Professor Nicholas Didow of Kenan-Flagler Business School requested on the midterm exam for his Global Marketing class that students address an article in The Economist titled America’s New Business Model in the form of a letter to the Editor. Inspired by the relevance and applicability of this academic endeavor, I thought it pertinent to share what I would say to the Editor and, should he be willing to listen, to Trump:

Dear Editor:

I agree with the general premise of this article: Trump’s promises and policies are contradictory, short-sighted, and politically savvy.

President Trump’s brilliance lies in his ability to monopolize global attention with the grandiose declaration of promises that appeal to the underinformed citizen whose short-term time horizon favors quick-fixes and drastic measures. Often criticized by opponents for his lashing out on social media and attacks on corporate leaders, Trump has successfully convinced the American public that he will be their economic advocate without yet having to incur any of the costs or losses of political capital should he actually implement all-encompassing policy measures.

There is no mystery to the appeal of Trump’s economic policies to the American workforce. Despite the notable improvements made during the last administration, the nation is still very much so recovering from economic turmoil, and the memory is fresh in the minds of constituents. Playing to the desire for job security and global competitiveness is a safe political move. His tactics, though, do not account for the long-term need for labor force adaptation and the danger of political unpredictability. By demonizing any firm that looks abroad, Trump effectively bolsters American elitism and isolationism, undermining what may have been opportunities to better serve the American consumer. His promise of tariffs on goods produced elsewhere takes a protectionist economic tool designed to differentiate between the corporations of different nations and transforms it into a mechanism for internal conflict and nepotism as well, heightening the potential disadvantageous effects. For a leader who praises capitalism and old-fashioned hard work, his interventionist tendencies and erratic actions counteract the market forces at play. This isolationism is increasingly detrimental when the modern global socio-political climate is taken into account; the largest threats facing society include violent non-state actors, the collective action problem presented by climate change, and the international automation of operations. These obstacles will require collaboration, cooperation, and commitment.

Neorealist thought, championed by Kenneth Waltz, suggests that the state’s main purpose and function is to maintain security. Protectionism appears to be a mechanism for guaranteed security, as it eliminates the possible entry of an external threat; however, a new threat can emerge from within, as efficiency, opportunity, and competition suffer from manufactured constraints. Contrarily, a highly-competitive global marketplace may simultaneously seem to facilitate security, especially in the form of power. If a nation is able to generate competitive advantages and increase efficacy, the bargaining power, relationships, and wealth generated can act as means for reinforcing domestic security. Unfortunately, intense competition in a globalized and inequitable world presents the potential for international threats and disputes.

Any ideology in excess presents dangers; both the 11/9 (openness from the fall of the Berlin Wall) and 9/11 (isolation from a devastating act of international terror) mindsets have detrimental capacity if implemented to the extreme or in a vacuum. This logic materializes in the election of government officials, such as President Trump. The commonplace bipolar political spectrum exhibits strength in its potential to offer checks and balances and demonstrates risks with the ability for extremists on either end to acquire power. It is a widely-held belief that a moderate approach is often most lucrative and desired. Protectionism at its purest decreases the quality of life and the opportunities domestically in the long-term; however, an element of protectionism may be necessary, especially as an economy transitions (for example, from one rooted in agrarian activities to an industrialized, capital-intensive marketplace) and the labor force adapts. Likewise, complete openness and exchange, as exemplified by the fall of the Berlin Wall, presents challenges as well, such as the short-term exploitation of lesser developed communities due to their lack of regulation and bargaining power in the quest for efficiency.

President Trump’s intervention in the market sets a dangerous precedent in which the government, specifically the president, is able to interfere with the economy at any given time, despite the its stable state or any ability to self-regulate. This danger is furthered as the likely negative repercussions from these actions will probably be viewed by the public as the consequences of government action, leading to a negative perception of big government and government intervention in situations when it could, in fact, be quite necessary.

Ironically, his eagerness to initiate protectionist policies and attack businesses’ globalizing activities is in direct combat with his promises to “drain the swamp” and rid the government of the collusion and corruption that has frustrated Americans for so long. By operating with a fear tactic and singling out specific corporations, he is incentivizing companies to appease him and enter into agreements with his administration. Corporations will now prioritize government relations and seek out tight alliances, potentially including positions in the government itself. As noted in The Economist, lobbying will become more influential than ever, making the American democracy less responsive to the constituents than before.

While the predicted material implications of his promised policies are detrimental, these policies do not have to come to fruition for Trump to severely damage the American economic and political system. His antagonistic rhetoric and isolationist behaviors are cultivating the walled-off nation that Friedman discusses emerging from the fear of external threats. The distrust he facilitates between both domestic neighbors and international populations will deprive the United States of valuable alliances, not only in conflict but in knowledge-sharing, innovation, and partnership. The pairing of protectionist policies, which range from physical walls to intangible declarations and are supposed to foster nationalism, with his aggressive demeanor lays the groundwork for internal strife and conflict in a country that will lag behind its global counterparts in quality of life.

Best,

Meredith Freeland

Additional Sources:

The World is Flat- Milton Friedman

Warren J. Keegan and Mark C. Green, Global Marketing, (2017) 9^th Edition, Pearson.