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Donald Trump and his top advisers are trying to install a right-wing nationalist regime in America. Their efforts, if successful, would be disastrous for ordinary people, in the United States and around the world. But all is not lost. The process of regime change is just beginning, and the outcome is far from determined. Understanding the roots of this dangerous trajectory can contribute to developing strategies for resistance and for moving toward a progressive future. The United States is not the only nation to see rising nationalism. Right-wing regimes have emerged in Turkey, India, Hungary, Poland, and the Philippines as well as in Russia under Vladimir Putin. These regimes stress patriotic themes, play upon and intensify citizens’ fear of minority ethnicities and religions as well as other long oppressed groups. They promise to resolve festering economic problems, blaming them on convenient scapegoats, such as foreigners or immigrants. When right-wing nationalist regimes are consolidated, they invariably restrict long-established individual rights and introduce, or intensify, the use of extra-legal violence at home and abroad. Trump fits squarely into this right-wing nationalist camp. While many of his hires are pursuing long-standing neoliberal goals — deregulation, privatization, cutbacks in social programs — we are nevertheless facing the possibility of a fundamental change in the established framework of neoliberal capitalism, affecting both the dominant institutional form and ideology of American capitalism. The 2016 election represented a remarkable shift in the relationship between big business and electoral politics. Every president elected in the past seventy-five years has enjoyed significant support from the giant corporations and banks that dominate the economy. Last year was different. While some wealthy individuals supported Trump, he won the Republican primary and the White House without the backing of any significant section of the traditional ruling class of big corporations and financial institutions, and in the face of major mass media opposition. The deep structure of political power in the US, which had remained stable despite major earlier shifts in the dominant economic model, has been ruptured.

Setting the Stage The soil from which the Trump presidency emerged began to form in the late 1970s and early 1980s, when the structure of American capitalism was transformed from the regulated capitalism of the post–World War II decades into “neoliberal capitalism.” This profound change reoriented the role of the state in the economy, the capital-labor relation, the corporate sector, and the society’s dominant ideas. The government reduced its regulation of business and finance, privatized public services, cut social welfare programs, and shifted the tax burden from corporations and the rich to the middle classes. Meanwhile, the rules of the global economy were changed to promote the free movement of goods, services, and capital across national boundaries, giving rise to a globally integrated economy. The state and corporate elite abandoned the postwar capital-labor compromise, launching an attack on trade unions that marginalized collective bargaining and made a growing percentage of jobs part-time or temporary. The cooperative price-setting practiced by big companies in the preceding period gave way to unrestrained competition. Market principles penetrated all aspects of society, and the financial sector expanded rapidly. The dominant ideas changed even before institutions and policies shifted. Starting in the late 1960s and gathering momentum in the 1970s, classical liberal ideas gained influence, particularly among economists. Policy in the decades after World War II was rooted in a Keynesian ideology that saw capitalism as the best possible system and markets as generally efficient, but also advocated an active role for the state in shaping the economy. An active state was justified as necessary to prevent depressions, limit income inequality, increase individual economic security, and prevent such “market failures” as environmental pollution. By the late 1970s, however, an extreme version of classical liberal beliefs had replaced Keynesianism as the dominant ideology. The newly ascendant neoliberal ideology held that individual freedom of choice in markets is the fundamental basis of human welfare, while the state is an enemy of individual freedom, a threat to private property, and a parasite living off the hard work of individuals. This new form of capitalism proved to be remarkably robust. For several decades, it effectively resisted any change in direction, despite its harmful consequences for the majority and despite the periodic election of candidates whose promises conflicted with neoliberal prescriptions. Bill Clinton ran for president in 1992 promising to put “people before profits,” but, once in office, eliminated the main welfare program and pushed through the last stage of financial deregulation. Similar disappointment followed the British Labour Party’s return to power under Tony Blair in 1997. Neoliberal boosters promised that unshackling business from the government’s heavy hand would unleash private initiative, increasing private investment and accelerating economic growth. The rising tide would lift all boats. Investment and economic growth, however, actually slowed compared to the regulated capitalist era, and the promised rising tide never