The Only In-Depth Article Analyzing Musk's Establishment of the America Party

By Julius Krein

Translated by Ma Liming

Source: Law and Ideas

▲ Image source: Ikon Images (Illustration by Nick Lowndes)

Trump's second term achieved a revolutionary disruption of the neoliberal consensus. But no new paradigm consensus was established. A common theory of the new paradigm is called "post-neoliberalism". Behind the failure to consolidate a new order in elections, culture, and knowledge is the gap between the existing party framework of the oligarchic society and the challenges of the new era of geopolitical, economic, and technological competition. Now, both the left and the right alliances are facing battles they are not prepared for, and neither have managed to achieve the "reorganization" that people hoped for, like Roosevelt or Reagan. Instead, America's economic strategy, cultural debates, and foreign policy remain in an uneasy intermission.

Confusion about what post-neoliberalism is stems from an incomplete understanding of what neoliberalism is. Critics and defenders of neoliberalism tend to accept its ideological self-conception: free flow of capital, goods, and labor; separation of economic policy from democratic politics; privatization of public services, etc. Therefore, the end of neoliberal hegemony is often seen as meaning more "state" and less "market", or as economist Brad DeLong put it, more "Polanyi" and less "Hayek". This academic approach may be suitable for intellectual history, but it does not provide a direction for state intervention. It also does not fully explain the specific changes in economic incentives and corporate behavior caused by neoliberal policies. Neoliberal governance is not just about changing wealth distribution or shrinking the state (in the US, the latter can be said to have never been achieved; it merely weakened the state's ability to implement public projects). More importantly, neoliberalism has incentivized specific patterns of wealth creation, and the changes in corporate and investor behavior resulting from this can be considered the most profound and enduring impact of the neoliberal revolution.

As Herman Mark Schwartz pointed out, in the Fordist economy dominated by large integrated manufacturers (Ford, General Motors, General Electric, etc.) in the mid-20th century, the most profitable companies were also the largest employers and capital spenders. However, after the shift to neoliberalism, a new "fragmented" economic model emerged, with intellectual property and financial rents becoming the main drivers of corporate profits. In this fragmented economy, the most profitable companies today—leading technology and financial firms—have relatively fewer employees and capital investment needs, often outsourcing physical production and infrastructure.

This fragmented economy arose from the U.S. response to the crisis of the 1970s. After the major U.S. integrated manufacturers could no longer dominate global production, U.S. companies increasingly centered their business around intellectual property and financial rents, outsourcing manufacturing. These transformations were not always intentional, and factors outside of policy (such as technological change) also played a role.

Neoliberalism essentially provided an ideological justification for this transformation, and related policy changes were key catalysts. For example, from the 1980s until the Trump administration, U.S. trade policy consistently reduced tariffs, reduced protection for domestic manufacturing, and strengthened protection for intellectual property and the rights of foreign investors. Restrictions on vertical monopolies in antitrust laws were gradually weakened, allowing companies like Apple to capture most of the profits while exerting effective control over suppliers and labor without producing products or directly employing workers (and without sharing profits with most workers). Patent laws became more favorable to large corporations, and federal research policies changed, making government research results easier to privatize and commercialize. Changes in corporate governance enhanced the power of institutional asset managers relative to corporate executives. These changes were more important in creating the neoliberal economy than any tax cuts.

This fragmented economy initially brought returns, but its costs and contradictions have become increasingly heavy. Unlike the virtuous cycle of Fordism—high investment driving high wages, which in turn drive strong demand—the fragmented economy has stripped corporate profits from the most labor- and capital-intensive parts of the corporate value chain, fostering financialization, stagnation, and increasingly severe inequality. Although the neoliberal model claims moral attributes in financial terms, it relies on debt to maintain consumption, exacerbating household financial instability and systemic financial instability.

