The alliance between the pro-business Republican Party establishment and its populist working-class voting base has never been more tenuous. The fragility of that uneasy alliance is likely to come into sharper focus over the next six to eight months as the Republican presidential primary advances. But the two-party system in America is a blunt reality, and fiscal conservatives and populist-inclined “New Right” conservatives will have to find a way to make peace with each other, lest their fratricide prevents their ability to defeat a mutual foe: a Democratic Party that has gone ever further left.

The return of Donald Trump to the campaign trail to seek, in Grover Cleveland-esque fashion, a second nonconsecutive term in the White House has led many to rethink, and at times relitigate, Trump’s shocking breakthrough during the 2016 election cycle. Over the course of his tumultuous Republican presidential primary victory and general election triumph, Trump managed to repeatedly offend the delicate sensibilities of the Republican Party’s “Conservatism Inc.” establishment wing. 

From an institutional perspective, Trump in 2016 was a genuine outsider who had never paid any heed to, donated to, or seemingly been molded in any way by, Conservatism Inc.’s sprawling constellation of flagship journals and Beltway think tanks. From an intellectual perspective, Trump ran an explicitly nationalist-leaning campaign that rejected many of the putatively inviolable tenets that defined the post-1950s “fusionist” conservative movement — namely, cultural traditionalism, laissez-faire economics and (anti-Communist) foreign policy assertiveness.

Poll: Republicans see Trump as a ‘person of faith’ ... more so than Mitt Romney, Mike Pence and others

That fusionism culminated in the 1980s-era presidency of Ronald Reagan. In 2016, Trump took a wrecking ball to that consensus: In particular, he did not shy away from confronting stale Republican orthodoxies pertaining to immigration, foreign policy hawkishness and fiscal conservatism.

As president, Trump often did not govern in the manner in which he had campaigned; his two signature pieces of domestic policy — the Tax Cuts and Jobs Act of 2017 and the First Step Act passed one year later — amounted to a standard Wall Street Journal editorial board-style supply-side tax cut and an ideologically libertarian “criminal justice reform” initiative. But over the course of Trump’s first term, many “New Right”-leaning organizations arose to put some intellectual and policy meat on the bones of his 2016 electoral earthquake. 

The erudite quarterly journal American Affairs, founded in 2017, publishes many long-form essays on industrial policy, the need to re-shore or “ally-shore” supply chains, and the manifest failures of the neoliberal consensus. The think tank American Compass, founded in 2020, focuses on similar communitarian themes, including white papers on what a robust family policy might entail and how to unwind decades of the pernicious financialization that has hampered genuine economic productivity. (As a disclosure, I have contributed multiple times to both American Affairs and American Compass.)

Now, more than eight years after Trump’s infamous descent down the gilded Trump Tower escalator, the political Right continues to debate just how much its policy consensus has, in fact, changed and, more importantly, whether it should continue to evolve, moving forward. In no area is this conversation livelier than that of economic policy, given the yawning chasm between the more ideological laissez-faire priorities of the Republican Party’s donor class and the more empirical and nationalist sensibilities of the GOP’s middle- and working-class base. The nature of the relationship between old-school fiscal conservatism and the intellectually ascendant forces of national conservatism and the other strands of the so-called “New Right”, moving forward, is thus ripe for analysis.

Fiscal conservatives tend to exalt theoretical abstractions and let the economic chips fall where they may, while populist conservatives are guided by empiricism and pragmatism.

What is a fiscal conservative?

It is important to first define terms — namely, what constitutes “fiscal conservatism.” 

Fiscal conservatism could be defined narrowly as a prioritization of deficit reduction, debt minimization, fiscal austerity and balanced budgets. That’s how the term would normally be used in European countries. But in contemporary American political discourse, fiscal conservatism invokes a much broader and wider-ranging suite of roughly related policies and ideals: not only slashing wasteful and excessive spending, but also opposition to most governmental transfer payments (especially since the New Deal), a zeal for supply-side tax cuts for both individuals and businesses, a general favoring of business deregulation and lax antitrust enforcement, a permissive approach to deregulation without paying heed to either supply chain resilience or economic distribution concerns, and a neoliberalism that touts the benefits of globalization and the free international movement of labor and capital. Thus, fiscal conservatism in America might be used interchangeably with “economic libertarianism,” or perhaps simply “classical liberalism.”