materialized. Neoliberal restructuring increased corporate profits and incomes for the rich, while workers’ real wages trended downward from 1979 until the eve of the financial crisis in 2007. A growing segment of the population watched as their material conditions deteriorated, yet it seemed impossible to effectively challenge the existing order. Many individuals and families filled in the growing gaps in their budget through borrowing, secured by asset bubbles in the stock market and housing market that temporarily increased households’ paper wealth. This process left the economy and financial system vulnerable when the giant real estate bubble burst. The real estate market’s collapse in 2007 ushered in a major financial and economic crisis, which began in the United States and rapidly spread around the world. When the giant banks — alongside General Motors and Chrysler — faced insolvency, elites quickly dropped the lectures about individual responsibility and rushed to bail them out with public money. The millions of homeowners facing foreclosure were not shown the same solicitude. Speedy and massive state intervention resolved the financial panic, but, after bailing out the banks and arresting the economic collapse, policymakers returned to neoliberalism as usual, now in the guise of austerity policy. What’s followed has been economic stagnation, with annual GDP growth averaging 1 to 2 percent in the US since the recovery began in the summer of 2009. This stagnation, a global phenomenon, reflects not just the effects of state austerity policies but also the exhaustion of the neoliberal economic model, which can no longer generate the debt-financed consumer spending on which it had depended. And while more people are talking about the problem of income inequality, in recent years it has worsened. Almost all of the meager income increases in the United States have gone to the rich. Profits have bounced back, but corporations and banks are now sitting on the proceeds rather than using them for investment. The above sequence — twenty-five years of gradually worsening conditions for the majority, then a big crisis, then stagnation — destabilized the political system in many countries. The spectacle of the bank bailouts followed by business as usual delegitimized the ruling free-market ideology. Ordinary people became angry at the rich and powerful. Suddenly, public opinion surveys showed high favorability ratings for “socialism,” especially among young people. By 2016, a large segment of the US population was ready to embrace a radical departure from the established policies. The candidates supported by the ruling elite offered no solutions to festering economic problems. The two-party system, which had once pressured politicians to move toward the center, failed to act as a key stabilizing institution. The outsider Donald Trump captured the Republican presidential nomination, and self-described socialist Bernie Sanders almost won the Democratic contest. Voters in 2016 almost faced a scaled-down version of the old leftist maxim, socialism or barbarism. This political conjuncture is not unprecedented. The Great Depression of the 1930s set off a long period of economic stagnation, after an earlier phase of free-market capitalism collapsed. Extreme political polarization followed, as three new directions took hold: fascism arose in Germany, Italy, Spain, and Japan. Progressive reform of capitalism emerged in Scandinavia, France, the United Kingdom, and the United States. State socialism expanded into East/ Central Europe and Asia.

Trump’s Base The current period opened up the possibility of a radical break in the dominant socioeconomic model. Trump’s success, in fact, rests on this sense of possibility. During his primary campaign, he called for an alternative to the existing order, initially challenging central aspects of neoliberalism. Trump’s ideology stressed nationalism, xenophobia, racism, disdain for science, and a kind of revanchism that would restore an imagined past glory. Meanwhile, his political tendencies suggested a drive toward authoritarianism, bullying, and law and order. He scapegoated minorities, promised revenge on political adversaries, hinted at violence, and projected an image of a strongman ruler who could solve every problem “on day one.” Against the neoliberal status quo, Trump advocated interventionist economic policies including major infrastructure investments, trade protectionism, and forcing corporations to invest and create jobs in the United States. He challenged various aspects of neoliberal international policy by proclaiming “America First” — the rallying cry of isolationist and pro-Nazi groups in the 1930s — denounced multilateral institutions such as NATO and the World Trade Organization, and suggested that nuclear proliferation might be desirable. And he consistently focused on curtailing immigration, which is contrary to the interests of key sections of US business that depend on cheap labor. All this amounted to a somewhat coherent strategy for a right-wing nationalist regime. Trump would lead a muscular state, defending the nation against its perceived enemies, domestic and foreign, and even against its long-time friends, which he claimed were taking advantage of the nation’s power and generosity. His appeal also contained a potentially coherent alternative economic model. While it offered nothing that could reverse wage stagnation, Trump’s economic platform called for more state spending on infrastructure and a beefed-up