President Trump the Mercantilist?

President Donald Trump’s shtick—during the campaign and now in his presidency–is that he’s all about going to the mat for the Forgotten Americans and to him the marrow of that mission entails tangling with the outsourcing U.S. corporations whose business decisions have left millions with the short, shitty end of the economic stick. To his credit, he has kept his word, utilizing his bully pulpit to condemn and berate domestic companies that hurt the American worker as unpatriotic. Trump’s tongue-lashings have been done with such effectiveness that he has made corporate leaderships uneasy about proceeding with business as usual, as Reuters reported right before his inauguration:

Some U.S. companies are reviewing potential mergers while others are rethinking job cuts or looking at their manufacturing operations in China for fear of being cast as “anti-American” by President-elect Donald Trump, according to Wall Street bankers, company executives and crisis management consultants. Having seen some of America’s largest companies, including General Motors Co, Lockheed Martin Corp and United Technologies Corp, bluntly and publicly rebuked by Trump on Twitter, many others are worried they may be his next target–especially if they have significant overseas manufacturing, have had U.S. job cuts or price increases for consumers. “Any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S. without retribution or consequence is WRONG!” Trump tweeted in December… Government relations and public relations advisers say they have received a number of calls from companies wanting help in assessing if they have any red flags that could draw Trump’s ire. Advisers say these potentially include outsourcing of manufacturing, consumer price increases and lower tax rates than peer companies… Corporate leaders, say the advisers, can no longer focus only on maximizing shareholder value; they must now also weigh national interest. “CEOs are talking to their boards saying we’ve got to be viewed pro-America. If something is more on the margin–like layoffs, or moving manufacturing, then they are not going to do it,” said one Fortune 500 CEO, who said he had spoken with other U.S. companies…”You never want to be against the president–especially not one as vocal as (Trump),” the Fortune 500 CEO said.

Many must wonder at Trump–a billionaire businessman who has himself been guilty of the business practices he now attacks passionately–becoming the punisher of corporate America but it’s understandable when one considers that Trump takes a wide-ranging view of capitalism. Thanks to financial capitalists being the predominant capitalist faction and taking the wheel of the U.S. economy for decades, Trump’s thinking likely goes, the capitalist system as a whole became badly out of whack and by restoring his capitalist sect to its proper place he will reorient it and prudent, responsible capitalists will take the reins once more. He knows, as OECD Chief Economist Pier Carlo Padoan said at Davos back in 2012, that “Rising inequality is one of the major risks to our future prosperity and security,” and consequently that “The main challenge facing governments today is implementing reforms that get growth back on track, put people to work and reduce the widening income gap.” He knows that, according to an opinion poll Former White House aide Larry Summers once cited, “40 percent of Americans no longer have a positive opinion of capitalism” and he believes, like Summers, that “the crisis of confidence in the system could be addressed with sufficient fiscal and monetary stimulus to kick-start growth.”

Trump’s strategy for pumping the sorely needed money back into the U.S. economy is to browbeat his elite peers and be the boot in the ass that they need to recognize the same truths he does, which will spur them to voluntarily re-invest their wealth here at home and accept tax hikes that will give the middle class a helping hand. It’s not like the money for the public betterment can’t be easily obtained—the elite could simply dip into their fund of trillions that they have squirreled away through tax evasion.

Given that Trump’s modus operandi is to balance interests of particular groups so as to ensure the stability of the entire economy, I asked myself–does President Trump fit the description of a mercantilist? Mercantilism is an older form of capitalism that was understood by mercantilists themselves as transcending economics and embracing a social order that is ever striving to achieve the common good.* We can judge by this passage from William Appleman Willliams’ Contours of American History [Page 35] if mercantilism is comparable to Trump’s outlook:

“Should the merchants be allowed to run unchecked with no effort being made to control and balance the economic changes and the social consequences which followed in the wake of their activities? From almost every point of view, the answer supplied by England’s existing traditions was negative…he [the king] could neither risk unlimited power in the hands of the merchants per se nor the probability of their excesses provoking rebellion in the lower classes (and in the old agrarian aristocracy). From the economic angle, untrammeled freedom for the merchants did not produce general economic improvement. Food production, for example, was sadly neglected in the rush to wool-raising and mining. Finally, even the merchants came to realize that they had to have a more unified and balanced society in order to attract other segments of society to support the Crown in undertakings that would help them to expand their overseas operations. It should be apparent, therefore, that mercantilism was anything but the narrow ideology of the commercial interest, for while it stressed the need for trade and was supported by the merchants, it defined the problem as one of directing such activity so as to produce the common good.”

Personally, I think Trump being a mercantilist checks out and would unriddle the worldview of a man so baffling to so many analysts.

* “Both men [John Quincy Adams and James Monroe] realized that there was more to mercantilism than economics. Monroe persisted in his conviction that “one system” of interrelated and balanced parts would accomplish “great national purposes” and “promote the welfare of the whole people.” Contours, 209