Recent developments suggest that US President Donald Trump’s power is waning, with his behavior drawing resistance even from some fellow Republicans. A non-exhaustive list of his recent setbacks includes: losing the debate over the Epstein files; a sharp decline in his popularity; defeats in most court cases; MAGA stalwart Marjorie Taylor Greene’s resignation from the US Congress; the rejection by Indiana Republicans of his mid-cycle redistricting plan; the outcry over his lawfare against US Federal Reserve Chair Jerome Powell; and the growing likelihood of Republican losses in this year’s midterm elections.
With Trump’s base showing signs of fracturing, and with the president departing the political stage in the not-too-distant future, the MAGA movement’s long-term influence is likely to be minimal. If so, history would view this era as a brief setback for democracy, and Trump as merely the symptom of a larger problem.
By exposing the weaknesses of American democracy, MAGA might well serve as a catalyst for the system’s rejuvenation. This does not mean that Trump’s lawless authoritarianism should be taken lightly, nor that the road back would be easy. In the months and years ahead, it would be crucial for democratic forces to explore the reforms needed to revitalize American democracy and strengthen its legitimacy.
Illustration: Mountain People
To explain why I expect MAGA to decline requires examining its origins. Since about 1980, the combination of free-market policies, globalization and labor-saving technologies has devastated the livelihoods of US workers without college degrees, resulting in massive job losses and economic decline in several US regions.
Notably, such costs have been normalized as the inevitable byproduct of “creative destruction.” Never mind that eliminating millions of jobs entails profound suffering — families torn apart as incomes collapsed, and as drug addiction and suicide spread — and losses of human capital. So savage have been the results that workers without college degrees now have shorter lifespans than they did in the recent past, as Anne Case and Angus Deaton have amply documented.
In Private Power and Democracy’s Decline, I demonstrate that since the 1970s, rising market power and widespread job destruction have fueled economic and political inequality, and sharp social polarization, pitting workers without college degrees against more educated Americans. The rise of MAGA populism and the decline of democracy are the ultimate consequences of these forces, and of the US’ second Gilded Age.
The MAGA movement itself encompasses three distinct constituencies, and tensions between them are rising. The largest group comprises individuals directly affected by job losses and young workers without college degrees, who have become even more anxious about their future in the face of artificial intelligence (AI). Members of this broad constituency want to find and keep high-quality jobs, but increasingly doubt their chances.
The second group comprises traditional Republicans who still generally endorse former US president Ronald Reagan’s economic policies. They support Trump for the same reason they supported his Republican predecessors: the promise of low taxes, deregulation and a strong national defense.
The last group includes several ideological factions holding anti-democratic views. It includes figures such as US Vice President J.D. Vance, Steve Bannon, the late Charlie Kirk, far-right podcaster Tucker Carlson, and their followers. As the most active and the most eager to change the US, this diverse group is gradually becoming the face of the movement.
Most of this last group’s members believe that the US’ identity should not be based on the principles of equality outlined in the US Declaration of Independence, but on blood and soil. What they call “heritage Americans” can trace their roots back to the white Anglo-Saxon Christian settlers of the US. Such a position is anti-democratic by definition, especially now that only 44 percent of Americans identify as white Christians.
MAGA would decline for several reasons. First, the largest MAGA constituency — unskilled workers — would gradually leave the movement. Trump’s primary legislative achievement, the One Big Beautiful Bill Act, reduced taxes for the wealthy and corporations by cutting programs like Medicaid and health-insurance subsidies that help low-income Americans. He has shown no indication that he wants to address these workers’ need for high-quality jobs.
Trump’s tariffs certainly would not create such jobs, and his alignment with AI-industry “accelerationists” would only add to these constituents’ anxieties. The November elections last year showed that many previous Trump supporters in this group have no problem switching their support to Democratic candidates.
