The election of Donald Trump marked the end of neoliberalism as the dominant hegemonic bloc of our time. Neoliberalism is an economic and political philosophy espousing economic freedom and laissez-faire policies as the means to achieve economic prosperity.

Milton Friedman’s “Capitalism and Freedom” (1962) provided the theoretical framework, promoting entrepreneurial freedom, strong property rights, free markets and free trade. For Friedman, protecting freedom requires limiting government, necessary to achieve the neoliberal ideal of an economy governed by prices and prices alone. Thus, Friedman opposed occupational licensure, laws forbidding discrimination, labor unions, government management of the public lands (including national parks), and other barriers to free markets. The doctrine and policies of Ronald Reagan, Margaret Thatcher, and later Bill Clinton established the political framework for neoliberalism’s dominance

So why did many voters support Trump, ending the neoliberal hegemony? There are three reasons. First, neoliberal policies fostered globalization. Globalization, together with new technologies, produced both winners and losers. The winners were primarily multinational corporations and consumers. Multinational corporations gained from lower production costs, stemming from outsourcing jobs to China and elsewhere. Consumers gained from lower prices. The losers were primarily blue-collar workers, those who built the goods now produced elsewhere or produced by new technologies. Trump won by convincing blue-collar workers and other economically disadvantaged voters that he could return those jobs to the United States.

Second, many Trump supporters felt a sense of economic injustice. They resented policies imposed on them by the urban elites, polices that benefited urbanites but hurt those living in rural areas who depended on the land for their livelihood. They saw the system as rigged. Environmental policies and government control of public lands made it more difficult for ranchers, farmers and miners to earn a living. Marginalized and without any allegiance to neoliberalism, they sought to reverse policies of the urban elites.

Third, neoliberalism failed to address rising inequality in income and wealth, the result of the very policies that neoliberalism supported. Free trade, corporate tax cuts, deregulation, financialization and so on benefited corporations, consumers and the more affluent. Their failure to compensate blue-collar workers and those in rural areas evoked a populist countermovement with two distinct versions: Progressive populism (Bernie Sanders, Elizabeth Warren, et al.) and reactionary populism (Trump).

Trump promised to re-establish low-tech manufacturing, reduce environmental regulations and attack any elites or institutions that support free trade, open borders or fiscal responsibility. Trump’s triumph and Clinton’s defeat in 2016 signaled a populist countermovement strong enough to potentially unseat neoliberalism as the dominant hegemonic bloc.

Fortunately, the strength of American institutions, the 2018 midterm elections, and the remnants of neoliberalism has checked the rise of Trump’s reactionary populism. None of the three blocs (neoliberalism, progressive populism and reactionary populism) are strong enough on their own to establish a new dominant hegemonic bloc. Without a secure hegemony, we face an unstable interregnum with significant instability and no guiding or unifying economic and political philosophy to steer the U.S. and the world economy. As Antonio Gramsci noted, “The old is dying and the new cannot be born.”

For the new to be born will require an alliance between two of the three blocs. It seems unlikely that either progressive populism or neoliberalism would align with reactionary populism. For progressive populism to align would require working class supporters of Trump and Sanders to see a common interest as differently situated victims of a single rigged economy. But given the bad blood stirred up by political partisanship and Trump’s rhetoric and politics, such an alliance seems unlikely. A neoliberal alignment with reactionary populism also seems unfathomable, given much of Trumps anti-neoliberal rhetoric, his fascist attacks on neoliberal institutions and his mercantilist-based nationalist agenda.

Unfortunately, the schism in ideology, rhetoric, partisanship and policy may extend this interregnum beyond the 2020 elections. Ideally neoliberalism and progressive populism can forge a new consensus that combines elements of economic efficiency and growth along with equity, fairness and opportunity. To fail will politically empower reactionary populism and its fascist leanings.

James “Cid” Seidelman | Westminster College

James “Cid” Seidelman is distinguished service professor of economics and former provost of Westminster College.

John Watkins | Westminster College

John Watkins is professor of economics at Westminster College.