To many, President Donald Trump’s victory on November 5 seems to be a symbol of a major shift in the way our politics is practiced. But what is the nature of that shift? It is often seen as a turn away from “globalism” and toward a nationalism based on “race … religion, national origin” more at home in nineteenth-century continental Europe than America.

　　Seen in the context of our own history, however, we can understand present changes as part of a different, more sophisticated, and more quintessentially American tradition of nationalism. This tradition was intimately familiar to our Founders, who took it from eighteenth-century France and Britain and made it the medium of our politics even as its importance in Western Europe declined after 1790. It was a view of the nation based not on land or tribe but on political economy: the nation is no more or less than the people who do the work and pay the taxes to the government they elect.

　　One version of this nationalism held that those people who form the backbone of the nation should have the main say in the country’s future. The other version argued for a country of managers in which the terms of the country were set by institutional operators distinguished by their education and expertise. From 1791 to 1932 and then again since 2015, these two different versions of political economic nationalism have been the core of our partisan contests.

　　For most of our history, the Americans debating across this divide would have described themselves as members of a nation, America, with two different views of the way politics should handle economic questions inside of that nation’s constitutional (or bodily) structure: government subsidies or limited government; tariffs or free trade; welfare or markets; labor or business. Recovering this language of political economic nationalism—and the historical shifts that obscured it—is both historically interesting and relevant to understanding our current moment.

　　The Hidden Founding Links Between Constitutionalism and Political Economy

　　If we return to the origins of modern Britain, America, and France from the 1750s to the 1780s, we see widespread agreement among the most influential thinkers that a nation is a political economic entity, belonging to the people who work and pay taxes, and the people who came before them who did the same. The classic statement of this understanding is the pamphlet “What is the Third Estate?” by Emmanuel Sieyes, whose publication may constitute the most clarifying and, in the long term, the most revolutionary moment of the French Revolution.

　　Sieyes had a specific yet sweeping rhetorical task: to delegitimize two of the three branches of the French Parliament, the “First Estate” of clergy and the “Second Estate” of nobles, before Parliament’s meeting to address France’s debt crisis. Sieyes’s goal was to clear the field at the meeting for the Third Estate, which represented the middle and working class, to have the biggest voice.

　　In Sieyes’s view, the other two estates were simply illegitimate. Over the years, he thought, clergy and nobles had gradually corrupted religion, heredity, and tribe to justify their right to rule over people. By redefining membership in the nation as based solely on work rather than religion, heredity, or tribe, Sieyes was ensuring the people would no longer be manipulated by unaccountable elites. Members of the Third Estate agreed; Sieyes gave them the coherent rallying cry at the meeting that led to the establishment of France’s first (short-lived) constitutional monarchy.

　　Sieyes’s solution for how to govern this new political, economic nation was more controversial. He favored a managerial approach: concerned about civil war, he reasoned, in the words of scholar Michael Sonenscher, that “legal systems and financial resources provide forms of conflict resolution that politics cannot.” This meant that unelected administrators should do most of the work of government. Sieyes’s view was largely shared by Alexander Hamilton. It was in Hamilton’s America that Sieyes’ approach encountered sophisticated opposition from James Madison.

　　The Development of a Uniquely American Political-Economic Tradition

　　Like Sieyes and Hamilton, Madison commercialized politics. A careful reader of Adam Smith and Smith’s friend and mentor, David Hume, he predicated his definition of a nation on the principle of division of labor: divided labor meant divided interests, and in a geographically large nation these interests could express themselves freely without coming together to form a mob. But Madison also, unlike Sieyes and Hamilton, politicized commerce. The ultimate measure of any commercial system, Madison made clear in his public essays of 1791 and 1792 combating Hamilton’s program of government-backed development, was whether it increased citizens’ independence: their ability to govern their own lives. In his view, Hamilton’s administration, which was using public debt to create favored industries, was creating stark dependencies instead.

　　Under pressure from new spiritual enemies, American politics moved to embrace the Sieyes-Hamilton view of political economy, functionally erasing the Madisonian alternative.

　　To ensure citizens’ independence, Madison supported a shift to free markets and state-based governments run by the people’s representatives as well as targeted national action like tariffs and embargoes against the threat of dependency on Britain from abroad. Whereas Hamilton supported tariffs on specific industrial imports as an economic tool to promote large American manufacturers while leaving America’s dependency on British imports intact, Madison supported tariffs as a political mechanism to secure America’s sovereignty by breaking Britain’s hold on its market.

　　For 140 years after 1791, American political contestation rested on a clear public divide between these two political economic arguments. Everyone knew in the 1830s that the dominant Democrats stood for individual states promoting development and for mostly free trade, while up-and-coming Whigs stood for Washington-run development and across-the-board tariffs. In the 1870s, 1880s, and 1890s, minority Democrats hearkened to “Jefferson’s principles of 1798” while majority Republicans stood for Lincoln’s muscular federal government which used tariffs and land grants to back business. Beginning in the 1910s, in the face of government-backed corporations becoming powers unto themselves, the parties enacted more sophisticated versions of the same divide.