Second, income inequality has finally taken center stage in US politics. It has appeared in the guise of an “affordability crisis,” which implies that incomes are too low to secure 21st-century necessities. Even as national income rises, wages for workers without a college degree are either stagnant or rising more slowly than prices.
Trump’s “beautiful” tax bill can be expected to increase income inequality significantly, because it shifted real (inflation-adjusted) income from the bottom to the top, while his tariffs have cut further into real income by raising prices. He could remove the tariffs on groceries and other essentials, but this would mitigate only part of the problem he created. Since the response would be entirely insufficient, his supporters inevitably would be disappointed yet again.
A third factor is the rapidly growing influence of far-right racist and anti-Semitic elements, who are increasingly pushing MAGA toward embracing an extreme Christian-nationalist agenda. In October last year, Carlson held a friendly two-hour interview with Nick Fuentes, a racist, celibate, anti-Semitic Nazi supporter, because he believed that Fuentes’ influence among young MAGA adherents was increasing.
What followed shows that these ideas have infiltrated the movement more broadly than many had realized. Leading MAGA figures like Kevin Roberts, president of the Heritage Foundation, unapologetically supported Carlson and his implicit endorsement of Fuentes, suggesting that the MAGA political agenda is broad enough to include fans of Adolf Hitler and white supremacists.
The rise of racists and anti-Semites within MAGA is not accidental; it reveals the sympathy that a significant portion of young MAGA members have for white supremacy. Once Trump exits the stage, there would be only a small gap between Fuentes and Vance, and since most Americans reject their ideas, they would turn away from the MAGA movement.
The fourth reason is the growing rift within MAGA over US foreign entanglements. Many MAGA nationalists are strongly isolationist, and see the administration’s interventions in foreign countries and faraway regions as a betrayal of Trump’s own “America first” agenda.
Lastly, Trump’s second administration would be remembered as the most corrupt in US history. Aside from his disregard for the US constitution and abuse of the judiciary, he has turned the US Department of Justice into his personal attack dog, using it to indict perceived enemies without any evidence. He is also openly and shamelessly mixing his private business interests with his presidential duties, using his office to enrich himself, his family and his friends. None of this has gone unnoticed, helping to explain why his approval rating is the lowest of all post-World War II presidents in their first year in office.
When Trump leaves, MAGA would be consumed by infighting, without achieving any resolution. All three constituencies — angry, humiliated workers and young people who want good jobs; billionaires and wealthy Americans who seek higher profits; and white Christian nationalists — want to destroy the “deep state,” but lack a shared vision of what should replace it.
Three forms of change are needed in the US after MAGA implodes: legal-constitutional, economic and cultural. Constitutional reforms might include amendments to reduce the role of money in politics, eliminate the US Electoral College, limit the tenure of US Supreme Court justices and remove the president’s near-total criminal immunity for acts while in office. Congress should also act to strengthen voting rights and establish redistricting rules to prevent gerrymandering. These are well-known needs; I will focus, instead, on the necessary economic and cultural shifts.
Significant changes in a democracy often face opposition from those who benefit from the “status quo.” Thus, democracies tend to resist major reforms, and a crisis is usually required to galvanize support. We saw this mechanism at work a century ago, and we are seeing it now, during Trump’s crypto and AI-fueled version of the “Roaring Twenties.” So, to understand what we are seeing, it is worth revisiting what happened last time.
In 1901, as the first Gilded Age was ending, then-US president Theodore Roosevelt began implementing reforms to curtail the power of big business, and these continued slowly until the end of then-US president Woodrow Wilson’s term in 1921. However, the political winds shifted. From 1921 to 1933, three Republican administrations — led by then-US presidents Warren G. Harding, Calvin Coolidge and Herbert Hoover — halted the Progressive Era reforms and promoted laissez-faire policies favorable to business. The result was the speculative boom (fueled by investments in electricity and automobiles) of the 1920s, which ultimately contributed to the Great Depression.
