Donald Trump’s selection this week of Ohio Sen. J.D. Vance as his vice presidential pick tells us something about the Republican Party’s approach to economics these days. Vance styles himself in the same vein of conservative populism that Trump has come to symbolize. And that seems to mark a shift in the party’s relationship with business—at least in theory.
Does conservative populism indicate that business interests have been downgraded in the Republican Party? How do businesses benefit from current Republican policy priorities?
Those are a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast that we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.
Cameron Abadi: The traditional Reaganite coalition in the Republican Party has been between big business, social conservatives, and nationalist security conservatives. In the new populist configuration, business seems to have been sacrificed to the interests of the others somewhat. But at the same time, Vance was a venture capitalist before he was a senator, and he’s also very close to Silicon Valley conservatives. So, is there a contradiction between populism and big business at all? Or is this really more an indication of the rise of a new type of business elite that represents different industries?
Adam Tooze: It’s a really fascinating situation that we’re in and hard to read. And I think the simplest and smartest answer to all of these questions will be, “It’s too soon to tell, and we shall see what happens.” But you could just be cynical and say that Vance is a man on the make—he will say or do anything necessary to advance his career. I think there’s an element of that in play. He’s clearly incredibly ambitious. Another, more sympathetic reading would be that he’s also traveling an astonishingly long way. I mean, of course he has stylized this for everyone to read, in the form of this memoir/account of Appalachian or sub-Appalachian Ohio industrial culture, Hillbilly Elegy. But he is a man who’s traveled remarkable distance in terms of his political career. In some senses, therefore, the contradictions may be the unfolding of the sort of tensions of a bildungsroman, you know, the formation of a rather remarkable American biography. So you start in one place, you end up somewhere else, and people say you’re contradicting yourself as you go along.
He was a venture capitalist, specifically in the sort of orbit of Peter Thiel, who was an early PayPal investor and is now big in Palantir, which is the national security wing of the Silicon Valley scene—so much less liberal, more conservative, more hawkish in international politics. So this is venture capital. This is not private equity. This is not corporate raiding. You’re not going into existing businesses and tearing them up and firing people and trying to skim profits. You’re actually trying to generate new business. So this is a protean, imaginative way of thinking about how capitalism is going to transform the world. I think that’s the one key element of this story.
And it’s also middle tier, right? So the Trump coalition is made up, above all, of idiosyncratic venture private equity and all the way down from there to blue-collar folks in trailers—and along the way the extremely prosperous, what are called the American gentry, you know, car dealership owners, the owners of dry cleaning chains, kind of what we would once upon a time in class terms have called petty capitalist or petty bourgeois. And in that kind of view, there are lots of ways of squaring the circle, right? So you can basically be against Big Tech whilst being in favor of Little Tech. So Vance is, by all accounts, a public fan of Lina Khan, who is one of the more aggressive exponents of antitrust. Because somebody like Vance sees the big tech platforms as liberal, as so not aligned with Trump, and as dominating the market, which is bad for smaller businesses coming up and also bad for workers.
And so you can see how you can combine all of these elements into something that is actually not so contradictory, but a relatively coherent vision of a kind of nationalist reconciliation between the interests of the “little people,” which range from the workers to up-and-coming new businesses that want to change the world in a positive way and stand opposed by incumbent oligarchic, liberal establishment interests. And Vance stands for the former group against the latter.
CA: Then how does this relationship with business square with the Republicans’ current policy priorities? Who benefits, for example, from crackdowns on immigration? Also, both Trump and Vance are in favor of a weaker U.S. dollar. To the extent these policy ideas oppose business interests, should we just expect they’ll be loss of a priority at all for a renewed Trump administration, as opposed to tax cuts that businesses will always benefit from?
AT: Yeah, this is where we really are going to have to see how this plays out because it’s all very well to talk about the need to promote small businesses and workers’ interests against the coalition of incumbents. But when Trump was in office the last time round, his appointments at the senior economic policy level, as opposed to regulation and so on, were straight down the middle, relatively conservative representatives of established interests. And it’ll be very interesting to see what happens this time.
So, regarding the proposal to engage in mass deportations, there are, by estimates of the Pew Research Center, over 7.5 million undocumented migrants in the United States who are in the workforce. There’s probably closer to 10 to 11 million actually living in the United States, but they’re disproportionately active in the labor force. Far from being parasitic on the welfare system, they’re actually huge contributors to the American workforce. And at the bottom end of the American labor market, it’s very hard to see how employers would do without them. And it’s not obvious that there are 7 or 8 million Americans eager to do the kinds of jobs for the kind of pay that those people do currently, which is menial cleaning service, construction work on the whole. Estimates by the Peterson Institute suggest a 5 percent shock to American GDP because that’s, roughly speaking, what 7 to 8 million workers would be as a share of the American workforce. That’s a huge and damaging impact, which you would expect to rally a massive coalition against any such policy, setting aside the humanitarian, the legal, the political aspects of any kind of mass deportation program because where on earth are these people going to go? To Mexico? Surely not, that’s not reasonable. A fraction of them are Mexican but only a fraction.