Furthermore, the hollowing out of manufacturing and the abandonment of capital-intensive industries have gradually weakened America's innovation capabilities in many areas, threatening its geo-economic status and some economic superstructures. In addition, the continuous loss of the middle class and the growing regional divide have created internal tensions. American companies have not only given up "commodity" production but also abandoned advanced manufacturing and leadership in certain key technological fields. In this regard, even parts of the U.S. defense industrial base and other key supply chains depend on the production capabilities of geopolitical rivals.

In summary, the problems of American neoliberalism are not just low tax rates, greedy billionaires, or overly "globalized" corporations, but rather the wealth accumulation model of neoliberalism is increasingly undermining the economic, political, and security conditions on which it relies. These issues have prompted elites and the public to reflect on the orthodoxy of neoliberalism, yet people rarely discuss these issues using these precise terms, and post-neoliberals have never found their core base.

A genuine post-neoliberal development agenda aims to reshape corporate incentives—changing from "redistribution" to "pre-distribution"—which is highly incompatible with both traditional political alliances. The progressive self-image emphasizes a moralistic and symbolic welfare state, and it is unlikely to reconcile with a new state-capitalist development alliance with nationalist ambitions. These elements of the New Deal have become distant memories. Meanwhile, for decades, conservatives have been taught to believe that the state only hinders economic progress, which is basically the core identity of the right wing. Although social conservatives are no longer faithful adherents of neoliberal policies, they still doubt any attempt to expand state power, believing it would only bring them disadvantages. Of course, a significant portion of the donors and intellectual networks in both parties, whether for material or idealistic reasons, still adhere to the neoliberal institutional model, obviously further intensifying the current divisions.

Therefore, the discontent of both parties with the broad sense of "neoliberalism" often quickly solidifies into entrenched party positions. These disputes have already triggered many changes: previous debates about privatizing social security and abolishing the Affordable Care Act have faded (although they occasionally resurface). Overall, budget disputes have become increasingly absurd—recently, the Republican Freedom Caucus's edge tactics regarding government shutdowns (continuously pushing situations to the brink to test the tolerance limits of opponents and gain maximum benefits) exemplify this. Both parties now aim to polarize seemingly common economic issues: progressives focus on racial inequality, while conservatives condemn "woke capital" and cultural elitism; displaced Appalachian coal miners and vulnerable urban service workers are pitted against each other, while rust belt factory workers and student loan borrowers are also pitted against each other. Thus, the call for post-neoliberalism has been reduced to clichés of cultural warfare, while the consensus that could have been formed around the huge changes brought by the fragmented economy has been largely weakened.

On the other hand, both the progressive and conservative sides uphold neoliberalism, or at least one key assumption of neoclassical liberalism: the abstract concepts of "market" and "state" are inherently opposed, rather than integrated, so the goal is to balance opposing forces, not to coordinate complementary ones. Although the U.S. has a rich tradition of state-led development—built by Alexander Hamilton, Henry Clay, and Abraham Lincoln's "American System," as well as the efforts of both Roosevelts—Americans have not engaged in in-depth thinking about state economic development for a long time, and there is a lack of a shared conceptual framework and a strong implementation mechanism. These topics are largely limited to technocratic bureaucracy, and in our highly fragmented media environment, public discussions almost entirely revolve around cultural warfare and personal idolization.

Therefore, recent policy departures from neoliberalism may have significant impacts, but they do not represent a new ideological consensus, nor do they signal an imminent reshuffling of electoral politics. Rather, they are just exceptions—in these exceptions, the traditional moral ideological commitments of existing party alliances (national security, environmentalism) happen to align with industry lobbying groups (semiconductors, universities, automakers). They may eventually become part of a larger puzzle, but there is currently no consensus on what this puzzle is or how to assemble it. At least before the 2024 election, further legislative action cannot be expected.

