I think it is a mistake to see the election of Trump in isolation. The same upheavals of discontent can be found in Germany, Sweden, England (Brexit!), Italy and many other countries. It is the voice of a beleaguered former majority voice (white blue collar workers) who have felt adrift in their own countries—neglected and sacrificed at the altar of liberal ideals.
The fault lies with us pointy-headed Enlightenment propagandists—those who over the last century were proposing to open borders to trade and people, as a way to raise the general level of wealth, promote world peace, and achieve greater fairness.
The Kantian ideal to treat all persons with respect, or the Benthamite ideal to count equally the pain of all persons and animals, whether rich or poor, has given way to instinctive nativism and crude insults towards those with differences.
The 2016 U.S. election was certainly about the distribution of gains (and losses) from the Enlightenment project. And there’s a curious paradox: in electing Trump, voters are rejecting the Democratic approach of redistribution through entitlement spending, and supporting a more neoclassical approach of tax cuts for the rich and trickle down. One could say this is something like communitarian or process justice in opposition to distributive justice.
But the twist is this: Adam Smith, in The Wealth of Nations, also supported a communitarian justice approach. Fair rules of exchange would lift the working poor out of poverty! To achieve fair rules would require opening markets to globalization and trade.
In Trump’s world, to achieve fair rules means to reduce openness to globalization and trade.
Part of the blame for this backlash against globalization goes to those who...
For example, the standard trade model taught to students highlights the gains from comparative advantage, and totally ignores the costs of transition to get from one situation to the next. That is like saying “The winter is warmer in Georgia than in Maine, hence let’s magically move there at no cost.”
Opening to trade and specialization does require reallocating resources from one part of a large country to another, since it would be a bizarre accident if the rural region for growing cotton (the losing industry) were exactly the best place to do medical research (the gaining industry). Homes, schools, hospitals, and infrastructure of all kinds would be lost in the losing region and have to be rebuilt in the new region, to mention just one large and obvious fixed capital issue. There are other poignant issues of family, locational ties, and other major costs of relocation, job training, and so on.
The resulting unemployment or underemployment has too often been swept under the rug in the rush to endorse the supposed magic of the invisible hand. Opening to trade is the sort of thing that should happen over a generation, not overnight, which is why Adam Smith favored a slow opening to trade, not shock therapy. Those of us who teach trade theory should have also paid more attention to other distributional issues.
Having said all this, the election should not be seen as a total repudiation of Enlightenment ideals. In fact, more people voted for Hillary and the status quo than voted for repudiation. Unfortunately, those coming into power (controlling the executive, House, Senate, and soon another Supreme Court nominee) have the opportunity and the motive to swerve our institutions for generations to come, even though a majority of Americans voted for status quo.