How Donald Trump demagoguery will hurt future global economic growth

Published: October 8, 2016 6:17:44 AM

The US presidential election this year must be one of the most significant events of the 21st century

trump, us elections, trump elections, hillary clintonInterestingly, Trump makes his running mate, Michael Pence, seem reassuringly civilised and normal. (Reuters)

The US presidential election this year must be one of the most significant events of the 21st century. The global economy is still crawling its way out of the effects of the Great Recession of 2008-09. Meanwhile, globalisation and technological change are leading to tectonic shifts in the distribution of wealth. And to top off the witches’ brew, West Asia is the site of a brutal conflict that has displaced millions and fuelled extremism and terrorist violence.

These are the conditions that have helped produce the most deplorable major party candidate for US president in living memory. This is a candidate who is a narcissist, misogynist, racist and demagogue. He has taken the worst characteristics of the Republican Party, exposed and extended it, and made it worse. Such is the level of fear and worry among his constituents that he continues to run a close race, only falling back when he behaves particularly childishly and nastily.

Right-wing demagogues have been flourishing in Europe for some time, reflecting some of the same phenomena that Donald Trump has been exploiting in his campaign, but no major West European country has come to be led by someone like them. The prospect of a Trump presidency is truly frightening. Interestingly, Trump makes his running mate, Michael Pence, seem reassuringly civilised and normal. But Pence is an extreme right-winger in more traditional ways than Trump himself. The Republican Party is breeding politicians that are trying to hold back a tide that is changing the US.
The country is becoming more diverse—racially, ethnically and religiously. This is not an easy process, and made more difficult by slower growth and uncertainty about the future. America is also becoming more socially diverse and liberal: people now express themselves individually in a range of cultural contexts that challenge many previous norms of social conformity. These changes are another aspect of the mix that has propelled Trump to prominence: he himself has not been a social conservative, but has quickly adapted to exploit people’s anxieties in cultural and social dimensions.

Even if Trump loses, his campaign will have lasting effects on the American political and economic landscape. By normalising bigoted discourse, Trump has made it more acceptable to express racism openly. It will take an effort on the part of America’s leaders to develop a more constructive dialogue about racial and social inequalities in the country. Contrast Trump’s words on Muslims with how George W Bush responded to the September 11, 2001 attacks, “The enemy of America is not our many Muslim friends. It is not our many Arab friends.” Unfortunately, of course, Bush’s actions in Iraq set in motion a chain of events that undermined such noble sentiments.

Trump has also attacked globalisation, somewhat disingenuously, since he has benefited from it greatly as a businessman. He has attacked China, but used Chinese steel in his buildings. He has attacked immigration, but used immigrant workers. He has even repeatedly attacked the North American Free Trade Agreement, which is decades old, and already long been digested by the US economy. Indeed, he blithely lies about the facts in the process of reallocation of capital and jobs not just in North America, but globally. International trade does create winners and losers, but the answer has always been policies that mitigate adjustment costs for workers, not the kinds of trade restrictions that Trump advocates. The result of this demagoguery will be a change in the policy discourse in Washington, DC that sets back globalisation in ways that will hurt future economic growth.

Perhaps one of the bright spots in this gloomy story is that Indian Americans seem to understand the stakes clearly. Work I have been doing with Sanjoy Chakravorty and Devesh Kapur confirms that this group of Americans has succeeded largely through factors like education and helping each other, and that they have a global outlook. A recent poll shows that 59% of Asian Americans will support Hillary Clinton or lean toward her, compared to 16% for Trump. For Indian Americans, the ratio is a staggering 70:7. It is comforting that this educated group is mostly on the side of social progress and a semblance of economic rationality, along with more disadvantaged minorities like Hispanic and African Americans.

My own hope is that Indian Americans can not only make positive contributions to America’s political, economic and social life, but also continue to bring those sensibilities to their country of origin. India has long struggled with accepting economic openness, but that tide seems to have turned for good. On the other hand, India is struggling more than ever with accepting diversity, gender equality, social freedom and similar values, and with controlling demagoguery and divisiveness. There are many lessons for India in America’s election.

Nirvikar Singh, the author is professor of economics, University of California, Santa Cruz

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