In the field of foreign policy, chaos is also widespread. The "end of history" theory can be said to have completely lost market appeal: calculated by purchasing power parity, China has become the world's largest economy and also the main trading partner for most countries. In some technological fields, there is almost no gap between China and Western countries, and in some key supply chains, China holds a dominant position. The 2022 Ukraine conflict accelerated the reorganization of geopolitical and geo-economic blocs, leading to the demise of the "Pax Americana." In 2016, Trump's tough stance towards China was unusual; now, it has become one of the few areas where both parties have reached a consensus.

However, this decisive break from traditional views a few years ago is largely imposed on the United States by external events, and it does not necessarily translate into a consensus basis for future matters.

Unlike the Soviet Union, after decades of integration, China has deeply embedded itself in the U.S. supply chains, corporate value chains, financial networks, university research systems, and so on. Most industry lobbying groups oppose any actions taken by the U.S. that could be against China, whether to maintain the Chinese market or supply chains. Although American companies have lost some enthusiasm for China in recent years, major American companies are still China's most important allies in the U.S. However, unlike Japan, the previous main economic competitor of the U.S., China is not under the U.S. security umbrella, and the diplomatic policy goals of both sides are clearly conflicting. Therefore, achieving a grand reconciliation based on the思路 of the Plaza Accord in 1985 seems unlikely.

The asymmetric nature of the relationship between enterprises and governments within and between the two countries further complicates the situation. Enterprise lobbying groups have much greater influence in U.S. politics than in China. Therefore, American enterprises seem willing to demand Washington to provide subsidies unconditionally, while publicly avoiding any obligations to support national interests. Elon Musk's company receives substantial subsidies and orders from the U.S. government, while being heavily influenced by Chinese supply chains, subsidies, and end markets.

Similarly, Intel and other semiconductor companies, after receiving billions of dollars in subsidies through the Chip Act, lobbied against export controls and restrictions on semiconductor investments in China. Some of these policy issues may be complex, but the surface phenomenon is straightforward. Although discussions on national security issues revolve around export controls and rather naive "decoupling" concepts, the "sticking" of enterprises clearly illustrates the limitations of American resolve—the degree of dependence of the American economy.

Theoretically, countries can engage in economic and technological competition without seeking to delegitimize their opponents ideologically. However, for American elites immersed in cultural war moralism, simply pursuing national interests is not a natural thing, so efforts to revive the Cold War-era "democracy" versus "totalitarianism" dichotomy are intensifying.

Defining "democracy" based on narrow Western cultural customs also makes it increasingly difficult to build an "containment" coalition against China, and it seems unlikely to attract support from India, Turkey, Mexico, Middle Eastern monarchies, or Vietnam. After the Ukraine conflict, Americans were surprised by the developing countries' clear desire to maintain a "non-aligned" stance—they shouldn't be surprised.

Compared to this, although the competition with China can become a unifying theme in American politics, it is often used as a cover for domestic cultural wars. Between these quarrels and conflicts (at best, contradictions), there is no consensus on a China-U.S. relations strategy.

Behind the confusion in American economic and foreign policy lies a great change in partisan interests and goals. After decades of neoliberal depoliticization, the basic assumptions about the nature of democratic politics—that is, aiming to establish a broad majority to use government power to implement a consistent policy agenda for the public—are no longer applicable.

Historian Charles S. Maier published "The Project-State and Its Rivals: A New History of the Twentieth and Twenty-First Centuries," attempting to analyze how the seemingly unshakable (neo)liberal consensus after the Cold War collapsed. I think the book has flaws in its discussion of the current politics, but the concept of the "project-state" proposed by Maier is very enlightening. Based on 20th-century experiences, we tend to think that party conflicts stem from competing ideological projects or policy agendas. However, the fundamental issue in today's American politics is not which competing policy ideas will win, but whether there is even a political project that is possible or desirable—at all, regardless of the right, left, or center. Do they have at least the capacity to offer a political project?

The right has basically given up any pretense of a positive plan. As long as the party can play the role of opposition, block the Democrats' initiatives, and maintain low taxes, the right-wing donors seem satisfied. At the same time, the right-wing media, intellectuals, and voters seem content with just entertainment, and their expectations for political candidates are nothing more than symbolic affirmations and serving as the latest meme material.

