Donald Trump’s victory in the November 2016 election for president of the United States astonished the world.

Though he had never held political office, he won the Republican nomination. The leading polls predicted his loss to Hillary Clinton in the general election, but he prevailed. How was this possible? John Judis’s book was written before Trump’s ultimate triumph, but it offers an important account of the reasons for Trump’s rise to prominence. Unfortunately, this account rests on bad economics.

Judis sets the Trump movement within the broad context of populism. “There is a kind of populist politics that originated in the United States in the nineteenth century, has recurred in the twentieth and twenty-first centuries, and in the 1970s began to appear in Western Europe. Whereas populist parties and movements in Latin America have sometimes tried to subvert the competition for power, the populist campaigns and movements in the United States have embraced it. In the last decades, these parties and movements have converged in their concerns, and in the wake of the Great Recession [of 2008], they have surged. That’s the subject of this book.”

The type of populism Judis considers comes in two varieties. “Leftwing populists champion the people against an elite or establishment. Theirs is a vertical politics of the bottom and middle arrayed against the top. Rightwing populists champion the people against an elite they accuse of coddling a third group, which can consist of Islamists or African American militants. Leftwing populism is dyadic. Rightwing populism is triadic. It looks upward, but also down upon an out group.”

Judis is right to see populism as a revolt against the elite, but his answer to the obvious question that next arises suffers from a fundamental flaw. If populists are against the elite, why do they think the elite has failed? As Judis sees matters, the capitalist economy periodically breaks down. It proves unable to provide adequately for large groups of the population, hence people rise up against the elites until government limits the market to deal with their concerns. But he fails to show that the difficulties result from defects in the free market but instead takes for granted that government intervention is needed.

This pattern began with what Judis sees as the origins of populism. American farmers near the end of the nineteenth century were being crushed by the unregulated market that both the Democrats and Republicans favored. “The populists were the first to call for the government to regulate and even nationalize industries that were integral to the economy, like the railroads; they wanted government to reduce the economic inequality that capitalism, left to its own devices, was creating. … Eventually, much of the populists’ agenda … was incorporated into the New Deal and the outlook of New Deal liberalism.”

Capitalism, according to Judis, again needed the guiding hand of government to cope with the Great Depression. Once more, he holds, populism led the way. Judis’s unlikely hero is Louisiana governor Huey Long, whose “Share Our Wealth” nostrum worried Franklin Roosevelt. He had been elected on a conservative platform; but unless he could move in Long’s direction, he would face popular discontent. “That fear was an important factor in Roosevelt and the Democrats joining forces to pass what was called the “second New Deal.” Unlike the first, it dealt directly with the issue of economic inequality that Long had repeatedly raised.”

Judis views with approval the New Deal policies that prevailed from the 1940s to the 1960s; unfortunately, in his view, after that a dire new policy challenged the established order. The menace was “neoliberalism.” “This meant, in the United States, the modification, but not the wholesale abandonment, of New Deal liberalism — support for the New Deal safety net, but beyond that, priority to market imperatives.”

The new policy led to trouble, and free trade bore a substantial amount of the blame. “[M]any Americans were troubled by the continuing loss of manufacturing jobs to Japan and Western Europe.” Dissatisfaction with the economy led to the Ross Perot movement, but this soon fizzled out. “Neoliberalism,” which Judis considers the chief economic error of modern times, prevailed; and inequality and loss of manufacturing jobs continued apace. “With the economy booming in the late 1990s, neoliberalism seemed to be working. The gap between the very rich and everyone else was growing, legal and illegal immigration was soaring, and America’s trade deficit was increasing, but neither Perot … nor [Pat] Buchanan … could get any traction.”

Matters changed dramatically after the 2008 recession, and these changes in Judis’s view account for Trump’s rise. Of course Judis blames neoliberalism for the economic crisis. “When the housing bubble burst in 2007, millions lost their jobs and financial institutions were put at risk. … But the crash was also precipitated by the politics of neoliberalism — by financial deregulation … by trade and investment policies that led to unwieldy dollar surpluses in the hands of China and other Asian nations; and by tax policies and anti-union business policies that widened economic inequality and led to the need to prop up consumer demand through the accumulation of debt.”

The economy never fully recovered, and Trump’s campaign took full advantage of this. “Trump’s political base was among the [Republican] party’s white working and middle-class voters. … He had become the voice of middle American radicalism and more broadly of the white Americans who felt left behind by globalization and the shift to a post-industrial economy.”

The revulsion against neoliberalism was worldwide. In Spain and Greece, for example, the “sovereign debt crisis” threatened to bring about economic ruin. “As the debts mounted, the bond rating agencies lowered the countries’ ratings, and interest rates on their payments rose, enlarging, in effect, the debts themselves.” In normal circumstances, these nations would have devalued their currencies; but the heartless neoliberals in control of the Eurozone’s main banks would not permit this. Instead, they demanded austerity measures. Small wonder that populist movements, wishing to end interest slavery, gained power and influence.

What is one to make of all this? Readers of The Austrian will be in little doubt that Judis is economically illiterate. Why is a trade deficit bad? What is the evidence that trade destroys more jobs than it creates? Why must a prosperous economy avert a relative decline in manufacturing jobs? No doubt people whose income fails to increase will be dissatisfied, but do people really care that the very rich make much more than they do? Why do high wages depend on strong labor unions? Is extensive government spending required to boost consumer demand during a recession? I cannot here examine Judis’s reasons for these various contentions, because he offers none. One illustration of his dubious thinking must here suffice. He presents the “sovereign debt crisis” as a failure of unfettered capitalism. But the situation is one in which governments seek new loans to pay debts. Even if the debts arose through government efforts to bail out failing banks, how is any of this a failure of the market, rather than an illustration of the dangers of government meddling in the economy?

Where has Judis gotten all this nonsense? Besides the usual suspects, such as Paul Krugman, he has a more exotic source, the Argentine populist Marxist Ernesto Laclau, and his wife, Chantal Mouffe. “In analyzing how it [populism] works, I was influenced by the late Ernesto Laclau’s book on Populist Reason (Verso, 2005). Laclau portrays populism as a logic that can be used by the left as well as the right, and he explains how the demands that populists make are different from those of other parties and candidates.” I venture to suggest that Judis would have found Mises a better guide to economics than this dissident Marxist.

My remarks on Judis must meet an obvious objection. If, from the Austrian point of view, he makes mistakes about economics, why does this matter? Could he not respond that he is trying to present the opinions of the populists themselves, and here what matters is what they believe, true or not?

I do not think this objection succeeds. Judis’s mistakes about economics lead him to miss key aspects of the populist movement that culminated in Trump. Much of this was motivated by opposition to a powerful and intrusive state. Judis recognizes populist opposition to high taxes, but he downplays this. Opposition to taxes was in fact basic not only to populism in America but in Europe as well, as the 1950s Poujadist movement in France well illustrates. (On this, see the important article by Murray Rothbard, “Poujade: Menace or Promise?”) In his discussion of the 2008 recession, Judis says nothing about the heroic campaign of Ron Paul to end the Fed, despite the great interest in this of many of Trump’s supporters. Judis has devoted much study to the populists, but his unexamined assumptions about economics limit his book’s usefulness.

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