The Political Right Has Luxury Beliefs, Too
Support for industrial policy and protectionism are supposed to help the working class. Instead, these ideas elevate the already privileged.
If you've heard of the concept of "luxury beliefs," you can thank writer Rob Henderson. Henderson's concept refers to cultural and political ideas that are predominantly held and advertised by individuals in society's upper echelons—those persons with significant economic, social, and cultural capital—to demonstrate that they are on the side of the downtrodden, minorities, and the poor.
Henderson's new memoir, Troubled: A Memoir of Foster Care, Family, and Social Class, discusses luxury beliefs, a concept he developed during his time at Yale. Henderson had a difficult childhood spent in foster care, and he felt distanced from his Ivy League contemporaries, who espoused fashionable but unworkable or outright harmful views that they themselves were insulated from by some combination of status, wealth, and familial stability. The luxury beliefs Henderson witnessed were a way to signal and maintain elite status by supporting social concepts or policies that sounded empathetic. Yet in reality, they made life worse for those at the bottom rungs of society.
Henderson argues that luxury beliefs are not just harmless opinions. They can have negative real-world implications, influencing policy and societal norms in ways that might exacerbate inequality or disconnect the elite from the broader societal consequences of the positions that they advocate.
As one might expect from a concept born out of alienation from Ivy League privilege, most of the discussion around luxury beliefs has focused on the left. The left has adopted this sort of self-serving worldview in many ways.
In a recent interview with Henderson, however, writer and podcaster Jesse Singal raised a different question: What are some of the luxury beliefs of the right?
It turns out the political right—especially those in the New Right, its growing nationalist/populist faction—has plenty of luxury beliefs too. They support policies designed to elevate their own status while making it seem as if they are on the side of lower-class workers. But those policies would actually make life worse for those they say they want to help.
The so-called New Right has built its movement on the idea that conservatives should care first and foremost about workers as a reason to justify a shift in economic policies away from so-called "market fundamentalism," deregulation, and smaller government and toward more top-down big government policies such as protectionism, support for unions, and industrial policy. In other words, they have embraced policies that were usually supported by Democrats.
Among the leaders of these efforts are the who's who of the elite conservative world. They include senators, Harvard and Yale university graduates, and six-figure-income pundits. Unfortunately for lower-income workers, their situation will be worsened by these measures, as such interventions inevitably backfire. More infuriatingly, these New Right leaders won't shoulder the burden of the negative effects of their policies—negative effects such as higher prices, slower growth, or work displacement—as these elite conservatives are part of the protected class likely living in the world's most recession-proof region: Washington, D.C. and its suburbs.
Take the New Right's full-throated embrace of protectionism and industrial policy. This romance with protectionism started in the 1990s with former GOP presidential candidate Pat Buchanan, gained enormous traction under former President Donald Trump, and is still going strong today.
The conservative push for more active government management of trade policy represents a significant shift in economic policy that already had, and will continue to have, wide-ranging effects on the economy. These won't be pretty.
While protectionist policies, with its tariffs on imports and wholesale rejection of globalism, are often justified on the grounds of supporting domestic industries, preserving jobs, and enhancing national security, they also carry significant downsides, particularly for the most economically vulnerable populations.
Tariffs are taxes on purchases of imported goods, and these additional costs are passed down to consumers in the form of higher prices. For everyday items that are imported or contain imported components, this means an increase in costs for consumers. Essentials such as clothing, food, and household goods can become more expensive, stretching already tight budgets even thinner. To that, New Righters object that economic efficiency and lower prices aren't everything. But that's easy to say when your income is large and paying much more for necessities leaves you with plenty of cash to spend on other things.
The poor, however, spend a larger proportion of their incomes on basic goods and services, and feel these price increases most acutely. As the cost of essentials rises, families will find it more difficult to acquire basic necessities, leading to greater financial insecurity and hardship. This can exacerbate existing socioeconomic disparities and increase the burden on social safety nets.
The same is true of the New Right's rediscovery of protectionism's close cousin, industrial policy. Here, the belief is that China's trade expansion pushed down the country's throat by market fundamentalists is the cause of the decline in U.S. manufacturing employment. As such, this view holds that the government needs to restructure the economy to rebuild American capitalism and, among other things, bring manufacturing jobs back. Their preferred policy tools are tariffs and subsidies.
Unfortunately, when all is said and done, industrial policy will only expand the swamp without delivering benefits to most of the workers who the New Right claims to fight for.
Take, for instance, Trump's attempt to bolster U.S. steel manufacturing with tariffs. Ignoring the fact that U.S. steel was doing more than fine, with 70% to 90% of the U.S. steel consumption produced by domestic steel in the last decade, tariffs rose to please steel producers and a thousand steel-making jobs were secured. Meanwhile, these same tariffs destroyed 75,000 other jobs in steel-consuming industries.
Adding insult to injury, when our trading partners retaliated with their own tariffs on American goods, including on farm goods from soy to corn, the Trump administration tried to cover for its policy errors by bailing out damaged farmers with $28 billion in subsidies. After all this, U.S. Steel decided to sell itself to the Japanese company Nippon, causing outrage among New Right senators and pundits.
This episode is unlikely to prompt a reconsideration of these luxury beliefs. And why would it? The belief-holders are neither farmers nor workers in steel-consuming factories. They also have higher incomes to shelter them from the full impact of these price hikes or the failure of the top-down policies. Better yet, they, not workers or middle or lower-class Americans, will benefit from the new policies whether or not they succeed.
Protectionism and industrial policy require the bolstering of the bureaucratic state capacity. Bureaucrats after all will be the ones controlling the allocation of resources and many other aspects of industrial policy. That task will be massive if these guys are serious about reinventing capitalism or achieving "common good capitalism."
You need people deciding who gets the money, where to send the checks and the tax credits, and what to spend it on. It will take an extra level of power and maybe a few more agencies to enable bureaucrats to decide who, exactly, can export what, precisely, to which countries, and how and where corporations can invest their capital. Who do you think will get these powerful jobs if not our New Right friends?
Many of the left's luxury beliefs are trendy cultural attitudes with political implications. But the New Right's embrace of destructive economic policies meets the definition of luxury belief in just about every way: It's self-serving and counterproductive, designed to elevate one's personal status without regard to the practical consequences for those with less power and privilege in the world. Throughout history, industrial policy and protectionism have been shown to be costly to individuals and the larger economy: These beliefs are luxuries we can't afford.
