It's a cliche that markets are driven by fear and greed. The same is true of the attitude of big business in the US towards Donald Trump.
Some of this fear is short term and specific. Corporate CEOs dread a presidential tweet denouncing a move to offshore US jobs to somewhere cheaper. But the more fundamental worries are long term.
As the historians Charlie Laderman and Brendan Simms show in a new book, since the 1980s Trump has developed a consistent worldview. It is highly critical of the dominant US global strategy since 1945 of building and maintaining a liberal capitalist international order.
Trump wants to replace this with the protectionism he lauded in his inaugural address.
And he’s started to act on this—withdrawing from the Trans Pacific Partnership, demanding the renegotiation of the North American Free Trade Agreement, and targeting some of the US’s leading trade partners.
It’s not just China and Mexico that are in Trump’s sights. Last week Peter Navarro, the head of his National Trade Council, denounced Germany. He said it “continues to exploit other countries in the European Union as well as the US with an ‘implicit Deutsche Mark’ [ie the euro] that is grossly undervalued.”
Navarro wants to dismantle the cross-border supply chains through which modern manufacturing production is organised.
“It does the American economy no long term good to only keep the big box factories where we are now assembling ‘American’ products that are composed primarily of foreign components,” he said. “We need to manufacture those components in a robust domestic supply chain that will spur job and wage growth.”
This is a pretty fundamental threat to US transnational corporations, which have used these supply chains to cut costs and boost profits. But so far their response has been timid. The Financial Times newspaper reported that “some business leaders seem intoxicated at the prospect of breaking bread with the most powerful man on earth.”
Here is where greed comes in. The report continued, “It would be hard to find a representative of corporate America whose blood does not run faster at the notion of tax reform, regulatory relief and a recovery in economic confidence — all things the president has repeatedly promised to deliver.”
Indeed, after campaigning against Wall Street, Trump has been stuffing his administration with its representatives. And he’s giving them more of what they want. One example is an executive order to review the Dodd-Frank Act which imposed more regulation on the financial markets after the 2008 crash.
Eagerness for short term bucks hasn’t stopped some top CEOs, such as Ford and Goldman Sachs, from criticising the Muslim ban. Leading tech companies—Airbnb, Uber, Twitter, Google, Facebook, Apple and Microsoft—reliant on skilled workers from around the world, are backing the court case that led to suspending the ban.
A senior consultant told Politico magazine’s Morning Money blog, “The corporate world prefers stability and order and what worries them are signs of instability on the horizon. A lot of these policies and executive actions will lead to some level of chaos.
“People are willing to give the White House some time to demonstrate that they understand the restraints of the system while also protecting their immediate interests.”
The capitalist class is inherently fragmented. They act like what Karl Marx called “hostile brothers”, each trying to grab for themselves the biggest share of the profits they extract from workers.
This focus on individual and often conflicting private interests makes it hard for the bosses to arrive at a unified political position. This is where the state comes in as the set of institutions that develops a general view of the ruling class interests overall and imposes it on society.
But the high command in Washington is now in the hands of an adventurer, along with advisers such as Steve Bannon, who says he wants to “destroy all of today’s establishment.” Expect a bumpy ride for US capital, and for the rest of us.