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Twenty-four years ago, when then-President Bill Clinton asked Congress to establish permanent normal trade relations with China, and Congress did just that, the chief argument that Clinton and the bill’s proponents made was that bringing China into the world capitalist system was sure to push the country in a democratic direction. Capitalism and democracy, they repeatedly averred, were inextricably linked.
Some empirically oriented economists, particularly those at the Economic Policy Institute, predicted that the corporate pillars of American capitalism would not only set up shop in China but decimate American manufacturing in the process. They were dismissed as protectionists, though their predictions proved to be entirely correct. Others of us noted that the slim history of what happens when Communist nations embrace aspects of a mixed economy showed that those nations compensate for moving toward economic liberalization by snuffing out political liberalization. That’s certainly what happened in the Soviet Union in the early 1920s, when Lenin’s decision to move away from nationalization to a more market-oriented economy was accompanied by Lenin’s decision to outlaw, first, the Communists’ rival socialist parties (the Mensheviks and Social Revolutionaries), and then all oppositionist tendencies within his own Communist Party as well.
But neither the lessons of history nor those of economics gave any pause to PNTR’s advocates. Capitalism yielded democratic as well as monetary dividends, they said—and said and said—again. The relationship was causal: To support capitalism, ipso facto, was to support democracy.
Except, of course, when it doesn’t.
Recently, that exception has become glaringly visible in the run-up to this year’s presidential election. For the first time in our post-Jacksonian history, one of the two major-party candidates is clearly opposed to our nation’s fundamental, if incomplete, democratic norms and laws. Despite that, in growing numbers, many of our nation’s most prominent capitalists have come around in recent weeks to supporting Donald Trump.
They include private equity pirate Stephen Schwarzman, hedge fund mogul Ken Griffin, “activist investor” (i.e., corporate shakedown guy) Nelson Peltz, and just today, aspiring university dictator Bill Ackman—multibillionaires all—and a host of Silicon Valley gazillionaires. Also among those now speaking fondly of Trump is JPMorgan Chase CEO and Wall Street’s acknowledged leader Jamie Dimon.
As The New Republic’s Tim Noah has written, many of these, Dimon most particularly, professed to swear off Trump as a threat to democracy in the wake of the January 6th insurrection. What possibly could have produced such a change of heart within this cohort, understanding as they do that Trump poses a clear and present danger to America’s democratic values?
Just between us, it’s money. In 2025, the Trump tax cuts on individuals—more than 80 percent of which went to the wealthiest Americans—will expire. Trump has vowed to continue those cuts if he’s elected, which would increase the nation’s deficit by a cool $4 trillion. Biden, by contrast, has promised to end those cuts for those Americans whose annual income exceeds $400,000. And despite their ostensible and frequently voiced concern for rising deficits, more and more of our gazillionaires have decided that Trump’s commitment to make them still more filthy rich trumps (no pun intended) their heartfelt claims of support for democracy.
Don’t take my word for it; take Trump’s. According to The Washington Post’s Josh Dawsey, when Trump met with über-wealthy donors at New York’s Pierre Hotel earlier this month, he told them that their “taxes are going to go up four times” if Biden is re-elected. “You’re going to have the biggest tax increase in history,” he added. “So whatever you guys can do, I appreciate it.” If the assembled Wall Streeters wanted a one-on-one lunch with him, the Post reported, Trump said the tab (to his campaign, or legal expenses) they would have to pick up would be no less than $25 million.
For the past century, and most particularly during the past 50 years of increasingly globalized production and markets, most big-time investors and corporate leaders have gladly invested their funds in enterprises in nations marked by a dearth of democracy. In backing Trump this year, however, they’re now bringing their indifference to democracy home—believing that the increase to their wealth from Trump’s tax cuts outweighs whatever assaults on majority rule and minority rights Trump may launch, and that their transactional relations with him (that is, the money they funnel his way) will save them from whatever general havoc he wreaks.
So if one of these guys dares to assert again that capitalism fosters democracy, give him a smack in the kisser.