Since the Bush administration, the Republicans have stopped proposing any positive policies. As demonstrated by Trump in 2016, this conservative "establishment" has lost credibility, even among Republican voters, and its policy institutions have continued to shrink. After Trump was elected, many establishment conservative scholars and intellectuals actually left the party.

The social conservatism that was a positive political project in the 20th century has collapsed, though less visibly, perhaps more fundamentally. In 2022, the Supreme Court overturned Roe v. Wade, ending federal abortion rights, which can be seen as the peak of the previous generation of conservative politics. But what followed shows that this branch of the conservative movement has declined. Since the overturning of Roe v. Wade, every vote to restrict abortion has ended in failure, including multiple initiatives in deep red states. It can be said that the "pro-life" movement has declined in national politics, and it has not provided an electoral agenda for the "post-Roe" era, instead becoming a source of embarrassment for Republican politicians.

Under the influence of neoliberalism, American society has generally become more left-leaning, and as a social unit, the family has disintegrated. Christian traditionalism as an ideology and way of life has been marginalized. At the same time, as the electoral base and intellectual-cultural foundation shrink, social conservatives often seek exemptions and tolerance for their unconventional lifestyles, which is diametrically opposed to the aggressive attitude of 20th-century cultural wars.

Overall, contemporary American social conservatism related to politics has deviated from the moral dominance of the 1980s and has turned towards moral indifference. Commentator Matthew Walther calls it "Barstool conservatism," derived from the irreverent sports website "Barstool Sports." Barstool conservatives resent "woke" political correctness, environmental regulations, and pandemic control measures. But they show little interest in banning abortion, restoring school prayers, or restoring Christian public spaces. They are sometimes called "folk versions of liberals," although they are not interested in obscure market theories or policy experiments, nor in dismantling the welfare state or implementing fiscal austerity. At least according to conventional wisdom, they mainly want to barbecue, watch pornography, bet on sports, play video games, and joke without the risk of being "boycotted." According to the relative unpopularity of progressivism, barstool conservatism can become an electoral force, but it is not any kind of political project.

From this perspective, Trump is not the embodiment of the evangelical "Christian nationalism." During his presidency, he did not bring a serious "new right" economic agenda to the Republican Party. To the relief of his critics and the annoyance of his ideological supporters, Trump never completed a political project and showed no consistent interest in political projects. Chaos, obvious lack of instrumental rationality, frequent activity on social media, and disdain for norms.

By contrast, the left remains project-oriented, but seems to be building a project-NGO rather than a project-state—showing little interest in uniting a large democratic majority. Justin H. Vassallo says that the progressive left is neither a "smart ally" of the Democrats nor a "credible independent political force." Its main projects—environmentalism and (using one word) "wokeness"—not only fail to become the basis of a new national project, but often undermine the formation of any broad-based consensus. Therefore, despite the dismal condition and fragmentation of the Republican Party, the Democratic Party still faces the Republican House and uncertain election prospects.

Progressive environmentalism—assuming the most shocking explanations of climate change—has many seemingly self-imposed blind spots. It focuses on disrupting daily life—like a campaign against gas stoves—and rarely mentions the massive fortunes and private jets of billionaire donors. It almost entirely focuses on punishing fossil fuels, domestic industries, and the regional economies they support, while mostly ignoring trade-driven environmental arbitrage and environmental pollution overseas. These obvious class and sector biases weaken its claimed urgency.

Over the past few decades, these neoliberal methods have not only clearly failed in the environmental cause, but even with changes in strategy, American environmentalism has struggled to transcend the typical supporters of neoliberalism—non-governmental organizations, multinational corporations, and technical experts. At every stage, it has refused to transform into a true, nationally mobilizing political project, instead providing moral affirmation and economic incentives for its upper-middle-class group, while requiring others to tighten their belts.

