
As their current leading spokesperson, Hillary Clinton, put it in a speech to Brazilian bankers – remuneration for which was a mere $225,000.00 – “I dream of a hemispheric common market with open trade and open borders.”
In this talk and many more, Clinton championed the essential elements of contemporary globalization: the de-localization of Western industries into foreign and mostly underdeveloped states, where greedy capitalists, unfettered by national considerations and political controls, seduced and corrupted local leaders, transforming them into minority partners in their abusive economic schemes. Cheap third-world labor became global capitalism’s life blood, dramatically suppressing the cost of production and making it possible for money speculators and other Wall Street types to deploy their “financial wizardry” in an essentially risk-free manner.
But Hillary Clinton’s dream was a nightmare for the common folk in America. Clinton and her supporters failed to anticipate the political and social consequences of the economic pain that their corrupt and debauched version of globalization inflicted upon working- and middle-class Americans. By abandoning the nurturing environment of the modern democratic nation-state, Clinton’s cronies drove a wedge between the people and their government, distorting the principles of capitalism to its roughest and most lawless frontier, betraying their fellow compatriots for pockets full of ill-begotten profits.
Responding with aversion to Clinton’s candidacy, the people first embraced the quixotic campaign of Bernie Sanders. Today, they are considering electing Donald Trump to the office of the presidency, the Republican nominee who has pledged to “make America great again” by reversing economic globalization and re-domesticating the jobs of the American under-working and middle classes.
Trump has pledged to build a wall on the boundary line separating the United States from Mexico, very much akin to the wall that Israel built on its border with Egypt. The Israeli wall reduced illegal immigration by 98 percent, and there is no reason to suspect that the American wall will be any less effective. As such, Trump’s wall will drain the under-class of illegal immigrants, freeing up menial-labor employment for legal citizens, while using market forces to raise the level of compensation.
More significantly, Trump wants to overturn the North American Free Trade Agreement, gut the Trans Pacific Partnership and recalibrate economic relations with China. In essence, he intends to restore the state’s economic control over the nation’s territorial boundary lines. By so doing, Trump intends to neither suppress nor liberate free markets. Rather, he wants the state to mediate between the various free-market competitors in order to ensure a more equitable distribution of the economic bounty that only free markets can generate. In many ways, “Trumponomics” appears to be a judicious integration of the ideas expounded by John Locke in his Second Treatise on Civil Government and the principles of Keynesian economics, which modern Western democracies adopted at the end of the Second World War.
While we do not know if Trump will win or lose this week’s election, it seems that his economic vision holds the key to the economic future of the United States and in every other modern industrialized nation-state, including Israel.
The economic rot threatening the Israeli middle class and the future of immigration will not be staved off by empty slogans demanding social justice and a return to a command economy. Any more moves in that direction may only compromise or corrupt our democratic polity. Socialism, in any of its varieties, cannot be the cure.
Instead, Israel needs to design its own version of Trumponomics, by developing an economic program in which the authority of the state is deployed in order to safeguard free and fair competition at home, while carefully monitoring the goods that pass through its borders. In parallel, it needs to stimulate the creation of employment at home so that Israelis and potential immigrants can get better-paid jobs. And it needs to do so in a manner that makes its dedication to capitalism and democracy – the twin engines of modernity – clear and irreversible.
If Israel were to move in this direction, Trump’s movement, born out of his candidacy for the Oval Office, will have been well worth it, whoever wins on Tuesday.
The author is a Jerusalem-based international political analyst and business adviser.