[Eric Posner] Is a pro-labor Republican Party possible?

Following a speech by Sean O’Brien, the president of the Teamsters union, at the Republican National Convention last month, a New York Times analysis considered whether the party could really carry out a populist agenda in support of workers. While Donald Trump has never shown much interest in workers’ rights, many of his acolytes have. Republican Sens. Josh Hawley, Roger Marshall, Marco Rubio and JD Vance (the party’s vice-presidential candidate) have all sided with workers in policy debates about labor organizing, the minimum wage, and worker protections.

Hawley, for example, recently declared that “it’s time Republicans embraced the trade unions of the working man. … I’ve been on the picket line with the Teamsters. I voted to help them unionize Amazon. I supported the railway strike and the autoworkers’ strike. And I’m proud of it.”

Hawley coupled his encomium to labor with a paean to Christian nationalism that will trouble many worker advocates, who tend to be liberals. He was drawing on a long Republican tradition of attracting workers by appealing to their moral and religious commitments. But his support for labor organization and other worker protections -- including the minimum wage and enhanced antitrust enforcement -- really does represent a fundamental departure from the Republican Party of the last century.

This strategy seems to fill an empty box in the matrix of American politics. Voters can be classified along two dimensions: socially conservative versus liberal/progressive; and pro-market versus market-skeptical. While there are pro-market liberals and anti-market liberals (like New Deal Democrats), social conservatives have long remained in the Republican coalition alongside free marketeers who celebrate wealth accumulation, and sometimes outright hedonism and greed. Yet such values are out of step with Christianity, which teaches its followers to reject vanity and materialistic values.

By advocating Christian nationalism, Hawley seeks to pair social conservatism with market skepticism. One can see the political logic. Before the 1990s, the Democratic Party itself was liberal on social issues and skeptical of markets. But at least since President Bill Clinton’s administration, it has made peace with big business. Clinton accepted the pro-market philosophy that Ronald Reagan had made respectable, and so did Barack Obama. Most of their appointees to economic-policy positions were skeptical of regulation.

This bipartisan embrace of markets came to define an era in which workers’ wages stagnated while corporate titans grew richer. As some libertarians drifted toward the Democratic Party, Republicans like Hawley recognized that they could peel off working-class votes by repudiating the wealthy who had defected to the other side, exchanging the money of the few for the votes of the many.

When Hawley condemns “woke corporations,” he is tapping into rank-and-file Republicans’ growing distaste for monied elites. Many Republican politicians complain that businesses have breached their implicit quid pro quo: firms would be free to make money as long as they deferred to the party’s religious wing on moral and religious matters. But this unnatural alliance could last only so long, because, in order to maximize profits, many corporations have followed customers and investors as the broader culture has moved left.

A reconciliation of Republicanism and workers’ interests is also conceivable on philosophical grounds. During the Reagan era, economists assumed that labor markets are inherently competitive, implying that unions must be cartels that push wages above the competitive rate, ultimately reducing production and harming consumers. By the same token, minimum-wage laws would necessarily lead to higher unemployment. As economists advocated labor-market deregulation, businesses turned the theory into orthodoxy, and Republicans (and eventually Democrats) vied for business support by promising to turn the new orthodoxy into policy.

In practice, however, deregulation -- along with other forces, such as globalization and advances in technology that favored scale economies -- benefited large firms. Soon enough, just a few companies dominated a broad range of markets, which had two major implications. First, it meant that corporations were less innovative and productive than they would have been in competitive markets. Second, surpluses generated by economic activity accrued more to investors, and less to consumers and workers. As economic growth weakened, inequality widened, exemplified by the massive increase in the difference between workers’ and executives’ compensation.

A flood of research in recent years has shown that labor markets are not so competitive after all. Workers cannot move seamlessly from job to job, because they face a variety of obstacles such as high search costs and the absence of competing employers who are hiring. And because workers cannot easily change jobs, employers gain by underpaying and under-employing them. In this world, unions do not necessarily reduce productivity (moreover, the evidence for such an effect was always exceedingly thin); minimum-wage laws can push up wages without reducing employment; and antitrust enforcement can restore competition to labor markets, leading to higher wages and productivity.

Hawley wants to force traditional pro-market Republicans to make a choice. They must either accept that free-market economics has failed and endorse government intervention to help workers, or they must acknowledge themselves as corporate stooges who advance the interests of business over workers to keep the donations flowing to the party from the capital-owning class. Hawley’s vision of a Christian society with legal restrictions on the excesses of capitalism could hardly be more different from Trumpian capitalism, which is unbridled rather than restrained.

In this respect, Trump is a Republican in the classic mold. His appointments to the National Labor Relations Board, the Department of Labor, and the Supreme Court all sided with corporations on every major issue, and his signature policy achievement as president was a corporate tax cut. The Silicon Valley and Wall Street billionaires are flocking to his standard bet that he will support them, not labor. Contrary to MAGA ideologists, Trump is a nationalist and a plutocrat, not a populist, let alone a religious conservative. Whether and how Hawley will find support for his vision in a secularizing, money-mad country is the question of the day.

Eric Posner

Eric Posner is a professor at the University of Chicago Law School. The views expressed here are the writer’s own. -- Ed.

(Project Syndicate)