The other great plan of the progressives might be more polarizing. Previous efforts to pursue a "color-blind" civil rights movement failed to eliminate significant racial disparities in income, wealth, education, incarceration, and other indicators. In response, progressive anti-racism measures reject the "color-blind" politics and advocate for affirmative action that actively distinguishes, and demand a reconfiguration of national history, holidays, speech norms, school curricula, and so on. However, regardless of whether one agrees with the premises of this movement, it seems unlikely to become the basis for the nationwide consensus that the civil rights movement ultimately built.

First, woke politics is anti-majoritarian, which in essence seems self-defeating. It seeks to affirm the identities of oppressed minority groups and provide spiritual and material compensation on this basis, making the majority de facto oppressors. More specifically, it seeks "comrades" rather than "alliance partners" on different fronts, emphasizing moral absolutism rather than pragmatic policies. While color-blind integration can theoretically propose a final goal, woke activists often imply that American racism is inherent and incurable, meaning their policy prescriptions are more for personal redemption than social transformation.

Therefore, despite the significant progress of the woke movement in elite institutions, raising substantial funds, and holding large-scale "Black Lives Matter" protests in 2020, its policy achievements have been minimal—this movement seems to be gradually dying. The few specific policy attempts of the woke movement, such as "defunding the police," have sparked the widest political backlash—among which even cities like San Francisco, which are extremely progressive, have participated. Anti-woke calls are one of the few things that can unite the divided right, and recent controversies over anti-Semitic rhetoric in elite universities indicate that the scope of anti-woke is expanding, with supporters far beyond the political right.

American conservatives seem to have given up any political responsibility, and thus have also given up the ability to develop positive political projects; while the progressive side is plagued by moral enthusiasm, this self-indulgent hyper-morality hinders the establishment of a democratic alliance.

Ultimately, the collapse of the post-Cold War consensus should be understood as the collapse of neoliberalism as a political project. The idea of building a neoliberal society has failed and is no longer viable: the belief that another tax cut will promote economic growth, or that a new carbon credit program will end climate change, is no longer credible. But this does not mean that a new consensus has replaced the old one—rather, all political projects seem equally implausible. In fact, abandoning the neoliberal project may represent the final victory of neoliberal instincts: without any common project, politics is completely conceptualized as a process of individual self-realization—through individual wealth accumulation, personal redemption, or even individual entertainment—rather than collective self-governance.

In this sense, the conditions required to form a new post-neoliberal consensus seem still unsatisfied. Although official policies have deviated from neoliberal orthodoxy, this has not changed the basic patterns and structures of political influence, and in many cases, has not changed the participants of political influence. The main donors, top-down non-governmental organizations, big tech platforms, and other intellectual property-driven corporate lobbying groups remain the dominant forces in American politics. The mass organizations of the New Deal era have not revived, nor have new political forms and industry alliances emerged to replace them. The elderly politicians and donors remain the main figures on both sides of the political spectrum.

Post-neoliberalism may still evolve from general criticism to substantive projects and common consensus. The desire for a new policy paradigm seems to persist, and the momentum of external events also persists. Decades of neoliberal depoliticization have distorted Americans' understanding of political action and the possibilities of the state, but the hollowing out of traditional ideological categories has also created new opportunities for cross-party cooperation and policy experimentation.

Fifty years ago, neoliberalism emerged as an ideological expression of the U.S. losing its economic dominance—also as a myth in some respects. Today, for the same reasons, the shift to neoliberalism may have occurred similarly without sufficient self-awareness, under the guise of various inherited ideologies, which may not necessarily be consistent. However, the goal of neoliberalism is to depoliticize and de-collectivize, and post-neoliberalism requires a shared constructive vision to go further.

Now, the post-neoliberal trend has witnessed two distinct presidential administrations, but it is still searching for its movement, even its definition.

*This article is translated from "Law and Ideas," with some edits.