On November 8th, Donald Trump shocked the country and the world by defeating Sen. Hillary Clinton in the U.S. presidential race by accumulating a majority in the Electoral College. Mr. Trump, the first president in U.S. history to gain the presidency without having been previously elected to office or served in the military, is something of an unknown. In other words, we have little personal history to examine to forecast his geopolitical leanings. All we really have are his public statements and campaign platform.
However, these sources do offer solid clues as to where he intends to take his foreign policy. In this report, we will characterize our expectations of Trump’s foreign policy using Mead’s archetypes.1 From there, we will examine how we expect Trump to change America’s superpower role, which it has provided since the end of WWII. As always, we will conclude with potential market ramifications.
Trump, the Jacksonian
We use Walter Russell Mead’s 2002 book Special Providence2 to examine foreign policy positions. Mead took a unique approach in describing policy positions, using historical figures instead of abstract models. Other policy analysts have used terms like “realists” or “idealists.” Unfortunately, these broad generalizations fail to fully express the subtleties of American foreign policy.
Mead named four archetypes: Hamiltonian, Wilsonian, Jeffersonian and Jacksonian. Each one of these archetypes has specific characteristics that describe the viewpoints and behavior of a policymaker of that certain type. By using a real historical figure as a representative of that archetype, it helps the reader to envision the position of that particular “school.” As with all archetypes, these are considered model specimens. Actual policymakers tend to be a mix of these four types; rarely will a policymaker be of pure form. However, the archetypes do offer a construct for an analyst to examine and predict the foreign policy behavior of elected officials.
Jacksonians are perhaps the most unique of the four American archetypes. As such, this archetype is the one likely to most confound foreigners.
The Jacksonians believe that the most important goals of foreign policy are the physical security and economic wellbeing of the American people. Thus, they oppose the Hamiltonian approach to policy as too willing to support business to the detriment of American workers. They also find the Wilsonian position on fighting moral wars repugnant. Why risk American lives because some dictator is abusing his own people? That problem is someone else’s worry.
The Jacksonians are most similar to the Jeffersonians. Both oppose big government and support broad democracy. What separates the Jacksonians from the Jeffersonians is the role of national honor. According to the Jacksonians, it is dishonorable to back down from a real threat to American freedom and security.
Jacksonians generally oppose war; however, once war is deemed necessary, the Jacksonians show no quarter. Wars for Jacksonians end with unconditional surrenders by the enemy. Limited wars are of no use. If the government decides to commit itself to a war, then the enemy must be destroyed.
The inability of foreigners to understand Jacksonians has been to their detriment. Foreign governments tend to view Jacksonians and Jeffersonians in the same light; both fear war and prefer not to fight. However, they often fail to grasp that once committed, Jacksonians are hell-bent on winning unconditionally. Because of their full commitment, Jacksonians do not take war lightly. Once committed, an enemy finds itself facing a formidable foe.
Jacksonians are probably the least understood of the four archetypes. To some extent, this is due to the lack of an intellectual tradition; the other three archetypes have ideological roots. Hamiltonians developed from the British conservatives. Wilsonians come from the Protestant missionary Social Gospel movement. Jeffersonians have been aligned with Libertarianism. Jacksonians are the closest the U.S. has to a folk movement. Ethnically, the Jacksonian roots spring from the Protestant Scotch-Irish that initially immigrated into the Carolinas and Virginia and spread to West Virginia, Kentucky and parts of Illinois and Indiana. They tended to view themselves as a class. What they want from the government is not ideological. They want government to support their group’s goals—for example, they don’t oppose government spending per se, but want it focused on their needs and wants. In modern terms, they support Social Security, which helps the retirement of the middle class, but oppose welfare as government giveaways for the idle poor. In visceral terms, the themes of country music—honoring America, living the simple life, following the rules—represent the best descriptions of the Jacksonians.
Trump’s comments during his campaign, in which he questioned remaining in NATO, suggested Japan and South Korea should consider nuclear weapons, stated his opposition to trade deals and alleged manipulation by other nations of their currencies for trade advantage, are consistent with a Jacksonian archetype. A Jacksonian isn’t interested in the “Great Game” of foreign policy. If other nations leave the U.S. alone, he will likely allow them to act as they see fit. It would be consistent with this archetype for Trump and Putin to negotiate over Russia’s influence in Eastern Europe, for example.
On the other hand, actions that make America look weak, like Russian warplanes buzzing U.S. naval vessels or Iranian speedboats swarming U.S. warships, will not be tolerated. It would not be surprising to see Trump order these incursions to be met with deadly force.
American Hegemonic Imperatives
The U.S. reluctantly accepted the role of superpower after WWII in order to not fight WWIII. There were two primary pillars to the execution of U.S. hegemony. The first was financial and was created at the Bretton Woods conference in 1944. The U.S. established the dollar as the reserve currency.3 This system developed by the U.S. changed how hegemony was exercised. European hegemons had acquired colonies to expand their influence. These powers used their colonies for raw materials and export markets. Instead, the U.S., mostly a self-contained economy that could meet most of its raw material needs domestically, opened its borders to trade. This allowed the nations ravaged after the war to rebuild by selling goods to American consumers. The Free World became dependent on the American economy for their demand and for the currency most used in global trade.
The second element of American hegemony was the management of geopolitical situations. The U.S. adhered to four policies.4 First, the Soviet Bloc was encircled with American bases and alliances with other Free World governments. Second, the U.S. solved the German problem in Europe by demilitarizing the continent and shouldering their security needs. Third, it froze the Sino-Japanese conflict by demilitarizing Japan. And fourth, it decided to enforce the artificial borders and states in the Middle East by supporting status quo governments.
This foreign policy required a domestic political coalition to manage the costs and benefits that were part of this arrangement.5 The initial coalition, assembled by President Roosevelt, consisted of right-wing populists and the center-left managerial/rentier establishment. It was characterized by high marginal tax rates and heavy regulation, which supported organized labor. The policy, designed to create a broad path to the middle class, generated ample consumption to absorb the imports required from the dollar’s reserve currency status. However, it was inefficient and part of its downfall was