　　Each side gained decisive victories. Starting with Jefferson, some version of the Democratic Party dominated American politics from 1800 to 1860; Abraham Lincoln’s Republicans dominated from 1860 to 1932; and Franklin Roosevelt’s Democrats regained control from 1932 to 1980. Tellingly, though Lincoln and Roosevelt successfully argued for a larger role for a national government of managers, they ran their vision through states via targeted legislation (in Lincoln’s case) and labor unions and city parties via patronage (in Roosevelt’s). This connected them to the ground, ensuring feedback and support from the farmers, small businesspeople, and blue-collar laborers whom they had re-crafted their version of top-down political economy to serve.

　　Throughout this history, ethnicity, religion, and tribe helped determine party loyalty, but these identities were run through with political economic concerns. Irish, Italian, and Slavic Catholic immigrants were blue-collar laborers and mostly supported Democrats, who trusted big manufacturing corporations less; Protestant businessmen, who ran or benefited from government-backed business expansion, supported Republicans. The reason this clarity became obscured was events abroad, flowing from a wholly different brand of politics.

　　The European Challenge and the “American Way”

　　This brand of politics started in the 1790s with the Jacobins in reaction to political economic nationalism. The Jacobins thought that nations of working people unattached to a universal Christian ideal like medieval Europe’s under the Pope had created a “permanent crisis of a divided mankind” that had to be overcome so human beings could recover their spiritual wholeness. By the 1930s, different spiritual politics derived from their view had conquered Russia and Germany, both in the service of using the nation to dismantle nations: one to create a “liberated” world; the other a racial empire ruled by the “strong.”

　　When Franklin Roosevelt entered office by harnessing the new Democratic coalition which was suspicious of corporate conglomeration, his advisers began defining his policies in response to Europe’s spiritual politics. The purpose of many Great Depression programs was to stave off material hardship that his advisers thought had caused Europe’s new spiritual and political extremes. Similarly, the intertwined mobilization of America’s new defense apparatus and consumer economy to fight the Cold War was based on protecting the country from the lure of communism by greasing its economy and those of its allies while using armaments for deterrence.

　　Under pressure from new spiritual enemies, then, American politics moved to embrace the Sieyes-Hamilton view of political economy, functionally erasing the Madisonian alternative by incorporating one aspect of it into a bigger Hamiltonian project. Specifically, Roosevelt used the national government to fuse corporations and labor into an alliance to ensure smooth economic functioning and prevent a descent into the extremes paralyzing Europe. This was an alliance, the “American Way,” predicated on two of Hamilton’s mechanisms (government, corporations) and one of Madison’s (labor). It was based less on bottom-up partisan conflict and adjustment, and more on the work of a bipartisan cohort of Washington DC managers, papering over fractures and dispensing balance to the coalition. And it was maintained with different emphases by every president until Ronald Reagan.

　　Ostensibly, the economic underpinning of this three-way alliance was a Madisonian focus on free trade combined with targeted tariffs to protect labor. But a closer examination shows that this economic approach was recognizably Hamiltonian. Its purpose and practice were not what Madison had advocated: to use tariffs as a political weapon to avoid dependencies abroad and free trade to help small producers at home. Its purpose and practice, instead, were to encourage mass consumption at home, which Franklin Roosevelt said was the new underpinning of America’s political economy, and to boost corporate exports to out-compete the Soviets, while keeping labor reasonably satisfied. Abroad, this meant Washington, DC using CIA interventions and International Monetary Fund and World Bank rules to ensure cheap imports of goods or resources so that America’s consumer prices stayed low. At home, it meant Washington favoring specific American industries over others.

　　What was lost in this managerial framework was the core Madisonian focus on preventing Americans’ dependency. By lowering prices, the managers gave power to government-backed corporations, international organizations, and foreign competitors. By propitiating labor, the managers gave power to government regulators to pick and choose winners and losers. Both of these moves were exactly what Madison, from 1791 on, was explicitly against.

　　And there was another flaw in the system. Two of its three prongs, government and corporate, were managerial, and not just managerial but staffed by people raised explicitly and proudly on the Hamiltonian inheritance. As Samuel Goldman and Michael Knox Beran have pointed out, this distinct cohort, the WASPs, came from the same set of families and had been educated since the 1790s at the same Episcopalian and Puritan institutions (Groton, Harvard). They dominated administrative agencies and corporations as well as set up international connections that pre-cursed those of later (the United Nations, the International Monetary Fund.) They consciously embraced a tradition of “good” government as managers instructing citizens. After World War II, they expanded religiously to include mostly secular Jews and liberal Catholics and ethnically to include high-skilled immigrants from Asia and Africa.

