Trump’s Inauguration: Ageing Pains

Vincent at Notes on Liberty has discussed the relative age of US presidents. There is something to be said about the age of electorates too. 

I was living in the United Kingdom when we voted for Brexit (I was a soft remainer). I was living in the United States when Trump won the election. So I can’t help but feel that Trump’s inauguration is part of a generalised nationalist turn that, ironically, transcends national borders. Why is this nationalist turn happening? And why has it wrong-footed pollsters and political scientists more than once now?

We are repeatedly, and correctly, warned not to over-interpret individual events as somehow determined by given factors. Both the Brexit vote and the presidential election were close, with Trump taking the electoral college without the popular vote. One domino that didn’t fall last year was the Austrian presidency that, after a close call, went to a Green rather than a nationalist. So whatever explanation we are looking for has to be a tendency that’s slightly shifted the odds in favor of nationalist politicians without the experts being able to anticipate it in advance. 

Some suggest that this resurgent economic nationalism is an inevitable outcome of the overreach of trade liberalisation that has undermined national self-determination and humiliated local cultures. Others argue that the real cause is growing income and wealth inequality. I think a potentially more straightforward factor is demography. The electorate is simply older than it used to be. 

There are a few reasons why this explanation may work better than the more popular ones. The ageing electorate is almost unprecedented in history. This could make it harder for political scientists to predict its impact on elections. Surveys might be able to tell us how older people vote as individuals without being able to work out how older people surrounded, in addition, by lots of older peers will behave. 

Countries like Italy and Japan were somewhat ahead of us on this demographic transition. And perhaps not entirely coincidentally, Italy repeatedly elected a mini-Trump, Silvio Berlusconi as Prime Minister, while continuing to support the elderly at the expense of opportunities for the young. Meanwhile, Japan has always been more ethno-nationalist than other developed economies and in some ways has grown more politically reactionary in recent decades. 

This explanation chimes with the fact that Trump voters were not typically economically disadvantaged. They were older and less educated but typically economically secure. Age was also a big factor explaining support for Brexit. At the same time, an ageing population presents real economic challenges that translate into politically salient problems. Demography is probably responsible for a great deal of the sustained drop in real interest rates, precisely the sort of thing that worries ageing savers with slowly growing pension pots. 

Trump wants to boost infrastructure, construction and manufacturing. But these sectors do best with young and growing populations, where families want new and bigger houses and offices, roads to connect them and cars to drive to and from them. What happens when everyone already has a great deal of material goods and a country hasn’t got as many young adults to demand new stuff? Inevitably, an economy’s trend growth declines and may even contract, leaving investors with fewer places to get a good return. 

So for those worried about nationalism or protectionism, what could this mean about the future? On the one hand, this could be quite a pessimistic explanation. There is very little that can be done in the short or medium term about the demographics of an electorate. So we might just be in for a more reactionary period. The vote is not about strength of belief, just the sheer numbers nudged in that direction, and that is what age can do. 

On the other, this could be an optimistic hypothesis. The situation we find ourselves in is a side-effect of two generally attractive outcomes: people living much longer, and lower fertility thanks to women becoming more educated. The balance between the young and the elderly might eventually improve once the demographic bulge of the baby boomers has passed into history (this depends critically on whether institutions permit new family formation). In addition, tomorrow’s elderly are not the same as today’s elderly. They will probably be more educated, less nationalist and possibly less subject to cognitive decline than the current generation. They are less likely to be impressed by a bad sales pitch.  

This is a cross-post from Notes on Liberty