It is this broader, American conception of fiscal conservatism — a mishmash of anti-government free-market fundamentalist impulses — that is most important to assess when it comes to the more nationalist- and populist-inclined “New Right,” and the future of the American Right more generally.

It first must be conceded that the two camps — fiscal conservatives, on the one hand, and national and populist conservatives, on the other hand — really do prioritize different things. 

Fiscal conservatives tend to exalt theoretical abstractions, such as Adam Smith’s “invisible hand” or David Ricardo’s theory of comparative advantage, and are content to obediently accept the consequences and let the economic chips fall where they may. American Compass founder Oren Cass aptly calls this approach, which is favored by the GOP donor class and the journals and think tanks of Conservatism Inc., “let the market rip.” 

On the other hand, populist conservatives are driven less by blind fealty to abstract dogma than they are guided by empiricism and pragmatism. Accordingly, national conservatives and many of their “”New Right”” fellow travelers believe in a prudential economic statecraft that takes seriously such concerns as supply chain durability, family formation and support, and social solidarity. Fiscal conservatives tend to prioritize the primacy of the individual, presumed to be rationally self-maximizing, whereas national conservatives and the “”New Right”” tend to prioritize the primacy of the common good of the polity.

These are very serious differences. They might even seem to be unbridgeable. But the inescapable political realities of America’s reigning two-party system demand that old-school fiscal conservatives and new-school national and populist conservatives find a way to move forward together. Given how far left the Democratic Party has moved both economically and culturally, especially in the years since Barack Obama’s 2008 presidential victory, it is extraordinarily difficult for either fiscal conservatives or populist conservatives to countenance openly working with the political Left. In other words, fiscal conservatives and populist conservatives are stuck with each other, whether they like it or not. 

Meeting Republican voters where they are

So, what kind of a path forward is possible?

The answer to that question depends primarily upon the ability of fiscal conservatives to engage in sober introspection, recognize the unpopularity of many of their ideas even within the Republican fold and to adjust and make concessions accordingly. And the answer depends secondarily upon the ability of national conservatives and “New Right” fellow travelers to recognize that some of the fiscal conservatives’ ideas are sound, perhaps even indispensable — namely, those pertaining to the general desirability of market-oriented public policy solutions and, above all, the imprudence of profligate spending and the recklessness of massive budget deficits.

In June 2017, the political scientist Lee Drutman published a much-read study on the political beliefs of those who had voted in the 2016 presidential election. The study included a two-axis scatterplot, where the X-axis divided voters along economic belief lines (from “economic liberal” to “economic conservative”) and the Y-axis divided voters along social/identity belief lines (from “social/identity liberal” to “social/identity conservative”). The results were, in some ways, shocking: 44.6 percent of the 2016 electorate was “liberal” (liberal on both economic and social issues), 28.9 percent was “populist” (liberal on economic issues but conservative on social issues), 22.7 percent was “conservative” (conservative on both economic and social issues) and a paltry 3.8 percent was “libertarian” (conservative on economic issues but liberal on social issues). 

It thus seems likely that, in order to counter the consolidation of the “liberal” quadrant, Trump consolidated “conservatives” and also won most “populists” and many “libertarians” (numerically inconsequential though that group is). But without the “populists,” the math simply would not have added up for Trump: While 26.5 percent of the electorate identified as conservative on economic issues, 73.5 percent identified as liberal. A cursory glance at the scatterplot indicates that the most notable and compact cluster of all Trump voters was economically centrist — but socially/culturally conservative — voters. 

The unmistakable truth is that no matter how much money Conservatism Inc. and the GOP’s donor class have spent trying to sell Americans on untrammeled laissez-faire and free-market fundamentalism, the voters themselves are simply not buying it. Additional recent polling further clarifies just how far removed Republican voters are, in crucial ways, from the era of the party’s Mitt Romney-Paul Ryan 2012 presidential platform.