　　But how long until these insulated managers decided to jettison the populist prong of the “American Way”—labor—and govern solely from the top down? This was a particularly germane question given that many of these managers now truly believed that the alternative to management was fascism or communism, and given that some of their newer members felt (and feel) understandably vulnerable as members of extremely small ethnic minority groups in America.

　　Managerialism Runs Amok—and Creates a Backlash

　　The break began in 1961, with the advent of John F. Kennedy’s administration, which began a sixty-year process of converting America to a white-collar economy run by national institutions. This began the long squeeze of the labor prong of the American Way to the benefit of government and corporations whose cultures matched managers’ values. After an interregnum under Ronald Reagan, who lowered taxes for blue-collar laborers (“Reagan Democrats”) and made elected state governments players in the constitutional system again, the managers came back. They funded government investment programs through the Internet and Silicon Valley as well as Massachusetts’ Route 128 “technology corridor”; they encouraged risky mergers for major financial players; and they backed social initiatives involving environmental, gender, and racial policies. Like the Kennedy Administration’s initial push away from labor, these moves relied on the decline of blue-collar work and the promotion of a global market.

　　Nationally and in states, the rapid expansion of Artificial Intelligence at the hands of major government-backed companies will make a debate over regulations and antitrust all but inevitable.

　　The reckoning for this sixty-year experiment came with Trump, who stormed onto the American political scene joining Reagan’s pro-state constitutional arguments with an explicit appeal to labor (along with labor’s social concerns: ethnicity, masculinity, religion, ties to land).

　　Trump’s use of the language of labor has led an establishment still mired in the lessons of the 1930s to label Trump fascist. In my view, this label is not only inaccurate, but misses the important paradigm shift back to questions of political economy. Trump’s two winning issues in 2024, inflation and immigration, are political economic questions: does massive government spending help or hurt the average person; and which groups should receive government benefits and protection—taxpaying workers or unauthorized migrants offering cheap labor?

　　Trump’s major intellectual supporters, among them The American Compass’s Oren Cass, also frame their focus explicitly around political economic questions—is America’s system benefiting the people who are its engine?—and they see President Trump as enacting a Hamiltonian program. This, in my view, misses what Trump is actually doing, which is recognizably Madisonian. From dismantling what he calls the “deep state” to using tariffs as a political weapon to protect America’s sovereignty from illegal immigrants and drugs, he is attempting to return power over the nation to the citizens who create the nation through their work.

　　The Reinvigoration of Political Economic Nationalism—and the Fate of Laissez-Faire

　　The return of political economy to the center of our debate may soon become clearer. In states in particular, the relationship between the market and politics is explicitly becoming a major subject. Democrats argue for government funding of policies ranging from “market-friendly” environmental innovations to affordable housing growth. Free-market Republicans like Florida Governor Ron DeSantis take “anti-market” stands on issues like banning lab-grown meat and targeting what some argue is the de facto government-backed corporate monopoly that is Disney.

　　Nationally and in states, the rapid expansion of Artificial Intelligence at the hands of major government-backed companies will make a debate over regulations and antitrust all but inevitable. The intra-Republican-and-Democrat dispute over H-1B visas, pitting the Right and Left of the respective parties against their seeming centers, is also a question of national political economy: whom should the government fund to help America’s technology apparatus compete with China? All this means it won’t be analytically useful for much longer to talk about “nationalism” versus “globalism” but about two competing forms of American nationalism, both predicated on political economy run through our Constitutional structure.

　　What, though, does this mean for laissez-faire economics,Americans’ other twentieth-century European inheritance? Running from Austrians like Ludwig Von Mises and Friedrich Hayek through economists at the University of Chicago, it helped Ronald Reagan fight against the arbitrary central government of postwar managers. Mises and Hayek were operating against the economic statism they saw in the Soviet and Nazi spiritualist regimes: these regimes failed to account for the complexity of large market societies and to allow for efficient transactions inside them. What Mises’ and Hayek’s insights bequeathed to American conservatives in the 1980s was a vision of statist involvement as the enemy not the ally across the board.

　　Fortunately, our new political economic nationalism affords this view a significant place among Republicans. Like Madison, the Trump Administration pairs decentralized government to increase citizens’ independence with aggressive pushback against the threat of dependency from abroad. While the latter priority means tariffs, which go against the laissez-faire grain, the former means anti-regulatory politics in Washington, DC via DOGE and the recent overturning of Chevron. In the meantime, in deep blue states like Illinois and New York, failures of statist Democratic solutions like public pensions and climate regulations are so extreme that they may give ambitious Republicans a political platform. Laissez-faire economics, then, still has great currency in America, only more surgically applied.