military, which could potentially solve the problem of who would buy the growing output of a growing economy — a problem neoliberal capitalism failed to resolve after 2008. If household borrowing could no longer fuel economic expansion, rising state spending could fill in the gap. Infrastructure spending had fallen drastically in the neoliberal era, and reversing this trend would signify a major departure from now-orthodox economic policy. The ideology of nationalism is the glue that maintains public support for such a regime. While the material benefits for working people are limited, Trump can maintain social peace by directing people’s attention to the state’s growing strength. Putin gets over 80 percent approval ratings, despite ongoing material deprivation, because he has projected an image of a strong Russian state that restored public order following the chaos of the immediate post-Soviet years. Trump’s right-wing nationalist appeal helped him defeat a series of extreme neoliberal opponents in the Republican primaries. But once he secured the nomination, he needed to beat Hillary Clinton. The 2016 general election has interesting parallels to Reagan’s 1980 run. Like Trump, Reagan challenged the Republican establishment and was not initially supported by the traditional big business backers of Republican candidates, who got behind George H. W. Bush in the 1980 primary contest. Reagan’s big money backing came primarily from newly rich Southwestern business interests. But here the similarities end; once Reagan had the nomination, he abandoned policies like trade protectionism and started actively courting (and winning) broad support from big business. Unlike Reagan, Trump didn’t change his platform for the general election, and he consequently did not win over big business. Instead, he added new appeals to attract voters who had supported McCain in 2008 and Romney in 2012. Trump’s lifestyle and previous positions on social issues made the Republicans’ crucial base of conservative Christians hesitate, so he called for an end to the alleged persecution of Christians and harped on “traditionalism” with respect to social issues, including abortion. He promised big tax cuts and denounced excessive government regulation. By doing so, Trump solidified support from most of the constituencies that had voted for McCain and Romney. He just needed to win over white working-class voters desperate for change. By hammering away on his promise to boost American manufacturing and energy production, stressing his opposition to the “elite,” and glorying in the mainstream media’s attacks on him, he did just that, denying Clinton once-Democratic strongholds in the Rust Belt and winning the election.

A New Agenda Once elected, Trump had to change tack. He faced a powerful Republican Congress filled with hardcore neoliberals and social conservatives. His appointments suggest a continued commitment to building a right-wing nationalist regime, but they also show a significant modification of his stance on domestic economic policy, likely aimed at winning over a skeptical Republican congressional majority. Mapping out Trump’s high-level appointments reveals a kind of clustering. First, there are the right-wing nationalist ideologues: Steve Bannon as chief adviser and Stephen Miller as senior adviser for policy. Then the generals: Trump named retired generals as national security adviser, secretary of defense, and secretary of homeland security. He also named a former Navy Seal as secretary of the interior. Trump’s big capital allies come next: Rex Tillerson, CEO of ExxonMobil, as secretary of state; Stephen Mnuchin, hedge fund millionaire, as secretary of the treasury; Wilbur Ross, head of a private equity firm and takeover specialist, as commerce secretary; and Gary Cohn, president of Goldman Sachs, as director of the National Economic Council. In line with his inward-looking economic vision, Trump appointed trade nationalists as US trade representative and head of the White House National Trade Council. And, in the interest of building bridges, he rewarded several longtime Republican politicians with high posts: Jeff Sessions became attorney general; Rick Perry, secretary of energy; Reince Priebus, chief of staff; Mike Pompeo, CIA director; Dan Coats, director of national security; and Sonny Purdue, secretary of agriculture. Finally, Trump filled out his team with hardcore neoliberals, whom he put in charge of key regulatory, economic, and social agencies: Scott Pruitt as head of the Environmental Protection Agency, Walter Clayton as head of the Securities and Exchange Commission, Ben Carson as secretary of Housing and Urban Development, Mick Mulvaney as director of Office of Management and Budget, and Betsy DeVos as secretary of education. Naming extreme neoliberals to key regulatory, economic, and social policy posts is nothing new. However, the extreme neoliberal appointments are telling, suggesting that once in office Trump compromised on a key part of his campaign appeal. Campaigner Trump promised to protect social programs. While he endorsed deregulation, he did not emphasize it. But President Trump, eager to keep congressional Republicans in line and avert a rebellion, has adopted much of the neoliberal agenda for domestic economic and social policy. This undermines the so-called populist aspect of his appeal, as well as the economic coherence of his right-wing nationalist program, which now seems shorn of its interventionist domestic economic policies.

