Once upon a time, the conservative position on economics was easy to describe: It was in favour of the free market. In public policy, this meant support for lower taxes, fewer regulations, smaller government, and fiscal prudence. Republicans did not always adhere to these principles, but at least they pursued them.
However, there has been a political and economic shift, and now much of the conservative movement is turning against the free market. This change may well be bigger and last longer than Donald Trump's presidency. All of this raises an unpleasant question for free-market advocates, myself included: Is there a party that remains market-friendly in America?
Let's take a look at the Republican Party's 2024 campaign program: "For decades, politicians sold us our jobs and incomes to overseas bidders with unfair trade deals and blind faith in the sirens of globalization." Forget Ronald Reagan – this is not Mitt Romney's party.
For his part, Trump has his own free-market contradictions. The policies of his first term were mostly pro-market. Tariffs were small, and the policies he signed into included tax cuts and less regulation. It is true that he increased the debt, but in this he resembled previous Republican presidents.
This time, his government also has some pro-free market tendencies, but anti-market evidence is more evident. On the one hand, there are promises to reduce regulations, the size of government and taxes. On the other hand, there are even bigger tariffs in even more countries, an emphasis on narrow tax cuts instead of broader reform, a manufacturing fetish, talk of a DOGE dividend and – despite statements of fiscal responsibility – a strong commitment not to cut benefits.
Even officials are divided. Elon Musk, perhaps the most powerful member of the government, could be described as pro-market, or at least pro-efficiency. Treasury Secretary Scott Bessed, Home Secretary Doug Bergham and economic advisers Kevin Hassett and Steven Miran are all in favour of the market. Labour nominee Lori Chavez-De Römer and Federal Trade Commission Chairman Andrew Ferguson, with their enthusiasm for labour and antitrust enforcement, are more anti-market.
And then there's the party's likely future, Vice President J.D. Vance, who is a graduate of Yale's market-sceptical economics school. The same goes for other young and influential Republicans, such as Senator Josh Hawley.
The divide within the leadership is reflected in its supporters. The party is becoming increasingly industrious, and these voters may prefer less market-friendly policies. Polls show there is growing support for unions and tariffs to boost output among Republican voters. But Republicans also count on the support of big business, which is generally hostile to tariffs and pro-labour policies. A talented politician may be able to appease both groups for a while – but a showdown is inevitable.
In this context, Trump's promise not to touch benefits may prove to be the most significant departure from free-market principles. DOGE's effort to curb waste and fraud on Medicare and Social Security, while useful, doesn't count — there's not enough money there. Unfunded benefit spending is the biggest threat to America's fiscal health.
Trump's promise may be popular with both Republicans and Democrats. But it removes any pretence that it cares about debt and, besides, is unrealistic. Over the next decade, both parties will have to take a stand on benefits and say whether they are in favour of raising taxes, cutting benefits or some combination of them — or simply planning to increase public debt.
In the Republican Party, the answer may come sooner. If Trump's deregulation and tax cuts produce growth and tariffs don't cause much trouble, then the MAGA ideology will seem to have worked. A Vance administration would then undoubtedly turn even harder against the markets. But if inflation returns, growth falls, or there is a bad economic shock, then Trump's approach will be seen as less successful. In that case, more traditional Republicans may return to a more market-oriented rhetoric.
Republicans are still friendlier to markets than Democrats. But conservatism itself is losing its enthusiasm for the free market. For what reason? As far as I can tell, conservatives support a smaller, less interventionist government that makes large fiscal transfers, restricts international trade, keeps taxes low, and accumulates a lot of debt. As a philosophy of governance, I'm not sure what to call it. But I have a word for it: unsustainable.
Performance – Editing: Lydia Roumpopoulou