The economic policies the US had in place a century ago should sound familiar: tax cuts, tariffs and immigration quotas favoring Western Europeans. Like the first Roaring Twenties, the MAGA era would also end with a major crisis, creating public pressure for reforms, but which reforms are most likely to be implemented?
Our current social dysfunction stems from the massive rise of private power, and the deep economic and political inequality it has produced. These are the root causes of everything that has gone wrong since the advent of free-market policies in the 1980s, which stripped most Americans of their political voice and led to the severe injustice of job losses, especially for unskilled workers.
A struggle between the established oligarchy and the forces seeking a more egalitarian society has become inevitable. No democracy could survive the current configuration of private power alongside economic and political inequality. In the age of AI, voters would not tolerate a scenario in which the livelihoods of large segments of the population are sacrificed to achieve Silicon Valley elites’ vision of progress. To restore democracy’s legitimacy, we need to ensure greater equality and a much fairer distribution of technology’s economic benefits.
With this in mind, two priorities must shape future reforms. The first is to contain private power, and eliminate extreme economic and political inequality; the second is to attain a more equal division of the benefits of innovation and economic growth, leaving no group in society behind.
Systemic economic change also entails a cultural shift, suggesting that the period of reform would be prolonged. The era of free-market economic policy has been associated with the greed-is-good ethos that emerged in the 1980s. It is a creed that insists that individuals pursue their own opportunities for advancement, rather than rely on the government, and that they bear full responsibility for the outcomes. Like the heroes of Ayn Rand’s novels, people are masters of their own destiny.
This understanding of self-reliance is fanciful. People need community and want to belong to something that offers moral strength and inspiration. Without this grounding, many become alienated. A 2024 Gallup poll found that more than 20 percent of US adults reported feeling lonely “a lot of the day yesterday,” and the share was even higher for young males. In fact, very few people have the natural resilience and luck of Rand’s characters, and where self-reliance fails to reverse downward mobility, it is families and communities that suffer the effects.
That might be why the longing for common purpose and solidarity is intense in US society today. One sees this in Kirk’s right-wing movement, Turning Point USA, which has attracted a national following of young people by offering a sense of belonging through personal interaction, helping them shape their identity. The rise of leaders like New York City Mayor Zohran Mamdani reflects something similar on the opposite end of the political spectrum. Mamdani’s campaign reportedly attracted many volunteers who were seeking an escape from loneliness and isolation, and Mamdani himself repeatedly emphasized that he favors community-focused programs and communal forms of change.
Economic policy and culture are interdependent. Striving for greater economic and political equality would necessarily foster a fairer, more solidarity-based society, embodying values which in turn guide policy. In the changing conditions shaped by AI, democratic forces would prevail if they promote effective measures to address shared problems such as global warming and the need for social infrastructure.
Such a society would emphasize the quality of human interactions, focus on communal needs, and commit to social values and civic responsibilities. A more cooperative culture would recognize life’s flaws and accept that people might need help to overcome unexpected challenges, highlighting the importance of supporting institutions that assist those in need. The emergence of this society would take time, but the conditions for it are already in place.
What reforms could advance these goals? The first step is to contain market power. A firm’s market power originates in its private ownership of innovative technology, which it gains either through invention or acquisition. In a free-market economy, this power tends to grow beyond the intent of patent law, ultimately becoming entrenched as firms actively defend and expand it. For reasons explained in the book, technological competition does not eliminate such monopolies. Competition truly emerges only when a new technological paradigm forces old firms to reinvent themselves, perhaps once every generation.
Moreover, entrenched corporate market power confers economic and political power on wealthy individuals, who increasingly have the means to influence policy in their favor. To curb this excess, I propose a policy that permits firms to maintain their monopoly power over a technology they have innovated, but prevents them from expanding this power or making it permanent.
