Embracing Economic Populism: How the GOP Can Secure its Future

Dominic de Bruyn | United States Fellow

From the moment then-candidate Donald J. Trump descended a golden escalator in Trump Tower to announce his unlikely bid for the presidency, it was clear the Republican Party was entering a brave new world. Trump’s successful bid for the party’s nomination and his subsequent victory in the general election sent shockwaves rippling through the political landscape, not least in the ‘Grand Old Party’ (GOP).


Since its inception in the 1850s, the Republican Party has generally functioned as a pro-business outfit. The party’s economic policy agenda has traditionally been characterised by staunch fiscal conservatism and an unwavering conviction in free markets. The free market fundamentalists that have dominated the modern Republican Party strongly oppose any new taxes or government spending, and advocate cutting regulation wherever possible. However, in order to compete in national elections, the party may need to enact an economic agenda that strategically promotes a greater role for government and organised labour.


Notwithstanding the GOP’s robust electoral performance in recent decades, the party’s libertarian philosophy is unpopular with broad constituencies. A Morning Consult poll from March 2021 found that 55 per cent of voters support a ‘Medicare for All’ program, under which Americans would receive health insurance from the government. Further, a Data for Progress poll from July 2022 found that 83 per cent of likely voters' support legislation that would raise Social Security benefits.


As a candidate, Trump recognised this reality, and campaigned on a more populist economic agenda, even if he quickly abandoned this vision once in office. However, given Trump’s success among white working-class voters in the Midwest, a disparate group of Republican Party operatives and elected officials are developing a more populist economic framework aimed at convincing voters they have a real alternative in the GOP.


American Compass, a right-of-centre think tank, argues the Republican Party should abandon its doctrinaire devotion to free market principles in favour of a national economic policy that “restores the importance of family, community, and industry.” Republican Senator Marco Rubio, once a darling of the party’s establishment wing, admits that corporate profits have been prioritised over the obligation to invest for the benefit of workers.


A central component of national economic populism is a focus on industrial policy, in which the United States (US) promotes domestic manufacturing and cultivates strong national firms. Proponents of a strong industrial policy argue that the GOP should embrace the role of government in channelling investment towards long-term national priorities. This strategy emphasises investment in the ‘real economy’, as opposed to financial speculation, which remains a key feature of the US economy. This policy framework would appeal to working class voters who have suffered from the offshoring of manufacturing jobs.


An increased role for the state may also provide important national security benefits. Republican Senator Tom Cotton asserts that the US must make strategic investments in advanced technology and critical infrastructure, as well as increase research and development budgets for scientific agencies. He also argues in favour of manufacturing critical products in the US, including medicine and semiconductors, to shield the US from adverse geopolitical developments. Proponents of greater local manufacturing point to the challenge of procuring critical items during the coronavirus pandemic, when the US struggled to acquire protective masks.


The reformist wing of the Republican Party also claims to seek an increase in the power and agency of ordinary workers. Despite the GOP’s historic hostility towards labour unions Oren Cass, Executive Director of American Compass, contends that organised labour should be a conservative priority, as it reduces a reliance on redistributive policies by giving workers power and agency in the job market. Senator Rubio embodied this sentiment by supporting a unionisation effort by Amazon workers in Alabama in March 2021.


If the Democratic Party continues to appeal primarily to well-educated, affluent suburbanites, there is an opening for Republicans to fracture the Democrats’ traditional voting base and assemble a formidable working-class coalition. The US federal system favours parties that can obtain broad support from across the country, rather than concentrated support in urban areas. Therefore, a Republican emphasis on industrial policy, workers, and families could lead to sustained electoral success.


To be sure, GOP reformers face significant challenges in their bid to overhaul the party’s economic ideology. President Trump’s most significant legislative achievement was a huge tax cut for corporations and top earners, signalling that the libertarian wing of the party still holds considerable sway in Washington. Wealthy donors continue to pour hundreds of millions of dollars into the party’s coffers each election cycle to uphold the status quo agenda. Libertarian think tanks influence the GOP’s policy platform by placing staff in key policy roles within Republican administrations. Unless key legislators and staff recognise the value of changing direction, future administrations will struggle to escape the bounds of establishment thinking.


Notwithstanding the formidable structural challenges facing reform efforts, the Republican Party may benefit electorally by embracing a national economic policy that prioritises working-class voters. With the party facing significant demographic obstacles to ongoing electoral viability, a more populist ideology would ensure the GOP remains a powerful political force in the decades to come.


Dominic de Bruyn is the United States Fellow for Young Australians in International Affairs. The views expressed in this article are those of the author’s and do not reflect those of any other entity.