Commentary on Political Economy

Friday 12 January 2024

America’s elite misinterprets the public’s grievances

Oren Cass The writer is an FT con­tribut­ing edi­tor and ex­ec­u­tive di­rec­tor of Amer­i­can Com­pass

Financial Times UK

12 Jan 2024

In a better world, Donald Trump’s political rise might have initiated a genuine soul-searching among a humiliated establishment. But the human capacity for denial in the face of rejection knows few bounds. Rather than consider how they had failed so badly that the American people would turn to a reality television star for relief, the policymaking elite have concluded that it is they who have been failed — by the people.

In some tellings, “grievance”- and “resentment”-filled Americans simply do not understand how good they have it. In others, they are too racist to care. Assessments by pundits and politicians alike embrace the assumption underlying modern economics that maximising consumption is the highest good. So long as globalisation and uncontrolled immigration lead to more stuff at lower prices, no one has rational grounds to object. As Stephen Moore, founder of the Club for Growth and distinguished fellow in economics at the Heritage Foundation, said recently: “Cheap labour leads to a booming stock market? That benefits everyone.”

But few prominent institutions or analysts have explored what Americans actually believe and why. Or perhaps they prefer not to have the answer. Survey data published this week by American Compass helps to fill that gap. It depicts a public that has made nuanced and reasonable judgments that simply conflict with their leaders’ preferences.

The survey, conducted in partnership with YouGov, asked 1,000 American adults whether “you, personally,” had “benefited” or “suffered” from America’s embrace of globalisation and China. Overall, 41 per cent reported benefiting while 28 per cent reported suffering. The share benefiting was higher across classes and regions. Yet as the frame of reference expanded, the sentiment turned more negative. The margin in favour of “benefited” was only +7 per cent when the question was about “your family and friends”, fell to zero for “the community where you live”, and reached -13 per cent for “the nation as a whole”. Rather than nursing resentment, Americans appear simultaneously to appreciate the personal benefits of globalisation while worrying about its broader effects.

Likewise, actual attitudes bear little resemblance to Americans’ hypothesised xenophobia. While half of respondents were asked about the effects of “America’s embrace of globalisation”, the other half saw a question about “America’s embrace of China”. Rather than cause people’s blood to boil, mention of America’s main geopolitical adversary triggered a more positive response. Across classes, Americans were more likely to see the embrace of China than the embrace of globalisation as benefiting them personally. What two groups reacted far more negatively to mention of China? Those in the upper class or living in coastal cities.

Responses to two other questions help explain these results. First, place matters. While globalisation’s boosters take for granted that its disruptions can be remedied by “helping people move to opportunity”, Americans prefer a focus on “helping struggling areas recover” by 70 per cent to 30 per cent. Second, making things matters. By 83 per cent to 8 per cent, Americans agree that “we need a stronger manufacturing sector”.

Economists may believe that “the goal should be producing things where it can be done at lowest cost”, but only 3 per cent of Americans feel the same way. Remarkably, the top rationale for valuing manufacturing was not national security or good jobs, but the far more nuanced view that “manufacturing is important to a healthy, growing, innovative economy”.

Adding insult to injury, it seems the American people don’t just prefer their values to those insisted upon by many economists, they may be better at economics too.

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