Canada's Reagan Gambit
Canada's Reagan advert was designed to create cognitive dissonance within MAGA, while highlighting that for nationalists, like Trump, Adam Smith is the primary enemy
Late last week United States president Donald Trump cancelled trade negotiations with Canada, and slapped an additional 10 per cent tariff on Canadian goods in response to a television advert the provincial government of Ontario placed on American channels. The advert used a speech by former Republican Party president Ronald Reagan to highlight why tariffs are harmful to the countries that implement them. The advert’s reach has exploded due to Trump’s kneejerk response and the fervent social media debate that has been created.
Knowing the nature of Trump’s personality, this reaction by the president and his supporters may have been exactly what the Canadians wanted. What they looked to have devised is a cunning plan to not only expose the economic damage that Trump is doing to both countries, but also expose the contradictions in how modern “conservative” politics in the U.S sees itself.
Trump and his MAGA movement cling to the term “conservative”, but as a radical, even revolutionary, movement they don’t adhere to any philosophical definition of the term. Trump’s economic ideas certainly don’t align to what was considered conservative orthodoxy from the mid-20th Century onwards. These were ideas that found their most enthusiastic – albeit often confused – vehicles in presidency of Reagan and the prime ministership of the United Kingdom’s Margaret Thatcher.
Reagan remains a conservative icon. A figure whose name is treated with deep reverence within the Republican Party. Yet Trump is the anti-Reagan. On the surface this is obvious in political style and messaging – contrast Reagan’s sunny optimism of “Morning in America” with the relentless grievance of Trump’s “American Carnage.” Yet this contrast runs deepest through economic theory. What the Canadians have done is very publicly demonstrate this. Creating a powerful cognitive dissonance within the MAGA movement.
Trump usually has no problem attacking revered figures, he shows no deference (except to Vladimir Putin), and loves overturning received wisdom. But given his place in the Republican Party’s imagination, on a personal level Reagan has yet to make Trump’s enemies list. However, in the realm of ideas Reagan is firmly in the crosshairs. So, it is worth understanding why, to nationalists like Trump, free trade is so repellent. And why, at an abstract level, Trump’s number 1 enemy is the 18th Century economist and philosopher Adam Smith.
Smith’s most influential work – The Wealth of Nations – was a critique of the dominant mercantilism of the day. Smith’s observation was that a nation’s wealth flourished when states stopped trying to direct how wealth was created. Individuals and businesses were best placed to make decisions without consideration of any “national” sentiment or objectives. This “invisible hand” of dispersed decision-making would, ultimately, benefit the nation.
Yet this dispersed decision-making is also global. First identified by Smith, and subsequently expanded upon by David Ricardo, comparative advantage is the recognition that different regions are able to produce goods or services at a lower cost - and/or better quality – than others, and therefore this is where they should concentrate their efforts. Alongside this, with the seeking of efficiency, many products can be an amalgamation of multiple comparative advantages.
The counter-intuitive nature of these concepts is difficult for nationalist movements to comprehend. It is also difficult for them to stomach. For political movements that have control as their central operating principle, mercantilism aligned well with their psychology. It enabled them to direct the commanding heights of the economy and therefore manage the nature of society itself.
This is because invisible hands, comparative advantages, and dispersed knowledge are not only threats to the lust for control, but also to a romanticised vision of the nation as a self-contained – and at its worst, ethnically “pure” – unit.
The best illustration of how confronting this is to nationalists remains an essay written in 1958 by the economist Leonard Read, titled I, Pencil – which traced the construction of a single pencil. This pencil begins its journey in the forests of Oregon and northern California, but it then gains graphite from Sri Lanka, wax from Mexico, rubber from Indonesia and pumice from Italy. Read’s argument was that no single person is capable of making something as simple as a pencil. But what he also demonstrated was the inherent cosmopolitanism of trade. How even the production of a pencil requires vast cooperation across nations and ethnic groups.
If this cooperation wasn’t confronting enough to nationalists, the economic forces that drive the movement of products, also drive the movement of people and culture. The freer humans are able to exchange with each other, the more people of different backgrounds intermingle and societies evolve. The idea of a nation frozen in time may be compelling to some, but countries that have tried to create it – like North Korea – have placed themselves in crippling poverty and political brutality.
What the Canadians have done is hold a mirror up to the Republican Party, asking it to examine both its history and its current behaviour. Is it a party of wealth, freedom and cosmopolitanism? Or a party of privation, authoritarianism, and insularity? The bet – or hope – being made by Canada is the only way Republicans can return to the former is by having one of the party’s most revered figures demonstrate that it has become the latter.
Great analysis.