The policy rests on five pillars. The first is a clear antitrust mandate that resolves legal ambiguities: The explicitly stated goal of antitrust enforcement should be to contain market power. Second, acquisitions should be limited by barring mergers that raise technological concentration beyond a predetermined threshold. Third, patent law should be reformed to reduce the flood of trivial patents and limit secondary patents to half the life of the primary patent, thus curbing one of the main strategies that monopolists use to expand their market power. Fourth, legal barriers to unionization should be removed to enhance workers’ agency, albeit with strict public audits of unions to prevent corruption.
Lastly, the top personal income tax rate should be increased to 60 percent and the corporate rate to 45 percent. A high corporate rate is a crucial tool for taxing high-income individuals who earn their income from capital gains, rather than from wages, and taxation is necessary to ensure a more equitable sharing of economic benefits, such as by financing programs to provide universal medical insurance.
The second reform priority builds on this last point. Sustaining democracy requires not only a more equal distribution of the benefits of technology, but also a policy to restore lost livelihoods. Technological innovations often lead to economic changes that make some industries grow while others shrink and make some people billionaires while costing other people their jobs and income. Such outcomes should be recognized as unjust. We need a new approach to prevent large-scale livelihood losses.
My proposal for achieving this consists of two parts. The first is a policy to incentivize innovations that support human labor, rather than aiming to replace it. The second calls for a program to restore the livelihoods of all workers who have been displaced by policy-supported forces.
Silicon Valley’s resistance to regulation, combined with the massive displacement of workers witnessed during this second Gilded Age, underscores the need for a more systematic innovation policy. As matters stand, innovators can disregard the costs borne by workers who are displaced by economic changes they have unleashed. However, from society’s point of view, all costs and benefits must be considered for judging the desirability of an innovation.
The issue has grown even more urgent with the diffusion of AI. Since all AI algorithms involve generating new information, there are two extreme policy options available. The first would allow models to operate independently, even though we do not know precisely how they work or what the outcome would be. The second would push the industry toward creating algorithms that provide human operators with information that can boost their productivity.
The most fertile ground for such innovations lies in services. Instead of displacing millions of engineers, doctors and other service workers, public policy should focus on incentivizing technologies that enable these workers to perform more advanced tasks. For example, we might see an AI product that enables a nurse to perform some tasks handled by a physician, thereby allowing the physician to focus on more complex challenges.
In nearly any service, AI’s ability to enhance productivity means that some lower-paying jobs could be transformed into higher-paying jobs performed by humans with greater efficiency, without requiring a college degree. Such changes would require additional training for the operator using the AI; but, by design, this extra training would not be excessive and should be easy to complete quickly.
To tackle the second priority, my proposed program includes a federal right to the restoration of livelihoods: The state would guarantee that all workers displaced by acts supported by public policy could recover their family’s livelihood. My proposal also aims to improve the US labor market by raising the federal minimum wage to US$20 per hour and indexing it to the consumer price index.
Restoring a worker’s earning capacity requires more than financial compensation. It also might entail counseling to identify new skill pathways and adequate retirement support for those who cannot reskill; retraining via community colleges, technical schools, apprenticeships, or employer led programs; coverage for cost of living-adjusted living expenses during training; family counseling and medical insurance; childcare; coverage for relocation expenses, if needed; and a one year employment subsidy equal to 20 percent of the market wage to promote the hiring of displaced workers.
The program should be adaptable. A dedicated government agency would oversee coordination, but state unemployment offices or public-private partnerships (which have been successful in Germany and Japan) could manage specific components. Incentives for former employers to assist displaced workers in retraining would align corporate and social interests.
The decline of MAGA would trigger a political, economic and cultural reckoning for the US. Making the most of this moment would require new leaders and new thinking about the role of the state and citizens’ duties to one another. Only then can we hope that democracy will prevail once again.
Mordecai Kurz, an emeritus professor of economics at Stanford University, is the author of The Market Power of Technology, Understanding the Second Gilded Age and Private Power and Democracy’s Decline: How to Make Capitalism Support Democracy.
Copyright: Project Syndicate
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