He Is No Gentleman

These are the questions Democratic Party voters (and some of the more classical Republicans) should be asking themselves, too. However, I will leave Americans to sort out their own worries. My topic today is why the European establishment got the American election so wrong and is now so unhappy with the result. In my view there are three main reasons for this. One is the number of Trump look-alikes sprouting on this side of the Atlantic. The second is the fear of being left alone facing Russia and the troubles in the Middle East. The third is more subtle, namely the sudden realisation that the social-democratic consensus that made so many Europeans happy with Barak Obama’s and Hilary and Clinton’s worldviews is dead and buried.

As I say, the first reason for the deep hostility shown President Trump in Europe is the menace posed by politicians here who have the same tone as the new American President and propose similar policies. In every European country now there are parties right and left bent on upsetting the apple cart. In Germany there is Uwe Junge, the leader of “Alternative für Deutschland”, who wants to return to the Deutschmark, has declared himself against membership of the European Union, and rejects Angela Merkel’s generous policy to refugees from the Middle East. In France, Marine Le Pen, who, as I write, leads opinion polls for the coming presidential election, wants to return to the French franc, leave the EU, and pull out of NATO. In Spain, there is no ultra right-wing party, but the radical left-wing “Podemos” party also wants to leave the euro and recover national sovereignty. Italy has Beppe Grillo, a comedian by profession, who leads the “Five-Star” populist movement, Holland has Geert Wilders and Austria Norbert Hofer, with their respective Freedom Parties. Similar movements can be found in Hungary, Denmark, Greece, Sweden, and Finland. In the United Kingdom, the ‘Brexiteers’ are nationalist and protectionist with a sprinkling of free-marketeers.

The second reason is that Trump’s criticism of NATO, despite some later softening of tone, makes Europeans feel naked, especially those living on the edge of Russia. NATO itself has a very small budget. It is not there that President Trump wants allies to spend more on defence but on their own armed forces which could be called up for a NATO operation if need be. Europeans know how politically difficult it will be for their Parliaments to raise their military spending to 2% of GDP. We grudgingly admit that Trump’s criticism is fair and also fear American isolationism.

There remains a third reason for the widespread hostility toward President Trump felt by many Europeans: namely, the feeling that Hilary Clinton was a politician of their own kind. Obamacare they saw as a step towards the kind of universal health care which is such a part of European ideology. The fight against global warming (to give it its true name, not the Orwellian ‘climate change’) was one they eagerly wanted to join. Public education, state pensions, minimum wages, and pro-union legislation are all a fundamental part of Euro-faith. How could half of the American electorate not see that these were good for them?

Many of the measures taken or promised by Donald Trump are to be welcomed. The reduction of corporate taxes is overdue in America and much of the Western world. Let us hope they are accompanied by public expenditure cuts so that public debt does not go on growing. The condition that for a new regulation to be imposed, two old ones must be repealed is again an excellent idea; it would be even better if all new regulations included a sunset clause. President Trump is right in saying that a better way should be found for banking and finance to be made safer than the present day byzantine controls.

Some of the measures taken by President Trump as soon as he was in office are decried in Europe with more than passable hypocrisy. Germany and Sweden have been very generous with refugees from Syria, Iran, Iraq, and Afghanistan. But this is not so with the rest of Europe. Many Britons have signed a petition to stop Trump’s state visit to London, but many more are itching to control immigration from the Continent so as to stop the proverbial Polish plumber from competing with the home-grown variety. Spain has a tall fence around the two Spanish enclaves in Morocco to try to stop unwanted immigrants. Hungarians are rejecting non-Christian arrivals from the Middle East. Italy, France, Poland, and Austria are complaining at the numbers arriving at their borders.

Even when complaining of Trump’s commercial protectionism, Europeans are disingenuous. The negotiations for a Transatlantic Trade and Investment Partnership (TPP) between the United States and the EU were taking ages, a procrastination visible on both shores of the Atlantic. Trump may not understand the advantages of free trade, but neither do the Europeans. Of course, competition is uncomfortable for people who find it difficult to change. So is progress. But if one wants one’s country to be great again, fencing trade off with hurdles border taxes is not the best way. An old libertarian friend of mine, who used to be a member of Margaret Thatcher’s government, repined when I called for Britain fully to open its shores to trade unilaterally. I reminded him of Milton Friedman’s call in Capitalism and Freedom for the United States to reduce their tariffs across the board by 10% every year, whatever other nations did. First, Friedman said, consumers would gain immensely from cheap imports. Second, foreign competition would force American producers to improve their goods in quality and price. In any case, in the modern world it has become almost impossible to know which part of imported goods had earlier been made in the US and which abroad. My friend was not convinced, when I recalled British unilateral dismantling of trade protection from 1820 to 1840, principally to make bread and sugar cheaper for the working classes. So I used another example: in World War I and World War II the German Navy tried its best to stop the British importing goods from abroad; this no doubt gave a boost to home agriculture but it made life miserable to the beleaguered Brits. It is a grave failure of us economists not to be able to convince the public of the advantages of globalisation, especially for the deprived of the world. Even more uphill it is to convince the locals to welcome immigrants for their contribution to economic prosperity. People say they care for equality, but all, Americans and Europeans alike, dislike foreign competition and resist the call of the Statue of Liberty’s to “give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore”.