Trump’s shaky capitalist support: Business conflict and the 2016 election

Three Way Fight


A detailed study of 2016 campaign contributions confirms that a majority of the ruling class opposed Donald Trump’s candidacy and that he was backed by an unstable coalition of competing capitalist interests.

What kind of support does Donald Trump have within the U.S. ruling class? He is the first billionaire president of the United States, and his administration (despite the rhetoric about being an advocate for working-class Americans) has massively favored big business and the rich. Yet on a number of domestic and foreign policy issues he has gone against dominant neoliberal thought and has made many people in established elites deeply uncomfortable. And among big capitalists, it’s not just centrist or liberal figures such as Tom Steyer and Michael Bloomberg who have opposed Trump, but also the Koch brothers, who just a few years ago were the most notorious funders of hardline conservative politics, but are now organizing against the president on immigration and trade policy.

As a starting point to help make sense of Trump’s relationship with U.S. capitalists, I recommend the report “Industrial Structure and Party Competition in an Age of Hunger Games: Donald Trump and the 2016 Presidential Election,” by Thomas Ferguson, Paul Jorgensen, and Jie Chen. Drawing on an intensively researched database of political contributions, the report (which I’ll refer to as “Hunger Games” for short) analyzes the relative support the various 2016 candidates received from small and large contributors and, equally important, from specific industrial sectors within the business community.

The investment theory of party competition
“Hunger Games” is based on Ferguson’s investment theory of party competition, which argues that business interests hold most political power in capitalist societies, that electoral contests within and between political parties generally reflect conflicts between distinct blocs within the business community, and that these blocs tend to follow distinctions between specific industries (such as finance, mining, pharmaceuticals, etc.) and related economic characteristics (for example, labor-intensive versus non-labor-intensive industries, export-oriented firms versus firms oriented toward domestic markets, etc.). Ferguson, both alone and with various collaborators, has been using this approach for over thirty-five years to analyze political developments across much of modern U.S. political history. For example, his book Golden Rule detailed the formation of a historical bloc of capitalists behind FDR’s New Deal in the mid-1930s, while Right Turn, which Ferguson co-authored with Joel Rogers, traced the large-scale rightward shift of business interests in the 1970s, a development that pushed Jimmy Carter to the right, helped put Ronald Reagan in the White House, and contributed to the rise of what we now think of as neoliberalism.

Photo shows President Trump, surrounded by aides and holding a pair of scissors, about to cut red ribbon in front of two piles of papers: a small pile labeled "1960" and a large pile labeled "today."
President Donald J. Trump prepares to cut “red tape”
representing regulations today compared with 1960.

Before collaborating on the “Hunger Games” report, Ferguson, Jorgensen, and Chen previously analyzed the 2012 presidential race, in which Barack Obama won re-election over Mitt Romney. In many ways, 2012 was fairly typical of modern presidential elections: overall spending was similar for both big party nominees, but the Republican candidate enjoyed broader capitalist support overall, while the Democrat captured the greater share of small contributions (from non-rich voters). Broken down by sector, Romney received greater support than Obama from most industries, both in dollars and number of firms, with particularly strong support for Romney coming from “industries that have been heavily engaged in battles over climate change, alternative energy, and regulatory policy, including oil…, mining…, chemicals, paper, and utilities.” But Obama received substantial backing from many of the other industries. Defense and aircraft manufacturers were evenly split between the two candidates, and Obama received the bulk of support from health insurance, telecommunications, computers, and software and Web companies.

Ferguson, Jorgensen, and Chen saw a key connection between the pattern of Obama’s business support and the fact that his administration largely continued and in some respects expanded the national security policies initiated by Bush and Cheney. “Our study shows that national Democratic leaders are politically allied with many of the industries closely linked with the new national surveillance state”—i. e., “a system dominated by firms that want to sell all your data working with a government that seems to want to collect nearly all of it.”

2016: small contributors versus the establishment
We don’t need political scientists to tell us that the 2016 contest was different from 2012, and arguably from every other presidential race in U.S. history. But “Hunger Games” helps us pinpoint and quantify some of what made it different. Two broad issues stand out. First, the report documents, in dollar terms, the revolt of ordinary voters against the established leadership in both major parties. In the Democratic primaries, the Bernie Sanders campaign represented “something we are confident is without precedent… across virtually the whole of American history”: “a major presidential candidate waging a strong, highly competitive campaign whose support from big business is essentially zero” (25). Aside from a few largish donations from labor unions, basically all of Sanders’ funding came from small donors. But Donald Trump attracted a lot of small donations as well—a higher percentage of them, in fact, than Barack Obama did in 2012. Hillary Clinton, conversely, drew a smaller share of small donations than Mitt Romney did four years earlier. To Ferguson and his co-authors, for a Republican to attract more small money than the Democratic nominee is “the equivalent of forcing water suddenly to flow up hill” (25). Based on the groundswells for both Trump and Sanders, they suggest that “the major parties appear to be breaking down as mass organizing vehicles” (3).

