Trump, Corporatism, and the Dearth of Innovation
America’s innovative spirit has been weakened by a corporatist ideology that has permeated all levels of government, displacing the individualist ideology upon which capitalism thrives. Under Donald Trump, corporatism could become even more extreme, resembling the disastrous approach taken by Germany and Italy in the 1930s.
CHICAGO – In the United States, a domestic political shift from cosmopolitanism to nationalism, and from left-leaning metropolitan “elites” to right-leaning rural “populists,” seems, to many, to be underway. The prevailing economic ideology is also shifting, from a redistributive, regulatory corporatism to something like the old interventionist corporatism.
Disaffected voters are behind both changes. For decades, Americans believed that they were riding a magic carpet of economic growth, owing to advances in science and, later, to the rise of Silicon Valley. In fact, growth in total factor productivity has been slow since the early 1970s. The 1996-2004 Internet boom was only a fleeting departure from the trend.
Over time, as businesses have cut back on investment in response to diminishing returns, growth in labor productivity and hourly wages has slowed, and workers in many households have dropped out of the workforce.