The writer is executive director of American Compass and author of ‘The Once and Future Worker: A Vision for the Renewal of Work in America’

Politicians are not known for decency or decorum, but typically they wait for a leader’s defeat before diving into the scrum for a successor. Not this time. Even before US President Donald Trump gets his chance at a second term, a battle has begun over where the Republican Party may turn after.

The reason for this pre-emptive conflict is the inevitable expiration of Trumpism itself. The president will sit atop the party so long as he remains in office, but he is building no intellectual foundation, no institutional infrastructure and no policy agenda to provide the basis for a political coalition once his singular personality eventually departs. As with an heirless monarch, all sides foresee the vacuum and vie to fill it.

In another era, a stable party apparatus that predated Mr Trump might be waiting in the wings. But of course, if that existed, the party would not have been levelled by the Trumpian earthquake. Instead, its strains and infirmities, so well exploited by Mr Trump, define the contours of arguments about how to rebuild. The fundamental question is this: what happens to a party beholden to free-market dogma when the market fails to deliver?

Traditionally, Republicans brought together libertarians and conservatives who both prized markets but in different ways. Libertarians regard the free market as an end unto itself, or trust that the free market will deliver the best outcome. Conservatives see the free market as a means to an end. Markets can deliver healthy social outcomes, but there is no guarantee they will. If they do not, policymakers should play a role channelling market competition to advance the common good.

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In the latter half of the 20th century, when faith in markets was still richly rewarded, both sides were in general agreement. But 50 years later, economic reality had changed and the coalition began to crumble.

Line chart showing how Trump and Biden are doing in the US national polls

While economic output, overall wealth and stock prices surged, wage growth for typical US workers was painfully slow. In 1985, someone with only a high-school degree could provide for a family of four’s major costs (housing, healthcare, transportation, education) on 30 weeks of median wages. By 2018, it took 53 weeks. The 2008 financial crisis and its aftermath were especially painful. The opioid crisis then claimed lives at a rate similar to the Aids epidemic’s peak.

Even with this backdrop, libertarian Republicans still tend to view Mr Trump’s success as an aberration to be lived through and forgotten in a future that faithfully reapplies Reagan’s free market agenda. “Why don’t we look at a policy and just ask, does it expand economic freedom?” says Jack Spencer of the Heritage Foundation, the citadel of America’s conservative establishment. Nikki Haley, the former South Carolina governor seen as a leading contender for a future Republican presidential nomination, puts it more plainly: “Tax cuts are always a good idea.”

Genuinely conservative Republicans envision a different post-Trump future. They draw lessons from his political success but focus on the challenges that caused it. They ask: What has gone wrong with the market, and what role can policymakers play in fixing it? Their task is to apply conservative principles to contemporary conditions.

A group of Republican senators leads this effort. Marco Rubio of Florida, coining the term “Common Good Capitalism”, has called for public policies to drive investments in key industries, arguing that “pure market principles and our national interest are not aligned”. In uncommonly harsh terms for a philosophical intraparty debate, Ms Haley condemned such talk as “the slow path to socialism”. Senator Pat Toomey called it a “dagger thrust into the heart of the traditional centre-right consensus”.

Whatever happens at November’s election, such arguments will continue until the party selects its next presidential nominee. The more libertarian pre-Trump faction has the party’s institutions and leadership on its side. But the post-Trump conservatives have the energy, agenda and closer connection to economic reality. The pandemic has only highlighted the divide. Most of the useful Republican proposals have come from Mr Rubio and Senate colleagues Mitt Romney, Josh Hawley and Tom Cotton, who share a post-Trump outlook. By contrast, leaders relying on the pre-Trump playbook have offered another capital gains tax cut.

Rarely is the smart money in politics on the reformers. But in the ideological battle for the Republican party, it is the reformers that have the real ideas and the better chance.

Via Financial Times