The Political Economy Logic Behind the Political Changes in the United States

Abstract

The neoliberal reforms implemented during Reagan’s administration, while once revitalizing the U.S. economy, also sowed great potential problems for society. The trend of increasing income inequality, accelerating de-industrialization and capital concentration in the financial sector has caused the continuous decline of the “Rust Belt” region, and the gradual marginalization of blue-collar workers in the social status, and the prolonged accumulation of these social contradictions has finally erupted into violent political energy, which has brought about far-reaching impacts on the American society. This paper explains the socio-economic mechanism of the “Rust Belt” dilemma: under the neo-liberal-dominated global division of labor system, the region has lost its comparative advantage in heavy industry, and many industries have migrated to new industrial regions with lower labor costs. At the same time, the weakening of government regulation and the influence of labor unions has led to a prolonged failure to protect the claims of local workers. Economic hardship and unfair income distribution have caused residents to accumulate a great deal of dissatisfaction with the existing system. The Rust Belt’s support for Trump in the 2016 election was a strong rebellion against the neoliberal economic model and the establishment parties. Trump’s victory reflects the dissatisfaction of the region’s residents with the imbalance of economic development and signals a new round of social unrest.