The same goes for the tariff policy. Many of the tariff proposals that the Trumpians are making are not just in violation of the World Trade Organization but much more significantly, they’re in violation of the trade arrangement with Mexico and Canada, which used to be called NAFTA and which is overwhelmingly America’s most important trade relation. And if the Republicans went about trying to challenge this, demolish this, raise tariffs all around, they would face retaliation from their leading trade partners, which would be Mexico and Canada, and that would really hurt. And the last time Trump tried to do this, the farm lobby mobilized, and Trump realized that farmers love him. Famously, this was one of his phrases when he was shown the impact on the farm sector: “Oh, I better not do that.” And so NAFTA survived. It was renegotiated as the United States-Mexico-Canada Agreement in its current form.
And I would expect a similar kind of struggle to go on if they actually attempt to make good on these really dramatic interventions in the structure of the U.S. economy. Because it is notionally possible that domestic producers would benefit from a tariff or that workers locally would benefit from an even tighter labor market. But it presumes in both cases that there are either American businesses or industrial capacity or workers who actually want to fill those slots, rather than actually regarding the American trade imbalance and the flow of migrants as a highly functional arrangement that raises the standard of living for most Americans. And if they go forward with, for instance, a suggestion that has been widely touted of Jamie Dimon moving out of JPMorgan Chase into the U.S. Treasury slot, then they’ll be dealing with somebody who will offer not so much deep-state as just straight, in-the-cabinet resistance to any measures along these kinds of lines, I would say.
CA: I wanted to ask a bit more about the Republican ticket’s relationship to CEOs. This past week has seen a variety of endorsements for Trump, most notably Elon Musk, the head of Tesla but also the owner of X, formerly Twitter. But beyond that, Trump had meetings with a collection of CEOs, all of whom seemed quite taken by him and have sort of let their support be known to the public. And yeah, obviously, the timing of this seems coincidental with this failed assassination attempt and the shift in Trump’s political fortunes. Is this an indication of the business sector’s political mutability—the impulse to line up behind any likely winner in hopes of securing advantage when they’re in power?
AT: Well, I think the crucial thing here is to differentiate again between different business constituencies. I mean, you spoke of CEOs, and that is the language that is commonly used in the United States. There’s this real cult kind of worship of the chief executive officer, the CEO, the boss. And they do have certain common properties, which is that they need to be competent and vigorous. And generally speaking, they tend to be younger than presidential candidates in the United States right now. And if the choice is between two people, I think an energetic business person is going to prefer the Trump choice in this case because Trump’s a dynamic, thrusting figure still, despite his age, and very, very unlike Joe Biden in his current incarnation.
But it makes a huge difference whether you are Musk or somebody running a big venture fund or hedge fund or private equity business. These are two very, very different sociologies. They’re very different class groups. And among the corporate leadership of the United States, the Forbes, you know, top 100, very, very few have openly come out in favor of Trump because he’s just a figure from a different reality. This is a man that runs clubs, that runs hotels, that runs golf courses. It’s not the same as running Bank of America or JPMorgan, where you are a highly regulated figure in the American public sphere. Dimon took a knee in 2020 because he’s running a big American bank and it was what was necessary to be done. Quite apart from his personal proclivities, this is the sign of respect that was showed to the Black Lives Matter movement by going down on a knee.
You can’t see the titans of Silicon Valley doing anything of the sort. And why are the Silicon Valley people disposed a little bit more in Trump’s direction? Well, back in 2016, it really only was Thiel who went out on the limb and did that. Since then, I think the balance of opinion has shifted, in part and largely, I think, because of the position of the Biden administration. If you ultimately have to choose, you have to choose what is good for your business in the narrow sense. And the Biden administration on three domains—on crypto, on AI regulation, and on the taxation of unrealized capital gains—has made steps, made threats, and seems to be headed in a direction that the Silicon Valley titans just don’t like. The Biden administration’s regulators have been, in the view of the crypto-owning class, hostile to them. The Biden administration is trying to string together a version of AI regulation. And the latest budget proposal from Biden includes a 25 percent tax on unrealized capital gains for those with over $100 million in wealth. And that, of course, directly affects the entire venture capital business and is supposed to redistribute in an equitable way.
And so it is relatively unsurprising, I think, that that particular group of people who are unconstrained by the institutional limits of big corporate governance in the United States—who are basically operating shops of 50 to 100 to maybe a couple of hundred employees, who are basically patriarchal bosses in their own little backyard of a business, which could have a balance sheet of several hundred billion but is nevertheless basically a light-footprint organization shaped by people’s personalities—those people can shift toward Trump. It’s a different business if you’re running an absolutely mainstream American firm. And Musk is, of course, the liminal character because through Tesla he operates a really large global business. But in terms of personality type and culture, he comes out of this gun-slinging, loudmouth Silicon Valley culture, which is very at odds with standard corporate governance.
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