(personal underlines)
What J.D. Vance gets right
J.D. Vance is just about the least popular conservative in Britain right now. The US Vice President’s treatment of Volodymyr Zelensky, and more recent leaked text messages discussing strikes on Yemen, have left Vance mired in scandal. Even in America, home of the MAGA movement, he is among the most disliked veeps in history, at least at this early stage in his term.
So it’s no wonder that last week Vance tried to move back onto his home turf and the issues for which he first became famous as a writer: the impact of globalisation on the American working class. In a room full of tech entrepreneurs, his championship of red-state, Main Street conservatism was clearly a hard sell. But look beyond the early political disasters of the second Trump administration, and it’s clear that Vance was offering something sorely lacking on both sides of the Atlantic: an economic worldview that is both reformist and coherent.
The Vice President and author of Hillbilly Elegy embraces a vision that seeks to strengthen American productivity, but with the firm objective of bringing prosperity to American workers. He makes a compelling economic case regarding the root causes of western stagnation and Chinese dominance, wrapped in an analysis that is morally grounded. The purpose of the economy is to raise general living standards in a way that supports families. He quotes the canonised Pope John Paul II, who perhaps surprisingly lionised the deployment of science and technology – so that man may earn a living, but also ‘elevate unceasingly the cultural and moral level of the society within which he lives.’
In challenging the wisdom of hyperglobalisation and arguing that growth must benefit American workers, ‘Vance-ism’ reflects an emergent body of thought within the American New Right which, behind the celebrity chaos of the Oval Office, has developed this new synthesis of thought. In this respect, US conservatives are intellectually ahead of their counterparts this side of the Atlantic, where centre-right policymakers remain either addicted to Reagan cosplay or otherwise believe that everything is (deep down) actually fine.
Achieving a cheap and illusory prosperity through cost-cutting rather than innovating and building will no longer do, Vance argues. One form this takes is the offshoring of production – whether it’s the manufacture of cars, chips, solar panels, steel or storage batteries. This reduces the costs of production and allows us to tell ourselves we are meeting environmental targets to boot. The theory is that value would flow up the supply chain. In fact, the opposite has happened. By suppressing input costs, offshoring has reduced businesses’ incentive to be more productive.
The second is the mass immigration of low-skilled labour – which is really the same thing. It just means moving workers to the West, rather than factories to the East. Migrants who cost taxpayers more than they contribute put strain on already indebted welfare states in the Anglosphere. And migrants earning low wages depress wages by creating an artificial oversupply. This allows margins to remain high and consumer prices low, even if businesses are bad at what they do. Why would you train a British or American worker to do a task more efficiently, or invest in labour-saving technology, when it’s cheaper up front to employ an underpaid migrant? The result has been the alienation of local labour and stagnant productivity – which in the UK’s case has not moved since 2008.
This is to say nothing of the cost to economic security when you rely on a strategic enemy for steel, electricity, the components that enable access to the internet and life-saving drugs. None of this would matter if the total integration of global markets had brought us perpetual peace on pain of mutually assured economic destruction. Clearly, it has not.
There is a new consensus in Vance’s mind and among his advisers. But there is friction even within the intellectual vanguard of the MAGA movement. Tech optimists in Silicon Valley look forward with glee to a workless future, in which all income is earned technologically, ordinary people’s material needs are met with passive incomes, and they are kept happy with immersive gaming, as one CEO boasted to Vance. But this would simply be an acceleration of the kind of Brave New World economics that brought the Anglosphere to this political revolution in the first place. There must be an accommodation with the populists who defend American labour – or the tech bosses will be biting the hands that politically feed them.
Vance is right that productivity gains from training, skills, technology and investment should not destroy the value of labour. It is measured in ‘output per hour worked’. So on the contrary, productivity gains should increase workers’ prosperity, allowing them to create more with less, earn better salaries and live more secure lives. But that vision of widespread economic improvement is already clashing with the tech lords’ preference for a digitised, borderless world where the proceeds of innovation are privatised and hoarded while workers become literally redundant.
To ensure growth benefits workers, there must be a rebalancing of the global trading order. Britain is in a worse state than America: we import nearly 40 per cent of our energy and consume £28 billion more in goods and services than we produce annually, financed by selling equities in our companies, private and public debt, and our scarcest national resource – land you can legally build on – to foreigners.
Productivity has been frozen for over a decade, yet consuming cheap imports and importing cheap labour has papered over this. But it has hollowed out our manufacturing so we produce just two per cent of global output, while China now accounts for more than 30 per cent. Companies with capacity for productive growth have gone overseas and good jobs have disappeared.
Autarky for America, let alone Britain, would be impossible and mad. But the current model cannot go on. The old economic religion was blind to inequality so long as growth was achieved. But it has not. The remoralising of Anglo-American thinking on economics can and must go hand in hand with a better and saner commitment to innovation and production that benefits workers and families, not transferring wealth up to the owners of technology or overseas to Beijing.
In many ways Vance is wrong, but Vance-ism is right.
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