The “Hunger Games” authors trace popular support for both Sanders and Trump to the rise of what they call a “dual economy” in the U.S.: the “extreme polarization of income and wealth over the last generation in the U.S. and many other developed countries, even while real earnings for most workers stagnated” (25-26). They devote several pages to detailing the dynamics, scope, and depth of this development. By 2016, they argue, the pressures of the dual economy had reached a tipping point—“a point where, quite literally, daily existence for many had become close to unlivable.” “When two politicians broke through the big money cartels that dominate both major parties, popular enthusiasm surged almost overnight to seismic levels, shocking elites in both parties and flummoxing the entire American establishment” (28). I agree that the dual economy fueled the populist upsurge in both major parties, although on its own it doesn’t tell us why some anti-establishment voters saw the main problem as concentrated wealth while others saw the main problem as Mexican and Muslim immigrants.

Capitalists rally to Clinton
The other broad issue that set 2016 apart from most modern presidential elections is that capitalists sided heavily with the Democrats. Unlike 2012, the Democratic nominee received much more campaign spending overall than the Republican: $1.4 billion for Clinton compared with $861 million for Trump. The chronology of Trump’s fundraising is significant. During the primaries, his campaign relied mainly on small contributions and his own money. As Ferguson et al. comment, “His money gave him both the means and the confidence to break the donors’ cartel that until then had eliminated all GOP candidates who didn’t begin by saluting the Bush family for starting the Iraq War, incessantly demanding cuts in Social Security and Medicare, and managing the economy into total collapse via financial deregulation…. He could say whatever he wanted” (38). Only in the summer, as the convention approached, did the Trump campaign begin to bring in significant money from major donors, ranging from coal mining companies to big banks to Silicon Valley firms such as Facebook. And capitalist donations to Trump didn’t kick into high gear until after billionaire Rebekah Mercer persuaded Trump to put Steve Bannon and Kellyanne Conway in charge of the campaign, with a strategy to target white working-class voters in key swing states.

The industrial pattern of political contributions was also dramatically different than it had been in 2012, when the Republican nominee received a majority of business contributions in most industries. In 2016, Clinton retained majority support from those industries that had sided with Obama (high tech and health insurance), but she also gained the bulk of contributions from defense and aerospace firms, which had split evenly between the two major parties in 2012, and she gained majority support from many industries that had backed Romney, including chemicals, electronics, pharmaceuticals, health care, utilities, general insurance, and both commercial and investment banking. Clinton enjoyed the broadest and deepest capitalist backing of any Democratic presidential candidate since 1964, when Lyndon Johnson defeated the “extremist” Barry Goldwater in a landslide. Clinton won this support, the “Hunger Games” authors argue, by reaching out to moderate Republicans and neoconservatives. She defended Wall Street in the face of Trump’s populist rhetoric, moved to Obama’s right on major foreign policy issues such as Syria, and (distancing herself firmly from Sanders) emphasized personal qualifications over policies. Clinton’s strategy to reassure elites rather than speak to popular anger was, as the authors conclude, “a miscalculation of historic proportions” (47).

Man in suit standing at podium in crowded auditorium, speaking.
Peter Thiel, who contributed over $1 million to Trump’s
election bid, speaking at 2016 Republican National Convention

Despite Clinton’s stronger business support overall, Trump did get majority backing from several industries, including mining (especially coal mining), casinos, agribusiness, rubber, steel, and gun and ammunition manufacturers. He also received a large proportion of support from food, chemicals, oil (especially big oil companies), transportation, and certain financial services sectors, especially private equity firms (“the part of Wall Street which had long championed hostile takeovers as a way of disciplining what they mocked as bloated and inefficient ‘big business’” [45]). As the “Hunger Games” authors argue, Trump’s call for deregulation and climate change denial appealed to firms in many of these industries, while a few industries, notably steel and rubber, liked his economic protectionism. The gun industry was predictably hostile to Democrats.

Trump’s unstable coalition
In their conclusion, Ferguson, Jorgensen, and Chen emphasize the deep ongoing tensions between President Trump and his party’s establishment. They argue, moreover, that Trump’s capitalist support base was not only much smaller than the Republican norm, but also “extremely unstable”:

It is made up of several layers of investor blocs with little in common other than their intense dislike of existing forms of American government. The world of private equity, intent on gaining access to the gigantic, rapidly growing securities markets of China and the rest of Asia or casinos dependent on licenses for their lucrative businesses in Macau are likely to coexist only fitfully with American industries struggling to cope with world overcapacity in steel and other products or facing twenty-first century mercantilist state targeting (48).

Ferguson, Jorgensen, and Chen’s analysis—particularly including this point about Trump’s “extremely unstable” business support—bolsters and sheds light on points I made about the Trump administration in Insurgent Supremacists. I noted that Trump’s candidacy alienated not only many Republican officials but also many business leaders. “Yet because he lacked an organizational base of his own, Trump was immediately forced not only to work with establishment figures in the Republican Party but also to bring them into his own administration. As a result, from the beginning Trump’s presidency rested on an unstable coalition of right-wing factions both opposed to and aligned with conventional conservatism” (200).

