The Corner

Economy & Business

Marco Rubio: Populist?

Senator Marco Rubio today authored an interesting post on the website UnHerd.com. You have to register your email address to access it, but the post (as well as their many other articles) is well worth your time to check out.

Rubio argues that the most under-reported story of 2017 was how Apple (and, by implication, a host of other American-based multinationals) exports not only production jobs but even its valuable intellectual capital to offshore foreign subsidiaries. The piece details how this is done and provocatively asks “is Apple an American company?” His conclusion follows up on that to raise an even more provocative question:

If Apple, the most successful enterprise of the information age, is not American, then something is wrong with our model. Globalization is based on the assumption that economic gains from a more open global economy will offset losses in American jobs. What happens if the gains get shipped abroad along with the jobs?

People open to economic populism can answer that question: if the gains get shipped abroad, you get Trump and Bernie Sanders. Americans have shown for decades they are untroubled by economic inequality so long as almost all people share in a ever-growing pie. But if the gains that derive from that pie are not broadly shared, then eventually people (i.e., voters) get wise to the game and demand reforms. While many things coalesced to create 2016’s political earthquakes, the sense that the economy no longer works for the benefit of millions of Americans was surely one of the most important fault lines beneath the tremors.

Teasing out Rubio’s thought here, it seems he endorses one of economic populism’s key tenets, that citizenship matters as well as efficiency in determining whether an economy works for a nation. Economic populism ultimately rests upon this point: it’s not enough that Americans own companies that produce wealth for people in other countries if the broad mass of Americans do not share in the increase in that wealth. That’s why economic populists focus on things like “American jobs”. To an orthodox economist who dismisses any good other than efficiency, there are no such things as “American jobs,” there are only “jobs in America”. And the sort of “jobs in America” that exist are, and ought to be, largely – if not solely – the product of market forces driven by the efficient allocation of capital to economically efficient firms. So under the orthodox view if America is a nation with financiers and software engineers on the one end and baristas and gardeners on the other, with little in between, there’s nothing unjust about that result.

Rubio’s post suggests he does not share that view. If true, it means there is now daylight between him and the party hierarchy and the purportedly populist, but increasingly economically orthodox, president. It would, if he chooses to take this path, allow him to craft a path between Romney-Ryanism on the one hand and Bannonism on the other.

The high priests of supply-side economics who sit in the Wall Street Journal’s editorial board will predictably denounce the Senator’s apostasy. They will find his lack of faith disturbing.

But just as a small band of rebels overthrew Vader’s Empire, I think Rubio has awakened the Force that binds Americans to one another – and which when wielded with skill brings political victory to its practitioner.

I don’t think Rubio is alone. Over the past few months, people like Senators Tom Cotton and Mike Lee have made their own proposals which, if taken to their logical conclusions, are also inherently economically populist and at odds with the supply-side religion. But none to my knowledge has posed the central question – does citizenship matter as much as efficiency in crafting economic policy? – as clearly as Rubio has in this one small post.

I have been writing about working class Americans and their views for nearly nine years. As part of that effort, I have urged Republicans to begin to rethink their faith in their ancient, supply-side religion. For most of that period, I have often been asked something along the lines of “sounds great. Which Republican leader agrees with you?”Now, thanks to Rubio, and Cotton and Lee, I have new hope.

Henry Olsen — Mr. Olsen is a senior fellow at the Ethics and Public Policy Center, an editor at UnHerd.com, and the author of The Working Class Republican: Ronald Reagan and the Return of Blue-Collar Conservatism.

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