What Kind of Nationalism? Comparing Trump’s appointments to Reagan and George W. Bush’s in their first terms is instructive. Like Trump, both named extreme deregulators and a slew of right-wing Republican politicians to important positions. But there are also several key differences in Trump’s appointments. First, Trump appointed a very different class of big business representatives. Reagan and Bush tapped executives from famous names in American corporations and banking for their cabinets. In 1981, Reagan named six officials with strong connections to big capital: two from construction, two from old-line Wall Street firms, one from manufacturing, and one from agribusiness. In 2001, Bush also appointed six capital-affiliated officials: two from pharmaceuticals, one from General Motors, one from Lockheed, one from aluminum monopolist Alcoa, and one from oil. Half of Trump’s four big-capital appointments — Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross — come from speculative capital, a sector not previously elevated to high government positions. These firms’ profits derive not from production or traditional financial activities but from buying and selling assets to make a quick profit from capital gains. This sector, whose economic role is destructive even relative to capitalism’s logic, has been marginalized during periods of active state regulation, like the postwar decades. In the neoliberal era, however, this previously marginalized group has mushroomed, partly in the form of new institutions like private equity firms and hedge funds. The top position in Trump’s cabinet went to Rex Tillerson, CEO of the largest American oil company. As head of ExxonMobil, he specialized in striking deals for global oil exploration and production. ExxonMobil belongs to the extractive sector, and Trump has consistently emphasized expanding oil and coal production to boost the American economy. Fracking technology reversed domestic oil production’s long decline, making the United States one of the top three oil-producing nations. Perhaps Trump believes expanding oil exports will lead the way to global strength, a strategy that requires firm ties to the fossil-fuel sector. Tillerson’s friendly relations with the Russian government would also recommend him for the post, since oil-producing states benefit if they can work together to maximize prices. The fourth big capitalist in the administration, economic adviser Gary Cohn, formerly led Goldman Sachs. He alone counts as a representative of old-line financial capital, but he has so far not played a central role in the Trump administration. Some analysts have portrayed the cabinet as full of Goldman Sachs people, claiming that nothing much has changed. Indeed, the firm has often supplied top government officials: after twenty-six years with Goldman, Robert Rubin became Clinton’s most influential economic adviser and eventually secretary of treasury. Late in Bush’s second term, another Goldman Sachs CEO, Henry Paulson, became treasury secretary, just in time to preside over the government bailout of his old employer. Cohn follows that tradition but does not appear to have much power. Several other appointees did, at one time, work at Goldman, but that does not make them the firm’s representatives for life. While Mnuchin spent seventeen years at Goldman, he left in 2002 to run his own hedge fund before taking over a failed mortgage company that became a notorious foreclosure machine under his leadership. Corporate lawyer Walter Clayton, Trump’s SEC head, represented countless big banks and corporations. That Goldman was one of Clayton’s clients in the past does not make him a stand-in for the company today. Steve Bannon, Trump’s chief strategist, also worked at Goldman, but he left in 1990 to pursue a series of diverse interests before landing at the “alt-right” website Breitbart News. Bannon does not represent any capital interests but rather seems to be a serious ideologue, hoping to help Trump build a right-wing nationalist regime. The evidence suggests that the president wants to establish a capital base in the speculative and extractive sectors. No manufacturing executive made it into the cabinet, and only one traditional financial capital representative got a position, and one without much influence. Extractive capital is a particularly reactionary and antisocial wing of big capital, with a strong interest in denying climate change. Speculative capital is rapacious and unproductive. Trump built his real estate career by stealing from employees and suppliers through a deft use of the bankruptcy laws — a practice with some affinity to the speculative capitalist’s modus operandi. (A combination of extractive and speculative capital also defines the oligarchs who form the Putin government’s base in Russia.) Trump also stands out for naming three retired generals, with no political experience outside the military, to top positions in national security. The reason for this unusual departure is not clear, especially considering Trump belittled “the generals” during his campaign. It may not be far-fetched to think that Trump hoped that having several generals in key national security posts would solidify his support from the armed forces in case of a political showdown