America is a rich country with a lot of poor people. Around 22 million people, nearly 1 in every 15 of us, are estimated to have assets worth at least $1 million. Our population of paper millionaires may have doubled between 2020 and 2023 alone. To fully savor this marvel of capitalism, money-printing, and inflation, they would need to sell everything they have and live in their cars. They could then join the 37.9 million people who, the 2020 census found, were living in poverty and presumably still are. It has never been easier to get rich on paper. It has never been harder to recover from the reality of joining the 1 in 10 who are poor.
Thomas Carlyle called economics the “dismal science.” It is not much of a science, because it cannot replicate its results or predict its outcomes. It is dismal because it reduces human value to the thin black line of GDP on a graph. If the line is rising, governments and investors are happy, and so, we are told, should we be. If it is falling, government will intervene, investors will go elsewhere, and we are told to pull up our socks, roll up our sleeves, tighten our belts, and, having performed these Victorian adjustments, bootstrap ourselves with vigor sufficient to raise the thin black line again. Meanwhile, in another Victorian adjustment, the losers sink into the red. The wealth of nations is not the health of nations.
Something has to change. Something already has. Since 2016, the language of politics has changed by public demand. Look at the names of the Right’s new ideas shops: American Greatness, American Affairs, the America First Policy Institute, the Center for Renewing America. The common thread is that the greatness of America can only be renewed if we place our own affairs first. The advocates of this approach insist they are restoring historical norms to American economic and foreign policy. They have a point. Only after 1945 did Washington become the custodian of the world order. For the same reason, free traders have a point when they call this restoration a revolution, with all the risks that entails.
It is now 80 years since 1945. America has been a custodian of world order for a third of its existence. Those decades are also the decades in which America got rich and everyone got AC. The free traders argue that if we pull at the golden threads of the global economy, we will all soon find ourselves shivering naked on the heath like King Lear. The Trump administration counters that the golden threads are a straitjacket, imprisoning the American worker, who apparently cannot wait to get back down in the mines or, like Jack Nicholson in Five Easy Pieces, swap being a concert pianist for drunken roughnecking in the Texas oil fields like a young George W. Bush.
The arguments for and against President Donald Trump’s tariffs proceed from economic theory. Mere theory cannot withstand the dysfunction of the American political system and the enveloping chaos of the world order. Advocates of free trade and advocates of tariffs alike assume that their graphs will edge upward amid stable conditions. But neither domestic nor international situations are stable.
Since 2000, when the departing staffers of the Clinton administration removed the “W” keys from the keyboards in the White House, every successful presidential campaign has promised to destroy the traces of the sitting president. In a rare case of politicians honoring their promises, each new presidency since then has devoted its energies to actually doing it. Sooner or later, the Democrats will find a presidential nominee who is neither senile nor socialist. The cycle of destruction will turn and economic policy will shift back. The question is, how far?
The second Trump presidency began with Trump praising President William McKinley for making “our country very rich through tariffs.” True, the high-tariff decades after the Civil War coincided with industrialization and wealth creation — and were, despite this, the first era of globalization. Yet after becoming president in 1897, McKinley warned that if tariffs are too high, “you diminish importations and, to that extent, diminish the revenue.” He sought reciprocity with the U.S.’s major trading partners. Trump is now likely to selectively lower tariffs in exchange for reciprocity. As the Biden administration’s “Build Back Better” was Trump I’s “Make America Great Again,” so the next Democratic administration is likely to maintain Trump-lite tariffs on key areas of the economy.
Also true: McKinley’s high-tariff era coincided with the great-power competition that culminated in the world wars. Free traders rightly argue that tariffs create economic conflict, which can lead to war. The proponents of tariffs rightly argue that the economic conflict is already here. The second era of globalization is over. After his reelection in 1900, McKinley attributed America’s “unrivaled prosperity” not to tariffs, but to “our capacity to produce.” America needs to raise production capacity if it is to survive. The foundations of prosperity are domestic. So are the sources of our disorder.
Dominic Green is a Washington Examiner columnist and a fellow of the Royal Historical Society. Find him on X @drdominicgreen.
