How Donald Trump Is Trying to Rewrite the Rules of Capitalism
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From the online spectacle around Leo XIV's election to our favorite on-screen cardinals. This week on Critics at Large, we're talking all things Pope. The Catholic Church was made for this moment. I think 2,000 years ago, the Catholic Church basically anticipated TikTok, Instagram, X. You don't have those little Swiss guard outfits and think they're not being photographed. Oil painting is not enough. I'm Vincent Cunningham. Join me and my co-hosts for an episode on what can only be described as Pope Week. New episodes of Critics at Large drop every Thursday. Find us wherever you get your podcasts.
This is the New Yorker Radio Hour, a co-production of WNYC Studios and The New Yorker.
This is the New Yorker Radio Hour. I'm David Remnick. For decades, economic arguments in this country, in the broadest sense, were usually over taxes and spending. But for a long time, Republicans and most Democrats alike have been in favor of free trade, the idea that the global flow of goods and services should be as open as possible for the Even if it hurt some workers, the prevailing economic wisdom was that free trade was a necessary aspect of capitalism. Now, this was and has always been contentious. Unions have fought agreements like NAFTA. Critics say that the globalized economy led to deindustrialization in much of the country and that that deindustrialization, as we know, gave real fuel to Donald Trump's populism.
Trump has been a longtime proponent of tariffs, and he seems to relish the prospect of a major trade war with the Chinese. Those positions reached their fruition with his highly chaotic tariff rollout recently, which of course tanked the stock market and put us near the brink of a global recession. Even many Trump voters have told pollsters that they disapprove of this tariff policy, at least its chaotic nature. A new book by John Cassidy, our staff writer, takes a long view of these debates. It's called Capitalism and Its Critics, a History. Cassidy has been covering economics for The New Yorker for a long time, and he writes our weekly column called The Financial Page. Now, John, I think most people in America think of capitalism almost... as the eternal natural order of the universe somehow, like the weather. But it has a real beginning, and that's where you start your book. So how did capitalism start, and what did it replace?
Yeah, I mean, that's actually a pretty complicated question. Most of the book which I've written about is industrial capitalism. And we do have a start date for that. It's usually dated to about 1770 in England in the cotton industry, where a series of inventions led to the rise of the factory system. Now, that arose on top of another system of capitalism, which was called mercantile capitalism. What's the difference? Well, it's actually very timely. Prior to Adam Smith and prior to 1770, The government and the economy were pretty much intertwined a bit like they are now under Trump. Protectionism was the order of the day. I mean, Britain and Holland were the sort of empires in the 17th and 18th centuries. And they fought wars over it.
They basically were competing for the colonial trade, the Spice Islands, England. in what is now Indonesia, the trade in India, cottons, all sorts of goods came from the East.
Adam Smith, of course, is often thought to be the godfather of capitalism, the philosopher of the free market. But you cite him as a critic of capitalism.
Right, right. Now, there's a bit of a conceit there because, of course, you know, Adam Smith is the hero to a lot of capitalists and conservatives. I remember when I used to be a correspondent in Washington covering the White House in the late 80s, people used to walk, the Reaganites all walked around with their Adam Smith pins on. Right. Trump people wouldn't do that? I don't think so. Not most of them. I mean, they reject some of the – you know, protectionism is – Adam Smith wrote The Wealth of Nations to critique the mercantile system that we just mentioned and basically defend free trade. He said that protectionism was harmful. It led to corruption. He had these huge corrupt companies like the East India Company, which was actually bailed out by the British government. So –
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