This shaky coalition, I argued, brought together both supporters and opponents of neoliberalism, the ideology of deregulation, privatization, relatively open borders, and free trade that has dominated both major parties for about four decades. During the campaign, Trump advocated a form of nationalist populism embodied in the slogan “America First,” which challenged neoliberal orthodoxy on trade and immigration and also called into question the establishment’s related consensus around military interventionism and traditional alliances overseas. Trump brought some America Firsters into his administration, such as Steve Bannon, Jeff Sessions, Michael Flynn, Peter Navarro, and Stephen Miller, but they were never the dominant force there.

From the beginning, the majority of Trump’s high-level appointees were not nationalist-populists, but conventional conservatives of various stripes. Some were Christian rightists or Tea Partiers, some were veterans of the Republican political establishment, and some were known mainly for their experience in the military or in business. From early on, America Firsters clashed with neoliberals and establishment figures in the administration and in Congress on issues such as trade policy, which contributed to an unusual degree of chaos and lack of clear direction. The issues on which the different factions agreed, and on which the Trump administration moved forward most effectively, basically represented a hard-line version of neoliberalism’s domestic agenda: dismantle environmental regulations and consumer protection rules, open up public lands to corporate exploitation, “reform” the tax system to further redistribute wealth from low- and middle-income people to the rich, make the judicial system more punitive, and speed up militarization of the police. To a large extent, the result seemed to be policies that benefited narrow capitalist interests, such as military contractors, private prison operators, and energy companies, as well as the Trump family’s own businesses, more than a coherent unified program (204).

I think this image of an unstable coalition remains a useful framework. Since I wrote the passage above (in September 2017), the Trump administration’s America First faction has lost ground, several of its leading members are gone, and some critics have concluded that the president is just continuing neoliberal policies while overlaying them with xenophobic rhetoric to appease his popular base. But this doesn’t adequately get at the administration’s inconsistent, conflicted character, as when Trump announced a troop withdrawal from Syria that most of his own advisors opposed, or forced a government shutdown only after his right-wing base demanded no compromise on the border wall. It doesn’t explain why neoliberal measures have been interspersed with echoes of paleoconservative Pat Buchanan (who declared “we will put America First” over 25 years ago), as when Trump imposed steel and aluminum tariffs on Europe and Canada, launched a trade war with China, or railed against NATO allies. Buchanan’s 1992 campaign in the GOP presidential primaries was one of the first major right-wing challenges to neoliberalism, and it drew support from some of the same business sectors that later backed Trump’s candidacy.

I don’t have detailed information on how capitalists’ views of Trump may have shifted since the 2016 election, but in broad terms, the dominant business voices have supported his administration on taxes and deregulation of industry, while opposing it on immigration and trade. For example, the Business Roundtable (BR), which includes the CEOs of most big U.S. corporations, praised the 2017 tax “reform” law and testified that the Trump administration was “taking major steps” to achieve “smart regulation.” But in September 2018, BR reported that two-thirds of CEOs feared recent tariffs and expected trade tensions would negatively affect their capital investment decisions, and in August 2018, sixty BR members, including some of the country’s most prominent CEOs, signed a letter expressing “serious concern” over the administration’s immigration policy changes.

To sum up: Neoliberalism (and the related internationalist/interventionist foreign policy stance) still enjoys majority support within the U.S. ruling class and among political elites in both major parties, but its ability to rally popular support is in crisis (as it also is, for example, in many European countries). Rightwing nationalist populism has a large popular constituency, but it lacks a coherent, independent organizational infrastructure and its capitalist support is relatively weak. These factors enabled Donald Trump in 2016 to defeat establishment candidates in both the Republican primaries and the general election, but he attracted a relatively small and internally divided array of business supporters. As president, despite his strong personal inclinations toward nationalist populism, Trump has been forced to bring many establishment figures into his administration, and to implement elements of both neoliberalism and nationalist populism, or at least oscillate between them.

This is a volatile situation, which Trump’s authoritarian impulses won’t fix, and it’s hard to know how it will be resolved in the long run. Maybe transnationally oriented capitalists will find a way to reconnect with popular support, as Don Hamerquist has suggested. Maybe (if the United States’ global economic position weakens further) nationalist populists will gain greater and more organized ruling class backing, thus expanding their ability to govern without neoliberal partners. In the meantime, the situation seems likely to feed, not a calculated march toward dictatorship, but a sharpening mix of repression and instability. As the political collective Research & Destroy forecast shortly after Trump’s inauguration, “In many of the futures we can see from here, the state will be both turbocharged and weak; its oppressive mechanisms will churn in higher gears without being highly functional, as jurisdictional and factional disputes proliferate.” There are openings here for the left—but also for the far right.

1. December 14, 2017 in the Roosevelt Room at the White
House. Official White House photo (public domain), via Wikimedia Commons.
2. July 21, 2016, in Cleveland, Ohio. Photo by Voice of America (public domain), via Wikimedia Commons.

2 thoughts on “Trump’s shaky capitalist support: Business conflict and the 2016 election”

Leave a Comment