Make America great, make America unequal?

As a candidate, Donald Trump ran a strongly nationalist campaign with an undercurrent of populist economics. As president, he’s kept up the nationalism and ditched the economic populism. Did the nationalism make it easier to ditch the economic populism? Probably, yes.

To understand why, consider an article by Hebrew University of Jerusalem economist Moses Shayo with a compelling argument behind a clunky title: “A model of Social Identity with an Application to Political Economy: Nation, Class, and Redistribution.” The basic argument is this: High levels of nationalism undercut support for redistribution. In nations where national identity triumphs over class identity, the less well-off voters are less supportive of nationalism.

The more nationalistic the country, the worse the poor are doing relative to the rich

Shayo’s theory is that if lower-income individuals think of themselves as lower class, they will want more redistribution. If class consciousness prevails, the lower classes will strongly support redistribution and vote accordingly.

But if national identity is more salient than class identity, poorer individuals might instead identify with the nation more broadly, and less with their class.

Basically, humans are not selfish. We are group-ish. We want what’s best for people like us. But “people like us” is a highly subjective category. If “people like us” is “American patriots,” we’ll want what benefits “American patriots.” If we take on a nationalist identity, we can bask in the reflected glow of American greatness, even if our own finances are precarious. Thus, Shayo argues, “a national identity means less weight on class issues and less support for redistribution.”

Let’s start here by looking cross-nationally. In his article, Shayo plots data for 11 “established democracies” and compares the strength of nationalism (the x-axis) and the extent to which the bottom 20 percent of the Read More Here