over his administration’s unorthodox direction. Or perhaps he found their military background, which trains officers to obey orders from above, appealing, since he seems to fear opposition from within. The appointment of several trade nationalists to high positions represents a first in recent American politics, suggesting that Trump still stands behind his trade nationalist rhetoric. His appointees also include a larger than usual share of unqualified officials, such as Education Secretary Betsy DeVos, who demonstrated her ignorance of American public education on national television, and Energy Secretary Rick Perry, who was surprised to learn what his department actually does. Finally, Trump nominated no moderate Republicans, setting his administration apart from all earlier Republican presidencies. I suggested above that the political power of congressional Republicans had pushed Trump to give up his populist and interventionist economic platform planks. The fact that his much-touted infrastructure investment program has been postponed to 2018 and that the administration withdrew federal funding for a modest upgrade to San Francisco’s commuter rail line seems to point in that direction. These developments suggest that Trump’s right-wing nationalism is now wedded to extreme neoliberal domestic economic policies. While some right-wing nationalist regimes — such as Modi’s in India or Erdoğan’s in Turkey — support social welfare programs, others do not. Putin’s Russia combines right-wing nationalism with neoliberal economic policies: the worst of all worlds. In the United States, such a combination would perpetuate economic stagnation in the core economy and bring more pain to ordinary people by dismantling social programs. Rising oil prices might generate a large enough flow of revenue to partially mask the economic decay — as it did in Russia during the 2000s — but that does not represent a promising path for economic development.

Not Set in Stone While economic and political conditions have made a right-wing nationalist regime in the United States possible, we shouldn’t get ahead of ourselves. As the Left knows all too well, favorable conditions do not always produce the expected political outcome. Thankfully, serious obstacles still stand between Trump and the successful consolidation of such a regime. The first challenge comes from his own party. While most Republicans welcomed Trump’s victory, right-wing nationalism has few supporters in Congress, where the Republican majority is a mix of deregulators, free marketeers, welfare-state enemies, tax cutters, militarists, balanced-budget fanatics, and retrograde social engineers alongside a smattering of old-style centrists. With only a narrow congressional majority, this diversity is a recipe for gridlock. For Trump, or someone like him, to install a right-wing nationalist regime, he would need to dominate Congress, compelling it to endorse and enact his agenda. That seems unlikely. Further, it remains to be seen how secure Trump’s support is among big capital. So far, most of big business, the media, and the traditional power elite have withheld their support. They don’t seem to buy into right-wing nationalism, which poses problems for their economic interests. They also find Trump’s personal idiosyncrasies — his unpredictability, his bizarre statements, and his calls to abandon long-standing US-dominated international institutions — worrying. Resistance is also coming from within. To rule as a nationalist strongman, Trump needs an organizational instrument to carry out his policies. Right now, the only available instrument is the executive branch, but Trump doesn’t have a right-wing party or movement whose cadres can fill the federal bureaucracy. Indeed, many career bureaucrats are outraged by Trump’s policy direction. Even if Trump could stock the executive with like-minded rightists, Congress and the courts still hold significant political power. After all, the legislative branch can throw the president out under certain conditions. On the state level, governments can make their own policies on certain issues; two of the three largest state governments — California and New York — have already dug in against Trump’s agenda. So while Bannon can rave about deconstructing the administrative state, he will struggle to carry out a right-wing nationalist project in the face of the United States’ decentralized institutions. We have already seen this in the courts’ blocking of two successive anti-immigrant measures. Outside of these webs of power and bureaucratic channels, citizens are themselves resisting. On a basic level, American culture’s strong individualist and even anti-authoritarian strain makes it difficult to impose a strongman regime. More importantly, however, Trump’s right-wing nationalist agenda has energized and activated masses of people. Huge demonstrations and town halls flooded by angry constituents have put the Trump administration on the defensive. These trends have stiffened the backbones of Democrats in Congress and in state governments. If popular opposition continues at a high level, it will begin to worry big capital’s representatives, who are always attuned to the potential dangers that popular mobilization poses to their interests.