On immigration, Gallup reported in July on a poll it conducted from June 1–22, 2023: “73 percent of Republicans … want immigration decreased, while 10 percent want it increased, meaning their net preference for more immigration is -63.” Similarly, NBC News described some pertinent findings of a July 31, 2023, New York Times/Siena College poll: “69 percent (of Republicans) say America has lost out from increased trade because of job losses, versus 17 percent who think the U.S. has benefitted from increased trade,” and “59 percent (of Republicans) want to keep Social Security and Medicare benefits as they are, versus 29 percent who say it’s more important to take steps to reduce the budget deficit.” These findings ought to make libertarian-leaning fiscal conservatives run for the hills.

The Republican donor class and Republicans’ (dwindling) corporate boardroom constituency may be neoliberal when it comes to trade and immigration; dogmatic in their pursuit of maximally deregulated markets and indifferent to supply chain offshoring, trade deficits and income inequality concerns. And they may be upper-class. But typical Republican voters are increasingly none of these things: They are nationalist on issues such as trade and immigration and pragmatic about the utility of free markets, viewing them as convenient only when they help secure their livelihoods and provide for their families. They support prudential regulation of Big Business and more robust antitrust enforcement. They are concerned about income inequality; and they are middle- or working-class.

When it comes to issues where individualist liberal instincts are at loggerheads with the more populist communitarian concerns, it is incumbent upon fiscal conservatives and the Republican donor class to meet Republican voters where they are. 

No amount of money poured into roundtable seminars on Adam Smith or F.A. Hayek’s theories has convinced Republican voters to blindly accept the whims of the free market.

The reality for fiscal conservatives

Given the unpopularity of libertarian economic thinking, fiscal conservatives should have a natural self-interest in moderating their convictions to remain viable actors within the GOP tent and precluding their one day being written off as a doctrinaire “fringe” or as curmudgeonly “cranks.” Fiscal conservatives must face coalitional reality: No amount of money poured into roundtable seminars on Adam Smith or F.A. Hayek’s theories has convinced Republican voters to blindly accept the whims of the free market, no matter what the domestic or global results may be. Republican voters are empirical, not ideological, on matters of economic policy; they do not view family policy support payments or expanded child tax credits as crypto-socialism; and they do not accept the inevitability of emerging woke corporate tyranny in America.

However, fiscal conservatism still retains some key insights that the “New Right” ignores at its own peril. Above all, the single most important lesson in all of fiscal conservatism — that deficits do matter — has been thoroughly vindicated in recent years. The blowout spending of the final years of the Trump presidency and the first years of President Joe Biden’s presidency has resulted in the highest inflation in four decades — reaching over 9 percent on an annualized basis at its summertime 2022 peak.

It is important that those on the Right who may be inclined to go full populist, to again borrow from Drutman’s research, instead settle for something closer to “two cheers for capitalism.” Fiscal discipline is still important. Market solutions should generally be preferred, except when efficiency-maximizing market outcomes deviate from the national interest. And prudential efforts simply must be taken to pare down our massive national deficits and skyrocketing national debt. But excising the “scourge of a woke and weaponized bureaucracy,” to borrow from Trump’s former Office of Management and Budget Director Russ Vought, is a more politically promising place to start than the nonstarter that is “entitlement reform.”

The sooner fiscal conservatives and national/populist conservatives reconcile their differences and reach a stable and mutually acceptable equilibrium, the better off conservatives will be. Indeed, the current backdrop of the unfolding Republican presidential primary is an ideal time to strive to reach that equilibrium. 

The benefits of such a unified Republican Party would be myriad and consequential. A Right less riddled by constant intellectual dissension and enmity within its own ranks is a Right that stands on firmer ground. It is a Right that can stand before independent, moderate and persuadable voters more confident in its convictions and its proposed solutions. 

Ultimately, both sides will need to make compromises. Some of those compromises will be easier than others. But a path forward is indeed possible. Pragmatic economic nationalism with a dash of deficit-mindedness is the rough recipe. Now we just need some statesmen up to the task of making it a reality. 

Josh Hammer is Newsweek’s senior editor-at-large and a research fellow with the Edmund Burke Foundation. 

This story appears in the October issue of Deseret Magazine. Learn more about how to subscribe.